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Notice of Annual Meeting—May 18, 2022

and Proxy Statement

 

Dear Stockholder:

We invite you to attend the annual meeting of stockholders of Westinghouse Air Brake Technologies Corporation, doing business as Wabtec Corporation, on May 18, 2022 at 12:30 p.m. Eastern Time virtually, via a live audio webcast on the Internet at www.virtualshareholdermeeting.com/WAB2022. You will be able to attend and participate in the Annual Meeting online by visiting www.virtualshareholdermeeting.com/WAB2022, where you will be able to vote electronically and submit questions. You will not be able to attend the Annual Meeting in person. You will need the 16-digit control number on your proxy card to attend the Annual Meeting.

This booklet includes the formal notice of the meeting and the proxy statement. Pursuant to the rules adopted by the Securities and Exchange Commission, we have elected to provide access to our proxy materials over the Internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials (the “Notice”) to our stockholders. All stockholders will have the ability to access the proxy materials on a website referenced in the Notice or request a printed or e-mailed set of the proxy materials. Instructions regarding how to access the proxy materials over the Internet or to request a printed or e-mailed copy may be found in the Notice. In addition, stockholders may request proxy materials in printed or e-mailed form by mail, telephone or electronically by email on an ongoing basis.

The Notice was mailed to stockholders, and the proxy materials were first given to stockholders via Internet access, on or about April 5, 2022. On or before the time that the Notice was sent to stockholders, all materials identified in the Notice were publicly accessible, free of charge, at the website address specified in the Notice. Such materials will remain available on that website until the proxy materials for the 2023 annual meeting of stockholders are made available.

The proxy statement tells you more about the items upon which we will vote at the meeting. It also explains how the voting process works and gives information about our director candidates.

Whether or not you plan to attend the Annual Meeting, please cast your vote by proxy over the Internet by following the instructions provided in the Notice, by telephone or by requesting a paper proxy card to sign, date and return by mail. Regardless of the method used, please vote your shares so that enough shares are represented to allow us to conduct the business of the Annual Meeting. Voting over the Internet, by telephone or by proxy card if you request one does not affect your right to vote in person while you attend the virtual Annual Meeting.

Sincerely yours,

 

Albert J. Neupaver

Chairman of the Board

April 5, 2022

We have provided you this booklet and proxy materials on or about April 5, 2022 because the Board of Directors of Westinghouse Air Brake Technologies Corporation, doing business as Wabtec Corporation (“Wabtec” or the “Company”), is soliciting your proxy to vote at the Company’s 2022 annual meeting of stockholders.

Holders of our common stock as of the close of business on March 22, 2022, the record date for this Annual Meeting (the “Record Date”), may vote at the Annual Meeting. As of the Record Date, there were 184,251,524 shares of our common stock outstanding. Stockholders are not permitted to cumulate votes with respect to the election of directors. Each share of common stock is entitled to one vote for each Director nominee and on each proposal.

Registered Stockholders. If shares of our common stock are registered directly in your name with our transfer agent, you are considered a “registered stockholder” with respect to those shares and the Notice was provided to you directly by us. As the registered stockholder, you have the right to grant your voting proxy directly to the individuals listed on the proxy card or to vote live at the Annual Meeting.

Beneficial Owners. If you hold shares of our common stock in a brokerage account or by a bank or other nominee, you are considered to be the “beneficial owner” of shares that are held in “street name,” and the Notice was forwarded to you by your broker or nominee, who is considered the registered stockholder with respect to those shares. As the beneficial owner, you have the right to direct your broker, bank or other nominee as to how to vote your shares. Beneficial owners are also invited to attend the Annual Meeting. However, since a beneficial owner is not the stockholder of record, you may not vote your shares of our common stock live at the Annual Meeting unless you follow your broker's procedures for obtaining a legal proxy. If you request a printed copy of our proxy materials by mail, your broker, bank or other nominee will provide a voting instruction form for you to use.

We will be hosting our Annual Meeting via live webcast only. Any stockholder can attend the Annual Meeting live online at www.virtualshareholdermeeting.com/WAB2022. The webcast will open at 12:15 p.m. Eastern Time on May 18, 2022, and the meeting will start shortly thereafter at 12:30 p.m. Eastern Time. Stockholders may vote and ask questions while attending the Annual Meeting online. In order to be able to attend the Annual Meeting, you will need the 16-digit control number, which is located on your Notice or proxy card (if you received a printed copy of the proxy materials).

Proposal 1. As required by Wabtec’s amended and restated bylaws, each director is to be elected by a majority of votes cast with respect to that director’s election. Each stockholder will have one vote per share to vote for each Director nominee. Abstentions and broker non-votes will have no effect on the outcome of the vote with respect to this Proposal.

Proposal 2: The approval of Proposal 2 requires a favorable vote of a majority of the shares present and entitled to vote on the Proposal. An abstention will have the same effect as a vote against this Proposal. Broker non-votes will have no effect on the outcome of the vote with respect to this Proposal.

Proposal 3: The approval of Proposal 3 requires a favorable vote of a majority of the shares present and entitled to vote on the Proposal. An abstention will have the same effect as a vote against this Proposal. Broker non-votes will have no effect on the outcome of the vote with respect to this Proposal.

Approval of any other matter that properly comes before the Annual Meeting requires the favorable vote of a majority of shares present and entitled to vote on the matter, unless the matter requires more than a majority vote under statute or our amended and restated by-laws. An abstention will have the same effect as a vote against the proposal. Broker non-votes with respect to any such proposal will have no effect on the outcome of the vote with respect to that proposal. We do not expect any business to come before the Annual Meeting other than the proposals described in this proxy statement.

If your shares are held by a broker, the broker will ask you how you want your shares to be voted. If you give the broker instructions, your shares will be voted as you direct. If you do not give instructions, one of two things can happen, depending on the type of proposal. For the ratification of the independent auditor (Proposal 3), the broker may vote your shares in its discretion. For all other proposals, the broker may not vote your shares at all if you do not give instructions.

A quorum is the minimum number of shares required to be present at the Annual Meeting to properly hold an annual meeting of stockholders and conduct business under our amended and restated bylaws and Delaware law. The presence, in person at the virtual meeting or by proxy, of a majority of the issued and outstanding shares of our common stock entitled to vote on the Record Date will constitute a quorum at the Annual Meeting. Abstentions, withheld votes and broker non-votes are counted as shares present and entitled to vote for purposes of determining a quorum. As of the Record Date, March 22, 2022, we had 184,251,524 shares outstanding.

If you are a registered stockholder, there are four ways to vote:

If you are a beneficial owner, please follow the instructions from your broker, bank or other nominee to vote by Internet, telephone or mail. Beneficial owners may not vote via the Internet at the Annual Meeting unless they receive a legal proxy from their respective brokers, banks or other nominees.

Yes. If you are a registered stockholder, you can change your vote or revoke your proxy any time before the Annual Meeting by:

If you are a beneficial owner, you may revoke any prior voting instructions by contacting your broker, bank or nominee.

Proxies are solicited by and on behalf of our Board. Mr. Neupaver and Mr. DeNinno have been designated as proxy holders by our Board. When proxies are properly dated, executed and returned, the shares represented by such proxies will be voted at the Annual Meeting in accordance with the instructions of the stockholder. If no specific instructions are given, however, the shares will be voted in accordance with the recommendations of our Board as described above. If any matters not described in this Proxy Statement are properly presented at the Annual Meeting, the proxy holders will use their own judgment to determine how to vote the shares. If the Annual Meeting is adjourned, the proxy holders can vote the shares on the new Annual Meeting date as well, unless you have properly revoked your proxy instructions, as described above.

