UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No. )

LINCOLN ELECTRIC HOLDINGS, INC.

(Name of Registrant as Specified In Its Charter)

 
(Name of Person(s) Filing Proxy Statement, if Other than the Registrant)

 

	DATE & TIME WEDNESDAY, APRIL 19, 2023 11:00 AM ET   PLACE Online at www.virtualshareholdermeeting.com/LECO2023   ACCESS Online at www.virtualshareholdermeeting.com/LECO2023. You must have your 16-digit control number which is printed on your proxy card.   PARTICIPATION Submit pre-meeting questions online by visiting www.proxyvote.com before Friday, April 14, 2023 at 5:00 pm ET.   RECORD DATE Shareholders of record on the close of business on February 28, 2023 are entitled to vote at the 2023 Annual Meeting.
	HOW TO CAST YOUR VOTE   Your vote is important! Please vote your shares promptly in one of the following ways:
		BY INTERNET USING YOUR COMPUTER Visit www.proxyvote.com until April 18, 2023
		BY PHONE Call 1-800-690-6903 by April 18, 2023
		BY INTERNET USING YOUR TABLET OR SMARTPHONE Scan this QR code to vote with your mobile device by April 18, 2023
		BY MAIL Sign, date and return your proxy card or voting instruction form, which must be received by April 18, 2023
		DURING MEETING Vote online on April 19, 2023 during the Annual Meeting at:
	www.virtualshareholdermeeting.com/LECO2023

OUR GLOBAL FOOTPRINT

OUR GUIDING PRINCIPLE: THE GOLDEN RULE

TREAT OTHERS AS YOU WOULD LIKE TO BE TREATED

For nearly 130 years, we have achieved success through innovation and business practices that seek to align and generate superior value for all our stakeholders. Our long-term strategic initiatives and investments drive alignment by providing:

OUR HIGHER STANDARD 2025 STRATEGY

All of the 2025 Strategy’s key financial targets are integrated into the Company’s key short-term and long-term compensation metrics and are incorporated into the Chief Executive Officer (CEO) and executive leadership’s individual annual compensation goals and further cascaded through the organization.

⁽¹⁾ Performance measures used in the design of the executive compensation program are defined in Appendix A

Our 2025 sustainability goals and initiatives are aligned across each peak of our 2025 Higher Standard Strategy and are incorporated in annual individual performance goals. Our sustainability initiatives focus on reducing our operational footprint through reduced emissions, lower energy intensity, greater conservation of natural resources, strong governance, increased diversity, equity and inclusion, enhanced employee development and engagement programming, and maintaining strong community partnerships.

Additionally, we are focused on advancing sustainability in our customers’ operations and designing solutions to support decarbonization across the end markets we serve. Our product stewardship initiatives focus on improving the design, manufacture, packaging, and transportation of our products to improve customer safety, increase recyclability, and reduce our products’ overall carbon footprint. Our application expertise and proprietary solutions are also at the forefront of supporting the expansion of clean technology by enabling the fabrication of renewable energy infrastructure and power generation, as well as the electrification of the transportation sector.

This section provides an overview of important items related to this Proxy Statement and the 2023 Annual Meeting. We encourage you to read the entire Proxy Statement for more information before voting.

2022 PERFORMANCE HIGHLIGHTS

In 2022, we achieved record sales, adjusted operating income margin and adjusted earnings per share performance, while diligently managing inflationary headwinds and increasingly challenging operating conditions in our international business. By prioritizing employee safety and training, leading with a “customer-first” approach, and maintaining an agile manufacturing and supply chain strategy, we successfully exited 2022 at 2019 volume levels on a consolidated basis yet with significantly higher returns in 2022. This achievement demonstrates the strong execution and value creation of our 2025 Strategy.

We also remained focused on our long-term 2025 Strategy and sustainability targets. We continued to invest in growth and expanded our vitality index of new products, supported product redesigns to accommodate supply chain substitutions, continued to expand automation and our large scale, metal 3D printing solutions, and announced our newest organic growth initiative to manufacture DC fast chargers for electric vehicles in late 2023. In addition, we completed our Company’s largest acquisition, with the addition of Fori Automation, LLC (“Fori”) in December 2022, which extends our welding industry leadership in automation with greater capabilities and engineering expertise, and broader international footprint. With Fori, our automation portfolio was at an $850 million revenue run rate at year-end, and we believe we are well-positioned for continued growth and the ability to exceed our 2025 $1 billion automation revenue target.

Record profitability and earnings in 2022 reflect diligent cost management and greater operating leverage from our Lincoln Business System, with most notable improvements in our automation portfolio. We also benefited from efficiencies gained from our shared service center structure and initiatives that are increasing the digitization and automation of back office activities. These achievements, along with enhanced employee training and development programming and continued progress across many of our sustainability metrics, generated strong cash generation, adjusted returns on investment capital and superior shareholder returns in 2022.

2022 FINANCIAL HIGHLIGHTS

End markets remained resilient in 2022, led by strength in Americas Welding and in our automation portfolio. Sales increased approximately 16% to a record $3.8 billion, primarily due to 20% organic sales growth and an approximate 2% contribution from acquisitions. We achieved strong operating income performance with a 200 basis point increase in our operating income margin to a record 16.3% versus the prior year. Higher operating leverage from 5% volume growth, effective cost management and benefits of our Lincoln Business System initiatives generated our record results. Adjusted operating income margin also improved 200 basis points to a record 16.8%. Cash flows from operations increased approximately 5% versus the prior year despite maintaining higher inventory levels to service customers’ needs.

See Appendix A for definitions and/or reconciliation of these metrics to results reported in accordance with GAAP. Performance measures used in the design of the executive compensation program are presented within the Compensation Discussion and Analysis section.

Our 2022 performance advances our progress towards our 2025 Strategy financial targets, with several metrics pacing at or above their 2025 target:

2022 SHAREHOLDER RETURNS

We continued to generate solid cash flows and pursued a balanced capital allocation strategy with strong shareholder returns in 2022 despite the challenging operating conditions. In 2022, we returned $312 million to shareholders through our dividend program and share repurchases. In addition, the Board approved the Company’s 27th consecutive dividend increase, raising the dividend rate by 14.3%. These returns were complemented by a record $508 million in growth investments from internal capital expenditures and acquisitions.

In 2022, Lincoln Electric was one of two machinery firms recognized by Investor’s Business Daily® as a “Top 100 Best ESG Company.” The ranking recognizes companies with leading environmental, social and governance ratings, as well as stock performance.

2022 SAFETY AND ENVIRONMENTAL HIGHLIGHTS

Safety, operational excellence and sustainability are a priority at Lincoln Electric and we strive to improve our performance annually to achieve our 2025 goals across these key safety and environmental metrics: our total recordable case rate safety metric, carbon emissions, energy intensity, recycling, and water use. Our performance to goal demonstrates continued structural improvements achieved in the business through our 2025 Strategy and our commitment to best-in-class performance.

2022 GLOBAL WORKFORCE AND DIVERSITY AND INCLUSION PROGRAMS

In executing our 2025 Strategy, we continue to focus on the importance of employee development, engagement and building a culture to develop and foster the vast talents of our employees. Our CEO and Chief Human Resources Officer lead our diversity and inclusion (D&I) initiatives, and report on the Company’s D&I programs, talent attraction and retention, and succession planning to the Board twice annually and our Compensation and Executive Development Committee is briefed at every committee meeting on D&I matters throughout the year. Our D&I programs focus on:

DIVERSITY HIGHLIGHTS

In 2022, we expanded initiatives to further build, acquire and foster increased diversity, engagement and connectedness among our global organization. Highlights include:

EMPLOYEE DEVELOPMENT & TRAINING

One of the four peaks of our 2025 Strategy is focused directly on our employees’ engagement and professional development because a highly-engaged workforce drives innovation, productivity and improved bottom-line results. One key area of engagement is our investment in training and development to ensure a strong succession pipeline and ample development opportunities to advance skills, knowledge and expertise to prepare our employees for future career opportunities.

