🧾 What This Document Is

This is a Definitive Proxy Statement (DEF 14A) for Watts Water Technologies. It's an official document sent to shareholders before the annual meeting. Its job is to give shareholders the information they need to vote on important company matters, like electing directors and approving executive pay. Think of it as the company's "annual report card" for governance and leadership.

🏢 What The Company Does

👉 In simple terms, Watts Water Technologies makes products and systems that help manage water. They focus on safety, conservation, and efficiency for water flow in buildings and homes. It's a company built on a very basic human need: clean, managed water.

📅 The Annual Meeting: The Main Event

Shareholders are invited to the annual meeting on Tuesday, May 19, 2026, at 9:00 a.m. at their headquarters: 815 Chestnut Street, North Andover, Massachusetts 01845. The purpose is to vote on three key proposals and hear a business update. The record date to vote was March 24, 2026.

How to Vote: Shareholders can vote online, by phone, or by mail. Attending the meeting doesn't automatically revoke a previously submitted proxy.

🗳️ The Three Proposals to Vote On

Proposal 1: Elect Nine Directors The Board is asking shareholders to elect nine people to serve until the next annual meeting. Notably, one current director, Louise K. Goeser, is retiring per the board's age policy. The board recommends a vote "FOR" each nominee.

Proposal 2: Approve Executive Pay (Advisory Vote) This is a non-binding "say-on-pay" vote. Shareholders are asked to approve the compensation of the company's top executives. The board recommends a vote "FOR".

Proposal 3: Ratify the Auditor Shareholders are asked to confirm (ratify) the appointment of KPMG LLP as the company's independent accounting firm for 2026. The board recommends a vote "FOR".

👥 Who's on the Board? Meet the Nominees

The Board has nominated nine individuals. Here’s a quick look at the key nominees, led by CEO Robert J. Pagano, Jr., who is also the Chairperson.

Robert J. Pagano, Jr. (Age 64) - CEO, President, and Chair.
David A. Dunbar (Age 66) - Lead Independent Director.
Joseph T. Noonan (Age 66) - Son-in-law of controlling shareholder Timothy Horne.

The board has ten current members but is reducing to nine with the retirement of Ms. Goeser. The board believes it has a strong mix of skills in finance, operations, global leadership, and technology.

⚖️ Corporate Governance: How the Company is Run

This section reveals some very important structures about how Watts is governed.

Dual-Class Stock & The Horne Family Control

The Structure: The company has two types of stock. Class A shares have one vote each. Class B shares have ten votes each.
The Result: As of March 1, 2026, the Horne family (through a voting trust led by Timothy P. Horne) controls 68.1% of the total voting power. This makes Watts a "controlled company" under stock exchange rules.
Why It Matters: This structure means the Horne family can effectively elect all directors and control shareholder votes, even though they may not own a majority of the economic ownership (the actual shares). The board notes this structure was set before the 1986 IPO and can only be changed with approval from Class B shareholders.

Board Leadership

The roles of CEO and Chairperson are combined, held by Robert J. Pagano, Jr.
To provide independent oversight, David A. Dunbar serves as the Lead Independent Director. He presides over meetings of independent directors without management present.

Committees of the Board The board has three main committees, each with independent members:

Audit Committee: Oversees financial reporting, risk, and the auditor (KPMG). Chaired by Merilee Raines.
Compensation Committee: Sets pay for executives and directors. Chaired by Louise K. Goeser.
Governance & Sustainability Committee: Handles director nominations, governance rules, and ESG strategy. Chaired by Michael J. Dubose.

💰 Executive Compensation: How the Top Team is Paid

This is a detailed look at how the company pays its top executives to align their actions with shareholder interests.

Pay Philosophy: The goal is to tie pay closely to company performance, using a mix of salary, annual bonuses, and long-term stock awards.

CEO Pay Example (Robert J. Pagano, Jr.):

Base Salary: $1,200,000
Target Bonus: 125% of salary = $1,500,000
2025 Actual Bonus: He earned $2,709,000 (181% of target) because the company hit 164-200% of its financial goals (sales, profit, cash flow).
Long-Term Awards (2025): He was granted $6,000,000 in target value, split evenly between performance-based stock units and restricted stock awards.

2025 Financial Performance That Drove Bonuses: The company had a strong year against its internal goals:

Consolidated Net Sales: Beat target by 7% ($2.415 billion actual vs. $2.257B target).
Adjusted Net Income: Hit 200% of the target (maximum payout).
Free Cash Flow: Beat target by 13% ($322 million actual vs. $285M target).

Other Executive Pay Highlights:

Shashank Patel (Former CFO): Received a total bonus of $600,460 before his retirement.
Diane McClintock (New CFO as of Nov 15, 2025): Received a prorated bonus of $306,650 for the year and a special $500,000 retention stock award.
Long-Term Incentives: Awards are a mix of Performance Stock Units (payout based on 3-year revenue growth and return on capital) and Deferred Stock (time-based vesting).

🔮 What's Next & Why This Matters

What's Next: The main event is the May 19 annual meeting where shareholders will decide on the proposals. The company will also present an operational update.

Why This Matters for Investors:

Control is Key: The dual-class stock and Horne family control are the most important governance features. It means the long-term vision of the controlling family heavily influences the company's direction.
Pay-for-Performance is Demonstrated: The bonus payouts show that when the company beats its financial targets (which it did significantly in 2025), executives earn substantially more than their target pay.
Stability with a Transition: There's been a CFO transition from Shashank Patel to Diane McClintock, but the compensation structure is designed to retain talent and maintain focus.

🧠 The Analogy

Think of Watts Water Technologies like a family-owned ship. The Horne family owns the "super-voting" compass (Class B shares) that steers the ship, even though many other passengers (Class A shareholders) are on board. The captain (CEO Pagano) is also the head navigator (Chairman). The crew (executives) get big bonuses when the ship hits its treasure maps' targets (financial goals), which aligns their interests with the passengers who want to find treasure (shareholders).

📇 Key Contacts & People

Investor Relations: [email protected]
Corporate Secretary: Kenneth R. Lepage (General Counsel, Chief Compliance Officer, Chief Sustainability Officer and Secretary)
CEO & Chair: Robert J. Pagano, Jr.
Lead Independent Director: David A. Dunbar
Compensation Committee Chair: Louise K. Goeser
Audit Committee Chair: Merilee Raines
Governance & Sustainability Committee Chair: Michael J. Dubose

🧩 Final Takeaway

This proxy statement shows a company with strong financial performance driving executive pay, but its most defining feature is a governance structure where a single family maintains overwhelming voting control through a dual-class stock system. Shareholders voting at the annual meeting are essentially endorsing this leadership and structure.

WATTS WATER TECHNOLOGIES INC — DEF 14A Filing