With regards to Proposal 1 (election of directors) (i.e., where a broker has not received voting instructions from the beneficial owner and for which the broker does not have discretionary power to vote on a particular matter), abstentions and broker non-votes are counted as present for purposes of determining the presence of a quorum but are not considered votes cast on Proposal 1. For Proposal 2 and Proposal 3, an abstention will have the same effect as a vote against each applicable proposal and broker non-votes will have no effect on the outcome of the vote with respect to each Proposal. Brokerage firms and other intermediaries holding shares of our common stock in street name for their customers are generally required to vote such shares in the manner directed by their customers. In the absence of timely directions, your broker will have discretion to vote your shares on our sole “routine” matter, the proposal to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year ending December 31, 2022. Absent direction from you, your broker will not have discretion to vote on Proposal 1 (election of directors) or Proposal 2 (Say-On-Pay Advisory Vote), which are “non-routine” matters.

In accordance with the rules of the U.S. Securities and Exchange Commission (the “SEC”), we have elected to furnish our proxy materials, including this Proxy Statement and our 2021 Annual Report, primarily via the Internet. On April 5, 2022, we mailed to our stockholders a Notice that contains instructions on how to access our proxy materials on the Internet, how to vote at the meeting and how to request printed copies of the proxy materials and 2021 Annual Report. Stockholders may request to receive all future proxy materials in printed form by mail or electronically by e-mail by following the instructions contained in the Notice. We encourage stockholders to take advantage of the availability of our proxy materials on the Internet to help reduce the environmental impact and cost of our annual meetings of stockholders.

We will announce preliminary voting results at the Annual Meeting. We will also disclose voting results on a Current Report on Form 8-K that we will file with the SEC within four business days after the Annual Meeting. If final voting results are not available to us in time to file a Current Report on Form 8-K within four business days after the Annual Meeting, we will provide preliminary voting results in the Current Report on Form 8-K and will provide the final results in an amendment to the Current Report on Form 8-K as soon as they become available.

The Annual Meeting will be held entirely online this year. We are excited to embrace the latest technology to provide ease of access, real-time communication and cost savings for our stockholders and our Company. Hosting a virtual meeting provides easy access for our stockholders and facilitates participation because stockholders can participate from any location around the world.

Our Board is soliciting proxies for use at the Annual Meeting. All expenses associated with this solicitation will be borne by us. We will reimburse brokers or other nominees for reasonable expenses that they incur in sending our proxy materials to you if a broker, bank or other nominee holds shares of our common stock on your behalf. In addition, our directors and employees may also solicit proxies in person, by telephone or by other means of communication. Our directors and employees will not be paid any additional compensation for soliciting proxies.

The Board recommends that you vote:

Under the proxy rules of the SEC, a person beneficially owns Wabtec common stock if the person has the power to vote or dispose of the shares, or if such power may be acquired, by exercising options or otherwise, within 60 days. The table below shows the number of shares of Wabtec common stock beneficially owned as of January 31, 2022 by our directors, nominees for director, Chief Executive Officer, Chief Financial Officer and the other named executive officers, and the directors and executive officers as a group. Each person has sole voting power and sole dispositive power with respect to the shares listed unless indicated otherwise. No directors or executive officers have pledged shares of Wabtec common stock.

The following table shows stockholders who are known to Wabtec to be beneficial owners of more than 5% of Wabtec’s common stock as of March 22, 2022.

 

Wabtec’s Board of Directors currently has ten members. The Board has determined that the number of Directors on the Board shall be no more than thirteen, and no less than seven. The Board is divided into three classes whose terms of office end in successive years. William E. Kassling, Albert J. Neupaver and Ann R. Klee, whose terms of office are expiring, have been nominated to serve for new terms ending in 2025. All nominations were made by the Nominating and Corporate Governance Committee, as further described under “The Nominating and Corporate Governance Committee” on page 21 and approved by the entire Board of Directors. Two of our directors, Mr. Lee Foster and Mr. Howell, are planning to retire in May 2022. The Nominating and Corporate Governance Committee is engaged in an ongoing board refreshment process consistent with the criteria discussed below.

Our Corporate Governance Guidelines require our directors to possess qualities and skills necessary to oversee the management of Wabtec. The Nominating and Corporate Governance Charter establishes a commitment to find nominees for membership on the Board of Directors who are of the highest possible caliber and are able to provide insightful, intelligent and effective guidance to the management of Wabtec. As part of this process, the Nominating and Corporate Governance Charter requires the Nominating and Corporate Governance Committee to ensure that the Board of Directors consists of individuals from diverse educational and professional experiences and backgrounds who, collectively, provide meaningful counsel to management. Under the Corporate Governance Guidelines, it is the responsibility of the Nominating and Corporate Governance Committee to establish, and from time to time review with the Board, the requisite skills and characteristics for new Board members. In assessing potential nominees, the Nominating and Corporate Governance Committee will take into account the following criteria:

With respect to nomination of continuing directors for re-election, the committee also reviews and considers each nominee’s contributions to the Board. The Nominating and Corporate Governance Committee’s process to recommend qualified director candidates is further described on page 21 under “The Nominating and Corporate Governance Committee.” As described above, and although the Board does not have a separate diversity policy, the Nominating and Corporate Governance Committee considers diversity as one of a number of factors in identifying nominees for director pursuant to its charter. The Board and the Nominating and Corporate Governance Committee believe it is essential that the Board members represent diverse backgrounds. In considering nominees for director, the Nominating and Corporate Governance Committee conducts inquiries into the background and qualifications of possible candidates and actively recruits qualified individuals. The Nominating and Corporate Governance Committee assesses the effectiveness of its approach as part of the annual review of its charter and the Corporate Governance Guidelines and as part of its annual review of the effectiveness of the Board and each committee of the Board.

Under our amended and restated bylaws, each director is to be elected by the vote of the majority of the votes cast at the Annual Meeting. For this purpose, a “majority of the votes cast” means that the number of shares voted “for” a director’s election exceeds 50 percent of the number of votes cast with respect to that director’s election. Votes “cast” exclude abstentions. In the event the number of director nominees for election at a meeting of stockholders exceeds the number of directors to be elected at that meeting, each director to be so elected will be elected by a plurality of the votes cast. Each director nominee has agreed to provide an irrevocable letter of resignation to the Board should such nominee fail to receive the required number of votes.

The description of each director and each nominee set forth below includes biographical information, on a director by director basis, and highlights the specific experience, qualifications, attributes, background and education of each director and each nominee that led the Board to conclude that each director or nominee should serve on the Board. In addition to the qualifications described in the biographical information set forth below, the Nominating and Corporate Governance Committee and the Board also determined that each director and each nominee possesses certain intangible attributes and skills, which led to the conclusion that each director and each nominee meets the criteria set forth in the Corporate Governance Guidelines and is qualified to serve as one of our directors. These intangible attributes and skills include, as to each nominee, integrity, the capacity to evaluate business issues and make practical and mature judgments, willingness to devote the necessary time and effort required to serve on our Board, the skills and personality to work effectively and collegially with other directors on a Board that is responsive to Wabtec’s needs, and the self-confidence and communication skills to participate effectively in Board discussions.

Your proxy will be voted “for” the election of these nominees unless you withhold authority to vote for any one or more of them. If any nominee is unable or unwilling to stand for election, your proxy authorizes us to vote for a replacement nominee if the Board names one.

Only votes “for” a candidate are counted in the election of directors. The three nominees who receive the most votes will be elected as directors, subject to the guidelines set forth on page 9 regarding any director nominee who receives a greater number of votes “withheld” from his election than votes “for” such election.