In addition to formal leadership, management and professional development programs, in 2022 we launched a bold initiative to repay up to

$125,000 towards each of our U.S. employees’ student loan debt obligations. This program has been enthusiastically welcomed by both our existing talent and at recruiting events on university campuses across the country.

We also continue to provide tuition reimbursement for external accredited programs, mentoring, self-guided online courses, instructor-led programs, and special project and rotational assignments that can lead to extensive global exposure and talent development.

2022 also marked the introduction of TalentLaunch – a global development program for early career employees. Over 250 employees began a 2-year learning journey structured around our core competencies, including living by the Golden Rule. Employees also work together in cohorts to expand their global network and build teamwork.

In addition to our career development programs, our annual talent and succession planning process reviews 100% of our global professional staff. This ensures all high potential employees have an active individual development plan to guide their career aspirations. This process also helps to ensure we have an appropriate talent pipeline for critical roles in general management, engineering and operations. These talent reviews include our CEO and all segment and functional leaders who use this process to identify and support high potential and diverse talent in succession planning for the next generation of Lincoln Electric’s leaders.

COMMUNITY ENGAGEMENT

In 2022, we maintained our employee assistance program, supported our internal employee resource group initiatives and community engagement through our Lincoln Electric Foundation grants, our U.S. employee matching program for donations and volunteerism, in-kind gifts, sponsorship of key events, and the hosting of community and academic events at our facilities. In 2022, we were pleased to host the WorldSkills® International Competition – Special Edition for welding and construction metal work at our Cleveland, Ohio headquarter campus. This event welcomed over 135 international competitors, experts and delegates from over 30 countries who represented premiere talent in metal fabrication and thought leaders discussing the future of workforce development. In addition, we maintained our community educational/career programming among secondary and high school students to address the skills gap in industry and expand awareness of attractive career pathways in manufacturing. This programming, along with our continued support of regional youth programs, welding competitions and serving as the global welding sponsor of WorldSkills® are foundational to our efforts to promote the trades and the science of welding.

CORPORATE GOVERNANCE HIGHLIGHTS

Lincoln Electric has a solid track record of integrity and corporate governance practices that promote thoughtful management by its officers and Board of Directors, facilitating profitable growth while strategically balancing risk to maximize shareholder value. The tables below summarize select Board and governance information, and highlight certain information about the 10 Director Nominees that shareholders are being asked to elect at the 2023 Annual Meeting.

DIRECTOR NOMINEES AND BOARD SUMMARY

PROPOSAL 1 Election of 10 Directors to serve until 2024 Annual Meeting or until their successors are duly elected and qualified		The Board recommends a vote FOR all Director Nominees. Our Nominating and Corporate Governance Committee and our Board of Directors have determined that each of the Director Nominees possesses the right skills, qualifications and experience to effectively oversee Lincoln Electric’s long-term business strategy.
	➜	See “Proposal 1 – Election of Directors” beginning on page 22 of this Proxy Statement.

You are being asked to vote on the election of ten Director Nominees. Selected biographical information of each Director Nominee, as well as committee membership and committee chair information is listed below. Additional information can be found in the Director biographies under Proposal 1.

DIRECTOR NOMINEES

♦ Chair  · Member

COMPOSITION OF DIRECTOR NOMINEES

RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM SUMMARY

EXECUTIVE COMPENSATION PROGRAM HIGHLIGHTS

We have a long history of driving an incentive management culture, emphasizing pay for performance to align compensation with the achievement of enterprise, segment and individual goals.

We believe our compensation program and practices provide an appropriate balance between profitability, cash flow and returns, on the one hand, and suitable levels of risk-taking, on the other. This balance, in turn, aligns compensation strategies with shareholder interests, as reflected by the consistently high level of shareholders voting for the compensation of our NEOs.

2022 NAMED EXECUTIVE OFFICERS

The Compensation Discussion and Analysis (CD&A) provides information regarding our executive compensation program for the following NEOs in 2022:

	Christopher L. Mapes   Chairman, President and Chief Executive Officer			Steven B. Hedlund   Executive Vice President, Chief Operating Officer
	Gabriel Bruno   Executive Vice President, Chief Financial Officer and Treasurer			Jennifer I. Ansberry   Executive Vice President, General Counsel and Secretary
	Michele R. Kuhrt   Executive Vice President, Chief Human Resources Officer

ACTIONS TO FURTHER ALIGN EXECUTIVE COMPENSATION WITH SHAREHOLDER INTERESTS

The Compensation and Executive Development Committee of the Board reviews the framework of our executive compensation program and seeks to align executive pay with our pay for performance philosophy. Each year, our Compensation and Executive Development Committee monitors our executive compensation program and how it relates to our corporate performance and shareholder interests. The historically high approval of our “say-on-pay” proposals on the compensation of our NEOs, including at the 2022 Annual Meeting, demonstrate the alignment of our executive compensation program with corporate performance and shareholder interests.

In 2022, our Compensation and Executive Development Committee reviewed the overall design of our executive compensation program, and held the program consistent with policies developed in prior years. In support of the company’s short and long-term strategy, the Compensation and Executive Development Committee modified the Company’s short-term incentive plan design for 2022. Changes approved by the Committee included a revision to the formula used for calculating each executive’s bonus that places a focus on first achieving financial performance, then considers the impact of individual performance. Further, the Compensation and Executive Development Committee approved adding a revenue metric to the Financial Metrics used in the bonus calculation

COMPENSATION FRAMEWORK & PHILOSOPHY

Our compensation program is designed to attract and retain exceptional employees. We also maintain a strong pay for performance culture. As indicated below, we design our compensation system to reflect current best practices, including setting base pay below the competitive market for each position, targeting incentive-based cash compensation above the competitive market and promoting quality corporate governance in compensation decisions. We believe these practices result in sustained, long-term shareholder value and reflect our philosophy that the pay for our best performers should align with the results of our long-term goals.

Our executive compensation program consists of three primary elements of total direct compensation: base salary (fixed), short-term incentive compensation (at-risk) in the form of an annual bonus (EMIP), and long-term incentive compensation (at-risk) in the form of stock options, restricted stock units (RSUs) and performance shares.

Short-term incentive compensation and long-term incentive compensation is variable, or “at risk,” and is a significant percentage of total compensation.

AVERAGE MIX OF KEY COMPENSATION COMPONENTS AND KEY COMPENSATION METRICS

The following charts present the mix of 2022 target direct compensation for our Chief Executive Officer (CEO) and all of our other NEOs, as established in the beginning of 2022. As shown below, 87% of our CEO’s compensation value and, on average, 73% of all of our other NEOs’ compensation value was “at risk,” with the actual amounts realized based on annual and long-term performance as well as our stock price.

We use the following key performance measures in our short-term and long-term compensation programs.

SAY-ON-FREQUENCY

LINCOLN ELECTRIC’S 2023 EQUITY AND INCENTIVE COMPENSATION PLAN

LINCOLN ELECTRIC’S 2023 STOCK PLAN FOR NON-EMPLOYEE DIRECTORS

PROPOSAL 6   To approve Lincoln Electric’s 2023 Stock Plan for Non-Employee Directors

✔ ➜

The Board recommends a vote FOR this proposal. Our Board recommends that shareholders vote “FOR” the approval of Lincoln Electric’s 2023 Stock Plan for Non-Employee Directors.   See “Proposal 6—To approve Lincoln Electric’s 2023 Stock Plan for Non-Executive Directors” beginning on page 105 of this Proxy Statement.

LINCOLN ELECTRIC HOLDINGS, INC.

