Document

DEF 14A 1 mwaproxy2022.htm DEF 14A Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

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Filed by the Registrant

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Filed by a Party other than the Registrant

Check the appropriate box:

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Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material Pursuant to §240.14a-12


Mueller Water Products, Inc.
(Name of Registrant as Specified In Its Charter)

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



Payment of Filing Fee (Check the appropriate box):
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☐			Fee paid previously with preliminary materials.
☐			Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

NOTICE OF ANNUAL MEETING

WHEN

WHERE

RECORD DATE

Tuesday, February 7, 2023;

10:00 A.M., Eastern Time

The Annual Meeting will be held virtually via live webcast at:

www.meetnow.global/MLMGXU5

Only our stockholders at the close of business on December 12, 2022, the record date for voting at the Annual Meeting, are entitled to notice of and to vote at the Annual Meeting and any adjournments or postponements thereof.

ITEMS OF BUSINESS


		Board Recommendation
Proposal 1	To elect ten directors	FOR each director nominee
Proposal 2	To approve, on an advisory basis, the compensation of our named executive officers	FOR
Proposal 3	To approve, on an advisory basis, the frequency of the advisory vote to approve the compensation of our named executive officers	ANNUALLY
Proposal 4	To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending September 30, 2023	FOR

Stockholders will also transact any other business properly brought before the Annual Meeting and any reconvened or rescheduled meeting following any adjournments or postponements thereof.

We use Securities and Exchange Commission rules allowing issuers to furnish proxy materials to their stockholders over the Internet. A Notice of Internet Availability of Proxy Materials or this Proxy Statement will first be mailed to our stockholders on or about December 19, 2022. Please refer to the Notice of Internet Availability of Proxy Materials, proxy materials email or proxy card you received for information on how to vote your shares and to ensure your shares will be represented and voted at the Annual Meeting.

By Order of the Board of Directors.

STEVEN S. HEINRICHS

Corporate Secretary

Atlanta, Georgia

December 19, 2022


IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON February 7, 2023 This Proxy Statement and our 2022 Annual Report are available at www.proxyvote.com (for beneficial stockholders) and www.edocumentview.com/mwa (for registered stockholders).

PROXY STATEMENT FOR 2023 ANNUAL MEETING 1

LETTER FROM OUR

BOARD OF DIRECTORS


DEAR FELLOW STOCKHOLDERS,
We are pleased to report that for the second consecutive year, the Company delivered double-digit net sales growth in Fiscal 2022. We once again increased our quarterly dividend by 5.5 percent and repurchased $35 million in common stock. In partnership with the Board of Directors, the Company’s management team continued executing the strategic plan to drive innovation, operational improvements with our key capital projects and safety across the Company. Aligned with our goal to become the leading provider of technology-enabled products for water utilities, we launched nine new products. These new products further strengthen Mueller’s position to help water utilities address the challenges they face from aging infrastructure, climate change, water scarcity and the labor market. We expect to see benefits from our key capital projects with investments in our domestic manufacturing capabilities, primarily driven by the initial start-up of the new brass foundry in Decatur, Illinois, and completion of our plant restructuring consolidation into our Kimball, Tennessee facility. These investments improve our sustainability initiatives with a lead-free alloy that will be poured in our new brass foundry and increase efficiencies primarily driven by new equipment and the proximity to our new Kimball facility. We published our second Environmental, Social and Governance (“ESG”) Report in January 2022, which outlined our ESG strategy, targets, performance and goals. The Company’s Diversity, Equity and Inclusion efforts expanded during the year with the creation of our Diversity, Equity and Inclusion Council as well as local teams at every facility and another team for our corporate and sales teams. Our Board of Directors believes in the importance of having best-in-class corporate governance. In October, we announced an accelerated board refreshment process as well as the appointment of two new board members. Brian Slobodow joined the Board in October, and Niclas Ytterdahl is serving as a Board observer until after the 2023 Annual Stockholders Meeting. I would like to take a moment to recognize Bernard G. Rethore who, after 16 years of invaluable and distinguished service, will be retiring from the Board of Directors at the 2023 Annual Stockholders Meeting. Mr. Rethore has been a superb leader who has provided remarkable service and sound guidance during his tenure. He will be sincerely missed. My fellow directors and I encourage you to review the accompanying Proxy Statement and associated materials prior to the Annual Meeting on February 7, 2023. Thank you for being a Mueller Water Products stockholder and for your continued support.