Wabtec’s business is managed under the oversight of our Board which conducts business through meetings of its members and its committees. The Board met nine times during 2021. All directors attended more than 75% of all meetings of the Board and the committees on which they served in 2021. The standing Board committees that help the Board fulfill its duties include the Nominating and Corporate Governance Committee, the Audit Committee and the Compensation and Talent Management Committee (the “Compensation Committee”). The Board also holds regularly scheduled meetings of non-employee directors. It is the Company’s policy that all directors attend the annual meeting of stockholders if reasonably possible. All directors attended the 2021 annual meeting of stockholders. The Board conducts annual self-assessments and has engaged a third party to conduct an external evaluation of the Board’s performance.

Our Corporate Governance Guidelines require a majority of the Board to be independent. For a Director to be considered an “Independent Director”, the Board must annually determine that they have no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization which has such a relationship with the Company). The basis for the Company’s determination of independence is based on the applicable New York Stock Exchange (the “NYSE”) and SEC rules, however no Director is considered to be an Independent Director if they:

The Board has reviewed the independence of its members considering these standards and any other commercial, legal, accounting and familial relationships between the directors and Wabtec and has determined that all of its members were independent during 2021, with the exception of Mr. Neupaver and Mr. Santana. Specifically, none of such independent directors has a material relationship with Wabtec, and each such director meets the Board’s categorical independence standards and the independence requirements of the NYSE listing standards. The Board’s Audit Committee, Compensation Committee, and Nominating & Corporate Governance Committee are composed entirely of directors who meet the independence requirements of the NYSE. Each member of the Audit Committee also meets the additional independence standards for Audit Committee members required by the SEC set forth above.

The Board currently has a non-executive, non-independent Chair of the Board, a separate Chief Executive Officer, and a Lead Independent Director. The Chief Executive Officer is responsible for setting the strategic direction for Wabtec and the day to day leadership and performance of the Company. The Chairman provides guidance to the Chief Executive Officer, sets the agenda for Board meetings and presides over meetings of the full Board. The Lead Independent Director, who is appointed by our independent directors, leads the meetings of our Independent Directors outside the presence of management and can be reached directly by our stockholders as set forth in Communications with the Board on page 56. The Board believes that this structure is in the best interests of Wabtec and provides clear leadership responsibility and accountability, while providing for effective corporate governance and oversight by an independent Board of strong and seasoned Directors. The Board evaluates this leadership structure annually.

Our Board of Directors appointed Mr. Lee Foster as “Lead Independent Director” in February 2021 to preside at all executive sessions of “non-management” directors during 2021, as defined under the rules of the NYSE. Our Board has also appointed Mr. Lee Foster as “Lead Independent Director” to preside at all such 2022 executive sessions.

The non-management Directors hold regular executive sessions without management in order to promote open discussion among the non-management Directors. The Board generally holds such executive sessions at every regularly scheduled Board meeting. At least one executive session each year is required to be attended only by independent directors.

The Board of Directors is responsible for overseeing and monitoring the material risks facing the Company. In its oversight role, the Board of Directors annually reviews Wabtec’s strategic plan which addresses, among other things, the risks and opportunities facing the Company. The Board also has overall responsibility for executive officer succession planning and reviews succession plans each year. The Board has delegated certain risk management oversight responsibility to the Board committees. As part of its responsibilities set forth in its charter, the Audit Committee is responsible for discussing with management Wabtec’s major risk exposures and the steps management has taken to monitor and control those exposures, including the Company’s risk assessment and risk management policies. In this regard, Wabtec’s management prepares a comprehensive risk assessment report and reviews that report with the Audit Committee twice each year. This report identifies the material business risks (including strategic, operational, cybersecurity, financial reporting and compliance risks) for the Company as a whole, as well as for each business unit and for corporate common services and identifies the controls that respond to and mitigate those risks. Wabtec’s management regularly evaluates these controls, and periodically reports to the Audit Committee regarding the controls’ design and effectiveness. The Audit Committee also receives annual reports from management on Wabtec’s ethics program and on environmental compliance. The Compensation Committee extensively reviewed the elements of compensation to determine whether any portion of compensation encouraged excessive risk taking and concluded:

The Nominating and Corporate Governance Committee annually reviews Wabtec’s Corporate Governance Guidelines and their implementation. Each committee reports to the full Board.

Although the Board does not establish specific goals with respect to diversity, the Board’s overall diversity is a significant consideration in the director nomination process. Our Board of Directors, including this year’s nominees, consists of individuals who bring valuable diversity to the Board in terms of gender, ethnicity, race, industries

represented, experience, age, and tenure. The Directors and nominees range in age from 50 to 78. Four of our Directors (including nominees) (40% of our directors) represent diversity of gender, race and ethnicity. 40% of our Directors (including nominees) have served on the Board for less than five years.

The Nominating and Corporate Governance Committee Charter was re-approved by the Committee at its February 10, 2022 meeting.

The principal functions of the Nominating and Corporate Governance Committee are to:

In addition, the Committee is committed to ensuring that all the nominees for membership on the Board of Directors are of the highest possible caliber and are able to provide insightful, intelligent and effective guidance to the management of the Company and that the governance of the Company is in full compliance with law, reflects generally accepted principles of good corporate governance, encourages flexible and dynamic management without undue burdens and effectively oversees and monitors the risks of the business and operations of the Company. With respect to Board refreshment, the Committee is seeking potential directors to fill anticipated vacancies due to Mr. Lee Foster and Mr. Howell reaching the mandatory retirement age. The Committee has engaged an external search firm to assist in its identification of diverse and highly qualified potential board candidates.

The Committee met five times during 2021. The members of the Nominating and Corporate Governance Committee in 2021 were Mr. Lee Foster, who served as the Chair starting in August of 2020, Mr. Erwan Faiveley (who resigned from the Board in May of 2021), Ms. Harty, Mr. Hehir, Mr. Howell, Ms. Klee, Mr. Banks and Mr. Byron Foster (who joined in July of 2021), all of whom were independent, as independence for such members is defined in the listing standards of the NYSE and the rules of the SEC.

The Committee will consider director nominees recommended by stockholders. Stockholders wishing to recommend a director candidate for consideration by the Committee can do so by writing the Secretary of Wabtec at 30 Isabella Street, Pittsburgh, PA 15212 and providing the information required under our amended and restated bylaws, including, but not limited to the candidate’s name, biographical data and qualifications. Any such recommendation should be accompanied by a written statement from the individual of their consent to be named as a candidate and, if nominated and elected, to serve as a director. No candidates for Board membership have been put forward by stockholders for election at the 2022 annual meeting of stockholders. Our amended and restated by-laws require that for a stockholder to recommend a director nominee, notice in writing must be delivered to the Secretary of Wabtec no later than the 60th day and no earlier than the 90th day prior to the first anniversary of the previous year’s annual meeting proxy statement. Our amended and restated bylaws also permit a stockholder, or a group of up to 20 stockholders, that has owned at least three percent of our outstanding Common Stock for at least three years to nominate and include in our proxy statement candidates for our Board, subject to certain requirements. Each stockholder, or group of stockholders, may nominate candidates for director, up to a limit of the greater of two or 20 percent of the number of directors on the Board. Any nominee must meet the qualification standards listed in our amended and restated bylaws.

In evaluating candidates for the Board, the Nominating and Corporate Governance Committee considers the entirety of each candidate’s credentials. In doing so, the Committee identifies candidates of requisite skills and characteristics to be found in individuals qualified to serve as members of the Board of Directors who collectively provide meaningful counsel to management. As part of this process, a goal of the Committee is ensuring that the Board of Directors consists of individuals from diverse backgrounds (including diversity of gender, race, and ethnicity) and experience who, collectively, provide meaningful counsel to management. In order to achieve this goal, the Committee seeks and considers diverse candidates, inclusive of gender, race and ethnicity. The Committee also considers the candidate’s character, integrity, experience, understanding of strategy and policy-setting and reputation for working well with others. In connection with this evaluation, the Nominating and Corporate Governance Committee determines whether to interview the prospective nominee and, if warranted, one or more members of the Committee, and others as appropriate, interview prospective nominees. After completing this evaluation and interview, the Nominating and Corporate Governance Committee makes a recommendation to the full Board as to the persons who should be nominated by the Board, and the Board determines the nominees after considering the recommendation and report of the Nominating and Corporate Governance Committee. If candidates are recommended by the Company’s stockholders, such candidates are evaluated using the same criteria. With respect to nomination of continuing directors for re-election, the individual’s contributions to the Board are also considered.