TABLE OF CONTENTS

Cautionary Note on Forward-Looking Statements: This Proxy Statement contains forward-looking statements, including statements regarding Lincoln Electric’s strategy and current expectations as well as sustainability and other ESG-related strategies, commitments, targets and goals, within the meaning of applicable federal securities laws and regulations. These statements reflect management’s current expectations and involve a number of risks and uncertainties. Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “guidance,” “goal,” “target” or words of similar meaning. Actual results (including the Company’s performance with respect to any sustainability or other ESG-related targets and goals) may differ materially from such statements due to a variety of factors that could adversely affect the Company’s operating results and ability to achieve its targets and goals. The factors include, but are not limited to: general economic, financial and market conditions; the effectiveness of operating initiatives; completion of planned divestitures; interest rates; disruptions, uncertainty or volatility in the credit markets that may limit our access to capital; currency exchange rates and devaluations; adverse outcome of pending or potential litigation; actual costs of the Company’s rationalization plans; possible acquisitions, including the Company’s ability to successfully integrate acquisitions; market risks and price fluctuations related to the purchase of commodities and energy; global regulatory complexity; the effects of changes in tax law; tariff rates in the countries where the Company conducts business; the Company’s ability to achieve its sustainability and other ESG-related targets and goals for a variety of reasons, including, among others, (i) technical and operating factors, (ii) assumptions not being realized, (iii) the outcome of current and future scientific research efforts and technological developments, and (iv) evolving sustainability strategies and best practices, and the possible effects of events beyond our control, such as the impact of the Russia-Ukraine conflict, political unrest, acts of terror, natural disasters and pandemics, including the coronavirus disease (“COVID-19”) pandemic, on the Company or its customers, suppliers and the economy in general. For additional discussion, see “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022. These forward-looking statements speak only as of the date on which such statements were made, and we undertake no obligation to update these statements except as required by federal securities law. Forward-looking and other statements in this Proxy Statement regarding our sustainability and other ESG-related strategies, commitments, targets and goals are not an indication that these statements are necessarily material to investors or required to be disclosed in our filings with the Securities and Exchange Commission (SEC).

PROPOSAL 1—

ELECTION OF DIRECTORS

DIRECTOR NOMINEES

Our shareholders are being asked to elect ten Directors to serve until the 2024 Annual Meeting or until their successors are duly elected and qualified. All of the Director Nominees have been previously elected by our shareholders. Each of the Director Nominees has agreed to stand for re-election. The biographies of our Director Nominees can be found in this section.

If any Director Nominee is unable to stand for election, the Board may provide for a lesser number of nominees or designate a substitute. In the latter event, shares represented by proxies solicited by the Directors may be voted for the substitute. We have no reason to believe that any of the nominees will be unable to stand for election.

HOW WE SELECT DIRECTOR NOMINEES

In evaluating Director candidates, including persons nominated by shareholders, the Nominating and Corporate Governance Committee expects that any candidate must have these minimum qualifications:

We are also committed to having Director candidates that can provide perspective on the industry challenges that we face and our long- term commitment to a pay for performance culture. The Nominating and Corporate Governance Committee’s process for identifying and evaluating nominees for Director includes annually discussing prospective Director specifications, which serve as the baseline to evaluate candidates. When recruiting new Director candidates, we may involve a recognized search firm, and the CEO and/or a member of the Nominating and Corporate Governance Committee (usually, the Chair) will contact the prospective director to gauge his or her interest and availability. The candidate will then meet with several members of the Board, including our Lead Independent Director. At the same time, references for the prospect will be contacted. A background check is generally completed before a final recommendation is made to the Board to elect a candidate to the Board.

During 2022, the Nominating and Corporate Governance Committee retained the search firm of Heidrick & Struggles to help identify director prospects, perform candidate outreach, assist in reference and background checks and provide other related services. The Board targeted diverse candidates with an eye toward gender diverse candidates who are active senior executives of public companies with experience in managing global businesses.

Shareholders may nominate one or more persons for election as Director of Lincoln Electric. The process for doing so is set forth in the FAQs section of this Proxy Statement. Director candidates recommended by our shareholders will be considered by the Nominating and Corporate Governance Committee in accordance with the criteria outlined above. For this year, the window for such nominations closed on January 21, 2023.

DIRECTOR NOMINEES’ SKILLS, EXPERIENCE AND BACKGROUND

Throughout 2022, the Nominating and Corporate Governance Committee reviewed the skills, qualifications and experience of each Director Nominee to ensure that each can effectively oversee our long-term business strategy. As shown below, our Director Nominees have a mix of skills and experience that we believe are relevant to the Company’s long-term strategy and success.

BOARD DIVERSITY

The Nominating and Corporate Governance Committee believes that having a diverse Board enhances overall corporate governance. The Nominating and Corporate Governance Committee considers diversity to include differences in race, gender, national origin, as well as professional background and capabilities, knowledge of specific industries, and geographic experience. To complement Board diversity, the Nominating and Corporate Governance Committee instructs any search firm engaged for each director candidate search to include individuals that represent diverse characteristics, whether by race, gender or other diverse qualities.

NASDAQ BOARD DIVERSITY MATRIX

In accordance with Nasdaq’s Board Diversity Rules, the following Board Diversity Matrix highlights the composition of our Board members as of February 15, 2023, which is based on voluntary self-identification. Each of the categories listed in the table has the meaning provided in Nasdaq Rule 5605(f).

*Includes information disclosed by all Director Nominees

MAJORITY VOTING POLICY

The Director Nominees receiving the greatest number of votes will be elected (plurality standard). However, our majority voting policy states that any Director who fails to receive a majority of the votes cast in an uncontested director election in his/her favor is required to submit his/her resignation to the Board. The Nominating and Corporate Governance Committee would then consider each resignation and determine whether to accept or reject it, with full Board approval of such decision. Abstentions and broker non-votes will have no effect on the election of a Director and are not counted under our majority voting policy. Holders of common stock do not have cumulative voting rights with respect to the election of a Director.

ANNUAL MEETING ATTENDANCE; NO SPECIAL ARRANGEMENTS

Directors are expected to attend each annual meeting. The Director Nominees plan to attend this year’s virtual Annual Meeting. All of our Director Nominees attended our 2022 Annual Meeting.

None of the Director Nominees has any special arrangement or understanding with any other person pursuant to which the Director Nominee was or is to be selected as a Director or Director Nominee. There are no family relationships, as defined by SEC rules, among any of our Directors or executive officers. SEC rules define the term “family relationship” to mean any relationship by blood, marriage or adoption, not more remote than first cousin.

YOUR BOARD RECOMMENDS A VOTE FOR EACH DIRECTOR NOMINEE

DIRECTOR NOMINEES

	BRIAN D. CHAMBERS Director since 2022   COMMITTEES: Audit Finance   AGE: 56   OTHER PUBLIC COMPANY DIRECTORSHIPS: Owens Corning (NYSE: OC) since 2019					CURTIS E. ESPELAND Director since 2012 Lead Independent Director since 2018    COMMITTEES: Audit Finance    AGE: 58   OTHER PUBLIC COMPANY DIRECTORSHIPS: Huntsman Corporation (NYSE: HUN) since 2022
	Experience Mr. Chambers has served as the Chair, President and Chief Executive Officer of Owens Corning, a global building and construction materials company, since 2020, and as President and Chief Executive Officer since 2019. During his over nineteen-year tenure with Owens Corning, Mr. Chambers has served in various leadership positions including Chief Operating Officer from 2018 to 2019, and President of the Roofing Division from 2014 to 2018. Mr. Chambers has also held several commercial and operational roles at Saint-Gobain, Honeywell and BOC Gases.   Reasons for Nomination ·  Executive leadership experience as CEO and Chair of a global publicly-traded company engaged in manufacturing operations.   ·  Strong leadership skills, business strategy development, international business and operations experience with a multi-national company.   ·  The Board has determined that Mr. Chambers’ extensive accounting and financial experience qualifies him as an "audit committee financial expert."   ·  Valuable knowledge of key governance matters, including sustainability matters, gained through executive leadership of various publicly-traded companies and as a director of Owens Corning.					Experience Mr. Espeland is the former Executive Vice President and Chief Financial Officer of Eastman Chemical Company, an advanced materials and specialty additives manufacturer, a position he held from 2014 until his retirement in 2020. Mr. Espeland joined Eastman Chemical Company in 1996 and, during his tenure, he also served as Vice President, Finance and Chief Accounting Officer from 2005 to 2008, and Senior Vice President and Chief Financial Officer from 2008 to 2014.   Reasons for Nomination ·  Extensive experience in corporate finance and accounting, having served in various finance and accounting roles, and ultimately as the Chief Financial Officer, at a large publicly-traded company.   ·  Significant experience in the areas of strategy, mergers and acquisitions, taxation and enterprise risk management.   ·  International auditing experience having served as an independent auditor at Arthur Andersen LLP, working in both the United States and abroad (Europe and Australia).   ·  The Board has determined that Mr. Espeland's extensive accounting and financial experience qualifies him as an "audit committee financial expert."   ·  Valuable insight into advancing the business priorities of Lincoln Electric's international operations gained from his international business experience.   ·  Valuable knowledge of key governance matters gained through his various directorships, including as a director of Lincoln Electric.

