🧾 What This Document Is — The Shareholder Playbook

This is Flowserve's Definitive Proxy Statement (DEF 14A). It's the official invitation and instruction manual for the company's 2026 Annual Shareholder Meeting. Think of it as a detailed agenda for a major company meeting. It tells shareholders what will be voted on, who is running the company, how the bosses are paid, and provides the financial and strategic context needed to make informed voting decisions.

🏢 What The Company Does — The Flow Control Giant

👉 In simple terms, Flowserve makes the heavy-duty pumps, valves, and seals that keep the world's essential processes running. They are a global leader in "flow control" equipment. If you need to move, control, or protect the flow of liquids or gases in critical industries, you call Flowserve. Their products are used in oil refineries, chemical plants, power stations (including nuclear), water treatment facilities, and pharmaceutical manufacturing. They have about 16,000 employees and a huge global network for manufacturing and aftermarket service.

💰 Financial Highlights — A Year of Strong Growth

The proxy highlights a very successful 2025, which is key context for everything else:

• Revenue: Grew 3.8% to $4.7 billion.
• Profitability: Adjusted Operating Income was $700 million (up nearly 12%).
• Cash Generation: Operating cash flow was a strong $506 million.
• Shareholder Returns: Returned $365 million to shareholders via dividends and buybacks.
• Stock Performance: Delivered a 1-year total shareholder return of 22.5%.
• Bookings: A healthy $4.7 billion in customer orders, including $400 million in key nuclear energy projects.

🚀 Why It Matters: This strong performance is the backdrop for management's strategy and compensation. It shows the company is executing well, hitting its margin targets early, and benefiting from trends like growth in nuclear power and data centers.

🚀 Key Moves & Strategy — The "3D" Plan and a Big Clean-Up

• The Flowserve Business System (FBS): This is their internal operating framework focused on People, Operations, Portfolio, Commercial, and Innovation excellence. They credit this system for their early achievement of margin goals.
• Divesting Asbestos Liabilities: A major strategic move in December 2025. They sold off legacy asbestos-related legal claims. Why it matters: This simplifies the company, removes a source of financial uncertainty and volatility, and frees up cash for growth investments.
• Nuclear & Power Focus: They are heavily emphasizing opportunities in nuclear and traditional power generation, driven by energy needs from AI and data centers. Achieving $400M in nuclear awards in 2025 is a key milestone.

📦 Board & Governance — Who's Steering the Ship

The board proposes 9 directors for election. The slate includes experts in finance, manufacturing, energy, and international operations. A few notable points:

• Independent Leadership: The Board Chairman (John L. Garrison) is separate from the CEO (Scott Rowe), a best practice for oversight.
• Refreshment: The board has added four new directors since 2022 to bring in fresh perspectives.
• Board Committees: Key committees include Audit, Corporate Governance & Nominating, Organization & Compensation, and a newly renamed Technology, Innovation & Risk Committee.

💼 Executive Compensation — Pay-for-Performance in Action

This is a huge section of the proxy. The core message is that executive pay is tightly linked to company performance.

• 2025 Annual Bonuses: Corporate executives earned 117% of target bonuses, driven by strong adjusted operating income.
• Long-Term Incentives (The Big Payout): Performance Share Units (PSUs) for the 2023-2025 period paid out at a massive 214.8% of target. This was due to exceptional three-year improvement in Return on Invested Capital (ROIC) and total shareholder return that ranked in the 90th percentile of its peer group.
• Alignment with Shareholders: The proxy shows the CEO's "realizable pay" over three years was 76% above target, while shareholder returns were up 148%. The company notes this strong alignment and received 97% shareholder support for its "Say-on-Pay" vote in 2025.
• CEO Pay: R. Scott Rowe's total compensation for 2025 was $13,143,521.

📊 Shareholder Proposals — The Vote on Buybacks

One key item for a vote is a shareholder proposal requesting an annual advisory vote on the company's stock repurchase (buyback) programs. The Board recommends voting AGAINST this proposal. Their argument is that their existing oversight and disclosure are sufficient, and a separate annual vote is unnecessary.

🔮 What's Next — 2026 and Beyond

Management is optimistic heading into 2026, citing positive momentum. Key themes include:

• Further strengthening the company's strategic position.
• Expanding in priority growth markets (like power generation).
• Broadening their "Innovation Excellence" to include internal process efficiency.
• Continuing shareholder returns through dividends and buybacks.

⚖️ Big Picture — Strengths & Risks

• 👍 Strengths: Market leadership in essential industrial products, a strong and growing aftermarket business (recurring revenue), successful execution of their business system, early achievement of financial goals, and strategic focus on high-growth markets like nuclear power.
• ⚠️ Risks: Exposure to cyclicality in end markets (like oil & gas), global supply chain and tariff challenges (noted as impacting inventory), and geopolitical uncertainties that could affect their worldwide operations.

🧠 The Analogy — The Engine Room of Industry

Think of Flowserve as the company that builds and maintains the high-performance pumps and valves in the engine room of the global industrial economy. They don't make the headline-grabbing final products (like gasoline or electricity), but absolutely nothing works without their critical, precision-engineered components moving and controlling materials under extreme conditions. Their strong 2025 results show their engine room is running very efficiently.

📇 Key Contacts & People

• R. Scott Rowe: President, Chief Executive Officer and Director
• Amy B. Schwetz: Senior Vice President and Chief Financial Officer
• Susan C. Hudson: Senior Vice President, Chief Legal Officer and Corporate Secretary
• Brian Boukalik: Senior Vice President, Chief Human Resources Officer
• Alice M. DeBiasio: President, Flowserve Flow Control Division
• Matthew Klopfer: President, Flowserve Pumps Division (effective April 11, 2026)
• Scott K. Vopni: Vice President, Chief Accounting Officer (retiring June 30, 2026)
• John L. Garrison: Non-Executive Chairman of the Board
• Investor Relations Contact: Not explicitly listed in the provided text, but typically handled by the CFO's office.

🧩 Final Takeaway

Flowserve had an excellent 2025, beating its financial targets and strategically cleaning up its balance sheet by shedding asbestos liabilities. This performance directly fueled big bonuses and long-term incentive payouts for its leadership team. Shareholders are being asked to re-approve this well-performing board and its compensation philosophy, while also rejecting a proposal for more frequent votes on buybacks. The company's story is one of strong execution and a strategic pivot toward the booming power generation market.