MARK J. O'BRIEN
Non-Executive Chair of the Board

2 MUELLER WATER PRODUCTS, INC.

PROXY SUMMARY

This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information you should consider, and you should read the entire Proxy Statement carefully before voting.

Company Overview

The Mueller Water Products story began in 1857 when a young machine shop apprentice immigrated to America to establish his first business in Decatur, Illinois. In the 165 years since, the Mueller name has become known for innovative water distribution products of superior quality, many of which have become industry standards.

Although the business has undergone many changes throughout the years, our commitment to innovation has never wavered. We are proud of our position as a leading manufacturer and marketer of products and services used in the transmission, distribution and measurement of water in North America and of our broad product and service portfolio found worldwide, which includes engineered valves, fire hydrants, pipe connection and repair products, metering products, leak detection, pipe condition assessment, pressure management products and software technology that provides critical water system data.

This breadth of products and services enables us to deliver sustainable and efficient solutions that bridge the gap between intelligence and infrastructure, helping our customers deliver important water resources to their communities and empowering the smart cities of the future. We are one of the only companies that can fulfill the needs of water utilities from end to end – at the source, at the plant, below the ground, on the street and in the cloud. Built on a solid legacy of innovation, we have the expertise and vision to provide advanced infrastructure and technology solutions for transmitting, distributing, measuring and monitoring water more safely and effectively than ever before, demonstrating why Mueller Water Products is Where Intelligence Meets Infrastructure®. To learn more visit www.muellerwaterproducts.com.

Notable Achievements in Fiscal 2022


			We continued execution of our long-term capital allocation strategy, allocating approximately $55 million for capital expenditures, nearing completion of the new lead-free brass foundry and reducing our geographic footprint.
			We launched the Diversity, Equity and Inclusion Council.
			We increased corporate efficiencies and reduced our geographic and environmental footprint with the consolidation of our facilities in Woodland, Washington; Hammond, Indiana; Aurora, Illinois; and Surrey, British Columbia into the recently acquired facility in Kimball, Tennessee.
			We again increased our annual dividend, which is the seventh increase since 2014.
			We experienced the second consecutive year of double-digit net sales growth and ended the year with a record backlog.
			We published our second annual ESG Report, updating our ambitious goals and targets.

PROXY STATEMENT FOR 2023 ANNUAL MEETING 3

PROXY SUMMARY

Highlights of Fiscal 2022 Performance



	Focused on Operational Investment and Efficiencies to Increase Long-Term Stockholder Value
We generated net sales of $1,274.4 million, operating income of $111.6 million, adjusted earnings before interest tax depreciation and amortization (“EBITDA”) of $194.5 million and net income per diluted share of $0.48 (with adjusted net income per diluted share of $0.58). Adjusted EBITDA and adjusted net income are financial measures not calculated in accordance with generally accepted accounting principles in the U.S. (“GAAP”) and are therefore considered non-GAAP measures. See Exhibit A for a reconciliation of non-GAAP performance measures to GAAP performance measures.


	Dividend Benefits		Stockholder Value
•We paid stockholders a quarterly $0.058 per share dividend during fiscal 2022, an increase of 5.5% from fiscal 2021. •We returned $36.5 million to our stockholders through dividends in fiscal 2022.		We repurchased $35 million of our outstanding Common Stock during fiscal 2022.


Proposal One
Election of Ten Directors
			The Board recommends a vote FOR each nominee for director.

Director Nominees

Our directors are elected annually by the affirmative vote of a majority of the votes cast. All nominees are independent, except Mr. Hall, our President and CEO. The Board held 8 meetings in fiscal 2022 and each director attended at least 93% of the total number of meetings of the Board and committees of which the director was a member.

4 MUELLER WATER PRODUCTS, INC.

PROXY SUMMARY

The following table provides summary information about each director nominee. See “The Board of Directors” for more information about each nominee.