	PATRICK P. GORIS Director since 2018   COMMITTEES: Audit(Chair) Nominating and Corporate Governance   AGE: 51   OTHER PUBLIC COMPANY DIRECTORSHIPS: None					MICHAEL F. HILTON Director since 2015   COMMITTEES: Compensation and Executive Development (Chair) Nominating and Corporate Governance   AGE: 68   OTHER PUBLIC COMPANY DIRECTORSHIPS: Ryder Systems, Inc. (NYSE: R) since 2012 Regal Rexnord Corporation (NYSE: RBC) since 2019 Nordson Corporation (NASDAQ: NDSN) through 2019
	Experience Mr. Goris has served as the Senior Vice President and Chief Financial Officer of Carrier Global Corporation, a leading global provider of healthy, safe and sustainable building and cold chain solutions, since November 2020. Prior to joining Carrier, he served as Senior Vice President and Chief Financial Officer of Rockwell Automation, a global industrial automation and information solutions provider, from February 2017 to November 2020.   Reasons for Nomination ·  Relevant global financial expertise from serving in various finance roles, and ultimately as the Chief Financial Officer, of publicly-traded, multinational organizations.   ·  Extensive experience in accounting, financial planning and analysis, investor relations and mergers and acquisitions.   ·  Experience with a global industrial automation and information solutions company provides Mr. Goris with broad exposure to digital operations and "smart" manufacturing solutions using data and analytics, which enhances operational intelligence, productivity and risk management in manufacturing processes. These are key initiatives for our business and our customers' businesses.   ·  The Board has determined that Mr. Goris' extensive accounting and financial experience qualifies him as an "audit committee financial expert."   ·  Valuable knowledge of key governance matters gained as a director of Lincoln Electric.					Experience Mr. Hilton is the former President and Chief Executive Officer of Nordson Corporation, a company that engineers, manufactures and markets differentiated products and systems used for precision dispensing of adhesives, coatings, sealants, biomaterials, polymers, plastics and other materials, fluid management, test inspection, UV curing and plasma surface treatment, a position he held from 2010 until his retirement in 2019. During his tenure at Nordson Corporation, Mr. Hilton also served as a director. Prior to joining Nordson, Mr. Hilton was Senior Vice President and General Manager for Air Products and Chemicals, Inc., a global company that provides a unique portfolio of atmospheric gases, process and specialty gases, performance materials, and equipment and services, with specific responsibility for leading its $2 billion global Electronics and Performance Materials segment.   Reasons for Nomination ·  With over 30 years of global manufacturing experience, Mr. Hilton brings to the Board an intimate understanding of management leadership.   ·  Extensive experience with strategy development and day-to-day operations of a multi-national company, including product line management, new product technology, talent development, manufacturing, distribution and other sales channels, business processes, international operations and global markets expertise.   ·  Valuable knowledge of key governance matters gained as a director of Lincoln Electric and several other publicly-traded companies.

	KATHRYN JO LINCOLN Director since 1995   COMMITTEES: Compensation and Executive Development Nominating and Corporate Governance   AGE: 68   OTHER PUBLIC COMPANY DIRECTORSHIPS: None					CHRISTOPHER L. MAPES Director since 2010 Chairman since 2013     COMMITTEES: None    AGE: 61   OTHER PUBLIC COMPANY DIRECTORSHIPS: The Timken Company (NYSE: TKR) since 2014
	Experience Ms. Lincoln has served as the Board Chair and Chief Investment Officer of the Lincoln Institute of Land Policy, an independent, global foundation focused on addressing significant policy issues through innovation land use and taxation methods, since 1996. As Chief Investment Officer, Ms. Lincoln manages and directs all aspects of the Institute's endowment, including strategic asset allocation and policy development, which have contributed to its current $800 million asset base. In her role as Chair, she plays a crucial role in the strategic direction and planning of the Institute, with ongoing involvement in the development of education programs, demonstration projects and impact measurement. Ms. Lincoln is a member of the board of directors of HonorHealth Network, and Claremont Lincoln University, and formerly served as a director of Johnson Bank Arizona, N.A. She is also the Co-Chair of the International Center for Land Policy Studies and Training in Taiwan and was appointed as a director for The Hope Effect, a non-profit entity.   Reasons for Nomination ·  Extensive leadership experience, addressing strategic planning, asset allocation matters and corporate governance.   ·  As a Lincoln family member and long-standing director of Lincoln Electric, Ms. Lincoln has a keen sense of knowledge about Lincoln Electric, its culture and the founding principles.   ·  Broad experience and commitment to board and corporate governance excellence, named as a Board Leadership Fellow of the National Association of Corporate Directors. Named by WomenInc. as one of 2019's most influential corporate directors.   ·  Valuable knowledge of key governance matters gained through her various directorships, including as a director of Lincoln Electric.					Experience Mr. Mapes is the Chairman, President and Chief Executive Officer of Lincoln Electric. Mr. Mapes has served as President and Chief Executive Officer since December 2012. In December 2013, Mr. Mapes was appointed as Chairman of the Board in addition to his other responsibilities. From September 2011 to December 2012, Mr. Mapes served as the Chief Operating Officer of Lincoln Electric. From 2004 to August 2011, Mr. Mapes served as an Executive Vice President of A.O. Smith Corporation, a global manufacturer with a water heating and water treatment technologies business, which has residential, commercial, industrial and consumer applications, and the President of its former Electrical Products unit. Mr. Mapes started his career with General Motors and has held roles in industrial manufacturing for over 35 years. In addition, Mr. Mapes has served as a director of The Timken Company since 2014.   Reasons for Nomination ·  Extensive leadership experience in large, global publicly-traded companies engaged in manufacturing operations.   ·  Keen understanding of the manufacturing industry and challenges organizations face growing globally.   ·  In addition to business management experience, Mr. Mapes has an MBA and a law degree.   ·  Valuable knowledge of key governance matters gained as a director of Lincoln Electric and The Timken Company.

	PHILLIP J. MASON Director since 2013   COMMITTEES: Compensation and Executive Development Finance (Chair)   AGE: 72   OTHER PUBLIC COMPANY DIRECTORSHIPS: GCP Applied Technologies (NYSE: GCP) through 2020					BEN P. PATEL Director since 2018   COMMITTEES: Audit Finance Nominating and Corporate Governance   AGE: 55   OTHER PUBLIC COMPANY DIRECTORSHIPS: None
	Experience Mr. Mason is the former President of the Europe, Middle East & Africa Sector (EMEA Sector) of Ecolab, Inc., a leading provider of food safety, public health and infection prevention products and services, a position he held from 2010 until his retirement in 2012. Prior to leading Ecolab’s EMEA Sector, Mr. Mason had responsibility for Ecolab’s Asia Pacific and Latin America businesses as President of Ecolab’s International Sector from 2005 to 2010 and as Senior Vice President, Strategic Planning in 2004. In addition, Mr. Mason has public company board experience, previously serving as a director of GCP Applied Technologies from 2016 to May 2020.   Reasons for Nomination ·  Executive leadership experience in an international business unit for a U.S. publicly-traded company, providing Mr. Mason extensive international business expertise, business-to-business and industrial sector experience.   ·  Extensive international business experience, starting, developing and growing businesses abroad, in both mature and emerging markets, having established businesses in China, South Korea, Southeast Asia, Brazil, India, Russia, Africa and the Middle East.   ·  Strong finance and strategic planning proficiency, including merger and acquisition experience, along with significant experience working with and advising boards on diverse issues confronting companies with international operations.   ·  Valuable knowledge of key governance matters gained as a director of Lincoln Electric and GCP Applied Technologies.					Experience Mr. Patel served as Senior Vice President, Chief Technology Officer of Cooper Tire & Rubber Company, a global manufacturer of specialized passenger car, light truck, medium truck, motorcycle and racing tires from November 2019 until July 2021. He previously served as Senior Vice President and Chief Technology Officer of Tenneco, Inc., a manufacturer of automotive emission control and ride control products and systems. During his 8-year tenure at Tenneco, beginning in 2011, he held roles leading regional advanced technology development and establishing a global research and development organization. Prior to joining Tenneco, Mr. Patel held numerous positions with increasing responsibility, including senior scientist, at the General Electric Company during his thirteen-year tenure with the organization.   Reasons for Nomination ·  Over 20 years of experience serving with publicly-traded, global products and technology companies.   ·  Broad expertise in material science, automation and “smart” systems, as well as extensive research and development experience.   ·  Mr. Patel has been a leader in global innovation and research initiatives, which lends tremendous support to our focus on being an innovation leader in our industry and our advanced manufacturing growth strategy, which helps customers identify value and efficiencies in their welding and cutting operations.   ·  Valuable knowledge of key governance matters gained as a director of Lincoln Electric.