The Committee is also charged with oversight of the evaluation of the Board of Directors and management. In this regard the Committee evaluates, and reports to the Board of Directors, the effectiveness of the Board of Directors (as a whole) and each Committee of the Board of Directors (as a whole) (including, without limitation, the effectiveness of the Compensation Committee in its process of establishing goals and objectives for, and evaluating the performance of, the Chief Executive Officer and the other officers of the Company). In this process, the Committee receives comments from all Directors and reviews each Committee’s evaluation of its performance. The Committee may also obtain such external evaluations as it deems appropriate.

To further our Board of Directors’ commitment to oversight and accountability of environmental and social issues, the Board established the Environment, Social and Governance Subcommittee (the “ESG Subcommittee”) of the Nominating and Corporate Governance Committee, chaired by Board member Ms. Klee and includes board members Mr. Byron Foster and Mr. Howell. The ESG Subcommittee supports Wabtec’s on-going commitment to environmental, social and governance (“ESG”) matters relevant to Wabtec including complying with all applicable laws and regulations affecting the health and safety of our employees and stakeholders, as well as protection of the environment (including climate) and other public policy matters.

In particular, the ESG subcommittee is tasked with:

Additional details regarding the ESG Subcommittee’s duties and responsibilities can be found in the Nominating and Corporate Governance Committee Charter located at https://ir.wabteccorp.com/investor-relations.

The Audit Committee reviewed and approved the continued use of its charter at its February 10, 2021 meeting.

The Audit Committee provides assistance to the Board in fulfilling the Board’s oversight responsibility to the stockholders, potential stockholders, the investment community, and others relating to the integrity of the Company’s financial statements, the financial reporting process, the systems of internal accounting and financial controls, the performance of the Company’s internal audit function and independent auditors, the independent auditor’s qualifications and independence, the Company’s compliance with ethics policies and legal and regulatory requirements, and the Company’s enterprise risk management review and assessment.

In discharging its oversight role, the Audit Committee is empowered to investigate any matter brought to its attention with full access to all books, records, facilities, and personnel of the Company and has the authority to engage independent counsel and other advisers, including accountants, as it determines necessary to carry out its duties.

The Audit Committee is directly responsible for appointing, compensating, retaining and overseeing the work of the independent registered public accounting firm engaged by Wabtec. The Audit Committee has established procedures for the receipt, retention and treatment of complaints received by Wabtec regarding accounting, internal controls or auditing matters and the confidential anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

The Audit Committee met five times in 2021. The members of the Audit Committee in 2021 were, Mr. Lee Foster, Ms. Harty, Mr. Hehir, Mr. Faiveley (until his resignation in May of 2021) and Mr. Byron Foster (appointed July of 2021). Ms. Harty is the Chairperson of the Audit Committee. Each of the foregoing members of the Audit Committee during 2021, and currently, is independent, as independence is defined in the rules of the SEC and in the listing standards of the NYSE. The Board has determined that each of Ms. Harty, Mr. Lee Foster and Mr. Hehir qualifies as an “audit committee financial expert” as defined in the regulations of the SEC.

The Audit Committee is responsible for reviewing Wabtec’s financial reporting process on behalf of the Board of Directors. Management of the Company has the primary responsibility for the financial statements and the reporting process, including the system of internal controls. In the performance of its oversight function, the Audit Committee meets with management periodically to consider the adequacy of the Company’s internal controls and the objectivity of its financial reporting. The Audit Committee meets privately with the independent registered public accountants, who have unrestricted access to the Audit Committee. Specifically, the Audit Committee has reviewed and discussed with management and the independent registered public accountants the Company’s consolidated financial statements as of and for the fiscal year ended December 31, 2021.

The Audit Committee has also discussed with the independent registered public accountants the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the Securities and Exchange Commission.

Furthermore, the Audit Committee received and reviewed the written disclosures and the letter from the independent registered public accountants required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant's communications with the Audit Committee concerning independence and have discussed with the independent registered public accountants their independence.

Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that Wabtec’s audited financial statements, as of and for the fiscal year ended December 31, 2021, be included in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2021, to be filed with the Securities and Exchange Commission.

Respectfully submitted,

Linda A. Harty, Chair

Byron Foster

Lee B. Foster, II

Brian P. Hehir

The Compensation Committee adopted, and the Board approved an amended committee charter which included changing the name of the Compensation Committee to the Compensation and Talent Management Committee in February 2022.

The Compensation Committee provides assistance to the Board relating to the compensation of Wabtec’s officers and directors. The Compensation Committee has authority, pursuant to its charter, to make recommendations to the Board, which then establishes compensation. The Compensation Committee’s principal responsibilities include:

The Compensation Committee members in 2021 were Mr. Banks, Ms. Klee, Mr. Hehir, Mr. Howell and Mr. Byron Foster (appointed July of 2021), all of whom were independent, as independence for such members is defined in the rules of the SEC and the listing standards of the NYSE. In addition, the Compensation Committee members each qualify as “outside directors” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended. Mr. Hehir served as the Compensation Committee’s Chair. The Nominating and Corporate Governance Committee recommends the Compensation Committee members who are approved by the full Board of Directors. The Compensation Committee met six times in 2021.

The Compensation Committee reviews our executive compensation programs and recommends changes or adjustments to the Board, which then establishes these items. Base salaries and bonus targets are established at the beginning of the fiscal year. Base salaries depend mainly on the executive officer’s position and responsibility, while cash bonuses are based on pre-established performance factors. These factors were established at the beginning of the year for 2021 and include (i) financial performance indicators measuring earnings per share, earnings before interest and taxes, and cash from operations; and (ii) a personal performance indicator which measures whether the individual executive attained certain quantitative and measurable goals established for that executive.

Executive officers also receive long-term incentive compensation. With respect to the long-term incentive portion of executive compensation, the Compensation Committee has discretion to grant equity-based, long-term incentive awards under our 2011 Stock Incentive Plan, as amended and restated (the “2011 Stock Incentive Plan”). Such awards take the form of restricted share awards, performance units and stock options. The performance units are paid three years after award based on achieving a rolling three-year performance metric established at award, and the restricted shares and options vest in 1/3 increments on March 1 of each succeeding year. The Compensation

Committee bases the amount of the award upon the executive’s job level, as well as other factors. These factors include benchmarking the total compensation an executive may earn to ensure it is competitive, compensating executives in a “pay for performance” manner and aligning the interests of the executives with the interests of the stockholders. The Compensation Committee also reviews the ratio of total compensation to total target cash compensation to ensure that the mix of long-term compensation is appropriate for each executive. See “Long-Term Incentive Compensation” on page 37 for additional details.

The Chief Executive Officer and Chief Human Resources Officer suggest guidelines in discussions with the Compensation Committee regarding executive compensation. They provide recommendations and information regarding the competitiveness of the industry, key employees, performance of individuals, succession planning and other relevant data to the committee. The Chief Executive Officer is not present during any discussions concerning his own compensation. The Compensation Committee also has the authority to retain compensation consultants, advisors and legal counsel as it deems necessary and has the sole authority to approve such consultants’ fees, which are payable by the Company. The Compensation Committee engaged the consulting firm Pay Governance, LLC (“Pay Governance”) during 2021. During its engagement, Pay Governance provided the following services: (i) reviewed and assessed the Company’s current compensation practices for executives; (ii) reviewed the current peer group and made recommendations to update the peer group; (iii) reviewed and provided a pay for performance assessment of Chief Executive Officer compensation; (iv) provided benchmarking of peer group and relevant industry data; (v) provided data and recommendations associated with a review of the long-term incentive plan; and (vi) provided data and recommendations on changes to the annual cash incentive program. In addition, Pay Governance reviewed and assessed the competitiveness of compensation provided to non-employee members of the Company’s Board of Directors. This review included benchmarking of the Peer Group and relevant industry data.