Name and Experience		Age	Director Since	Independent	Board Committees
	Shirley C. Franklin President of Clarke-Franklin & Associates, Inc.; Former Mayor of Atlanta	77	2010
	Scott Hall President and Chief Executive Officer of Mueller Water Products, Inc.	58	2017
	Thomas J. Hansen Former Vice Chairman of Illinois Tool Works Inc.	73	2011
	Mark J. O’Brien(1) Former Chairman and Chief Executive Officer of Walter Investment Management Corp.	79	2006
	Christine Ortiz(2) Morris Cohen Professor of Materials Science and Engineering at Massachusetts Institute of Technology	52	2019
	Jeffery S. Sharritts Executive Vice President and Chief Customer and Partner Officer of Cisco	54	2021
	Brian L. Slobodow(3) Operating Partner of the Operational Resource Group	54	2022
	Lydia W. Thomas(2) Former President and Chief Executive Officer of Noblis, Inc.	78	2008
	Michael T. Tokarz Chairman of Tokarz Group, LLC	73	2006
	Stephen C. Van Arsdell Former Senior Partner of Deloitte LLP; Chairman and Chief Executive Officer of Deloitte & Touche LLP	72	2019

Chair

Member

A = Audit

C = Compensation

E = EHS

G = Governance

O = Capital Allocation

X = Executive

(1)Mr. O'Brien serves as our Non-Executive Chair. See "Proposal One: Election of Ten Directors — Board Structure — Board Leadership Structure" for more information.

(2)Upon the recommendation of the Nominating and Corporate Governance Committee, the Board appointed Dr. Thomas as Chair of the Nominating and Corporate Governance Committee and Dr. Ortiz as Chair of the Environment, Health and Safety Committee effective October 1, 2022.

(3)Mr. Slobodow joined the Board on October 13, 2022 in connection with the Cooperation Agreement as defined and discussed in the “Proposal One - Election of Ten Directors — The Board of Directors — Background to Solicitation” section below.

PROXY STATEMENT FOR 2023 ANNUAL MEETING 5

PROXY SUMMARY

2022 Board Snapshot(1)

INDEPENDENCE

AGE

TENURE

DIVERSITY

1 Not Independent

3 50 to 60

4 0 to 6 Years

3 Women

9 Independent

7 Over 70

6 Over 10 Years

4 Underrepresented Minorities

(1)In accordance with the Cooperation Agreement, Mr. Slobodow was appointed to the Board in October 2022. The fiscal 2022 metrics do not include or represent his appointment.

Stockholder Engagement

We believe that strong corporate governance should include regular engagement with our stockholders to discuss various topics, including corporate governance, compensation, performance, strategy and other matters. With regular engagement with our stockholders, we are able to strengthen our relationships with stockholders and better understand stockholders’ views on our policies and practices and other matters of importance to our business. In 2022, management and the Board continued to reinforce our commitment to building long-term relationships with our stockholders. During the year, we utilized a variety of avenues for engagement including our Annual Meeting of Stockholders, in-person and virtual meetings, quarterly earnings calls and other investor events.


Fiscal 2022 engagement included: •Twelve investor events, including conferences, road shows and meetings •Topics of discussion included: •Drivers of sales growth including pricing initiatives, end market growth expectations and new product development •Health of key end markets, including municipal repair and replacement and new residential construction, and potential benefits from a federal infrastructure bill •Impacts of inflationary pressures, supply chain disruptions, manufacturing inefficiencies and labor availability •Environmental, Social and Governance topics, including strategies to achieve targets and goals •Capital spending plans, including three large capital projects •Cash flow expectations, including liquidity and working capital •Capital allocation strategy, including future capital spending and acquisitions, dividends and share repurchases •Our 2022 Annual Meeting of Stockholders			We value the stockholder feedback that we receive through our engagement activities.

Sustainability

PRIORITY AND REPORTING

We view sustainability, including environmental, social and governance (“ESG”) practices, as essential to our long-term viability. As an industry leader for 165 years, we embrace our responsibilities for sustainability stewardship. We recognize that these responsibilities not only address our commitment to our employees and our facilities, but also extend to our other stakeholders, including our investors, customers, suppliers and communities.