	HELLENE S. RUNTAGH Director since 2001   COMMITTEES: Compensation and Executive Development Nominating and Corporate Governance (Chair)   AGE: 74   OTHER PUBLIC COMPANY DIRECTORSHIPS: None					KELLYE L. WALKER Director since 2020   COMMITTEES: Compensation and Executive Development Nominating and Corporate Governance   AGE: 56   OTHER PUBLIC COMPANY DIRECTORSHIPS: None
	Experience Ms. Runtagh is the former President and Chief Executive Officer of the Berwind Group, a diversified pharmaceutical services, industrial manufacturing and real estate company, a position she held in 2001. From 1997 through 2001, Ms. Runtagh was Executive Vice President of Universal Studios, a media and entertainment company. Prior to joining Universal Studios, Ms. Runtagh spent 27 years at General Electric Company, a diversified industrial company, in a variety of leadership positions. In addition, Ms. Runtagh has extensive board experience, previously serving as a director of Harman International Industries from 2008 to 2017, NeuStar, Inc. from 2006 to 2017, and several other publicly-traded companies.   Reasons for Nomination ·  Over 30 years of experience in management positions with technology focused global companies, with responsibilities in management ranging from marketing and sales to finance, as well as engineering and manufacturing.   ·  Diverse management experience, including growing businesses while maintaining high corporate governance standards.   ·  Extensive experience as a director of publicly-traded companies.   ·  Valuable knowledge of key governance matters gained as a director of Lincoln Electric and several other publicly-traded companies.					Experience Ms. Walker has served as the Executive Vice President and Chief Legal Officer of Eastman Chemical Company, an advanced materials and specialty additives manufacturer, since April 2020. In this role, Ms. Walker has overall leadership and responsibility for Eastman's legal organization. She also served as Executive Vice President and Chief Legal Officer of Huntington Ingalls Industries, Inc., America's largest military shipbuilder, from 2015 to 2020. Prior to joining Huntington Ingalls Industries, Inc., Ms. Walker served as Senior Vice President, General Counsel and Secretary at American Water Works Company, Inc. Ms. Walker is a member of the board of directors of T. Rowe Price Funds, a position she has held since October 2021.   Reasons for Nomination ·  Seasoned senior executive with over 25 years of experience with publicly-traded companies, helping to increase organizational value through forward thinking, strategic discipline and a focus on continuous improvement.   ·  Extensive experience in corporate governance, compliance and litigation management, government affairs, strategy development, product stewardship and regulatory affairs, global business conduct and global health, safety, environment and security.   ·  Long-standing general counsel of publicly-traded companies and has also served as Chief Administrative Officer, leading human resources, information technologies, government affairs and corporate communications functions.   ·  Extensive leadership across various industries including global public companies, government organizations and utility companies that will lend value to advance our 2025 Strategy.   ·  Valuable knowledge of key governance matters gained as a director of Lincoln Electric.

CORPORATE GOVERNANCE

GOVERNANCE FRAMEWORK

We are committed to effective corporate governance and high ethical standards. We adhere to our ethical commitments in every aspect of our business, including our commitments to each other, in the marketplace and in the global, governmental and political arenas. These commitments are spelled out in our Code of Conduct, which applies to all of our employees (including our CEO and our other NEOs) and Directors.

We encourage you to visit our website at www.lincolnelectric.com, where you can find detailed information about our corporate governance programs/policies including:

SHAREHOLDER ENGAGEMENT

We are committed to engaging in constructive conversations with shareholders and nurturing long-term relationships with the investment community. We maintain an active shareholder engagement program where executives and management from various departments meet with shareholders regularly to discuss a variety of topics including business performance, strategic initiatives, corporate governance practices, corporate sustainability initiatives, executive compensation, and other matters of shareholder interest. The Board values an active investor relations program as it believes that shareholder input strengthens its role as an informed and engaged fiduciary.

Our shareholder engagement program includes participation at investor conferences, holding meetings and tours at Lincoln Electric, visiting investors at their offices, hosting tradeshow tours, being accessible to shareholder inquiries throughout the year and communicating with transparency. In 2022, we maintained active engagement with the investment community with calls/video conferencing, a virtual annual shareholder meeting, virtual and in-person investor conferences and non-deal roadshows. In addition, we invited institutional investors representing approximately 55 percent of our outstanding shares to discuss ESG matters with us as part of our annual ESG non-deal roadshow. These discussions provide good insights on our ESG practices and policies. We received positive feedback on our ESG disclosures, enhanced ESG governance framework, the alignment of our ESG strategy with our Higher Standard 2025 Strategy, corporate governance practices, executive compensation, our environmental, health and safety practices, and our investor relations program.

OUR BOARD OF DIRECTORS

Our Board oversees management of the long-term interest of Lincoln Electric and our stakeholders. The Board’s major responsibilities include:

DIRECTOR INDEPENDENCE

Each of our non-employee Directors meets the independence standards set forth in the Nasdaq listing standards, which are reflected in our Director Independence Standards. Additionally, Stephen G. Hanks, G. Russell Lincoln and William E. MacDonald, III, all of whom served on our Board in 2022, met the independence standards set forth in the Nasdaq listing standards. To be considered independent, the Nominating and Corporate Governance Committee must affirmatively determine that the Director has no material relationship with Lincoln Electric. In addition to outlining the independence standards set forth in the Nasdaq listing standards, the Director Independence Standards outline specific relationships that are deemed to be categorically immaterial for purposes of director independence. The Director Independence Standards are available on our website at www.lincolnelectric.com.

During 2022, the independent Directors met in regularly scheduled Executive Sessions in conjunction with each of the regular Board meetings. The Lead Independent Director presided over these sessions.

BOARD LEADERSHIP STRUCTURE

The Board evaluates the leadership structure to determine what is optimal for our Company. As a part of our current structure, Mr. Mapes, our President and CEO, serves as Chairman of the Board, in addition to his other responsibilities. Our Board believes having one individual serve as Chairman and CEO is beneficial to us because the dual role enhances Mr. Mapes’ ability to provide direction and insight on strategic initiatives impacting us and our shareholders. The Board also believes the dual role is consistent with good corporate governance practices because it is complemented by a Lead Independent Director. As Chairman, Mr. Mapes is responsible for planning, formulating and coordinating the development and execution of our corporate strategy, policies, goals and objectives. In his role as Chairman, Mr. Mapes has the following duties, responsibilities and expectations:

In addition to the duties of all Directors, the Lead Independent Director has the following duties, responsibilities, and expectations:

The Board will continue to monitor the Board leadership structure, considering what trends in the marketplace and viewpoints in the corporate governance community and, most importantly, what the Board believes is in the best interests of our Company and its shareholders.

OUR BOARD COMMITTEES

We have separately designated standing Audit, Compensation and Executive Development, and Nominating and Corporate Governance Committees established in accordance with applicable provisions of the Securities Exchange Act of 1934 (the “Exchange Act”) and SEC and Nasdaq rules. The Board also has designated a standing Finance Committee.