During 2021, Wabtec had no interlocking relationships in which (i) an executive officer of Wabtec served as a member of the compensation committee of another entity, one of whose executive officers served on the Compensation Committee of Wabtec; (ii) an executive officer of Wabtec served as a director of another entity, one of whose executive officers served on the Compensation Committee of Wabtec; or (iii) an executive officer of Wabtec served as a member of the compensation committee of another entity, one of whose executive officers served as a director of Wabtec. No member of the Compensation Committee was at any time during the 2021 fiscal year or at any other time an officer or employee of the Company.

The Compensation Committee of the Board of Directors has reviewed and discussed the Compensation Discussion and Analysis included on pages 29 through 50 of this proxy statement with management.

Based on this review and discussion, the Compensation Committee recommends to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement, and incorporated by reference in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC.

Respectfully submitted,

Brian P. Hehir, Chair

Lee C. Banks

Michael W. D. Howell

Ann R. Klee

Ongoing engagement with our stockholders is important to us. We value our stockholders’ views and their input is important. Our Investor Relations and Finance teams are dedicated to leading our engagement efforts and collaborating with Wabtec’s management teams and subject matter experts in order to provide appropriate resources for engagement with our stockholders. Our engagements with stockholders have been constructive and have provided management and the Board with insights on issues and initiatives that are important to our stockholders and other stakeholders.

We communicate with our stockholders through a variety of means, including direct interface, investor presentations, investor conferences, analyst meetings, our website, and publications we issue. We also initiate formal outreach

efforts in the months prior to our annual meeting of stockholders. Through that process, we contact stockholders and invite them to engage in discussions with our senior management team and subject matter experts on a variety of topics, including the stockholders’ priorities and interests, our proxy statement disclosures, stockholder proposals, and company strategy. In 2021, conversations with stockholders focused on the following key areas:

Following our annual meeting, our engagement efforts continue so that we may follow up on matters brought to our attention and/or discuss new issues of interest. We also respond routinely to individual stockholders and other stakeholders who inquire about our business. Input from our stockholders helps us formulate an appropriate action plan for addressing certain issues.

This year, we released our 2021 Sustainability Report, which highlights Wabtec’s accomplishments and commitments to building a more responsible and sustainable future. Wabtec established the following Sustainability Principles to guide our sustainability strategy:

Our 2021 Sustainability Report outlines a series of goals to improve our performance on global environmental, social, and governance matters, and drive a better future for people and the planet. The report also shares notable actions taken by Wabtec to advance its sustainability strategy.

The report can be found at www.wabteccorp.com/sustainability.

In addition, and to further our Board of Directors’ commitment to oversight and accountability of environmental and social issues, the Board established the ESG Subcommittee of the Nominating and Corporate Governance Committee, chaired by Board member Ms. Klee. The ESG Subcommittee supports Wabtec’s on-going commitment to environmental, health and safety matters relevant to Wabtec including complying with all applicable laws and regulations affecting the health and safety of our employees and stakeholders, as well as protection of the environment.

Details of the ESG Subcommittee’s duties and responsibilities can be found in the Nominating and Corporate Governance Committee Charter located at https://ir.wabteccorp.com/investor-relations.

Wabtec’s 2021 Sustainability Report is not a part of this proxy statement. The report is not “soliciting material,” is not deemed filed with the SEC, and is not to be incorporated by reference into any of Wabtec’s filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this proxy statement and irrespective of any general incorporation language therein.

 

As required under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd- Frank Act”), we are providing our stockholders with a non-binding vote to approve our executive compensation programs and arrangements in accordance with Section 14A of the Exchange Act. In 2017, our shareholders indicated their approval of the Board of Directors’ recommendation that we solicit an advisory vote such as this on an annual basis. Our Board of Directors has adopted a policy that is consistent with that preference and, accordingly, we are providing our stockholders with an opportunity to vote on this proposal at this Annual Meeting. A “say on-frequency” vote is required every six years, and as such, our next say-on-frequency vote is expected to occur in 2023.

As described in greater detail under the heading “Compensation Discussion and Analysis,” on page 29 we seek to closely align the interests of our named executive officers with the interests of our stockholders. Our compensation programs are designed to reward our named executive officers for the achievement of short-term and long-term strategic and operational goals and the achievement of increased total stockholder return, while at the same time avoiding the encouragement of unnecessary or excessive risk-taking. The overall objectives of our executive compensation program are to (i) enable us to attract, motivate and retain key executive talent essential to the achievement of our short-term and long-term business objectives; (ii) provide compensation competitive with others in our industry; (iii) reward senior executive officers in a “pay for performance” manner for accomplishment of pre-defined business goals and objectives; and (iv) align the interests of our executives with our stockholders. A significant portion of total executive compensation is variable compensation linked to corporate, business unit and individual performance. Our objective is to provide a significant portion of an executive’s total compensation in a form that is contingent upon achieving established performance goals that are intended to align the executives’ interests with those of our stockholders. In regard to compensation based on long-term performance, our objective is to provide a significant portion of such compensation in the form of equity awards.

Pursuant to the SEC rules, we are asking you to approve the 2021 compensation of the named executive officers, as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K of the SEC, including the Compensation Discussion and Analysis, the compensation tables and other narrative executive compensation disclosures.

Under the Dodd-Frank Act and the related SEC rules, your vote on this resolution is an advisory or “non-binding” vote. This means that the purpose of the vote is to provide stockholders with a method to give their opinion to the Board of Directors of Wabtec about certain issues, like executive compensation. None of the Board, its committees or Wabtec is required by law to take any action in response to the stockholder vote. However, the Board values our stockholders’ opinions, and the Board intends to evaluate the results of this year’s vote carefully when making future decisions regarding compensation of the named executive officers. The stockholder advisory vote in connection with our 2021 annual meeting received over 90% approval by our stockholders, indicating support of our compensation programs and policies. We believe that providing our stockholders with an advisory vote on our executive compensation program will further enhance communication with our stockholders, and it meets our obligations under the Dodd-Frank Act and the SEC’s rules.

This proposal is adopted if a majority of the shares present in person or by proxy vote for the proposal. Because the total shares voted “for,” “against,” or “abstain” are counted to determine the minimum votes required for approval, if you abstain from voting, it has the same legal effect as if you vote against. If a broker limits the number of shares voted on the proposal on its proxy card or indicates that the shares represented by the proxy card are not being voted on the proposal, it is considered a broker non-vote. Broker non-votes are not counted as a vote or used to determine the favorable votes required to approve the proposal.

The Board recommends that you approve the following resolution:

RESOLVED, that the stockholders approve the 2021 compensation of the named executive officers, as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K of the SEC, including the Compensation Discussion and Analysis, the compensation tables and other narrative executive compensation disclosures.

As of December 31, 2021, our named executive officers (“NEOs”) were:

In connection with the termination of his employment, Mr. Dugan ceased being Executive Vice President and Chief Financial Officer effective October 1, 2021. Mr. Olin became the Company’s Executive Vice President and Chief Financial Officer effective October 1, 2021. See “2021 Severance of Mr. Dugan” on page 50.

This Compensation Discussion and Analysis should be read in conjunction with the tabular and narrative disclosures beginning on page 29 of this Proxy Statement. See “Executive Compensation Philosophy and Objectives” on page 32 and the tables that follow for more information regarding our executive compensation programs.

In 2020, Wabtec implemented changes to our compensation programs as a result of the Covid-19 pandemic (“COVID”). These included preliminarily freezing salaries for all salaried employees, subsequently paying merit increases in a lump sum, and modifying the metrics and weightings associated with our Annual Cash Incentive Program.

As Wabtec re-evaluated our compensation programs in 2021, the Company made the decision to re-implement the annual merit increase process for all employees, modified our Annual Cash Incentive Plan back to similar design and metrics utilized prior to the pandemic and made adjustments to our 2019 - 2021 long term incentive plan. The modifications included the following:

Annual Cash Incentive Plan

EPS means our “adjusted earnings per diluted share” as described in our 2021 year-end earnings release included with our Form 8-K filed on February 16, 2022. The amount is based on our GAAP earnings per diluted share, adjusted for amortization expense, certain restructuring costs and other non-recurring items detailed in the earnings release.

Cash from operations means our “adjusted cash flow” based on our GAAP cash flow from operations, adjusted for certain restructuring costs and other non-recurring items detailed in our earnings release included with our Form 8-K filed on February 16, 2022.

EBIT means our “adjusted earnings before interest and taxes” (as described in our 2021 year-end earnings release included with our Form 8-K filed on February 16, 2022). The amount is based on our GAAP income from operations, adjusted for amortization expense, certain restructuring costs and other non-recurring items detailed in the earnings release.

The modifications to our Annual Cash Incentive Plan are discussed in more detail below in the “Components of Compensation” beginning on page 35.

For 2021, bonuses were earned under the plan at 144.81% of target for Mr. Santana, Mr. Olin, Mr. DeNinno, Mr. Gebhardt, and Mr. Dugan. Mr. Schweitzer’s bonus was earned at 137.52% of target.

In its deliberations, due to the impact of COVID on the business, the Compensation Committee also determined that modifications were necessary to the 2019 – 2021 long-term incentive program. Rather than having one three-year performance period, the Compensation Committee decided to split the performance periods into three separate periods: one for 2019, one for 2020 and one for 2021. The performance measurement of economic profit did not change. Performance for each period is measured separately, and the payout is determined by averaging the payout percentages of the three separate performance periods. The economic profit goal was achieved at target for 2019, but not achieved for 2020 or 2021. Therefore, payouts for the 2019 - 2021 performance period were earned at 33% of target on three-year economic profit goals established in February 2019. The modifications to our 2019 – 2021 long-term incentive program are discussed in more detail below in the “Components of Compensation” beginning on page 35.

The Compensation Committee has implemented the following best practices with respect to the executive compensation program:

In 2021, Wabtec delivered strong financial performance driven by growth in both Freight and Transit segments. Sales increased 3.5 percent to $7.82 billion and cash flow from operations was a record $1.07 billion. We achieved an adjusted EBIT margin of 15.9 percent and ended the year with adjusted earnings per diluted share of $4.26, excluding certain expenses detailed later in this report.

We aggressively mitigated the impacts of escalating metals, labor and logistics costs; components shortages; and supply chain disruptions. Additionally, we accelerated integration synergies, achieving $250 million of run-rate synergies in the third quarter of 2021, more than one year earlier than forecasted. These actions continue to position the Company for long-term profitable growth.

Our balance sheet was strengthened by reducing debt by $181 million, while keeping a focus on our liquidity position, which at end of year stood at $1.67 billion in cash, cash equivalents, and available credit facilities. We executed on our strategic priorities and returned $392 million of capital to shareholders via dividends and share repurchases. Our multi-year backlog also remained strong at $22.17 billion, giving us good visibility into 2022 and beyond.

Key business highlights include:

 

The Compensation Committee reviewed the results of the 2021 stockholder advisory vote on executive officer compensation and incorporated the results as one of the many factors considered in connection with the discharge of its responsibilities. At our 2021 Annual Meeting of Stockholders, over 90% of the votes cast approved the compensation program described in our 2021 proxy statement. The Compensation Committee interpreted this level of support as affirmation of the design and objectives of our executive compensation programs; however, the Compensation Committee continues to monitor best practices and the practices of our peers to improve our compensation program.

Overview. This compensation discussion describes the material elements of compensation awarded to, earned by, or paid to each of our executive officers who served as named executive officers during 2021. This discussion focuses primarily on the fiscal year 2021 information contained in the following tables and related footnotes and narrative. We discuss compensation actions taken prior to 2021 or in 2022 if we believe it provides relevant information.

The principal elements of our executive compensation program are base salary, annual cash incentives, and long-term equity incentives in the form of restricted stock awards and units, stock options and performance units. Our other benefits and perquisites consist of life and health insurance benefits, social and health club dues, and a qualified 401(k) savings plan (including company matching contributions). Our philosophy is to position the aggregate of these elements at approximately the median of that paid to executives of our Peer Group with similar responsibilities. To ensure that the Company is able to attract and retain highly talented and diverse executives, the Company benchmarks executive compensation using a reputable compensation survey of similar-sized companies and also uses available proxy disclosure compensation information of a group of similar-sized manufacturing companies. This group was reviewed and updated in late 2020. This peer group provided insights to the Compensation Committee as it made compensation decisions in 2021.

Our Peer Group represents a group of manufacturing companies who generally align with the following criteria:

This peer group was used for relative performance purposes for the Company’s 2021 long-term incentive plan and for use in making 2021 compensation decisions:

During fourth quarter of 2021, the Compensation Committee, with the assistance of its independent consultant, reviewed the peer group list. Twenty (20) of the 21 companies remained unchanged. The Compensation Committee removed Navistar as it was acquired in July 2021.

Objectives and Philosophy. The overall objectives of our executive compensation program are to (i) enable us to attract, motivate and retain key executive talent essential to the achievement of our short-term and long-term business objectives; (ii) provide compensation competitive with others in our industry; (iii) reward senior executive officers in a “pay for performance” manner for accomplishment of pre-defined business goals and objectives; and (iv) align the interests of our executives with our stockholders. A significant portion of total executive compensation is variable compensation linked to corporate, business unit and individual performance. Our objective is to provide a significant portion of an executive’s total compensation in a form that is contingent upon achieving established performance goals. In regard to compensation based on performance, our objective is to provide a significant portion of such compensation in the form of equity awards.

In 2021, our named executive officers’ compensation, based on actual amounts awarded, was allocated as follows (excluding Mr. Dugan because he was terminated during the year):

 

In setting base salaries at the beginning of the year, the Compensation Committee generally reviews benchmark information about compensation levels in Wabtec’s industry and among its peer group based on the position and responsibility of the particular executive provided by the Compensation Committee’s independent consultant. The Compensation Committee uses benchmarking to establish base salaries as discussed below. The cash bonus for 2021 is a cash award determined by the Compensation Committee based on pre-established performance factors. These factors are established at the beginning of the year and include (i) a financial performance indicator measuring EPS, EBIT, and cash from operations; and (ii) a personal performance indicator which measures whether the individual executive attained certain quantitative and measurable objectives which are tied to the overall company strategic objectives for that year. Long-term incentives in the form of stock options, restricted stock, restricted stock units and performance units are granted to provide the opportunity for long-term compensation based upon the performance of Wabtec and its ability to meet its long-term goals and objectives.

Compensation Committee. Executive officer compensation is administered by the Compensation Committee. The Compensation Committee approved the 2021 compensation programs for executive officers, including base salaries, cash bonuses and equity awards, described in this compensation discussion and analysis and recommended them to the full Board, which then approved them. Our Board of Directors delegates to the Compensation Committee the direct responsibility for, among other matters:

Role of Compensation Experts. Pursuant to its charter, the Compensation Committee is authorized to engage compensation consultants to assist it with its duties. The Compensation Committee has the sole authority to engage any outside counsel or other experts or consultants to assist it in the evaluation of compensation of our directors and executive officers, including the sole authority to approve such consultants’ fees and other retention terms. The Compensation Committee may also obtain advice from legal, accounting, human resources and other advisors as it deems necessary. The Compensation Committee engaged the consulting firm Pay Governance during 2021. During its engagement, Pay Governance provided the following services: (i) reviewed and assessed the Company’s current compensation practices for executives; (ii) reviewed the current peer group and made recommendations to update the peer group; (iii) reviewed and provided a pay for performance assessment of the Chief Executive Officer compensation; (iv) provided benchmarking of peer group and relevant industry data; (v) provided data and recommendations associated with a review of the long term incentive program; and (vi) provided data and recommendations on changes to the annual cash incentive program.

Role of Our Executive Officers in the Compensation Process. The Chief Executive Officer and the Executive Vice President, Chief Human Resources Officer suggest guidelines in discussions with the Compensation Committee regarding executive compensation. They provide recommendations and information regarding the competitiveness of the industry, key employees, performance of individuals, succession and other relevant data to the Compensation Committee. The Chief Executive Officer is not present during any discussions concerning his own compensation.

Our 2021 compensation program elements were primarily structured to reward our executive officers for achieving certain financial and business objectives.

Base Salaries. Base salaries for our executive officers are reviewed annually and reflect the executive’s role and responsibility relative to the competitive market. In defining the competitive market, the Company uses two different benchmarks, compensation information representing our Peer Group and broader benchmark compensation data based on a survey of companies that are similarly sized in terms of revenue. Individual salaries may be above or below the competitive median based on the individual’s contribution to business results, length of time in role, capabilities and qualifications, potential and the importance of the individual’s position to our success. Due to the impacts of COVID, named executive officer base salaries were adjusted in December 2020 to reflect the base salary rates originally approved at the beginning of 2020 before the pandemic. None of Wabtec’s named executive officers were granted base salary increases in 2021.

The Compensation Committee is dedicated to ensuring competitive compensation for each of Wabtec’s key employees and believes that current base salaries are in line with comparable industry practices.

Annual Cash Incentive Awards. Our annual incentive award plan is intended to: (i) compensate participants directly if personal, strategic and financial performance targets are achieved and (ii) reward participants for performance on those activities that are most directly under their control and for which they are held accountable. Corporate, business unit and individual performance goals under the annual incentive plan are linked to our annual business plan and budget. The actual amount of cash bonuses is a function of the Company’s overall financial performance, the participant’s individual performance and Board approval.

The cash bonus targets for 2021 for each of the named executive officers as a percentage of base salary were:

 

For 2021, Mr. DeNinno’s bonus target was increased from 70% of his base salary to 80% of his base salary to more closely align with market practice and his contributions to the business.

Overall, total target cash compensation (the sum of salary and target cash bonus) for our executive officers is competitive with market practice for similar executive positions in similar companies when performance goals under the annual cash bonus plan are achieved.

Entering 2021, the Company re-evaluated the changes it had made to the cash bonus incentive program as a result of the impact of COVID on the business in 2020. After careful evaluation and review, design of the 2021 cash incentive program was reverted back to a plan design similar to what the Company had adopted at the beginning of 2020. 2021 cash bonuses are based upon the success of two factors:

The weighted average results of the two measurements are then combined and called the combined performance factor or “CPF”. The cash bonus formula is based on the product of the participant’s base salary, the participant’s target cash bonus percentage, and the CPF. If both the financial performance and the applicable personal performance results are achieved, the named executive officers will earn 100% of their target cash bonus. Each metric includes a threshold level of performance (generally, 80% of the target goal at which a minimum 25% payout will be made), below which no payout will be made on the metric. Each metric also includes a maximum level of performance (generally, 125% of the target goal), at which a maximum 225% payout will be made on that metric. We believe that this philosophy encourages Wabtec and our executives to establish ambitious goals and that the program promotes teamwork, productivity and profitability. Target cash bonuses and performance factors were approved by the Compensation Committee at its meeting in February 2021.

The table below provides both the 2021 financial metrics and our performance achieved in 2021 for our corporate wide executives including, Mr. Santana, Mr. Olin, Mr. DeNinno, and Mr. Gebhardt:

Mr. Schweitzer’s compensation included certain performance metrics of the Freight Services Group. The metrics were established by the Compensation Committee. The table below provides the Corporate, Freight Services and individual metrics for Mr. Schweitzer.

EPS means our “adjusted earnings per diluted share” as described in our 2021 year-end earnings release included with our Form 8-K filed on February 16, 2021. The amount is based on our GAAP earnings per diluted share, adjusted for amortization expense, certain restructuring costs and other non-recurring items detailed in the earnings release.

Cash from operations means our “adjusted cash flow” based on our GAAP cash flow from operations, adjusted for certain restructuring costs and other non-recurring items detailed in our earnings release included with our Form 8-K filed on February 16, 2022.

EBIT means our “adjusted earnings before interest and taxes” (as described in our 2021 year-end earnings release included with our Form 8-K filed on February 16, 2022. The amount is based on our GAAP income from operations, adjusted for amortization expense, certain restructuring costs and other non-recurring items detailed in the earnings release).

EBIT Margin means our “adjusted earnings before interest and taxes” (as described in our 2021 year-end earnings release included with our Form 8-K filed on February 16, 2022, with the amount being based on our GAAP income from operations, adjusted for amortization expense, certain restructuring costs and other non-recurring items detailed in the earnings release) divided by consolidated revenue.

Acquisition Goal represents the summation of the average of the purchase price and annualized revenue for each acquisition completed in 2021.

Tier 4 FL/Y <2.5 is the weighted average calculating the number of times a Tier 4 locomotive is out of service or encounters an unscheduled maintenance service in a calendar year. <2.5 calculates to a locomotive failing less than 2.5 times a year. For this purpose, a Tier 4 locomotive is a locomotive that meets the Environmental Protection Agency (EPA) emission level standard.

Long-Term Incentive Compensation. Our Compensation Committee administers our long-term incentive compensation through our 2011 Stock Incentive Plan, under which we grant stock options, restricted stock, restricted stock units and performance units.

Our long-term incentive compensation program seeks to align the interests of our executives with our stockholders. We have typically granted stock options and restricted stock in February or March of the applicable year. We have

awarded options to purchase our common stock to executive officers at the fair market value (average of the high and low price) of our common stock at the grant date. We have not re-priced or back-dated any option awards. The vesting schedule for each grant of options and restricted stock is determined by the Compensation Committee. In recent years, the Compensation Committee has provided that the awards generally will vest in annual equal installments over three years. In March 2021, we granted both restricted stock and stock options to all named executive officers as part of their long-term compensation with the Company (except for Mr. Olin who joined the Company in October 2021). The grant date fair value of those awards is reflected in the Summary Compensation Table on page 42.

The Company also administers a rolling three-year long-term incentive program using performance units. A performance unit is equal to a share of Wabtec common stock. This program is designed to reward executives for meeting or exceeding pre-established, objective financial performance goals over a three-year performance period. The program is structured as a rolling three-year plan; each year starts a new three-year performance cycle with the most recently commenced cycle being 2022-2024.

For awards made for the 2019-2021 performance period, the awards are earned based on economic profit growth goals. Economic profit is a measure of the extent to which the Company produces financial results in excess of its cost of capital. Payouts range from 25% of target (for performance at 50% of target) to 200% of target (for performance at or above 150% of target). Specific Economic Profit Goals for the 2019 to 2021 plan were as follows:

While the award was originally intended to measure Economic Profit over a cumulative three-year period, the Compensation Committee decided in 2021 to split the performance periods into three one-year periods (2019, 2020 and 2021) and then take the average payout percentage of the three single periods. This approach allowed the Compensation Committee to recognize strong performance in 2019 prior to COVID, which included the efforts of new participants in the plan who formerly worked for GE Transportation, without having to adjust the target performance goals. Based on this approach the actual payout was 33.0%.

For the 2019-2021 performance period, the below named executive officers received the payouts as set forth below in March of 2022 which represented 33.0% of the target amount.

Mr. Olin and Mr. Gebhardt did not participate in the plan as they were not Wabtec employees at the time these awards were granted.

For the 2020-2022 and 2021–2023 awards, the Compensation Committee made adjustments to the long-term incentive plan program performance metrics reflecting the significant changes to the Company with the completion of the GE Transportation transaction. Rather than utilizing the single metric of Economic Profit, the Compensation Committee established the use of three metrics: 1) three-year average annual Return on Invested Capital (“ROIC”);

2) three-year average annual Cumulative Cash Conversion (“CCC”); and 3) Relative Total Stockholder Return (“RTSR”). ROIC and CCC results are weighted at 50% respectively. The combined results from the two goals are then subject to modification upward or downward (+/-10%) based on Wabtec’s RTSR results. For purposes of these awards:

Beginning with the 2022 awards, if Wabtec achieves the maximum three-year cumulative ROIC and CCC results, a participant can earn a maximum number (equal to 200% of the target level) of performance units. The RTSR modifier cannot increase the payout above 200% of the target. If Wabtec achieves the threshold three-year ROIC and CCC cumulative goals, a participant can earn a threshold number (equal to 25% of the target level) of performance units which would be subject to modification up or down based on RTSR. Payouts would range from 25% of target for performance at 75% of target to 200% of target for performance at or above 125% of target. No performance units would be earned for performance below the three-year cumulative ROIC and CCC and thresholds.

The long-term incentive program is intended to encourage the long-term stability of Wabtec’s management by establishing ambitious goals designed to promote the long-term productivity and profitability of the Company. If a program participant leaves the Company voluntarily, or is terminated for cause, they are not eligible to receive any performance units he or she may have earned under the program. If a program participant leaves the Company for death, disability, or retirement, their payout may be pro-rated in accordance with the amount of time they participated in the program relative to the performance period. These goals were based on a range of considerations including expected demand in Wabtec’s key end user markets, investor expectations and management’s business plan which includes year over year growth.

Equity awards made in 2021 to all named executive officers are detailed under the table “2021 Grants of Plan Based Awards” on page 44. Options and restricted stock are generally granted to employees, including our executive officers, each February as part of their long-term compensation. Additional awards may be made throughout the year to new hires, current employees in connection with promotions, and key management obtained through acquisitions. For 2021, Mr. Olin received a new hire award of restricted shares on his hire date (vesting on the third anniversary of the grant date) and will begin participating in the regular long-term incentive compensation program in 2022. We vary the relative amounts of options and restricted stock granted in a given year based on a number of factors including the overall performance of the Company, the stock price and retention of key management. The primary purposes of the long-term incentive program are to align the interests of executive officers and other key employees with those of our stockholders, to attract and retain key executive talent and to provide an incentive to meet and exceed long-term financial goals. Employees eligible for the long-term incentive program include those who are determined by the Compensation Committee to be in key policy-setting and decision-making roles, and to have responsibilities that contribute significantly to achieving our earnings goals. The size of an individual’s long-term incentive award is based primarily on individual performance, the individual’s responsibilities and position with our Company. Long-term incentive award values generally are competitive with market practice among our Peer Group and other general industries reviewed by the Compensation Committee.

Any awards made under the 2011 Stock Incentive Plan may be subject to forfeiture at the discretion of the Compensation Committee if between the date of grant and the third anniversary of any exercise, payment or vesting of the award, the participant:

Such forfeiture does not apply following the occurrence of a change of control event unless the award agreement specifically so provides or as required by applicable law.

Perquisites and Other Personal Benefits. Supplemental benefits are offered to select executive officers with the goal of attracting and retaining key executive talent. Those perquisites may include life and health insurance benefits, car and housing allowances, and social and health club dues.

Retirement Benefits. The Company maintains a qualified defined contribution program which includes a Company match on participant contributions which is provided to executives in the United States, on the same basis as is provided to other salaried employees of the Company who reside in the United States. The Company also maintains various defined benefit plans which are provided to executives on the same basis as are provided to other employees of the Company who reside or work outside the United States.

Deferred Compensation Plan. The Company sponsors a deferred compensation plan for executive officers and non-employee directors. Under the terms of the plan, eligible employee executive officers may elect to defer their base salary, cash bonus and/or long-term incentive payout. No NEOs deferred any compensation during 2021 or any prior years.

Wabtec has established stock ownership guidelines to encourage our key employees and Board members to own and retain shares of stock. The guidelines are as follows:

The aforementioned employees and directors are given five years to satisfy these guidelines. The Compensation Committee is responsible for administering and monitoring compliance with this guideline, including establishing parameters for determination. As of December 31, 2021, each of the named executive officers and non-employee board members has met their required stock ownership described above (including any shares deferred pursuant to the Deferred Compensation Plan), except for those individuals within their first five years of service with the company, all of whom are on track to meet their ownership guidelines. As of January 31, 2022, our directors and executive officers as a group owned approximately 1% of our common stock.

In the event of a financial restatement or a determination by the Board of Directors that misconduct by a responsible party caused financial or reputational harm to the Company, the Compensation Committee reviews the circumstances and makes recommendations to the Board as to whether recoupment should be pursued. Misconduct shall include any intentional or reckless violation of Wabtec policies or any grossly negligent act or failure to act. The Compensation Committee also reviews all compensation that has been awarded to the responsible party and determines how such compensation may have been affected by the financial restatements or misconduct.

Should the Board determine that recoupment is appropriate, the Company may recoup from the responsible parties any cash bonuses and equity awards in reliance on the financial statements that were restated or for the year in which the financial harm occurred as well as any gains realized from the exercise of options to the extent the Compensation Committee determines that the gains were based on such financial statements or resulted from such misconduct.

The Company considers it improper and inappropriate for any of its directors and officers, including the named executive officers, to engage in short-term or speculative transactions in Wabtec securities or in other transactions that may (i) lead to inadvertent violations of insider trading laws, (ii) reduce an officer’s or director’s incentive to improve Wabtec’s performance, (iii) focus the officer’s or director’s attention on short-term performance at the expense of long-term objectives, or (iv) otherwise engage in transactions to hedge or offset any decrease in the market value of Wabtec’s stock. To that end, the Company has adopted and maintains a policy covering transactions involving all Wabtec stock held by its officers or directors, including but not limited to stock held directly or indirectly by such officer or director and stock or other equity granted to an officer or director as part of their compensation.

The Board of Directors has entered into employment continuation agreements with certain senior executive officers, including Messrs. Santana, Olin and DeNinno, as well as a Severance Agreement with Mr. Santana. These agreements are discussed in this Proxy Statement beginning on page 48. Also discussed below, certain of our benefit plans contain provisions that address termination of an individual or a change in control of the Company.

Tax Implications of Executive Compensation. Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), limits the deductibility of compensation in excess of $1 million paid to certain covered employees (generally including the NEOs) in any calendar year. As a result, compensation paid in excess of $1 million to our named executive officers generally will not be deductible. The Compensation Committee designs compensation programs that are intended to be in the best long-term interests of the Company and our stockholders, with deductibility of compensation being one of a variety of considerations taken into account.

Accounting Considerations with Regard to Compensation Practices. The Compensation Committee reviews on an on-going basis the impact of our compensation programs on Wabtec’s financial statements, including the accounting treatment of equity-based compensation, and the Compensation Committee’s decisions may be influenced by such factors.

This table shows the compensation for Wabtec’s named executive officers for the year indicated.