Access to clean, safe water is essential. With the depletion of freshwater sources, the impacts of climate change and aging water infrastructure, we understand the importance of managing resources from start to finish. As a good steward and leader in water infrastructure, we embrace the opportunity and responsibility to make the world a better place for the benefit of future generations.

6 MUELLER WATER PRODUCTS, INC.

PROXY SUMMARY

In December 2020, the Company published its inaugural ESG Report, which includes the principal sustainability metrics the Company tracks: water withdrawal/energy usage, greenhouse gas emissions and solid waste creation. The most current ESG Report may be found at https://www.muellerwaterproducts.com/sustainability-program-vision-and-values. Our ESG Report is not a part of or incorporated by reference in this Proxy Statement.

In fiscal 2022, we remained focused on our ESG commitments, which are intended to create value for our stakeholders. We took meaningful steps this year and established long-term environmental and social goals, which will be included in our next ESG Report. We are excited about the progress made through our ESG initiatives.

SUSTAINABILITY APPROACH

•Our approach to sustainability programs and initiatives is rooted in and guided by the sustainability reporting standards set forth by the Global Reporting Initiative, the Sustainability Accounting Standards Board and the United Nations Sustainable Development Goals.

•When we first became a publicly traded company in 2006, our Board formed the Environment, Health and Safety Committee to oversee and guide our progress toward smart sustainability, making sustainability a key consideration in our directors’ deliberations and informing their overall approach to risk oversight.

•Management formed the ESG Management Committee in 2020 to enhance even further our focus on developing, monitoring, implementing, measuring and reporting on ESG-related matters.

•We tie ESG metrics to our executive compensation to highlight the importance of and focus on sustainability.

SOCIAL STEWARDSHIP

•We provide access to benefits and offer programs that are designed to support work-life balance, including physical, financial and mental health resources for employees and their families.

•We promote and facilitate a high-performance, inclusive workplace.

•We utilize a new associate development program to introduce and train new generations of employees entering the Mueller family.

•We partner, each year, with the American Water Works Association and local organizations providing scholarships, charitable donations and employee volunteers.

•We drive best practices development and benchmarking through the use of lean principles and our safety excellence and leadership program.

•We focus on the prevention of all injuries, with an emphasis on the prevention of serious injuries and fatalities.

•We seek to utilize new technologies and data analytics to drive safety performance improvement.

ENVIRONMENTAL STEWARDSHIP

•We strive to reduce our energy, water and material usage, maintaining a close watch on key performance indicators.

•We engage our supply chain to improve packaging and freight efficiencies.

•We strive to integrate sustainability key performance indicators into our facilities.

•We seek to locate our facilities in areas with increased renewable energy sources.

•We invest in the modernization of our facilities.

•We develop and implement effective programs to upgrade to energy efficient equipment, utilize reusable material and implement cutting-edge technology.

•We work to standardize equipment and procedures across all our facilities to promote consistent, efficient manufacturing processes.

GOVERNANCE STEWARDSHIP

•We are committed to a best-in-class governance structure built on a comprehensive set of corporate governance guidelines that promote the interests of our stakeholders.

•Our Board is led by an independent Chair and supported by fully independent standing committees of the Board.

•We promote director effectiveness through director orientation and mentoring, continuing education and regular Board, committee and director self and peer evaluations.

•We foster board and committee independence by conducting frequent executive sessions without the CEO or other members of management present.

PROXY STATEMENT FOR 2023 ANNUAL MEETING 7

PROXY SUMMARY

•We maintain significant Common Stock ownership guidelines, prohibit hedging and pledging of our Common Stock and adhere to a clawback policy relative to executive compensation.

•We maintain a robust stakeholder engagement program.

See “Proposal One — Election of Ten Directors — The Board’s Role and Responsibilities — Board Oversight — Environmental, Social and Governance (“ESG”)” for information regarding the Company's governance practices.


Proposal Two
Advisory Vote to Approve Executive Compensation
			The Board recommends a vote FOR this proposal.

Framework of 2022 Compensation

The following table lists the primary elements of our compensation structure. This overview should be read in conjunction with the more complete information set forth under “Compensation Discussion and Analysis” below.

SEC Form DEF 14A filed by MUELLER WATER PRODUCTS