Each Committee has a charter, which details all of the Committee’s roles and responsibilities. The following summaries set forth the principal responsibilities of each of our Committees, as well as other information regarding their makeup and operations. A copy of each Committee’s charter may be found on our website at www.lincolnelectric.com.

ANNUAL BOARD AND COMMITTEE EVALUATION PROCESS

The Board recognizes that a robust and constructive performance evaluation process is an essential component of Board effectiveness. Our Governance Guidelines require annual evaluation of the performance of the Board. The Nominating and Corporate Governance Committee oversees the annual evaluation process. As part of this process, each Board member completes an evaluation relative to Committee and Board matters. A summary of the results of this process is presented to the Nominating and Corporate Governance Committee. The results are then reported to the full Board by the Lead Director, which considers the results and ways in which Board processes and effectiveness may be enhanced.

OVERSIGHT OF OUR COMPANY

BOARD OVERSIGHT OF STRATEGY

One of the Board’s key responsibilities is overseeing the Company’s strategic planning process, including reviewing the steps taken to develop strategic plans and approving the final plans. In 2022, this included receiving periodic updates regarding the Company’s execution and performance as we continue to implement our 2025 Strategy. Our Board regularly discusses the key priorities of our Company, taking into consideration global economic, consumer and other significant trends. The Company’s long-term strategic plan is reviewed regularly with the Board, along with its annual operating plan, capital structure and sustainability performance.

BOARD OVERSIGHT OF ENTERPRISE RISK MANAGEMENT

In the ordinary course of business, we face various strategic, operating and compliance risks. Our enterprise risk management process seeks to identify and address material risks to the organization, and the Board provides oversight as to how management is addressing these risks. The Company maintains a risk management review process where risk is assessed throughout our entire organization, and is reported to our internal corporate risk committee, comprised of members of our business units and various functional leaders (e.g., IT, Finance, Legal), led by our Vice President of Enterprise Risk Management. High-priority risks facing the organization are identified each year and are assigned to either the full Board or various Board Committees for further review, analysis and development of appropriate plans for management and mitigation.

Our Board oversees the management of these risks on an enterprise-wide basis, and the Lead Independent Director promotes our Board’s engagement in this process. A fundamental part of the process is to understand the Company’s risks, and to provide oversight as to how management is addressing these risks. The Board, or Board designated committee, reviews with management its process for enterprise risk management and actively engages with management to understand and oversee our most significant risks. The Audit Committee oversees the Company’s risk assessment and management process each year, including ensuring that management has instituted processes to identify critical risks and has developed plans to manage such risks.

BOARD OVERSIGHT OF INFORMATION SECURITY AND CYBERSECURITY

Information security and cybersecurity have been identified as high-priority risks and the Audit Committee receives updates at each meeting on these matters. The Company maintains an insurance policy with respect to information security and has undergone several simulation, preparedness and response exercises. The Company has not experienced a reportable information security breach within the last three years and is tested externally on its information security environment annually. In addition, the Company has an information security training program, training all computer-based employees two times per year, through various employee training modules relative to information security matters, and simulates phishing events with employees to raise cybersecurity awareness on a monthly basis.

BOARD OVERSIGHT OF ESG AND SUSTAINABILITY MATTERS

Our approach to ESG and sustainability began with our founders who established the Company under the guiding principle of The Golden Rule: Treating others how you would like to be treated. Our culture, values and our commitment to D&I reflect The Golden Rule and our Purpose of Operating by a Higher Standard to Build a Better World.

The Board recognizes the importance of achieving our goals responsibly, and aligning with our key stakeholders to drive long-term value creation. The Board has broad oversight responsibility for ESG and sustainability matters and reviews sustainability initiatives and progress made towards our long-term safety and sustainability metrics. In addition, the Board receives a formal annual update on corporate governance matters, including ESG developments and pending considerations. The Nominating and Corporate Governance Committee assists the Board in fulfilling its oversight responsibilities related to corporate governance matters, monitoring new issues, regulatory changes and trends in corporate governance, environmental and social responsibility matters. Our Audit Committee oversees our ethics and compliance programs and cybersecurity, and reviews our Enterprise Risk Management policies and processes. Our Compensation and Executive Development Committee oversees the implementation and effectiveness of the Company’s human capital policies and practices, and reviews initiatives and strategies related to employee recruitment, promotion, retention and attrition, employee engagement and diversity, equity and inclusion.

Our Company has clear responsibilities and a robust governance structure related to ESG and sustainability matters. The Board’s oversight responsibility for ESG matters is reflected in our Governance Guidelines. Additionally, sustainability metrics are incorporated into the annual individual goals of our CEO and other executives. Our Executive Vice President, General Counsel (GC), oversees corporate environmental, health, safety & sustainability (EHS&S) initiatives and global reporting, as well as an Executive Sustainability Committee. The GC also works closely with our Vice President of EHS&S, business unit leadership and local facilities to implement, monitor and measure our EHS&S results. EHS&S also oversees an internal Product Sustainability Committee that was established in 2020 with a primary focus on enhancing product stewardship with sustainable solutions and now oversees a multi-disciplinary Sustainability Disclosure Committee, which was established in 2022.

The following policies and business practices exemplify our commitment to ESG matters:

COMPENSATION-RELATED RISK

We regularly assess risks related to our compensation and benefit programs, including our executive compensation program, and our Compensation and Executive Development Committee is actively involved in those assessments. In addition, WTW, a compensation consultant engaged by management, has provided a risk assessment of our executive compensation program in the past. Although we have a long history of pay for performance and incentive-based compensation, we believe our compensation programs contain many mitigating factors to ensure that our employees are not encouraged to take unnecessary risks.

As a result of all these efforts, we do not believe the risks arising from our executive compensation policies and practices are reasonably likely to have a material adverse effect on Lincoln Electric.

RELATED-PARTY TRANSACTIONS

The Board has adopted a policy regarding the review and approval of transactions between the Company and its subsidiaries and certain related parties that are required to be disclosed in proxy statements, which are referred to as “related-party transactions.” Related parties include our Directors, Director Nominees, executive officers, persons controlling 5% or more of our common shares, and the immediate family members of these individuals. Pursuant to the policy, the Audit Committee is responsible for reviewing and approving related-party transactions and will consider information it deems appropriate, including, but not limited to, whether the terms of the transaction are no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances, the approximate dollar value of the transaction, and the nature and extent of the related party’s interest in the transaction. No Director will participate in any discussion or approval of a related-party transaction for which he or she is a related party, other than to provide material information concerning the transaction.

We define “related-party transactions” generally as transactions collectively over $120,000 in any calendar year, in which any related party had, has or will have a direct or indirect material interest. We have a monitoring and reporting program, which includes requirements to report all actual or potential related-party transactions during the year and information regarding all relationships with entities involving a related party.

The Company did not have any related-party transactions that required Audit Committee approval in 2022.

DIRECTOR COMPENSATION

OUR BOARD COMPENSATION PROGRAM

Based upon the recommendations of the Nominating and Corporate Governance Committee, the Board determines our non-employee Director compensation. The Nominating and Corporate Governance Committee periodically reviews all elements of Board compensation in relation to our proxy peer group (as identified in the CD&A), trends in Board compensation and other factors it deems appropriate. In consultation with Korn Ferry as an independent advisor, the Nominating and Corporate Governance Committee did not recommend any adjustments to Board compensation with respect to 2022.

The objectives of our non-employee Director compensation program are to attract highly qualified and diverse individuals to serve on our Board and to align their interests with those of our shareholders. An employee of Lincoln Electric who also serves as a Director does not receive any additional compensation for serving as a Director.

All non-employee Directors receive cash retainers and an annual stock-based award for serving on our Board. Stock-based compensation is provided under our 2015 Stock Plan for Non-Employee Directors.

GOOD GOVERNANCE PRACTICES

Lincoln Electric seeks to attract and retain highly qualified individuals to serve on the Board. To that end, Lincoln Electric maintains the philosophy of paying non-employee Directors fairly and reasonably, considering external market factors, consistent with good governance practices. With respect to our non-employee Director compensation program, our governance practices include:

The following is a summary of our current Director compensation program:

The Stock Awards column represents the grant date fair value under Accounting Standards Codification (ASC) Topic No. 718 based on a closing price of $147.67 per share on December 12, 2022, and, with respect to the award granted to Mr. Chambers, a closing price of $128.03 per share on February 16, 2022. Assumptions used in the calculation of these amounts are included in footnote 10 to our audited financial statements for the fiscal year ended December 31, 2022 included in our Annual Report on Form 10-K filed with the SEC on February 21, 2023.

As of December 31, 2022, the number of RSUs held by each non-employee Director was 981, except for Mr. Chambers, who held 1,908 RSUs. Each of Messrs. Chambers, Goris, and Patel and Mses. Lincoln and Walker elected to defer receipt of the RSUs that were granted in 2022 under our Non-Employee Directors’ Deferred Compensation Plan.

OTHER ARRANGEMENTS

We reimburse Directors for reasonable out-of-pocket expenses incurred in connection with attendance at Board meetings, or when traveling in connection with the performance of their services for Lincoln Electric.

CONTINUING EDUCATION

Directors are generally reimbursed up to $5,000 for continuing education expenses (inclusive of travel expenses) for programs each Director may elect to attend. We also incorporate continuing education topics for Directors into our Board meetings from time to time.

STOCK OWNERSHIP GUIDELINES

In keeping with the philosophy that Directors’ interests should be aligned with the shareholders’ interest and as part of the Board’s continued focus on corporate governance, all of our non-employee Directors must adhere to our stock ownership guidelines. RSUs, including any RSUs that have been deferred under the Non-Employee Directors’ Deferred Compensation Plan, count toward the stock ownership amount; shares held in another person’s name (including a relative) do not.

The stock ownership guidelines can be met by satisfying one of the two thresholds noted in the chart below. Directors have five years from the date of election to the Board to satisfy the stock ownership guidelines. As of December 31, 2022, all of our non-employee Directors had satisfied the stock ownership guidelines, except for Mr. Chambers who was elected to the Board in 2022.

The Nominating and Corporate Governance Committee reviews the guidelines at least every two-and-a-half years to ensure that the components and values are appropriate. A review was conducted during 2021, with the assistance of Korn Ferry as an independent advisor, and it was determined that no changes to the guidelines were necessary, other than the share floor amount being reset as of December 31, 2021 and reflecting the modified Board retainer of $85,000, as the five times annual retainer guideline is consistent with the peer group median. The revised stock ownership guidelines became effective in 2022. The next review is anticipated to occur in 2023.

EQUITY AWARDS

The non-employee Directors’ RSUs awards are granted under the 2015 Stock Plan for Non-Employee Directors. Under the terms of the awards, RSUs vest in full one year after the date of grant. In addition, the awards vest in full in the event of a change in control of Lincoln Electric if the Director’s service is terminated or if the award is not assumed upon the change in control. The awards also vest in full upon the death or disability of the Director, or vest pro rata, based on length of service, upon the retirement of the Director. During the period in which RSUs remain unvested, dividend equivalents pay out in cash when dividends are generally paid to shareholders.

DEFERRED COMPENSATION PLAN

The Non-Employee Directors’ Deferred Compensation Plan allows the non-employee Directors to defer payment of all or a portion of their annual cash compensation and RSUs granted to them. This plan allows each participating non-employee Director to elect to begin payment of the deferred amounts as of the earlier of termination of services as a Director, death or a date not less than one full calendar year after the year the fees are initially deferred.

The investment elections available under the plan for cash compensation deferred are the same as those available to executives under our Top Hat Plan, which is discussed in the narrative under 2022 Deferred Compensation Benefits. RSU deferrals are deemed invested solely in a Lincoln Electric Stock fund, and no other plan deferrals are eligible for investment into that fund.

EXECUTIVE

COMPENSATION

Our long-term strategy is focused on key actions and initiatives that generate long-term profitable growth within our targeted markets through value-added solutions and operational excellence. We believe this approach engages our business team in creating a long-term value proposition for shareholders that generates above-market returns through an economic cycle while maintaining a short-term focus on improving profitability and driving operating excellence. More information on our business and strategy can be found in the “Business Overview” section at the beginning of this Proxy Statement.

The Compensation Discussion and Analysis (CD&A) describes our executive compensation programs and how they apply to our NEOs. The CD&A contains statements regarding future performance targets and goals. These targets and goals are disclosed in the context of our compensation programs and should not be understood to be statements of management’s expectations or estimates of results or other guidance. We caution investors not to apply these statements in other contexts.

For 2022, our NEOs were:
	CHRISTOPHER L. MAPES   Chairman, President and Chief Executive Officer
	GABRIEL BRUNO   Executive Vice President, Chief Financial Officer and Treasurer
	STEVEN B. HEDLUND   Executive Vice President, Chief Operating Officer
	JENNIFER I. ANSBERRY   Executive Vice President, General Counsel and Secretary
	MICHELE R. KUHRT   Executive Vice President, Chief Human Resources Officer

COMPENSATION DISCUSSION AND ANALYSIS

EXECUTIVE SUMMARY

Our approach to executive compensation is generally the same as our approach to employee-wide compensation, with a strong belief in pay for performance and a long-standing commitment to incentive-based compensation.

While maintaining our performance-driven culture, our executive compensation program is designed to achieve the following objectives:

KEY FINANCIAL PERFORMANCE

We have a strong track record of delivering increased value to our shareholders and we have typically delivered above-market performance across various financial metrics over many economic cycles. Our long-term strategy seeks to achieve profitable sales growth both organically and through acquisitions by emphasizing value-added solutions and differentiated technologies. We anticipate this strategy will yield improved profit margins and returns, and will generate best-in-class financial performance measured against our peer group.

In 2022, we achieved record sales, adjusted operating income margin and adjusted earnings per share performance, while diligently managing through inflationary headwinds and increasingly challenging operating conditions in our international business. We also achieved strong ROIC and Adjusted ROIC, increased cash flows from operations and maintained a strong balance sheet profile while investing in growth and returning cash to shareholders. By prioritizing employee safety and training, leading with a “customer-first” approach, maintaining an agile manufacturing and supply chain strategy, and strong financial discipline–we successfully executed above plan. We exited 2022 at 2019 volume levels on a consolidated basis with significantly higher returns, which demonstrates the strong execution and value creation of our 2025 Strategy.

2022 Net sales increased 16% to a record $3.8 billion. Organic sales increased 20%, led by a 14.5% increase in price and 5% higher volumes. We also benefited approximately 2% from acquisitions (which excludes the Fori acquisition, which closed on December 1, 2022). In 2022, all of our end markets generated double-digit percent organic growth, led by approximately 30% organic sales growth in the automotive/transportation sector. All major geographic regions also achieved organic sales growth, led by the Americas, where strong momentum in customer production activity and capital investments resulted in our highest levels of growth and strong backlogs in equipment and automation systems. Price primarily reflected actions previously taken to mitigate inflation and unfavorable foreign exchange translation and we successfully achieved our targeted neutral price/cost position on a full-year basis.

We also focused on the continued development and commercialization of innovative solutions and reinforced our industry-leading portfolio of automated solutions. In 2022, we expanded our vitality index of new products to 37% of total sales and 57% of equipment sales, while supporting product redesigns to accommodate supply chain substitutions. We also continued to expand our automation capabilities, as well as our leading large-scale, metal 3D printing solution for industrial parts, molds and prototypes, and launched our initiative to manufacture DC fast chargers for electric vehicles in the U.S. market in late 2023. In addition, we completed our Company’s largest acquisition, with the addition of Fori in December 2022. Fori extends our welding industry leadership in automation with greater capabilities and engineering expertise, and establishes new Lincoln Electric automation locations in India and South Korea. With Fori, our automation portfolio is at an $850 million revenue run rate at year-end and we believe we are well-positioned for continued growth and the ability to exceed our 2025 $1 billion automation revenue target.

We achieved record Operating income margin performance in 2022, which increased 200 basis points to 16.3%. Adjusted operating income margin also improved 200 basis points to a record 16.8%. Diligent cost management and the benefits from continuous improvement initiatives, the maturing of our Lincoln Business System across our automation portfolio, efficiencies gained from our shared service centers, as well as continued progress across many of our sustainability metrics generated higher operating leverage in the business.

Net income increased 71% to $472.2 million in 2022, and 30% to $485.7 million on an adjusted basis. Earnings per share increased 75% to a record $8.04, and 33% to a record $8.27 on an adjusted basis, which included an unfavorable $0.24 impact from foreign currency translation.

Cash flows from operations increased approximately 5% versus the prior year to $383.4 million despite maintaining strategically elevated inventory levels to mitigate supply chain challenges and service customers’ needs. Higher inventory levels, combined with the inclusion of Fori on our balance sheet at December 31, 2022 without commensurate sales, unfavorably impacted our Average operating working capital to net sales ratio, which rose to 20.9% at year end. Excluding Fori, the Average operating working capital to net sales ratio would have been 18.6%. Reported and Adjusted ROIC were 22.1% and 22.7%, respectively. Excluding Fori, we would have achieved ROIC and Adjusted ROIC of 27.9% and 28.6%, respectively.

See Appendix A for definitions and/or reconciliation of these metrics to results reported in accordance with GAAP. Performance measures used in the design of the executive compensation program are presented within this Compensation Discussion and Analysis section.

We remain focused on generating long-term value for our shareholders through a disciplined and balanced capital allocation strategy. In 2022, we deployed approximately $72 million towards capital projects focused primarily on growth and operational efficiency, invested $436 million in two new acquisitions and returned approximately $312 million of cash to shareholders through our dividend program and share repurchases. In the last five years, we have repurchased an aggregate amount of $954 million in shares and have increased the dividend rate by 64%, including the 2022 increase in the payout rate by 14.3%, marking 27 years of consecutive dividend increases.

TOTAL SHAREHOLDER RETURN (TSR)

In 2022, the combined value of our dividend program and the appreciation of our stock price resulted in strong total shareholder return (TSR) performance on a 1, 3 and 5-year basis. We believe that TSR is an important measure to demonstrate the Company’s value creation for shareholders and is important to our executives over the long-term. Approximately 69% of our CEO’s and 48% of our other NEO’s compensation is tied to equity-based compensation, which can be favorably impacted when the TSR increases. In this case, the value of the compensation paid to our NEOs increases in line with the appreciation received by our shareholders.

The following 3-Year (2020–2022) TSR Performance Percentile Rank chart illustrates our TSR performance compared to our peer group, the S&P Composite 500 Stock Index (S&P 500), the S&P 400, and a S&P 400 Midcap Manufacturing Index. The TSR percentile rankings show the position of our TSR performance compared to the particular group, with a 50th percentile ranking indicating median (or market) performance. Percentiles below 50 indicate below-market performance, while percentiles above 50 indicate above-market performance.

In 2022, Lincoln Electric was one of two machinery firms recognized by Investor’s Business Daily^® as a “Top 100 Best ESG Company.” The ranking recognizes companies with leading environmental, social and governance ratings, as well as stock performance.

FINANCIAL MEASURES USED FOR COMPENSATION PURPOSES

We consider various types of widely reported financial metrics to apply to our executive compensation program. Some of these financial metrics directly impact our executive compensation program, while in some cases we use the closest approximation to the metrics that we use in our compensation programs. We believe that all of these financial metrics are critical to the short-term and long-term growth and performance of our organization.

Financial metrics used to evaluate operational performance and used in our short term annual bonus (EMIP) and our long-term incentive plan designs are:

PERFORMANCE OF FINANCIAL MEASURES USED FOR COMPENSATION PURPOSES

SHORT-TERM COMPENSATION PROGRAM FINANCIAL METRIC PERFORMANCE

The following charts demonstrate our performance over the last three years in financial metrics incorporated in our short-term compensation program.

LONG-TERM COMPENSATION PROGRAM FINANCIAL METRIC PERFORMANCE

The following charts demonstrate our performance over the last three years relative to the financial metrics incorporated into our long-term compensation program: our Adjusted Net Income for Compensation Purposes and ROIC for Compensation Purposes.

The results for ROIC for Compensation Purposes are compared to our peer group, the S&P 400 Midcap Index (S&P 400), in which we participate, and the S&P 400 Midcap Manufacturing Index. The ROIC for Compensation Purposes percentile rankings show the position of our financial results compared to the particular group, with a 50th percentile ranking indicating median (or market) performance. Percentiles below 50 indicate below-market performance, while percentiles above 50 indicate above-market performance. Information is based on the most recently available public information (as accumulated by an independent third party), as of January 2023 when the analysis was performed. In our long-term incentive plan design, ROIC for Compensation Purposes is a relative measure and payout is determined based on our average performance over 3-years as compared to our peers.

PAY FOR PERFORMANCE, OBJECTIVES AND PROCESS

In designing our executive compensation program, a core philosophy is that our executives should be rewarded when they deliver financial results that provide value to our shareholders. Therefore, we have established a program that ties executive compensation to superior financial performance.

To assess pay for performance, we evaluate the relationship between CEO realizable pay and TSR performance using the ISS methodology. This allows us to understand the relative degree of alignment over a three-year period between the pay opportunity delivered to the CEO and the performance achieved by shareholders relative to our peer group. In conjunction with ISS resources, this analysis is performed by management and reviewed by management’s compensation consultant, WTW, the Compensation and Executive Development Committee (the “Committee”) and by the Committee’s independent consultant, Korn Ferry. This analysis was performed for the 2019 to 2021 period, which is the period for which both compensation and performance data was readily available for our peers.

In evaluating pay and performance alignment, the analysis focuses on CEO pay primarily as reflected in the Summary Compensation Table, with the exception of valuing equity-based awards. All stock-based awards (both time and performance-vesting) are calculated by multiplying the number of underlying shares by the closing stock price on the grant date, and option awards are calculated using the ISS Black-Scholes option pricing model. This means that for us, the CEO is evaluated based on the following compensation elements for the applicable three-year period:

The shaded area in the chart below highlights the area in which ISS has a low overall concern level. As shown in the chart below, our ranking for TSR performance and our ranking for CEO pay falls within the shaded area and demonstrates an overall alignment. Based on this analysis, the Committee is satisfied with the alignment of our CEO’s pay with the performance of the Company.

While we consider the ISS methodology in assessing pay for performance, we view it as one of the variables for evaluating pay for performance alignment. We have provided the ISS analysis in assessing pay for performance for investors that might be utilizing it in evaluating pay for performance.

2022 EXECUTIVE COMPENSATION ACTIONS

During 2022, the Committee reviewed the design of our executive compensation program to help ensure consistency with our pay for performance philosophy. Each year, the Committee monitors our executive compensation program and how it relates to our corporate performance and shareholder interests. At our 2022 Annual Meeting, we received 95% approval, based on the total votes cast, for our annual advisory say-on-pay vote to approve the compensation of our NEOs. The Committee considered this result, in connection with its review of the overall design of our executive compensation program, particularly in light of the 2025 Strategy. The Committee believes the voting results demonstrate significant support for our executive compensation program, and the Committee chose not to make any substantial changes to the existing program previously approved for 2022 specifically in response to the 2022 say-on-pay voting results. The Committee expects, however, to continue to work with its compensation consultant to monitor changes in executive compensation trends to keep our executive compensation program aligned with best practices in our competitive market.

In support of the company’s short and long-term strategy, in 2021, the Committee modified the Company’s short-term incentive plan design for 2022. Changes approved by the Committee included a revision to the formula used for calculating each executive’s annual incentive that places a focus on first achieving financial performance, then considers the impact of individual performance. Further, the Committee approved adding a Revenue metric to the Financial Metrics used in the bonus calculation.

GOOD GOVERNANCE PRACTICES

In addition to our emphasis on above-market financial performance and pay for performance, we design our executive compensation program to be current with best practices and good corporate governance. We also consider the risks associated with any particular program, design or compensation decision. We believe these assessments result in sustained, long-term shareholder value. Some of those governance practices are described in the Compensation-Related Risk section in this Proxy Statement.

The following table highlights certain of our good governance practices relative to our executive compensation program: