LINCOLN ELECTRIC HOLDINGS INC — Proxy Solicitation & Information Statement 2021

Mar 19, 2021

DEF 14A 1 i21060_leco-def14a.htm

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

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LINCOLN ELECTRIC HOLDINGS, INC.

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NOTICE OF ANNUAL MEETING

ANNUAL MEETING OF SHAREHOLDERS

| ITEMS
TO BE VOTED ON | RECOMMENDATION | |
| --- | --- | --- |
| PROPOSAL
1 T o
elect twelve Director nominees named in this Proxy Statement to hold office until the 2022 Annual Meeting or until their successors
are duly elected and qualified | FOR
all Director nominees | PAGE
19 |
| PROPOSAL
2 T o
ratify the appointment of Ernst & Young LLP as Lincoln Electric’s independent registered public accounting firm for
the year ending December 31, 2021 | FOR
this proposal | PAGE
87 |
| PROPOSAL
3 T o
approve, on an advisory basis, the compensation of our named executive officers (NEOs) for 2020 | FOR this proposal | PAGE
89 |

By Order of the Board of Directors, Christopher L. Mapes Chairman, President and Chief Executive Officer Jennifer I. Ansberry Executive Vice President, General Counsel and Secretary

WE WILL BEGIN MAILING THIS PROXY STATEMENT ON OR ABOUT MARCH 19, 2021.

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on April 22, 2021:

This Proxy Statement and the related form of proxy, along with our 2020 Annual Report on Form 10-K, are available free of charge at www.lincolnelectric.com/proxymaterials.

| DATE & TIME THU RSDAY,
APRIL 22, 2021 1 1:00
AM ET PLACE Online
at www.virtualshareholdermeeting.com/LECO2021 ACCESS Online at www.virtualshareholdermeeting.com/LECO2021. You must have your 16-digit control number which is printed on your proxy card. PARTICIPATION Submit
pre-meeting questions online by visiting www.proxyvote.com before Monday, April 19, 2021 at 5:00 pm ET. RECORD
DATE Shareholders
of record on the close of business on February 26, 2021 are entitled to vote at the 2021 Annual
Meeting. | |
| --- | --- |
| HOW TO CAST YOUR VOTE Your vote is important! Please vote your shares promptly
in one of the following ways: | |
| ● | BY INTERNET Visit www.proxyvote.com until April 21, 2021 |
| ● | BY PHONE Call 1-800-690-6903 by April 21, 2021 |
| ● | BY MAIL Sign, date and return your proxy card or voting instruction form, which must be received by April 21, 2021 |
| ● | DURING MEETING Vote online on April 22, 2021 during the Annual Meeting at |
| www.virtualshareholdermeeting.com/LECO2021 | |

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BUSINESS OVERVIEW

OUR PURPOSE: OPERATING BY A HIGHER STANDARD TO BUILD A BETTER WORLD Lincoln Electric is the world leader in the design, development and manufacture of arc welding products, automated joining, assembly and cutting systems, plasma and oxyfuel cutting equipment, and has a leading global position in brazing and soldering alloys. Headquartered in Cleveland, Ohio, U.S., we operate 55 manufacturing locations in 18 countries and distribute to over 160 countries. In 2020, we generated $2.7 billion in sales. As an innovation leader with the broadest portfolio of solutions and the industry’s largest team of technical sales representatives and application experts, we are known as the Welding Experts ® . Our portfolio of welding and cutting solutions is designed to help customers achieve greater productivity and quality in their manufacturing and fabrication processes. We leverage our global presence and broad distribution network to serve an array of customers across various end markets including: general metal fabrication, energy, structural steel construction and infrastructure (commercial buildings and bridges), heavy industries (agricultural, mining, construction and rail equipment, as well as shipbuilding), and automotive/transportation.

OUR GLOBAL FOOTPRINT

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OUR GUIDING PRINCIPLE: THE GOLDEN RULE

TREAT OTHERS AS YOU WOULD LIKE TO BE TREATED

For over 125 years, we have achieved success through innovation and business practices that seek to align our stakeholders. Our long-term strategic initiatives and investments drive alignment by providing:

· Customers with market-leading solutions that are manufactured responsibly, operate safely and efficiently, and are supported by our superior technical application capabilities;

· Employees with an incentive and results-driven culture where engagement and professional growth and development is a priority;

· Suppliers with a shared commitment to responsible operations that are safe, compliant and efficient;

· Communities with a responsible and engaged partner who is focused on helping communities thrive; and

· Shareholders with above-market returns.

The 2025 Strategy’s key financial and sustainability targets align with substantially all of the Company’s key short-term and long-term compensation metrics and are incorporated in the Chief Executive Officer’s compensation goals and cascade throughout the organization.

| KEY
FINANCIAL METRICS | 2025
GOAL | SHORT-TERM
COMPENSATION METRICS | LONG-TERM
COMPENSATION METRICS |
| --- | --- | --- | --- |
| A verage
Annual Sales Growth (organic & inorganic) | Mid-to-high
single-digit percent 2020-2025 | X (Individual
Performance Goals or Business Unit Performance Goals May include Sales Growth) | X 1 (Three-Year Cumulative Growth of Adjusted Net Income for Compensation
Purposes) |
| A verage
Adjusted Operating Income Margin | Average 15% 2020-2025 | X 1 (Representative
of EBITB) | |
| Average
Operating Working Capital Ratio | 15% in 2025 | X 1 | |
| Return
on Invested Capital (ROIC) | Top quartile performance vs. proxy peers | | X 1 |

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

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Employee engagement and development is a key focus of our 2025 Strategy as a highly engaged workforce is safer, innovative, productive, and generates long-term value for the organization. Our 2025 Strategy human capital investments enhance employee development and training through a range of online self-guided and instructor-led educational and experiential programs, skills training and career resources. This programming continues to expand to reach employees globally with learning and development opportunities targeted to all levels of the organization to promote personal development, career pathways and employee retention at Lincoln Electric.

In addition to our educational and career development programs, our annual talent and succession planning process reviews 100% of our global professional staff to ensure an appropriate talent pipeline for critical roles in general management, engineering and operations. This evaluation includes our CEO and all segment and functional leaders who use this process to identify and support high potential and diverse talent in a succession planning for the next generation of Lincoln Electric’s leaders.

The 2025 Strategy also incorporates the following long-term 2025 safety and environmental goals:

In addition, we focus on product stewardship in the design and manufacture of our products to improve safety, advance energy efficiency and reduce waste in our customers’ welding operations. We measure energy efficiency improvements achieved in our welding equipment as we transition our equipment portfolio from a transformer-based platform to a more efficient digital, inverter-based system. Product stewardship initiatives also include efforts to reduce packaging waste, digitization of product reference material, and the increased use of intermodal transportation to reduce the carbon footprint of our products in the supply chain.

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PROXY SUMMARY

This section provides an overview of important items related to this Proxy Statement and the 2021 Annual Meeting. We encourage you to read the entire Proxy Statement for more information before voting.

2020 PERFORMANCE HIGHLIGHTS

We operated as an “essential business” in 2020 and continued to manufacture and service customers globally, while maintaining the health and safety of our employees and communities through best practice Center for Disease Control and World Health Organization health and safety measures and remote work arrangements. Despite the unprecedented operational and safety challenges posed by the COVID-19 pandemic, our employees and operating model were resilient. Our strong balance sheet and liquidity allowed us to minimize the impact on wages, benefits and bonus programs, with the objective of maintaining our workforce through the pandemic, while investing in long-term growth and advancing our strategic commercial and operational initiatives. In addition, early implementation of cost reduction actions helped mitigate the impact of lower demand. To ensure product availability, we maintained higher levels of working capital to minimize the risk of supply chain disruptions during the pandemic. These actions resulted in solid returns, cash flow generation, and 117% cash conversion in 2020. Sales decreased 11.6% to approximately $2.7 billion primarily due to 12.2% lower organic sales, which were partially offset by a 1.3% benefit to sales from an acquisition. Operating income margin declined 180 basis points to 10.6% versus the prior year, primarily due to lower sales and rationalization and asset impairment charges. Adjusted operating income margin held relatively steady, declining 50 basis points to 12.4% as price management and approximately $88 million in cost reduction benefits substantially mitigated the unfavorable impact of lower volumes.

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

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Despite challenging operating conditions, we continued to pursue a balanced capital allocation strategy to generate strong shareholder returns. In 2020, we returned $232 million to shareholders through our dividend program and share repurchases. In addition, the Board approved the Company’s 25 th consecutive dividend increase, raising the dividend payout by 4.1%.

Safety and operational excellence are a priority at Lincoln Electric and we proudly achieved record safety, carbon reduction and recycling performance in 2020. This achievement, combined with improved environmental performance across most metrics, demonstrates the continued structural improvements achieved in the business through our 2025 Strategy and our commitment to best-in-class performance.

	2020 GOAL (VS. 2011 BASELINE)	2020 PERFORMANCE (VS. 2011 BASELINE)
Safety (DART)	75% Reduction	Record
85% Reduction
Greenhouse Gas Emissions (Absolute)	15% Reduction	Record
36% Reduction
Energy Intensity	30% Reduction	25% Reduction 1
Recycling (All Waste)	70% Rate	Record
75.1% Rate

(1) Our 2020 energy intensity performance was unfavorably impacted by production hours due to the COVID-19 pandemic.

Increased outreach was critical in 2020 to safeguard local communities facing the health and economic impact of the COVID-19 pandemic. Internally, the Company minimized the impact on wages, benefits and bonus programs, with the objective of maintaining its workforce through the pandemic. In addition, the Company’s employee assistance program supported eligible employees who required extra financial support. Community engagement was extended beyond our standard program of grants, scholarships, employee matching, in-kind donations and volunteerism. Emergency grants to foodbank programs, participation in a COVID-19 rapid response fund in Cleveland (our global headquarters), and personal protection equipment donations to first responders were key 2020 initiatives. In addition, we maintained our community educational/career programming among secondary and high school students to address skills gaps in industry and maintain awareness of attractive career pathways in manufacturing. This programming, along with expanded training and development opportunities for our employees in 2020, were key efforts to ensure long-term success for our key stakeholders.

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CORPORATE GOVERNANCE HIGHLIGHTS

Lincoln Electric has a solid track record of integrity and corporate governance practices that promote thoughtful management by its officers and Board of Directors, facilitating profitable growth while strategically balancing risk to maximize shareholder value. Below is a summary of certain Board and governance information with respect to 2020:

BOARD COMPOSITION AND PRACTICES
Size of Board	12*
Number of independent Directors	11
Average age of Directors	63
Percent diverse (among independent directors)	36%
Female Directors	3
Non-white Directors	2
Board meetings held in 2020	6
New Directors in the last 5 years	3
Average tenure (years)	12.2
Annual election of Directors	✔
Majority voting policy for Directors	✔
Lead Independent Director	✔

• Following the election of one director in October 2020, there were 12 Directors (11 were independent) during the 2020 calendar year.

Number of fully independent Board committees	4
Independent Directors meet without management	✔
Director attendance at Board and committee meetings	>75%
Mandatory retirement age (75)	✔
Stock ownership guidelines for Directors	✔
Annual Board and committee self-assessments	✔
Code of Conduct and Ethics for Directors, officers & employees	✔
No overboarded Directors (per ISS or Glass Lewis)	✔
Succession planning and implementation process	✔
Strategy, ESG and risk management oversight	✔
Corporate culture, diversity and inclusion oversight	✔

SHAREHOLDER PROTECTIONS
One share, One vote standard	✔
Dual-class common stock or Poison pill	✘
Cumulative voting	✘
Vote standard for Code of Regulations amendment	67%
Shareholder right to call a special meeting	✔ *
Annual election of Directors	✔
Majority voting policy for Directors	✔
Lead Independent Director	✔
Executive sessions without management present	✔

• Special meetings can be called by shareholders holding not less than 25% of the voting power

COMPENSATION PRACTICES
Pay for Performance	✔
Annual Say-on-Pay Advisory Vote	✔
Compensation aligned with strategic goals and individual performance	✔
Incentive plans do not encourage excessive risk taking	✔
No excessive perquisites	✔
Robust stock ownership guidelines for NEOs	✔
Clawback policy	✔
Double-trigger change-in-control	✔
Anti-hedging/pledging policy	✔
CEO Pay Ratio	145:1

ENVIRONMENTAL, SOCIAL & GOVERNANCE (ESG) POLICIES AND ENVIRONMENTAL GOALS
Compensation and Executive Development Committee oversight of corporate culture, diversity and inclusion	✔
Audit Committee oversight of ESG matters, including environmental, health & safety	✔
Audit Committee oversight of information security matters	✔
ESG performance incorporated into CEO’s annual performance goals	✔
Global Code of Conduct and Ethics	✔
Human Rights Policy	✔
No-Harassment Policy	✔
Anti-Corruption Policy	✔
Supplier Code of Conduct	✔
Environmental, Health, Safety & Quality Policy	✔
Environment management system	✔
Long-term safety and environmental goals	✔

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DIRECTOR NOMINEES AND BOARD SUMMARY

| PROPOSAL
1 Election
of 12 Directors to serve until 2022 Annual Meeting or until their successors are duly elected and qualified | The
Board recommends a vote FOR all Director Nominees. Our
Nominating and Corporate Governance Committee and our Board of Directors have determined that each of the Director nominees
possesses the right skills, qualifications and experience to effectively oversee Lincoln Electric’s long-term business
strategy. |
| --- | --- |
| ➜ | See
“Proposal 1 – Election of Directors” beginning on page 19 of this Proxy Statement. |

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

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DIRECTOR NOMINEES

| Name | Age | Director Since | Independent | Audit | Nominating
& Corporate Governance | Other Public Company Boards |
| --- | --- | --- | --- | --- | --- | --- |
| Curtis
E. Espeland (Lead Independent Director) Retired
Executive Vice President and CFO, Eastman Chemical Company | 56 | 2012 | ✔ | · | · | — |
| Patrick
P. Goris Senior
Vice President and CFO, Carrier Global Corporation | 49 | 2018 | ✔ | · | · | — |
| Stephen
G. Hanks Retired
President and CEO, Washington Group International | 70 | 2006 | ✔ | ♦ | · | — |
| Michael
F. Hilton Retired
President and CEO, Nordson Corporation | 66 | 2015 | ✔ | · | · | 2 |
| G.
Russell Lincoln President,
N.A.S.T. Inc. | 74 | 1989 | ✔ | · | · | — |
| Kathryn
Jo Lincoln Chair
and CIO, Lincoln Institute of Land Policy | 66 | 1995 | ✔ | · | ♦ | — |
| William
E. MacDonald, III Retired Vice Chairman, National City Corporation | 74 | 2007 | ✔ | ♦ | · | — |
| Christopher
L. Mapes (Chairman) President
and CEO, Lincoln Electric Holdings, Inc. | 59 | 2010 | | | | 1 |
| Phillip
J. Mason Retired President, EMEA Sector of Ecolab, Inc. | 70 | 2013 | ✔ | · | ♦ | — |
| Ben
P. Patel Senior
Vice President and Chief Technology Officer, Cooper Tire & Rubber Company | 53 | 2018 | ✔ | · | · | — |
| Hellene
S. Runtagh Retired
President and CEO, Berwind Group | 72 | 2001 | ✔ | · | · | — |
| Kellye L. Walker Executive
Vice President and Chief Legal Counsel Eastman Chemical Company | 54 | 2020 | ✔ | · | · | — |

♦ Chair · Member

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RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM SUMMARY

| PROPOSAL
2 Ratification
of independent registered public accounting firm | The
Board recommends a vote FOR this proposal. Our
Board of Directors recommends that shareholders vote “FOR” the ratification of the appointment Ernst & Young LLP
as Lincoln Electric’s independent registered public accounting firm for the year ending December 31, 2021. |
| --- | --- |
| ➜ | See
“Proposal 2 – Ratification of Independent Registered Public Accounting Firm” beginning on page 87 of this Proxy
Statement. |

EXECUTIVE COMPENSATION PROGRAM HIGHLIGHTS

| PROPOSAL
3 Approval,
on an advisory basis, of NEO Compensation | The
Board recommends a vote FOR this proposal. Our
Board of Directors recommends that shareholders vote “FOR” the approval, on an advisory basis, of compensation
of our NEOs for 2020. |
| --- | --- |
| ➜ | See
“Proposal 3 – Approval, on an Advisory Basis, of Named Executive Officer Compensation” beginning on page 89
of this Proxy Statement and “Compensation Discussion and Analysis” beginning on page 38 of this Proxy Statement. |

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

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

2020 NAMED EXECUTIVE OFFICERS

The Compensation Discussion and Analysis (CD&A) provides information regarding our executive compensation program for the

following NEOs in 2020:

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

Vincent K. Petrella (retired during 2020) Former Executive Vice President, Chief Financial Officer and Treasurer George D. Blankenship (retired during 2020) Former Executive Vice President, President, Americas Welding

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ACTIONS TO FURTHER ALIGN EXECUTIVE COMPENSATION WITH SHAREHOLDER INTERESTS

The Compensation and Executive Development Committee of the Board reviews the framework of our executive compensation program and seeks to align executive pay with our pay for performance philosophy. Each year, our Compensation and Executive Development Committee monitors our executive compensation program and how it relates to our corporate performance and shareholder interests. The historically high approval of our “say-on-pay” proposals on the compensation of our NEOs, including at the 2020 Annual Meeting, demonstrate the alignment of our executive compensation program with corporate performance and shareholder interests. In 2020, our Compensation and Executive Development Committee reviewed the overall design of our executive compensation program, particularly in light of the transition to the 2025 Strategy. The overall design of our executive compensation program was held consistent with policies developed in prior years. Throughout the year, our Compensation and Executive Development Committee monitored the impact of the COVID-19 pandemic on our executive compensation program, including pay for performance, alignment with stockholder’s interests, and motivation and retention of key talent.

| 2020
EXECUTIVE COMPENSATION PRACTICES — What
We Do | | What
We Don’t Do | |
| --- | --- | --- | --- |
| We
have long-term compensation programs focused on profitability, net income growth, ROIC and total shareholder returns | ✔ | We
do not allow hedging or pledging of our shares | ✘ |
| We
use targeted performance metrics to align pay with performance | ✔ | We
do not reprice stock options and do not issue discounted stock options without shareholder approval | ✘ |
| We
maintain stock ownership guidelines (5x base salary for CEO;
3x base salary for other NEOs) | ✔ | We
do not provide excessive perquisites | ✘ |
| We
have shareholder-approved incentive plans | ✔ | We
do not have multi-year guarantees for compensation increases | ✘ |
| We
have a broad clawback policy | ✔ | | |
| We
have a double-trigger change in control policy | ✔ | | |

NO ADJUSTMENTS TO COMPENSATION PROGRAMS FOR THE COVID-19 PANDEMIC

During 2020 we did not make any changes or adjustments to our executive compensation program specifically in response to the COVID-19 pandemic. The Compensation and Executive Development Committee did not modify individual performance goals or the corporate performance goals that were established at the beginning of the fiscal year, prior to the onset of the COVID-19 pandemic, for the annual bonus (EMIP) or outstanding performance share awards.

COMPENSATION FRAMEWORK & PHILOSOPHY

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

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

· Base salary is the only component of total direct compensation that is fixed · Short-term incentive compensation is based on annual consolidated and, if applicable, segment performance, and individual performance · Long-term incentive compensation is based on our financial performance over a three-year cycle · Variable, “at risk,” pay is a significant percentage of total compensation

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AVERAGE MIX OF KEY COMPENSATION COMPONENTS AND KEY COMPENSATION METRICS

The following charts present the mix of 2020 target direct compensation for our Chief Executive Officer (CEO) and all of our other NEOs, as established in the beginning of 2020. As shown below, 85% of our CEO’s compensation value and, on average, 69% of all of our other NEOs’ compensation value was “at risk,” with the actual amounts realized based on annual and long-term performance as well as our stock price.

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

| Key
Performance Metrics Tied to Executive Compensation — Metric | Short-Term Compensation (Annual Bonus) | Long-Term
Incentive Compensation Program (3-yr Performance Cycle) |
| --- | --- | --- |
| EBITB 1,2 (Earnings before interest, taxes and bonus) | ✔ | |
| Average
Operating Working Capital to Sales 2 ratio | ✔ | |
| Consolidated,
segment and individual performance | ✔ | |
| Adjusted
Net Income 2 growth | | ✔ |
| Return
on Invested Capital (ROIC) 2 | | ✔ |
| Total
Shareholder Return (TSR) 2 | | ✔ |
| Individual
Performance Goals 3 | ✔ | |

(1) EBITB is an internal measure that tracks our adjusted operating income.

(2) Financial performance measures used in the design of the executive compensation program are defined in Appendix A. Average Operating Working Capital to Sales for Compensation Purposes, Adjusted Net Income for Compensation Purposes, and Return on Investment Capital for Compensation Purposes have discrete definitions relative to our executive compensation program.

(3) Individual performance goals are set annually and a significant portion of our executive officers’ individual performance goals are tied to one or more aspect of our 2025 Strategy including sustainability and human capital matters.

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LINCOLN ELECTRIC HOLDINGS, INC.

TABLE OF CONTENTS

NOTICE OF ANNUAL MEETING	5
BUSINESS OVERVIEW	6
PROXY SUMMARY	9
PROPOSAL 1—ELECTION OF DIRECTORS	19
Director Nominees	20
Corporate Governance	26
Compensation-Related Risk	30
Related-Party Transactions	30
Our Board Committees	31
Director Compensation	33
EXECUTIVE COMPENSATION	37
Compensation Discussion And Analysis	38
Compensation Committee Report	63
Executive Compensation Tables	64
Termination And Change In Control Arrangements	77
Pay Ratio	82
MANAGEMENT OWNERSHIP OF SHARES	83
Beneficial Ownership Table	83
Equity Compensation Plan Information	84
OTHER OWNERSHIP OF SHARES	85
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION	86
ANNUAL MEETING PROPOSALS	87
Proposal 1—Election Of Directors	87
Proposal 2—Ratification Of Independent Registered Public Accounting Firm	87
Proposal 3—Approval, On An Advisory Basis, Of Named Executive Officer Compensation	89
AUDIT COMMITTEE REPORT	92
FAQS	93
APPENDIX A—DEFINITIONS AND NON-GAAP FINANCIAL MEASURES	97

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Cautionary Note on Forward-Looking Statements: This Proxy Statement contains forward-looking statements regarding Lincoln Electric’s strategy and current expectations within the applicable securities laws and regulations. These statements reflect management’s current expectations and involve a number of risks and uncertainties. Forward-looking statements generally can be identified by the use of words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “forecast,” “guidance,” or words of similar meaning. Actual results may differ materially from such statements due to a variety of factors that could adversely affect the Company’s operating results. The factors include, but are not limited to: general economic, financial and market conditions; the effectiveness of operating initiatives; completion of planned divestitures; interest rates; disruptions, uncertainty or volatility in the credit markets that may limit our access to capital; currency exchange rates and devaluations; adverse outcome of pending or potential litigation; actual costs of the Company’s rationalization plans; possible acquisitions, including the Company’s ability to successfully integrate acquisitions; market risks and price fluctuations related to the purchase of commodities and energy; global regulatory complexity; the effects of changes in tax law; tariff rates in the countries where the Company conducts business; and the possible effects of events beyond our control, such as political unrest, acts of terror, natural disasters and pandemics, including the current coronavirus disease (“COVID-19”) outbreak, on the Company or its customers, suppliers and the economy in general. The Company has experienced the negative impacts of COVID-19 on its markets and operations; however, the ultimate duration and severity on the Company’s business remains unknown. Although the Company’s customers have re-opened and increased operating levels, such customers may be forced to close or limit operations should a resurgence of COVID-19 cases occur. Given this continued level of economic and operational uncertainty over the impacts of COVID-19, the ultimate financial impact cannot be reasonably estimated at this time. For additional discussion, see “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020. These forward-looking statements speak only as of the date on which such statements were made, and we undertake no obligation to update these statements except as required by federal securities law.

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PROPOSAL 1—ELECTION OF DIRECTORS

DIRECTOR NOMINEES

Curtis E. Espeland Patrick P. Goris Stephen G. Hanks Michael F. Hilton G. Russell Lincoln Kathryn Jo Lincoln William E. MacDonald, III Christopher L. Mapes Phillip J. Mason Ben P. Patel Hellene S. Runtagh Kellye L. Walker

Our shareholders are being asked to elect twelve Directors to serve until the 2022 Annual Meeting or until their successors are duly elected and qualified. All of the Director nominees, other than Ms. Walker, who was elected to the Board on October 20, 2020, have been previously elected by our shareholders.

Each of the nominees has agreed to stand for re-election. The biographies of all of our Director nominees can be found later in this section.

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

MAJORITY VOTING POLICY

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

YOUR BOARD RECOMMENDS A VOTE FOR EACH DIRECTOR NOMINEE LISTED ABOVE

ANNUAL MEETING ATTENDANCE; NO SPECIAL ARRANGEMENTS

Directors are expected to attend each annual meeting. The Director nominees plan to attend this year’s virtual Annual Meeting. At the 2020 Annual Meeting, all of our then-current Directors attended our virtual annual meeting.

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

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DIRECTOR NOMINEES

| CURTIS
E. ESPELAND Director
since 2012 Lead
Independent Director since 2018 COMMITTEES: Audit
Finance AGE: 56 OTHER
PUBLIC COMPANY DIRECTORSHIPS: None | PATRICK
P. GORIS Director
since 2018 COMMITTEES: Audit Nominating
and Corporate Governance AGE: 49 OTHER
PUBLIC COMPANY DIRECTORSHIPS: None |
| --- | --- |
| Experience Mr.
Espeland is the former Executive Vice President and Chief Financial Officer of Eastman Chemical Company, an advanced materials
and specialty additives manufacturer, a position he held from 2014 until his retirement in 2020. Mr. Espeland joined Eastman Chemical
Company in 1996 and, during his tenure, he also served as Vice President, Finance and Chief Accounting Officer from 2005 to 2008,
and Senior Vice President and Chief Financial Officer from 2008 to 2014. Reasons
for Nomination · Extensive
experience in corporate finance and accounting, having served in various finance and accounting roles, and ultimately
as the Chief Financial Officer, at a large publicly-traded company. · Significant
experience in the areas of strategy, mergers and acquisitions, taxation and enterprise risk management. · International
auditing experience having served as an independent auditor at Arthur Andersen LLP, working in both the United States
and abroad (Europe and Australia). · The
Board has determined that Mr. Espeland’s extensive accounting and financial experience qualifies him as an “audit
committee financial expert.” · Valuable
insight into advancing the business priorities of Lincoln Electric’s international operations gained from his international
business experience. · Valuable
knowledge of key governance matters gained as a director of Lincoln Electric. | Experience Mr.
Goris has served as the Senior Vice President and Chief Financial Officer of Carrier Global Corporation, a leading global provider
of healthy, safe and sustainable building and cold chain solutions, since November 2020. Prior to joining Carrier, he served as
Senior Vice President and Chief Financial Officer of Rockwell Automation, a global industrial automation and information solutions
provider, since February 2017. He also served as Vice President, Investor Relations and Vice President, Finance, Architecture
and Software from 2015 to 2017 and Vice President, Finance, Architecture and Software and Operations and Engineering Services
from 2013 to 2015 at Rockwell Automation. Reasons
for Nomination · Relevant global financial expertise from serving in various finance roles, and ultimately as the Chief Financial
Officer, of publicly-traded, multinational organizations. · Extensive
experience in accounting, financial planning and analysis, investor relations and mergers and acquisitions. · Experience with a global industrial automation and information solutions company provides Mr. Goris with
broad exposure to digital operations and “smart” manufacturing solutions using data and analytics, which enhances
operational intelligence, productivity and risk management in manufacturing processes. These are key initiatives for our business
and our customers’ businesses. · The
Board has determined that Mr. Goris’ extensive accounting and financial experience qualifies him as an “audit
committee financial expert.” · Valuable
knowledge of key governance matters gained as a director of Lincoln Electric. |

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| STEPHEN
G. HANKS Director
since 2006 COMMITTEES: Audit
(Chair) Finance AGE: 70 OTHER
PUBLIC COMPANY DIRECTORSHIPS: McDermott International, Inc. (NYSE: MDR) through May 2018 Babcock & Wilcox Enterprises, Inc. (NYSE: BW) through March 2018 | MICHAEL
F. HILTON Director
since 2015 COMMITTEES: Compensation
and Executive Development Nominating
and Corporate Governance AGE: 66 OTHER
PUBLIC COMPANY DIRECTORSHIPS: Ryder
Systems, Inc. (NYSE: R) since
2012 Regal
Beloit Corporation (NYSE: RBC) since December 2019 Nordson Corporation (NASDAQ: NDSN) through 2019 |
| --- | --- |
| Experience Mr.
Hanks’ 30-year tenure with global engineering and construction company Morrison Knudsen Corporation and its successor, Washington
Group International, Inc. included serving the last eight years as President, Chief Executive Officer and a member of its Board
of Directors, retiring in January 2008. Mr. Hanks also formerly served as Washington Group’s Executive Vice President, Chief
Legal Officer and Secretary. In addition, Mr. Hanks has extensive board experience, previously serving as a director of McDermott
International, Inc. from 2009 to May 2018 and Babcock & Wilcox Enterprises, Inc. from 2010 to March 2018. Reasons
for Nomination · Executive
leadership experience, both as CEO and CFO, of a U.S. publicly-traded company with international reach. · Diverse
professional skill set, including finance (having served as CFO of Morrison Knudsen) and legal and governance competencies
(such as enterprise risk management, corporate compliance and legal strategy). · The
Board has determined that Mr. Hanks’ experience as a CEO and CFO of a publicly-traded company qualifies him as an
“audit committee financial expert.” · Valuable
knowledge of key governance matters gained as a director of Lincoln Electric and several other publicly-traded companies. | Experience Mr.
Hilton is the former President and Chief Executive Officer of Nordson Corporation (Nasdaq: NDSN), a company that engineers,
manufactures and markets differentiated products and systems used for precision dispensing of adhesives, coatings, sealants,
biomaterials, polymers, plastics and other materials, fluid management, test inspection, UV curing and plasma surface
treatment, a position he held from 2010 until his retirement in 2019. During his tenure at Nordson Corporation, Mr.
Hilton also served as a director. Prior to joining Nordson, Mr. Hilton was Senior Vice President and General Manager for
Air Products and Chemicals, Inc., a global company that provides a unique portfolio of atmospheric gases, process and
specialty gases, performance materials, and equipment and services, with specific responsibility for leading its $2 billion
global Electronics and Performance Materials segment. Reasons
for Nomination · With
over 30 years of global manufacturing experience, Mr. Hilton brings to the Board an intimate understanding of management
leadership. · Extensive
experience with strategy development and day-to-day operations of a multi-national company, including product line management,
new product technology, talent development, manufacturing, distribution and other sales channels, business processes,
international operations and global markets expertise. · Valuable
knowledge of key governance matters gained as a director of Lincoln Electric and several other publicly-traded companies. |

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| G.
RUSSELL LINCOLN Director
since 1989 COMMITTEES: Audit
Finance AGE: 74 OTHER
PUBLIC COMPANY DIRECTORSHIPS: None | KATHRYN JO LINCOLN Director
since 1995 COMMITTEES: Compensation
and Executive Development Nominating
and Corporate Governance (Chair) AGE: 66 OTHER
PUBLIC COMPANY DIRECTORSHIPS: None |
| --- | --- |
| Experience Mr.
Lincoln has served as the president of N.A.S.T. Inc., a personal investment firm, since 1996. Prior to joining N.A.S.T.
Inc., Mr. Lincoln served as the Chairman and Chief Executive Officer of Algan, Inc. Reasons
for Nomination · As
an entrepreneurial businessman with executive leadership and investment experience, including 25 years running a $50 million
business, Mr. Lincoln understands business risk and the importance of hands on management. · Experience
as a board member of various organizations, including as a board member of the Cleveland Museum of Natural History. · As
the grandson of James F. Lincoln and as a long-term trustee, Mr. Lincoln provides the Board with his historic perspective
on the Company’s unique culture and its incentive management system. · Valuable
knowledge of key governance matters gained as a director of Lincoln Electric. | Experience Ms.
Lincoln has served as the Board Chair and Chief Investment Officer of the Lincoln Institute of Land Policy, an independent, global
foundation focused on addressing significant policy issues through innovation land use and taxation methods, since 1996. As Chief
Investment Officer, Ms. Lincoln manages and directs all aspects of the Institute’s endowment, including strategic asset
allocation and policy development, which have contributed to its current $650 million asset base. In her role as Chair, she plays
a crucial role in the strategic direction and planning of the Institute, with ongoing involvement in the development of education
programs, demonstration projects and impact measurement. Ms. Lincoln is a member of the Board of HonorHealth Network, and Claremont
Lincoln University, and formerly served as a director of Johnson Bank Arizona, N.A. She is also the Co-Chair of the International
Center for Land Policy Studies and Training in Taiwan. Reasons
for Nomination · Extensive
leadership experience, addressing strategic planning, asset allocation matters and corporate governance. · As
a Lincoln family member and long-standing Director of Lincoln Electric, Ms. Lincoln has a keen sense of knowledge about
Lincoln Electric, its culture and the founding principles. · Broad experience and commitment to board and corporate governance excellence, named as a Board Leadership
Fellow of the National Association of Corporate Directors. Named by WomenInc. as one of 2019’s most influential corporate
directors. · Valuable
knowledge of key governance matters gained through her various directorships, including as a director of Lincoln Electric. |

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| WILLIAM E. MACDONALD, III Director
since 2007 COMMITTEES: Compensation
and Executive Development (Chair) Finance AGE: 74 OTHER
PUBLIC COMPANY DIRECTORSHIPS: None | CHRISTOPHER L. MAPES Director
since 2010 Chairman
since 2013 COMMITTEES: None AGE :
59 OTHER
PUBLIC COMPANY DIRECTORSHIPS: The
Timken Company (NYSE:
TKR) since 2014 |
| --- | --- |
| Experience Mr.
MacDonald is the former Vice Chairman of National City Corporation, a diversified financial holding company, a position he
held from 2001 until his retirement in 2006, where he was responsible for its seven-state regional and national corporate
banking businesses, the Risk Management and Credit Administration unit, Capital Markets and the Private Client Group. Mr.
MacDonald joined National City in 1968 and, during his tenure, held a number of key management positions, including Senior
Executive Vice President of National City Corporation and President and Chief Executive Officer of National City’s Ohio
bank. Reasons
for Nomination · Extensive
experience leading a large corporate organization with over 35,000 employees and structuring complex financing solutions
for large and middle-market businesses. · Experience
addressing human resources and development challenges facing a publicly-traded company. · Valuable
knowledge of key governance matters gained as a director of Lincoln Electric and several other publicly-traded companies. | Experience Mr.
Mapes is the Chairman, President and Chief Executive Officer of Lincoln Electric. Mr. Mapes has served as President and
Chief Executive Officer since December 2012. In December 2013, Mr. Mapes was appointed as Chairman of the Board in addition
to his other responsibilities. From September 2011 to December 2012, Mr. Mapes served as the Chief Operating Officer of
Lincoln Electric. From 2004 to August 2011, Mr. Mapes served as an Executive Vice President of A.O. Smith Corporation, a
global manufacturer with a water heating and water treatment technologies business, which has residential, commercial,
industrial and consumer applications, and the President of its former Electrical Products unit. Mr. Mapes started his career
with General Motors and has held roles in industrial manufacturing for over 35 years. In addition, Mr. Mapes has served as a director of The Timken Company since 2014. Reasons
for Nomination · Extensive
leadership experience in large, global publicly-traded companies engaged in manufacturing operations. · Keen
understanding of the manufacturing industry and challenges organizations face growing globally. · In
addition to business management experience, Mr. Mapes has an MBA and a law degree. · Valuable
knowledge of key governance matters gained as a director of Lincoln Electric. |

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| PHILLIP
J. MASON Director
since 2013 COMMITTEES: Compensation
and Executive Development Finance
(Chair) AGE: 70 OTHER
PUBLIC COMPANY DIRECTORSHIPS: GCP
Applied Technologies (NYSE: GCP) through May 2020 | BEN
P. PATEL Director
since 2018 COMMITTEES: Audit Nominating
and Corporate Governance AGE: 53 OTHER
PUBLIC COMPANY DIRECTORSHIPS: None |
| --- | --- |
| Experience Mr.
Mason is the former President of the Europe, Middle East &
Africa Sector (EMEA Sector) of Ecolab, Inc., a leading provider of food safety, public health and infection prevention
products and services, a position he held from 2010 until his retirement in 2012. Prior to leading Ecolab’s EMEA
Sector, Mr. Mason had responsibility for Ecolab’s Asia Pacific and Latin America businesses as President of Ecolab’s
International Sector from 2005 to 2010 and as Senior Vice President, Strategic Planning in 2004. In addition, Mr. Mason has public company board experience, previously serving as a director of GCP Applied
Technologies from 2016 to May 2020. Reasons
for Nomination · Executive
leadership experience in an international business unit for a U.S. publicly-traded company, providing Mr. Mason extensive
international business expertise, business-to-business and industrial sector experience. · Extensive
international business experience, starting, developing and growing businesses abroad, in both mature and emerging markets,
having established businesses in China, South Korea, Southeast Asia, Brazil, India, Russia, Africa and the Middle East. · Strong
finance and strategic planning proficiency, including merger and acquisition experience, along with significant experience
working with and advising boards on diverse issues confronting companies with international operations. · Valuable
knowledge of key governance matters gained as a director of Lincoln Electric. | Experience Mr.
Patel has served as Senior Vice President, Chief Technology Officer of Cooper Tire & Rubber Company, a global manufacturer
of specialized passenger car, light truck, medium truck, motorcycle and racing tires since November 2019. He previously
served as Senior Vice President and Chief Technology Officer of Tenneco, Inc., a manufacturer of automotive emission control
and ride control products and systems. During his 8-year tenure at Tenneco, beginning in 2011, he held roles leading regional
advanced technology development and establishing a global research and development organization. Prior to joining Tenneco,
Mr. Patel held numerous positions with increasing responsibility, including senior scientist, at the General Electric
Company during his thirteen-year tenure with the organization. Reasons
for Nomination · Over
20 years of experience serving with publicly-traded, global products and technology companies. · Broad
expertise in material science, automation and “smart” systems, as well as extensive research and development
experience. · Mr.
Patel has been a leader in global innovation and research initiatives, which lends tremendous support to our focus on
being an innovation leader in our industry and our advanced manufacturing growth strategy, which helps customers identify
value and efficiencies in their welding and cutting operations. · Valuable
knowledge of key governance matters gained as a director of Lincoln Electric. |

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| HELLENE
S. RUNTAGH Director
since 2001 COMMITTEES: Compensation
and Executive Development Nominating
and Corporate Governance AGE: 72 OTHER
PUBLIC COMPANY DIRECTORSHIPS: Harman International Industries (NYSE: HAR) through 2017 NeuStar, Inc. (NYSE: NSR) through 2017 | KELLYE
L. WALKER Director
since 2020 COMMITTEES: Compensation
and Executive Development Nominating
and Corporate Governance AGE: 54 OTHER
PUBLIC COMPANY DIRECTORSHIPS: None |
| --- | --- |
| Experience Ms.
Runtagh is the former President and Chief Executive Officer of the Berwind Group, a diversified pharmaceutical services,
industrial manufacturing and real estate company, a position she held in 2001. From 1997 through 2001, Ms. Runtagh was
Executive Vice President of Universal Studios, a media and entertainment company. Prior to joining Universal Studios,
Ms. Runtagh spent 27 years at General Electric Company, a diversified industrial company, in a variety of leadership positions.
In addition, Ms. Runtagh has extensive board experience, previously serving as a director of Harman International Industries from 2008 to 2017, NeuStar, Inc. from 2006 to 2017, and several other publicly-traded companies. Reasons
for Nomination · Over
30 years of experience in management positions with technology focused global companies, with responsibilities in management
ranging from marketing and sales to finance, as well as engineering and manufacturing. · Diverse
management experience, including growing businesses while maintaining high corporate governance standards. · Extensive
experience as a director of publicly-traded companies. · Valuable
knowledge of key governance matters gained as a director of Lincoln Electric and several other publicly-traded companies. | Experience Ms.
Walker has served as the Executive Vice President and Chief Legal Officer of Eastman Chemical Company, an advanced materials and
specialty additives manufacturer, since April 2020. In this role, Ms. Walker has overall leadership and responsibility for Eastman’s
legal organization. She also served as Executive Vice President and Chief Legal Officer of Huntington Ingalls Industries, Inc.,
America’s largest military shipbuilder, from 2015 to 2020. Prior to joining Huntington Ingalls Industries, Inc., Ms. Walker
served as Senior Vice President, General Counsel and Secretary at American Water Works Company, Inc. Reasons
for Nomination · Seasoned senior executive with 25 years of experience with publicly-traded companies, helping to increase
organizational value through forward thinking, strategic discipline and a focus on continuous improvement. · Extensive experience in corporate governance, compliance and litigation management, government affairs, strategy
development, product stewardship and regulatory affairs, global business conduct and global health, safety, environment and security. · Long-standing general counsel of publicly-traded companies and has also served as Chief Administrative Officer,
leading human resources, information technologies, government affairs and corporate communications functions. · Extensive leadership across various industries including global public companies, government organizations
and utility companies that will lend value to advance our 2025 Strategy. |

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CORPORATE GOVERNANCE

GOVERNANCE FRAMEWORK

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

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

· Code of Corporate Conduct and Ethics · Governance Guidelines · Charters for our Board Committees · Director Independence Standards

| CORPORATE
GOVERNANCE HIGHLIGHTS | |
| --- | --- |
| BOARD
OF DIRECTORS · Our Board held six meetings in 2020 · During 2020, each of our Directors attended at least 75% of the total full Board meetings and meetings of
committees on which he or she served during the time he or she served as a Director · Size
of Board: 12 · Plurality
vote with director resignation policy for failures to receive a majority vote in uncontested director elections · Lead
Independent Director · All
Directors are expected to attend the Annual Meeting BOARD
COMPOSITION · Number
of independent Directors: 11 · Diverse
Board including a complementary mix of backgrounds, experiences and expertise, as well as balanced mix of ages, tenure
of service and gender · Several
current and former CEOs · Global
experience · Audit
Committee has multiple financial experts BOARD
PROCESSES · Independent
Directors meet without management present · Annual
Board and Committee self-assessments · Board
orientation program · Governance
Guidelines approved by Board · Board
has an active role in risk oversight · Full
Board review of succession planning annually | BOARD ALIGNMENT WITH SHAREHOLDERS · Annual
equity grants align interests of Directors and officers with shareholders · Annual
advisory approval of named executive officer compensation · No
poison pill · Stock
ownership guidelines for Directors and officers COMPENSATION · No
employment agreements · Executive
compensation is tied to performance: 85% of CEO target pay and 69% of all of our other NEO target pay is performance-based
(at risk) · Anti-hedging
and anti-pledging policies for Directors and officers · Recoupment/clawback
policy INTEGRITY
AND COMPLIANCE · Code
of Corporate Conduct and Ethics for employees, officers and Directors · Environmental,
health and safety guidelines and goals, including long-term sustainability goals · Annual
compliance training relative to ethical behavior · Enterprise
risk management program with Board oversight |

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SHAREHOLDER ENGAGEMENT

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

Our shareholder engagement program includes participation at investor conferences, holding meetings and tours at Lincoln Electric, visiting investors at their offices, hosting tradeshow tours, being accessible to shareholder inquiries throughout the year and communicating with transparency. In 2020, we maintained active engagement with the investment community despite COVID-19 restrictions with calls/videoconferencing, a virtual annual shareholder meeting, virtual investor conferences and non-deal roadshows, as well as a virtual Lincoln Electric product exposition. Our efforts were recognized by Institutional Investors’ “All-American Executive Team” 2020 rankings, where our CEO, CFO and Investor Relations were among the top-3 midcap machinery executives in their respective areas. In addition, we reached out to investors representing approximately 49 percent of our outstanding shares to discuss corporate governance and sustainability (ESG) matters. We continued to gain good insights on our practices and policies and received positive feedback on the execution of our strategy, corporate governance, executive compensation, environmental, health and safety practices, and our investor relations program.

CORPORATE SUSTAINABILITY MATTERS

The Board recognizes the importance of achieving our goals responsibly, and this alignment with our key stakeholders also drives long-term value creation.

Our approach to sustainability began 125 years ago by our founders who established the Company under the guiding principle of The Golden Rule: Treating others how you would like to be treated. Our culture, values and our commitment to diversity and inclusion reflect The Golden Rule and our Purpose of Operating by a Higher Standard to Build a Better World.

Our governance structure for sustainability includes Board oversight, primarily driven by the Audit Committee, and sustainability metrics are incorporated into the annual goals of our CEO and our other executives. Our Executive Vice President and General Counsel oversees corporate environmental, health and safety (EH&S) initiatives and global reporting, and works closely with business unit leadership and local facilities to implement, monitor and measure our results. During 2020, we established an internal sustainability counsel with a primary focus on enhancing product stewardship for sustainable solutions.

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

· Our guiding principle is The Golden Rule; · Our Code of Corporate Conduct and Ethics; · Our Supplier Code of Conduct; · Health, safety and wellness initiatives for our employees, customers and communities; · Our Human Rights Policy; · Equal employment opportunities, along with our pledge to treat employees fairly, with dignity, and without discrimination in any form; · Focus on improving environmental performance, including long-term safety and environmental goals and performance reporting, and an emphasis on product stewardship; · Training and development programs to attract and retain high performing employees and help them reach their full potential; · Community engagement through employee-led fundraisers, grants provided by The Lincoln Electric Foundation, scholarships, in-kind gifts, and an employee matching and “Dollars for Doers” program to support volunteerism; · Positively impacting manufacturing and industry by promoting the art and science of welding among students and young professionals through our business initiatives, partnerships with schools and associations, and programming at the J.F. Lincoln Foundation; and · Enhancing diversity and inclusion through employee resource groups including our Diversity Councils, Veterans, Women in Lincoln Leadership, and Young Professionals organization.

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OUR BOARD OF DIRECTORS

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

· Overseeing the conduct of our business · Reviewing and approving key financial objectives, strategic and operating plans and other significant actions · Evaluating CEO and senior management performance and determining executive compensation · Planning for CEO succession and monitoring management’s succession planning for other key executives · Establishing an appropriate governance structure, including appropriate Board composition and succession planning · Overseeing enterprise risk management · Overseeing the ethics and compliance program · Overseeing ESG and diversity and inclusion matters

HOW WE SELECT DIRECTOR NOMINEES

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

· Demonstrates character, integrity and judgment · High-level managerial experience or experience dealing with complex business matters · Ability to work effectively with others · Sufficient time to devote to the affairs of Lincoln Electric · Specialized experience and background that will add to the depth and breadth of the Board · Independence as defined by the Nasdaq listing standards (for non-employee Directors) · Financial literacy

BOARD DIVERSITY

To maintain Board diversity, the Nominating and Corporate Governance Committee is committed to include in each director candidate search individuals that represent diversity of race and gender. The Nominating and Corporate Governance committee also considers diversity of national origin, professional background and capabilities, knowledge of specific industries, and geographic experience. Throughout 2020, the Nominating and Corporate Governance Committee reviewed the skills, qualifications and experience of each Director nominee to ensure that each can effectively oversee our long-term business strategy.

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

In October 2020, Ms. Kellye Walker was elected to the Board. In recruiting Ms. Walker, the Nominating and Corporate Governance Committee considered her background and skills and determined that her extensive leadership experience across various industries in legal, corporate governance and strategy development would be integral in helping advance our 2025 Strategy. Shareholders may nominate one or more persons for election as Director of Lincoln Electric. The process for doing so is set forth in the FAQs section of this Proxy Statement. Director candidates recommended by our shareholders will be considered by the Nominating and Corporate Governance Committee in accordance with the criteria outlined above.

DIRECTOR INDEPENDENCE

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

During 2020, the independent Directors met in regularly scheduled Executive Sessions in conjunction with each of the Board meetings. The Lead Independent Director presided over these sessions.

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BOARD LEADERSHIP

Mr. Mapes, our President and CEO, serves as Chairman of the Board, in addition to his other responsibilities. As Chairman, he is responsible for planning, formulating and coordinating the development and execution of our corporate strategy, policies, goals and objectives. He is accountable for Lincoln Electric’s performance and:

· reports directly to our Board, who reviews and approves his annual performance objectives; · works closely with our management to develop our strategic plan; · works with our management on transactional matters by networking with strategic relationships; · promotes and monitors the Board’s fulfillment of its oversight and governance responsibilities; · encourages the Board to set and implement our goals and strategies; · establishes procedures to govern our Board’s work; · oversees the execution of the financial and other decisions of our Board; · makes available to all members of our Board opportunities to acquire sufficient knowledge and understanding of our business to enable them to make informed judgments; · presides over meetings of our shareholders; and · sets the agenda for, and presides over, Board meetings.

Our Board believes having one individual serve as Chairman and CEO is beneficial to us because the dual role enhances Mr. Mapes’ ability to provide direction and insight on strategic initiatives impacting us and our shareholders. The Board also believes the dual role is consistent with good corporate governance practices because it is complemented by a Lead Independent Director.

| LEAD
INDEPENDENT DIRECTOR Our
Lead Independent Director focuses on overseeing the Board’s processes and prioritizing the right areas of focus.
Our Lead Independent Director is appointed each year by the independent Directors and serves as a liaison between the
Chairman of the Board and the independent Directors. Specifically, the Lead Independent Director has the following duties,
responsibilities, and expectations: · Collaborates
with the Chairman, the Secretary and senior management on the format and adequacy of the information that Directors receive
and on the effectiveness of the Board meeting process. · Acts
independently of the Chairman to review and approve Board meeting agendas and schedules. · Acts
as a sounding board to the Chairman of the Board on key aspects of the business, and assists in promoting sound corporate governance
practices. |
| --- |
| · Calls
meetings of the independent Directors as he sees fit,
presiding over such meetings. · Speaks
on behalf of Lincoln Electric, as the Board determines necessary. |

BOARD ROLE IN ENTERPRISE RISK MANAGEMENT

In the ordinary course of business, we face various strategic, operating and compliance risks. Our enterprise risk management process seeks to identify and address risks to the organization. Our Board oversees the management of these risks on an enterprise-wide basis, and the Lead Independent Director promotes our Board’s engagement in this process. A fundamental part of the process is to understand the Company’s risks, and to provide oversight as to how management is addressing these risks. The full Board reviews with management its process for enterprise risk management. In addition, the Audit Committee is charged with overseeing the Company’s risk assessment and management process each year, including ensuring that management has instituted processes to identify critical risks and has developed plans to manage such risks.

The Company maintains a risk management review process where risk is assessed throughout our entire organization, and is reported to a corporate risk committee comprised of members of our various business units and control functions. Each year, the committee identifies critical risks to the organization and those that are determined to be “high-priority” risks are reported to the executive management committee and the Board. Thereafter, “high-priority” risks are assigned, as appropriate, to various Board Committees, or to the Board as a whole, for further review, analysis and development of appropriate plans for management and mitigation. Information security is a high-priority risk, and the Audit Committee receives updates at each meeting relative to this risk and the Company maintains a related cyber risk insurance policy.

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BOARD ROLE IN STRATEGY OVERSIGHT

One of the Board’s key responsibilities is overseeing the Company’s strategic planning process, including reviewing the steps taken to develop strategic plans and approving the final plans. In 2020, this included receiving periodic updates regarding the Company’s execution and performance during the initial year of the 2025 Strategy. Our Board regularly discusses the key priorities of our Company, taking into consideration global economic, consumer and other significant trends. The Company’s long-term strategic plan is reviewed regularly with the Board, along with its annual operating plan, capital structure and sustainability performance.

COMPENSATION-RELATED RISK

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

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

RELATED-PARTY TRANSACTIONS

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

We define “related-party transactions” generally as transactions collectively over $120,000 in any calendar year, in which any related party had, has or will have a direct or indirect material interest. We have a monitoring and reporting program, which includes requirements to report all actual or potential related party transactions during the year and information regarding all relationships with entities involving a related party. In February 2020, the Audit Committee considered and approved the on-going related-party transaction involving P&R Specialty, Inc., a supplier to Lincoln Electric. Greg D. Blankenship, the brother of George D. Blankenship, our former Executive Vice President, President, Americas Welding, is the sole stockholder and President of P&R Specialty, Inc. During 2020, we purchased approximately $2.0 million worth of products from P&R Specialty in ordinary course of business transactions. George D. Blankenship has no ownership interest in or any involvement with P&R Specialty. We believe that the transactions with P&R Specialty were, and are, on terms no less favorable to us than those that could have been obtained from unaffiliated parties.

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OUR BOARD COMMITTEES

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

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

Audit Committee — Chair: Stephen G. Hanks	Compensation and Executive Development Committee — Chair: William E. MacDonald, III
Meetings held in 2020: 6
	Meetings held in 2020: 7
Key Responsibilities · Independent
auditor engagement · Reviews
financial statements and disclosures, interim financial reports and earnings press releases · Reviews
significant litigation and legal matters · Oversees
enterprise risk management, risk assessment, ethics and compliance programs, including ESG performance and general information
security matters · Reviews
and evaluates the scope and performance of the internal audit function · Reviews internal controls over financial reporting Each member of our Audit Committee meets the
independence standards set forth in the Nasdaq listing standards and have likewise been determined by the Board to have the financial
competency required by the listing standards. In addition, because of the professional training and past employment experience
of Messrs. Hanks, Espeland and Goris, the Board has determined that they are financially sophisticated Audit Committee members
under the Nasdaq listing standards and qualify as “audit committee financial experts” in accordance with SEC rules.
Shareholders should understand that the designation of Messrs. Hanks, Espeland and Goris as “audit committee financial experts”
is a disclosure requirement and that it does not impose upon them any duties, obligations or liabilities that are greater than
those generally imposed on them as members of the Audit Committee and the Board.
	Key Responsibilities · Reviews
and recommends to the Board total compensation of our CEO, and reviews and establishes total compensation of our other executive
officers · Evaluates
performance (along with full Board) of our CEO and other executive officers · Monitors
development, selection process and succession planning of key management · Reviews
and recommends to the Board, in conjunction with the Nominating and Corporate Governance Committee, the appointment and removal
of elected officers · Oversees
executive compensation policies, practices and programs, as further described in the CD&A · Reviews
and recommends to the Board new or amended executive compensation plans with our executive officers · Oversees
diversity and inclusion programming Each member of our Compensation and Executive Development Committee meets the independence standards set forth
in the Nasdaq listing standards and each is deemed to be (1) an outside Director within the meaning of Section 162(m) of the U.S.
Internal Revenue Code of 1986, as amended, and (2) a “non-employee director” within the meaning of Rule 16b-3 of the
Exchange Act. The Compensation and Executive Development Committee may, in its discretion, delegate specific duties, responsibilities
and authority to a subcommittee, one or more Committee members or one or more executive officers, to the extent permitted by applicable
law and stock exchange rules and regulations.

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| Nominating
and Corporate Governance Committee — Chair: Kathryn
Jo Lincoln | Finance
Committee — Chair: Phillip
J. Mason |
| --- | --- |
| | Meetings
held in 2020: 5 |
| Meetings
held in 2020: 5 | |
| Key
Responsibilities · Reviews
our corporate governance framework including external developments related to corporate governance matters · Reviews
appropriate composition of the Board, identifies Board candidates and recommends Director nominees · Reviews
shareholder proposals and shareholder engagement activities · Reviews
non-employee Director compensation program in light of best practices and makes recommendations to the Board · Reviews and determines Director independence · Oversees
the self-evaluation process of the Board and Committees · Reviews
environmental, social and governance matters Each member of our Nominating and Corporate Governance Committee meets the independence standards set forth in the Nasdaq listing
standards. | Key
Responsibilities · Reviews
financial performance, including comparing financial performance to budgets and goals · Reviews
capital allocation, dividend and share repurchasing strategies · Reviews
operating budgets · Reviews
capital expenditures · Reviews
M&A activity and integration performance · Oversees
strategic planning and financial policy matters Each member of our Finance Committee meets the independence standards set forth in the Nasdaq listing standards. All of our
Directors typically attend the Finance Committee meetings, a practice that has been in place for the past several years. |

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DIRECTOR COMPENSATION

OUR BOARD COMPENSATION PROGRAM

Based upon the recommendations of the Nominating and Corporate Governance Committee, the Board determines our non-employee Director compensation. The Nominating and Corporate Governance Committee periodically reviews all elements of Board compensation in relation to our proxy peer group (as identified in the CD&A), trends in Board compensation and other factors it deems appropriate. In consultation with Korn Ferry as an independent advisor, the Nominating and Corporate Governance Committee did not recommend any adjustments to Board compensation during 2020.

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

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

GOOD GOVERNANCE PRACTICES

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

| What
We Do — Reasonable
limits on non-employee Directors’ annual equity awards included in 2015 Stock Plan for Non-Employee Directors | ✔ | What
We Don’t Do — No
Hedging or Pledging of Lincoln Electric Stock | ✘ |
| --- | --- | --- | --- |
| Total
compensation is positioned at the peer median | ✔ | No
Excessive Perquisites | ✘ |
| Non-employee
Director compensation approved by full Board | ✔ | No
Excise Tax Gross-Ups or Tax Reimbursements | ✘ |
| Full-value
equity award granted at a fixed-value | ✔ | | |
| Double
Trigger Provisions for Change in Control | ✔ | | |
| Stock
Ownership Guidelines | ✔ | | |
| Independent
Advisor | ✔ | | |

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

| Cash | Retainer 1 | Board
Level — $
80,000 | Lead
Independent Director — Additional $28,000 | Committee
Chairs — Additional $20,000
for Audit $15,000
for Compensation and Executive Development, Finance and Nominating and Corporate Governance |
| --- | --- | --- | --- | --- |
| | Meeting
Fees 2 | — | – | – |
| Equity | Annual
Restricted Stock Unit (RSU) Award approx. value 3 | $135,000 | – | – |
| | Initial
RSU Award approx. value 3,4 | $135,000 | – | – |

(1) Directors have the ability to defer annual cash compensation under the Non-Employee Directors’ Deferred Compensation Plan.

(2) We do not have separate meeting fees, except if there are more than eight full Board or Committee meetings in any given year, Directors will receive $1,500 for each full Board meeting in excess of eight meetings and Committee members will receive $1,000 for each Committee meeting in excess of eight meetings in total.

(3) Directors have the ability to defer RSUs under the Non-Employee Directors’ Deferred Compensation Plan.

(4) The initial award will be pro-rated based on the Director’s length of service during the twelve-month period preceding the next regularly scheduled annual equity grant, which normally occurs in the fourth quarter of each year.

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| 2020
DIRECTOR COMPENSATION TABLE — Name | Fees
Earned or Paid in Cash ($) | Stock Awards 1 ($) | Change
in Pension Value and Nonqualified Deferred Compensation Earnings ($) | Total ($) |
| --- | --- | --- | --- | --- |
| Curtis
E. Espeland | 108,000 2 | 134,916 | | 242,916 |
| Patrick
P. Goris | 80,000 2 | 134,916 | 2,308 3 | 217,224 |
| Stephen
G. Hanks | 100,000 | 134,916 | | 234,916 |
| Michael
F. Hilton | 80,000 | 134,916 | | 214,916 |
| G.
Russell Lincoln | 80,000 | 134,916 | | 214,916 |
| Kathryn
Jo Lincoln | 95,000 2 | 134,916 | | 229,916 |
| William
E. MacDonald, III | 95,000 | 134,916 | | 229,916 |
| Phillip J. Mason | 95,000 | 134,916 | | 229,916 |
| Ben
P. Patel | 80,000 2 | 134,916 | | 214,916 |
| Hellene
S. Runtagh | 80,000 | 134,916 | | 214,916 |
| Kellye
L. Walker | 15,870 | 153,680 | | 169,550 |

(1) On December 10, 2020, 1,129 RSUs were granted to each non-employee Director under our 2015 Stock Plan for Non-Employee Directors. For Ms. Walker, 184 RSUs were also granted to her on October 20, 2020 upon her initial election to the Board.

The Stock Awards column represents the grant date fair value under Accounting Standards Codification (ASC) Topic No. 718 based on a closing price of $119.50 per share on December 10, 2020, and, with respect to the award granted to Ms. Walker, a closing price of $101.98 per share on October 20, 2020. Assumptions used in the calculation of these amounts are included in footnote 10 to our audited financial statements for the fiscal year ended December 31, 2020 included in our Annual Report on Form 10-K filed with the SEC on February 19, 2021.

As of December 31, 2020, the number of RSUs held by each non-employee Director was 1,129, except for Ms. Walker, who held 1,313. Each of Messrs. Goris, Hanks, Hilton and Patel and Ms. Lincoln elected to defer receipt of the RSUs that were granted in 2020 under our Non-Employee Directors’ Deferred Compensation Plan.

(2) All of Messrs. Espeland’s, Goris’ and Patel’s and Ms. Lincoln’s Board fees were deferred under our Non-Employee Directors’ Deferred Compensation Plan.

(3) The amount shown for 2020 represents the difference in earnings under the Moody’s Corporate Bond Index fund in our Non-Employee Directors’ Deferred Compensation Plan and a hypothetical rate.

OTHER ARRANGEMENTS

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

CONTINUING EDUCATION

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

STOCK OWNERSHIP GUIDELINES

In keeping with the philosophy that Directors’ interests should be aligned with the shareholders’ interest and as part of the Board’s continued focus on corporate governance, all of our non-employee Directors must adhere to our stock ownership guidelines. RSUs, including any RSUs that have been deferred under the Non-Employee Directors’ Deferred Compensation Plan, count toward the stock ownership amount; shares held in another person’s name (including a relative) do not. The stock ownership guidelines can be met by satisfying one of the two thresholds noted in the chart below. As of December 31, 2020, all of our non-employee Directors had satisfied the stock ownership guidelines, except for Ms. Walker who was elected to the Board in 2020.

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Directors have five years from the date of election to the Board to satisfy the stock ownership guidelines. The Nominating and Corporate Governance Committee reviews the guidelines at least every two-and-a-half years to ensure that the components and values are appropriate—a review was conducted during 2019, with the assistance of Korn Ferry as an independent advisor, and it was determined that no changes to the guidelines were necessary at this time, as the 5 times annual retainer guideline was consistent with the peer group median. As there was no modification and this was a mid-cycle review, the absolute share target remained unchanged. The next review is anticipated to occur in 2021.

| Retainer
Multiple | | Number
of Shares |
| --- | --- | --- |
| Shares
valued at 5x annual Board retainer ($400,000) | OR | 4,368* |

• Represents shares equal to $400,000 based on the closing price of Lincoln Electric stock as of December 29, 2017 (the last trading day of the calendar year) of $91.58.

EQUITY AWARDS

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

DEFERRED COMPENSATION PLAN

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

The investment elections available under the plan for cash compensation deferred are the same as those available to executives under our Top Hat Plan, which is discussed in the narrative under 2020 Deferred Compensation Benefits. RSU deferrals are deemed invested solely in a Lincoln Electric Stock fund, and no other plan deferrals are eligible for investment into that fund.

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EXECUTIVE COMPENSATION

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

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

| Executive
Compensation Table of Contents | |
| --- | --- |
| Executive
Summary | 38 |
| Our
Compensation Philosophy | 45 |
| Elements
of Executive Compensation | 50 |
| Other
Arrangements, Policies and Practices | 59 |
| Summary
of 2020 Compensation Elements | 64 |
| 2020
Summary Compensation Table | 65 |
| 2020
Grants of Plan-Based Awards Table | 68 |
| Holdings
of Equity-Related Interests | 71 |
| 2020
Pension Benefits Table | 74 |
| 2020
Deferred Compensation Benefits | 75 |
| Termination
and Change in Control Arrangements | 77 |

| For
2020, our NEOs were: | |
| --- | --- |
| ● | CHRISTOPHER
L. MAPES Chairman,
President and Chief Executive Officer |
| ● | G ABRIEL
BRUNO Executive
Vice President, Chief Financial Officer and Treasurer |
| ● | S TEVEN
B. HEDLUND E xecutive Vice President, President, Americas and International Welding |
| ● | J ENNIFER
I. ANSBERRY E xecutive
Vice President, General Counsel and Secretary |
| ● | M ICHELE
R. KUHRT E xecutive
Vice President, Chief Human Resources Officer |
| | VINCENT
K. PETRELLA (retired during 2020) F ormer
Executive Vice President, Chief Financial Officer and Treasurer |
| | GEORGE
D. BLANKENSHIP (retired during 2020) Former
Executive Vice President, President, Americas Welding |

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COMPENSATION DISCUSSION AND ANALYSIS

EXECUTIVE SUMMARY

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

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

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KEY FINANCIAL PERFORMANCE

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

We operated as an “essential business” in 2020 to ensure product availability for customers. Despite the unprecedented safety and operational challenges posed by the global pandemic, we achieved solid returns with a 17.7% ROIC, strong cash flow generation, and 117% cash conversion. Sales decreased approximately 11.6% to approximately $2.7 billion primarily due to 12.2% lower organic sales, which were partially offset by a 1.3% benefit to sales from an acquisition. Operating income margin declined 180 basis points to 10.6% versus the prior year primarily due to lower sales and rationalization and asset impairment charges. Adjusted operating income margin held relatively steady, declining 50 basis points to 12.4% as price management and approximately $88 million in cost reduction benefits substantially mitigated the unfavorable impact of lower volumes.

Our focus on operational excellence resulted in record safety performance for 2020 and we exceeded three of four of our 2020 environmental goals (with energy intensity not being achieved due to reduced working hours across the globe as a result of the pandemic, although actual energy consumption was down year over year). These results demonstrate the continued structural improvements achieved in the business as the organization pursues best-in-class performance.

We also focused on the continued development and commercialization of innovative solutions and leveraged new digital solutions to engage with customers virtually to drive long-term growth. In 2020, we maintained our R&D spend of approximately 1.9% of revenue. Our investments in innovation generated a sales vitality index from new products launched in the last five years of 31%, and we increased our vitality index in equipment systems to 54%. The vitality index represents the percentage of 2020 sales from new products launched in the last five years, excluding the International Welding Segment and customized automation sales.

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

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We remain focused on generating long-term value for our shareholders through a disciplined capital allocation strategy. In 2020, we deployed approximately $59 million towards capital projects focused primarily on growth and operational efficiency and returned approximately $232 million of cash to shareholders through our dividend program and share repurchases. In the last five years, we have repurchased an aggregate amount of $994 million in shares and have increased the dividend rate by 59%. Our Board increased the dividend payout rate for 2021 by an additional 4.1%, marking 25 years of consecutive dividend increases.

FINANCIAL MEASURES USED FOR COMPENSATION PURPOSES

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

Short-term financial metrics used to evaluate operational performance and used in our annual bonus (EMIP) design are:

• Adjusted earnings before interest, taxes and bonus (EBITB), and

• Average operating working capital to net sales ratio (AOWC/Sales) for Compensation Purposes.

The following charts illustrate our performance in these or comparable metrics.

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Financial metrics considered in our long-term incentive compensation program include:

| • | Growth
of Adjusted Net Income for Compensation Purposes (over a three-year cycle), |
| --- | --- |
| • | Three-year
average ROIC for Compensation Purposes indexed to peer performance, and |

The following charts illustrate our Adjusted Net Income for Compensation Purposes and ROIC for Compensation Purposes. The results for ROIC for Compensation Purposes are compared to our peer group, the S&P 400 Midcap Index (S&P 400), in which we participate, and the S&P 400 Midcap Manufacturing Index. The ROIC for Compensation Purposes percentile rankings show the position of our financial results compared to the particular group, with a 50th percentile ranking indicating median (or market) performance. Percentiles below 50 indicate below-market performance, while percentiles above 50 indicate above-market performance. Information is based on the most recently available public information (as accumulated by an independent third party), as of January 2021 when the analysis was performed.

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TOTAL SHAREHOLDER RETURN (TSR)

The following 3-Year (2018-2020) TSR Performance Percentile Rank chart illustrates our TSR performance compared to our peer group, the S&P Composite 500 Stock Index (S&P 500), the S&P 400, and the S&P 400 Midcap Manufacturing Index. The TSR percentile rankings show the position of our TSR Performance compared to the particular group, with a 50th percentile ranking indicating median (or market) performance. Percentiles below 50 indicate below-market performance, while percentiles above 50 indicate above-market performance. This information is based on the most recently available public information (as accumulated by an independent third party), as of January 2021 when the analysis was performed.

The following line graph compares the yearly percentage change in the cumulative total shareholder return on our common stock against the cumulative total return of the S&P 500 and the S&P 400 for the five-year calendar year period commencing January 1, 2016 and ending December 31, 2020. This graph assumes that $100 was invested on December 31, 2015 in each of our common shares, the S&P 500 and the S&P 400. A peer-group index for the welding industry, in general, is not readily available because the industry is comprised of a large number of privately held competitors and competitors that are smaller parts of large publicly traded companies.

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PAY FOR PERFORMANCE, OBJECTIVES AND PROCESS

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

To assess pay for performance, we evaluate the relationship between CEO pay and TSR performance considering the ISS methodology. This allows us to understand the relative degree of alignment over a three-year period between the pay opportunity delivered to the CEO and the performance achieved by shareholders relative to the ISS peer group. The ISS peer group for this analysis is comprised of 24 companies of which 11 companies overlap with our peer group. In conjunction with ISS resources, this analysis is performed by management’s compensation consultant, Willis Towers Watson, which is reviewed by the Compensation and Executive Development Committee (the “Committee”) and by its independent consultant, Korn Ferry.

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

• Base pay; • Annual bonus (EMIP); • The value of restricted stock units (“RSUs”) granted (based on the closing price of our common stock as of the grant date); • The value at target of performance shares granted (based on the closing price of our common stock as of the grant date); • The value of stock options granted (based on the ISS Black-Scholes pricing model as of the grant date); • Actual nonqualified deferred compensation earnings; and • All other compensation for the applicable three-year period.

As the following chart demonstrates, for the 2018-2020 performance period, our ranking for TSR performance was slightly above the median of the ISS peer group for the most recent three-year period. For the same period, our ranking for CEO pay was above the median. The shaded area in the chart below highlights the area in which ISS has a low overall concern level. As shown in the chart below, our ranking for TSR performance and our ranking for CEO pay has consistently fallen within the shaded area and demonstrates an overall alignment over the three most recent three-year performance periods. Based on this analysis, the Committee is satisfied with the alignment of our CEO’s pay with the performance of the Company.

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

2020 EXECUTIVE COMPENSATION ACTIONS

During 2020, the Committee reviewed the design of our executive compensation program to help ensure consistency with our pay for performance philosophy. Each year, the Committee monitors our executive compensation program and how it relates to our corporate performance and shareholder interests. At our 2020 Annual Meeting, we received 98% approval, based on the total votes cast, for our annual advisory say-on-pay vote to approve the compensation of our NEOs. The Committee considered this result, in connection with its review of the overall design of our executive compensation program, particularly in light of the transition to the 2025 Strategy. The Committee believes the voting results demonstrate significant support for our executive compensation program, and the Committee chose not to make any substantial changes to the existing program for 2020 specifically in response to the 2020 say-on-pay voting results. The Committee expects, however, to continue to work with its compensation consultant to monitor changes in executive compensation trends to keep our executive compensation program aligned with best practices in our competitive market.

In addition, beginning in March 2020, the Committee and senior leadership team closely monitored the impact of the COVID-19 pandemic on our executive compensation program, to help ensure ongoing alignment between our executive’s incentives and our stockholders’ long-term interests during a period of extraordinary market volatility. Ultimately, the Committee made no changes or adjustments to our executive compensation program in response to the COVID-19 pandemic.

NO ADJUSTMENTS TO COMPENSATION PROGRAMS FOR THE COVID-19 PANDEMIC

During 2020 we did not make any changes or adjustments to our executive compensation program specifically in response to the COVID-19 pandemic. The Committee did not modify individual performance goals or the corporate performance goals that were established at the beginning of the fiscal year, prior to the onset of the COVID-19 pandemic, for the annual bonus (EMIP) or outstanding performance share awards.

KEY EXECUTIVE TRANSITIONS

During 2020, two NEOs, Vincent Petrella and George Blankenship, retired from the Company. Prior to their retirements, Mr. Petrella served as our Executive Vice President, Chief Financial Officer and Treasurer and Mr. Blankenship served as our Executive Vice President, President, Americas Welding. In connection with these retirements, Gabriel Bruno was appointed Executive Vice President, Chief Financial Officer and Treasurer and Steven Hedlund was appointed Executive Vice President, President, Americas and International Welding. More information is provided below regarding the compensation for Messrs. Petrella and Blankenship for 2020, including in connection with their retirements.

GOOD GOVERNANCE PRACTICES

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

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

| What
We Do — Pay
for Performance Focus (Compensation
programs weighted heavily toward variable, “at risk,” compensation; perform annual reviews of market competitiveness
and the relationship of compensation to financial performance) | ✔ | What
We Don’t Do — No
Guaranteed Pay (No
multi-year guarantees for compensation increases, including
base pay, and no guaranteed bonuses) | ✘ |
| --- | --- | --- | --- |
| Balanced
Compensation (Compensation
opportunities linked to both short-term and long-term periods of time, while aligning compensation with several financial
performance metrics that are critical to achievement of sustained growth and shareholder value creation) | ✔ | No
Repricing or Replacement of Underwater Stock Options without
Prior Shareholder Approval | ✘ |
| Double
Trigger Provisions for Change in Control | ✔ | No
Payment of Dividends on Unvested Equity | ✘ |
| Stock
Ownership Guidelines for all Executive Officers | ✔ | No
Excessive Perquisites | ✘ |
| Clawback
Policy | ✔ | No
Excise Tax Gross-Ups or Tax Reimbursements | ✘ |
| Independent
Compensation Committee and Consultant | ✔ | No
Hedging or Pledging of Lincoln Electric Stock | ✘ |

OUR COMPENSATION PHILOSOPHY

CORE PRINCIPLES

The primary components of our executive compensation program, summarized below, help ensure that we maintain our performance-driven culture:

| Type | Component
and Competitive Target | | Philosophy
and Objective |
| --- | --- | --- | --- |
| Fixed
Compensation | Base
Pay | ● | · Targeted
at the 45th percentile of market (below market) to place stronger emphasis on incentive compensation · Provide
market-competitive fixed pay reflective of an executive officer’s role, responsibilities and individual performance
in order to attract and retain top talent |
| Incentive-Based
Compensation | Target Total Cash Compensation with Annual Bonus (EMIP) | ● | · Targeted above the competitive market, so that target total cash compensation (base pay and annual bonus which
incorporates financial targets and individual performance goals) is set at 65th percentile of market · Drive
financial performance, including adjusted earnings before interest, taxes and bonus (EBITB) and average operating working
capital to net sales ratio · Deliver
individual performance against specific business objectives, including executing on our 2025 Strategy,
increasing our customer satisfaction, developing and engaging a diverse and talented workforce, driving sustainable innovation
and improving operating efficiencies |
| | Long-Term Incentive Compensation | ● | · Targeted
at the 50th percentile of market (at market) · Divided
equally among 3 programs: (1) stock options; (2) restricted stock units (RSUs); and (3) Performance Shares · Incentivize
achievement of long-term value creation through financial performance objectives weighted more heavily toward rewards
for share price appreciation and long-term profitability |

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In addition to the primary components of our executive compensation program, we provide benefits and perquisites that we believe, taken as a whole, are at the market median.

Individual performance also plays a key role in determining the amount of compensation delivered to an individual in many of our programs, with our philosophy being that the best performers should receive the greatest rewards. The following charts present the mix of 2020 target direct compensation for our CEO and all of our other NEOs, as established in the beginning of 2020. As shown below, 85% of the CEO’s compensation mix was “at risk” and 69% of our other NEOs’ compensation mix was “at risk,” with the actual amounts realized based on annual and long-term performance as well as our stock price.

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THE ROLES OF THE COMMITTEE, EXTERNAL ADVISORS AND MANAGEMENT

The Committee, which consists solely of non-employee Directors, has primary responsibility for reviewing, establishing and monitoring all elements of our executive compensation program. The Committee is advised by its independent executive compensation consultant, Korn Ferry, and independent legal counsel as it deems appropriate. Management provides recommendations and analysis to the Committee, and is supported in those efforts by its own executive compensation consultant, Willis Towers Watson.

| ROLE
OF THE COMMITTEE | |
| --- | --- |
| Compensation-Related
Tasks | Organizational
Tasks |
| Reviews,
approves and administers all of our executive compensation plans, including our equity plans | Evaluates
the performance of the CEO, including consideration of tone and embodiment of core values, with input from all non-employee
Directors |
| Establishes
performance objectives under our short-term and long-term incentive compensation programs 1 | Reviews
the performance capabilities of the other executive officers, including consideration of tone and embodiment of core values,
based on input from the CEO |
| Determines
the attainment of performance objectives and the awards to be made to our executive officers under our short-term and long-term
incentive compensation programs 1 | Reviews
succession planning for officer positions, including the position of the CEO |
| Determines
the compensation for our executive officers, including salary and short-term and long-term incentive compensation opportunities 1 | Reviews
proposed organization or responsibility changes at
the officer level |
| Reviews
compensation practices relating to key employees to confirm
that these practices remain equitable and competitive | Reviews
our practices for the recruitment and development of a diverse talent pool |
| Reviews
employee benefit plans that relate to executive officers and/or key employees | Retains
the services of independent legal counsel from time to time to provide input on various matters |

(1) The independent members of the Board takes such action with respect to the CEO.

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ROLE OF EXTERNAL ADVISORS

Korn Ferry

• Independent executive compensation consultant for the Committee • Advises on matters including competitive compensation analysis, executive compensation trends and plan design, peer group company configuration, competitive financial performance and financial target setting • Reviews analysis and data collected by management (particularly the CEO, the CFO and the Chief Human Resources Officer) and Willis Towers Watson • Reports directly to the Chairperson of the Committee • Meets with the Committee in executive session without the participation of management • Discusses the CEO’s recommendations with the Committee to help ensure the compensation recommendations are in line with stated compensation philosophies and are reasonable when compared to the competitive market • The Committee is not bound by Korn Ferry’s recommendation • Considering all relevant factors (as required by compensation consultant independence standards set forth in applicable SEC rules and Nasdaq listing standards), we have assessed Korn Ferry’s independence, and are not aware of any conflict of interest that has been raised by the work performed by Korn Ferry

Willis Towers Watson

• Provides executive compensation analysis and other services directly to management • Performs data analysis on competitive compensation, competitive financial performance and financial target setting • Provides analysis to Korn Ferry in advance to allow Korn Ferry to comment upon the findings and recommendations made by management • Considering all relevant factors (as required by compensation consultant independence standards set forth in applicable SEC rules and Nasdaq listing standards), we have assessed Willis Towers Watson’s independence, and are not aware of any conflict of interest that has been raised by the work performed by Willis Towers Watson

ROLE OF CEO AND MANAGEMENT

• Provides compensation-related recommendations to the Committee • The CEO recommends the compensation for other executive management positions and provides the Committee with assessments of their individual performance (both of which are subject to Committee review) • Performs individual performance assessments based on achievement of various financial and leadership objectives set by the CEO • Receives suggestions from the Committee for modifications to financial and leadership objectives where warranted

OUR METHODOLOGIES

SELECTION OF COMPENSATION ELEMENTS

As part of its annual review, the Committee evaluates whether changes in the philosophy or structure are warranted in light of emerging trends, business needs and/or financial performance. The Committee then uses competitive market data, performance assessments, and independent executive compensation consultants and management recommendations to set the pay components along the targets described above (for example, 45th percentile for base pay). Actual pay for executive management will generally fall within a range of these targets (plus or minus 20%). Absent significant increases due to promotion, increases for break-through individual performance or significant changes in the competitive market data, pay increases are generally in line with national trends.

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MARKET COMPARISON DATA

We collect competitive market compensation data from multiple nationally published surveys, from proxy data for a peer group of companies and from proxy data for companies in the S&P 400. Nationally published survey market compensation data is statistically determined (through regression analysis) to approximate our revenue size and aged to approximate more current data. We did not select the companies that comprise any of these survey groups, and the component companies’ identities were not a material factor in this analysis. The Company worked with Willis Towers Watson during 2020 with respect to the benchmarking methodology used, and based on the analysis, we will generally blend 50% survey and 50% peer data for benchmarking executive compensation for our NEOs commencing in 2021.

PEER GROUP

We use a peer group of publicly traded industrial companies that are headquartered in the U.S. that serve a number of different market segments and that have significant foreign operations. These are companies for which Lincoln Electric competes for talent and shareholder investment. In addition, we only select companies with solid historical financial results (removing companies from the peer group when their financial performance has consistently fallen below an acceptable level) and companies with sales that are within 2.5 times that of Lincoln Electric, with the exception of Illinois Tool Works (ITW), as ITW is a global competitor with its largest presence in the U.S. The Committee conducts an annual review of our peer group, with the assistance of Korn Ferry as an independent advisor. In 2020, the Committee determined that no changes to the peer group were necessary, but it acknowledged that additional consideration may be needed in 2021 to monitor changing business models of certain peers and due to the effect of the pandemic across the current peer group.

For 2020, our peer group consisted of the following 18 publicly traded industrial corporations:

| Ametek
Inc. | Flowserve
Corporation | Kennametal
Inc. | SPX
Corporation |
| --- | --- | --- | --- |
| Carlisle
Companies Incorporated | Graco
Inc. | Nordson
Corporation | The
Timken Company |
| Colfax
Corporation | IDEX
Corporation | Regal
Beloit Corporation | The
Toro Company |
| Crane
Co. | Illinois
Tool Works Inc. | Roper
Technologies, Inc. | |
| Donaldson
Company, Inc. | ITT
Inc. | Snap-On,
Incorporated | |

EXECUTIVE COMPENSATION STRUCTURE

In evaluating our executive compensation structure, the Committee considers three primary elements: (1) business needs, (2) individual performance and (3) pay for performance review.

| Business
Needs | Individual
Performance | Organizational
Tasks |
| --- | --- | --- |
| · Independent
compensation consultant (Korn Ferry) provides information about emerging trends in executive compensation, along with Committee
members’ own reading and study | · Individual
performance is a significant factor in determining annual changes (up or down) to pay components | · The
Committee conducts an annual assessment of our financial performance and pay for performance, in determining whether changes
will be made to the existing philosophy or structure and before setting compensation levels for the upcoming year |
| · Trends
considered in light of our compensation philosophies and various business needs | · Annual
bonus (EMIP) includes an individual performance component in determining the percentage of target bonus to be paid (described
below and noted in the 2020 EMIP Matrix) | · The
annual assessments are used to evaluate whether executive compensation is properly aligned with our financial performance |
| · Business
needs that are evaluated can include: talent attraction or retention strategies, growth expectations, strategic programs,
cost-containment initiatives, management development needs and our company culture | · Individual
performance is measured against how well an executive demonstrates proficiency in key leadership competencies, as well as
the executive’s achievement against objectives established for him or her at the beginning of the year | |
| · No
single factor guides whether changes will be made, as the Committee uses a holistic approach, considering a variety of factors | · For
the past three years, individual performance ratings for the annual bonus for officers have ranged from 107% to 130% | |

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The following chart highlights the process and timing of compensation determinations and payouts:

| Prior
Year Fourth Quarter — · Committee reviews our compensation program and philosophy, including determining if our compensation levels
are competitive with our peer group and if any changes should be made to the program for the next year | | Current
Year First Quarter — · Committee determines the individual performance goals of the CEO (with Board approval) and sets the performance
goals for each corporate-based (financial) component | · Committee meets regularly throughout the year, with management and in executive session |
| --- | --- | --- | --- |
| · Committee determines the principal components of compensation for the NEOs | | · CEO sets individual performance goals for each of the other NEOs, which are reviewed by the Committee | · Ongoing review of Company performance against performance goals |
| · Management engages compensation consultant (Willis Towers Watson) to provide a competitive market assessment
of pay levels for the executive officers, including the NEOs | ● | · Individual performance goals of CEO and the other NEOs are designed to drive our corporate goals and our 2025
Strategy | ● |
| | | · Base pay, annual bonus targets and long-term incentive awards are set at a regularly scheduled Committee
meeting | |
| | | · Payout
amounts for the annual bonus (EMIP) and Performance Shares are determined at the first
available Committee meeting (normally in February) or a subsequent special meeting (normally
in March), once financial results are available | |

ELEMENTS OF EXECUTIVE COMPENSATION

Each compensation component for our NEOs is described below, with specific actions that were taken during 2020 noted. For 2020 compensation amounts, please refer to the Summary Compensation Table and other accompanying tables below.

BASE PAY

Base salary is provided to our executives to compensate them for their time and proficiency in their positions, as well as the value of their job relative to other positions at Lincoln Electric. Base salaries are set based on a subjective evaluation of the executive’s experience, expertise, level of responsibility, leadership qualities, individual accomplishments and other factors. That being said, we aim to set base salaries at approximately the 45th percentile of the market (slightly below market) in keeping with our philosophy that greater emphasis should be placed on variable compensation.

2020 AND 2021 BASE PAY

Ahead of 2020, the Committee reviewed officer pay, including all NEOs, as compared to the market. Based on this review, and in light of our overall cost-containment initiatives, management did not recommend, and the Committee did not approve, increases at the start of the year for any NEO’s 2020 base salary, other than for Ms. Kuhrt as detailed below.

| NEO | Increase % | 2020
Base Salary 1 |
| --- | --- | --- |
| Christopher L. Mapes | — | $1,000,000 |
| Gabriel Bruno | — | $ 346,750 |
| Steven B. Hedlund | — | $ 425,000 |
| Jennifer I. Ansberry | — | $ 411,730 |
| Michele R. Kuhrt | 2.4% | $ 343,000 |
| Vincent K. Petrella | — | $ 553,350 |
| George D. Blankenship | — | $ 515,000 |

(1) Base salaries effective as of January 1, 2020.

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The 2020 base salary increase effective January 1, 2020 for Ms. Kuhrt was to bring her base pay within the competitive framework. Later in 2020, in connection with Mr. Bruno’s appointment as Executive Vice President, Chief Financial Officer and Treasurer in April 2020, the Committee approved a 15.4% increase to Mr. Bruno’s base salary, effective as of September 1, 2020, establishing his new base salary at $400,000, to bring his base pay within the competitive framework. In connection with Mr. Hedlund’s appointment as Executive Vice President, President, Americas and International Welding, the Committee approved a 3.5% increase to Mr. Hedlund’s base salary, effective November 1, 2020, establishing his new base salary at $440,000.

Due to Mr. Bruno’s recent promotion, Mr. Bruno received a 2021 base salary increase of 11.3%. In addition, the Committee recognized that Ms. Kuhrt has continued responsibilities as the acting Chief Information Officer, in addition to her duties as the Chief Human Resources Officer. In light of such additional duties, the Committee approved a temporary supplemental base salary increase of $55,000. For 2021, excluding Mr. Bruno’s increase and Ms. Kuhrt’s supplemental increase, the average base salary increase for the continuing NEOs was 2.6%. The base pay falls within the competitive benchmark and the continuing NEOs remain, on average, slightly below the 45th percentile on base compensation.

ANNUAL BONUS (EMIP) AND TOTAL CASH COMPENSATION

The Executive Management Incentive Plan (EMIP) provides executive officers, including the NEOs, with an opportunity to receive an annual cash bonus. We believe that, given base pay is below market, annual cash bonus opportunities should be above average to balance some of the risk associated with greater variable compensation. However, we also believe that above-market pay should only be available for superior individual and financial performance. Therefore, we target total cash compensation (base pay and target annual bonus) at the 65th percentile of the market, but use a structure that provides payments of above-average bonuses only where the individual’s performance, the performance of the consolidated company, and the performance of his or her particular segment or business unit, warrant it.

ANNUAL BONUS (EMIP) MATRIX

The percentage of target annual bonus actually paid is based upon a matrix that takes into account financial performance and an executive’s individual performance, interpolating the results to calculate the actual percentage paid. If either of these factors is not met, the percentage of target annual bonus paid is reduced, with the potential that no bonus will be paid. If either of these factors exceeds expectations, the percentage of annual bonus paid can be above the target amount. To the extent that financial performance or an individual’s performance rating exceeds the maximum amounts set forth below, the payout percentage is capped.

The 2020 EMIP matrix is consistent with prior years.

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2020 EMIP Matrix

| Individual Performance Rating | Financial
Performance — 50% | 60% | 70% | 80% | 90% | 100% | 110% | 120% |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | Percentage
Payout | | | | | | | |
| 130 | 0 | 50% | 80% | 100% | 130% | 150% | 160% | 180% |
| 120 | 0 | 40% | 70% | 90% | 120% | 135% | 150% | 160% |
| 110 | 0 | 30% | 60% | 80% | 110% | 120% | 140% | 150% |
| 100 | 0 | 20% | 50% | 60% | 90% | 100% | 135% | 145% |
| 95 | 0 | 0 | 20% | 50% | 80% | 90% | 115% | 125% |
| 90 | 0 | 0 | 0 | 20% | 50% | 80% | 100% | 110% |
| 85 | 0 | 0 | 0 | 0 | 20% | 50% | 60% | 70% |
| 80 | 0 | 0 | 0 | 0 | 0 | 20% | 30% | 50% |
| 75 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |

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The Committee has discretion to approve EMIP payments outside of the strict application of this matrix. For the 2020 EMIP payments, the Committee made an adjustment to Ms. Kuhrt’s payout in recognition of her continued responsibilities she managed during 2020 as the acting Chief Information Officer, in addition to her duties as the Chief Human Resources Officer. EMIP payout determinations for the 2020 performance period were made in the first quarter of 2021.

ANNUAL BONUS (EMIP) INDIVIDUAL PERFORMANCE GOALS

Individual performance goals are set annually. A significant portion of our executive officers’ individual performance goals is tied to one or more aspects of our long-term strategy.

The following table highlights certain of the 2020 performance goals for our CEO. These performance objectives are cascaded throughout the organization and many are also in the individual performance goals for our other NEOs

| Individual
Performance Goals | CEO |
| --- | --- |
| Execution
of the Higher Standard 2025 Strategy | ✔ |
| Human
capital management, employee engagement, development and training, and diversity and inclusion initiatives | ✔ |
| Enterprise
risk management and compliance matters, including IT systems and cyber security | ✔ |
| Global
environmental, health and safety metrics | ✔ |
| Operating
and capital budget and financial performance | ✔ |
| Lincoln
Business System enhancement | ✔ |

The ability to achieve many of the individual performance goals established for our NEOs was impacted by the challenges associated with managing and responding to the changing business priorities as well as the extraordinary circumstances caused by the COVID-19 global pandemic. Operating globally as an essential business, our NEOs remained focused on our 2025 Strategy, the well-being of our employees and providing support to the communities in which we operate. Notwithstanding the challenging environment, none of the individual performance goals were modified specifically in response to the COVID-19 pandemic.

In assessing the individual performance of our NEOs, the Committee reviews the performance rating recommended by the CEO with respect to each of the other NEOs and recommends revisions, as needed, prior to the Committee approval of such rating. The CEO’s rating is determined based on a review of performance against underlying goals with the final rating being approved by the independent Directors of the Board.

ANNUAL BONUS (EMIP) FINANCIAL METRICS

A portion of the EMIP financial component is based upon achievement of company consolidated financial performance against budget and another portion may be attributable to segment financial performance against budget, depending upon the individual’s span of responsibility. By varying the financial metrics used based upon areas of responsibility, it is possible that certain participants will receive a higher percentage of target bonus while others will receive a lower percentage of target where the segment performance for one participant is better than the segment performance for the other. This is a key component of our pay for performance and incentive-based philosophies. For 2020, consolidated results and segment results (with the exception of the Harris Products Group) were below budget.

The following is a summary of the financial components used for 2020 for the NEOs:

| 2020
Annual Bonus (EMIP)—Financial Metrics Used — NEOs | Consolidated Results | Segment
Results |
| --- | --- | --- |
| Christopher
L. Mapes—Chairman, President & CEO | 100% | — |
| Gabriel
Bruno—EVP, CFO & Treasurer | 100% | — |
| Steven
B. Hedlund—EVP, President, Americas and International Welding | 50% | 50%
International Welding |
| Jennifer
I. Ansberry—EVP, General Counsel & Secretary | 100% | — |
| Michele
R. Kuhrt—EVP, Chief Human Resources Officer | 100% | — |
| Vincent
K. Petrella—Former EVP, CFO & Treasurer | 100% | — |
| George
D. Blankenship—Former EVP, President, Americas Welding | 50% | 50%
Americas Welding |

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EBITB. One of the EMIP financial metrics is the achievement of earnings before interest, taxes and the bonus referred to above (EBITB) as compared to budget. Since 2011, this metric accounts for 75% of the EMIP financial component. EBITB to budget has been used as the financial metric for the annual bonus since 1997 because it is an important indicator of profitability. Budgets are set aggressively (based on the local and global economic climate), at the beginning of the year, are reviewed by the Finance Committee of the Board and are approved by the full Board. The following is a summary of historical consolidated results:

| Historical
EBITB to Budget (Consolidated Results 2016-2020) | |
| --- | --- |
| | Consolidated
Results |
| Average | 97% |
| Highest
Level | 110% |
| Lowest
Level | 86% |

When performance goals are set, we believe that there is an equal probability of achieving EBITB to budget in any year, although the cyclical nature of our business may increase the probability in some years and decrease it in others. For 2020, our EBITB performance goals were set prior to the onset of the COVID-19 pandemic, without having a clear understanding of the impact of COVID-19. The ability to achieve our EBITB performance goals was impacted by the challenges associated with the COVID-19 pandemic. Notwithstanding the challenging environment faced during 2020, none of the EBITB performance goals were modified specifically in response to the COVID-19 pandemic.

For 2020, the consolidated EBITB budget was set at $478 million and actual performance for 2020, as adjusted, measured at budgeted exchange rates, was $428.4 million, or an achievement of 89.6% of budget. The Americas Welding Segment EBITB actual performance for 2020, as adjusted, measured at budgeted exchange rates, was $312.4 million, or an achievement of 74.5% of budget. The International Welding Segment EBITB actual performance for 2020, as adjusted, measured at budgeted exchange rates, was $78.2 million, or an achievement of 79.1% of budget. The EBITB performance results were adjusted for the same types of special items that impact Adjusted Operating Income and Adjusted Net Income as disclosed in Appendix A.

AOWC/Sales for Compensation Purposes. Since 2007, a second EMIP financial metric, namely the achievement of budget for average operating working capital as compared to sales (AOWC/Sales for Compensation Purposes), has been used as a reflection of our commitment to improving cash flow. Since 2011, AOWC/Sales for Compensation Purposes has accounted for 25% of the EMIP financial component. The following is a summary of historical consolidated results:

| Historical
AOWC/Sales to Budget (Consolidated Results 2016-2020) | |
| --- | --- |
| | Consolidated
Results |
| Average | 98% |
| Highest
Level | 105% |
| Lowest
Level | 92% |

Like EBITB, we believe that there is an equal probability of achieving AOWC/Sales for Compensation Purposes to budget in any given year, although the cyclical nature of our business may increase the probability in some years and decrease it in others. For 2020, our AOWC/Sales for Compensation Purposes performance goals were set prior to the onset of the COVID-19 pandemic, without having a clear understanding of the impact of COVID-19. The ability to achieve our AOWC/Sales for Compensation Purposes performance goals was impacted by the challenges associated with the COVID-19 pandemic. Notwithstanding the challenging environment faced during 2020, none of the AOWC/Sales for Compensation Purposes performance goals were modified specifically in response to the COVID-19 pandemic.

For 2020, the consolidated AOWC/Sales for Compensation Purposes budget was set at 22.9% and actual performance for 2020 was 24.8%, or an achievement of 91.6% of budget. The Americas Welding Segment AOWC/Sales for Compensation Purposes actual performance for 2020 was 19.9%, or an achievement of 86.1% of budget. The International Welding Segment AOWC/Sales for Compensation Purposes actual performance for 2020 was 33.2%, or an achievement of 88.9% of budget.

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2020 ANNUAL BONUS (EMIP) AND TOTAL CASH COMPENSATION

The 2020 EMIP annual bonus targets for the NEOs were established according to the principles discussed above. In light of Lincoln Electric’s overall cost-containment initiatives, management did not recommend, and the Committee did not approve, increases for any NEO’s 2020 EMIP annual bonus target effective as of January 1, 2020. The 2020 EMIP targets for the NEOs placed their total targeted cash compensation (base pay and target annual bonus), on average, slightly below the 65th percentile of market.

In approving the 2020 EMIP payouts, the Committee assessed our EBITB performance and AOWC/Sales for Compensation Purposes performance against budget for consolidated and segments, as applicable. In addition, the Committee has discretion to approve EMIP payments outside of the strict application of this matrix. The Committee increased Ms. Kuhrt’s payout by $100,000 in recognition of the continued responsibilities managed during 2020 as the acting Chief Information Officer, in addition to duties as the Chief Human Resources Officer. On average, 2020 EMIP payments for the continuing NEOs were 32% above their 2020 target amounts, as shown in the following table.

| NEO | Target
Award Opportunity | Target
Award Opportunity as a % of 2020 Base Salary 1 | Maximum
Award Opportunity Based on Matrix | Actual
Award | Actual
Award as a % of Target |
| --- | --- | --- | --- | --- | --- |
| Christopher
L. Mapes | $1,450,000 | 145% | $2,610,000 | $1,868,760 | 129% |
| Gabriel
Bruno | $ 330,623 2 | 91% | $ 595,121 | $ 419,362 | 127% |
| Steven
B. Hedlund | $ 377,500 2 | 88% | $ 679,500 | $ 428,765 | 114% |
| Jennifer
I. Ansberry | $ 319,770 | 78% | $ 575,586 | $ 399,073 | 125% |
| Michele
R. Kuhrt | $ 255,000 | 74% | $ 459,000 | $ 420,841 3 | 165% |
| Vincent
K. Petrella | $ 407,087 4 | 92% | $ 732,757 | $ 508,045 | 125% |
| George
D. Blankenship | $ 191,038 4 | 75% | $ 343,868 | $ 206,455 | 108% |

(1) With respect to Messrs. Bruno, Hedlund, Petrella and Blankenship, the target award opportunities percentages reflect prorated target award opportunities as compared to 2020 prorated base salaries as reflected in the Summary Compensation Table.

(2) From January 1 through April 22, 2020, Mr. Bruno’s 2020 EMIP annual bonus target was $264,000. Upon his appointment as Executive Vice President, Chief Financial Officer and Treasurer, the Committee adjusted Mr. Bruno’s 2020 EMIP annual bonus target to $360,000. From January 1 through November 1, 2020, Mr. Hedlund’s 2020 EMIP annual bonus target was $375,000. Upon his appointment as Executive Vice President, President, Americas and International Welding, the Committee adjusted Mr. Hedlund’s 2020 EMIP annual bonus target to $390,000.

(3) The Committee made an adjustment to Ms. Kuhrt’s payout in recognition of the continued responsibilities managed during 2020 as the acting Chief Information Officer, in addition to duties as the Chief Human Resources Officer.

(4) Mr. Petrella’s original target 2020 EMIP award opportunity was 93% of his 2020 annual base salary. Due to Mr. Petrella’s retirement from the Company in October 2020, his original target 2020 EMIP award opportunity and maximum 2020 EMIP award opportunity were prorated based on the portion of 2020 during which he was actually employed, pursuant to the terms of our annual bonus (EMIP) plan. Mr. Blankenship’s original target 2020 EMIP award opportunity was 89% of his 2020 annual base salary. Due to Mr. Blankenship’s retirement from the Company in May 2020, his original target 2020 EMIP award opportunity and maximum 2020 EMIP award opportunity were prorated based on the portion of 2020 during which he was actually employed, as approved by the Board in connection with his retirement. This table reflects actual achievement regarding those prorated 2020 EMIP award opportunities.

On average, 2020 EMIP payments for the continuing NEOs were 19% higher than the 2019 EMIP payments, largely due to the increase in the target award opportunity for Mr. Bruno in connection with his promotion and the adjustment made to Ms. Kuhrt’s payout in recognition of her continued responsibilities she managed during 2020 as the acting Chief Information Officer, in addition to her duties as the Chief Human Resources Officer. Excluding Mr. Bruno and Ms. Kuhrt, 2020 EMIP payments for the continuing NEOs were 7% higher than the 2019 EMIP payments.

2021 ANNUAL BONUS (EMIP) AND TOTAL CASH COMPENSATION

The 2021 EMIP targets for the continuing NEOs, approved in the first quarter of 2021, were established by the Committee in consultation with Korn Ferry, based on our compensation philosophies as well as competitive market data as discussed above. Due to Mr. Bruno’s recent promotion, to bring his EMIP target within the competitive framework, Mr. Bruno received a 2021 target bonus increase of 15.3%. The Committee recognized that Ms. Kuhrt has continued responsibilities as the acting Chief Information Officer, in addition to her duties as the Chief Human Resources Officer. In light of such additional

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duties, the Committee approved a temporary supplemental target bonus increase of $45,000 for 2021. Overall, excluding Mr. Bruno’s increase and Ms. Kuhrt’s supplemental increase, the 2021 bonus targets reflect an increase from the 2020 target amounts of, on average 5.1%, for the NEOs. The bonus targets still fall within the competitive benchmark and the continuing NEOs remain, on average, slightly below the 65th percentile on targeted total cash compensation.

LONG-TERM INCENTIVE COMPENSATION

We believe that long-term incentive compensation should be provided to focus rewards on factors that deliver long-term sustainability and should be established at the median (or 50th percentile) of the market. We have targeted the median of the market, in keeping with our pay for performance philosophy, because we believe that superior long-term financial growth itself should be the main driver of above-market long-term incentive compensation. We also believe that different financial metrics help drive long-term performance. Therefore, we have established a structure for long-term incentives that combines several different long-term metrics, with the greatest emphasis placed on share appreciation and equity awards.

For 2020, our long-term incentive compensation program consist of three components: (1) stock options, (2) RSUs and (3) Performance Shares (LTIP). The value of each is weighted equally. This provides an even balance with respect to the different attributes and timing associated with each type of award. Annual awards of all three components are made to EMIP participants, including the NEOs.

The following is a summary of the three components of our long-term incentive compensation program as in effect for 2020:

| | Standard
Vesting Provision | Accelerated
Vesting Provisions | Total
Employees Receiving Grant in 2020 |
| --- | --- | --- | --- |
| Stock
Options | · Vest ratably over 3 years | · Full
vesting upon death or disability · Pro-rata
vesting upon retirement · In the
event of a change in control, if (i) replacement awards are not provided or (ii) replacement awards are provided and there
is a subsequent qualifying termination, full vesting | 24
employees, including NEOs, all EMIP participants and other senior leaders |
| Restricted
Stock Units (RSUs) | · Vest in full after 3 years | · Full vesting upon death or disability · Pro-rata
vesting upon retirement · In the
event of a change in control, if (i) replacement awards are not provided or (ii) replacement awards are provided and there
is a subsequent qualifying termination, full vesting | 608
employees, including NEOs, all EMIP participants, other senior leaders, managers and significant contributors, regardless of their
position within Lincoln Electric |
| Performance
Shares | · Vest based on performance during the applicable 3-year performance period | · Full vesting at target upon death or disability · Pro-rata
vesting upon retirement, based on actual performance for the applicable 3-year performance period · In the event of a change in control, if (i) replacement awards are not provided or (ii) replacement awards
are provided and there is a subsequent qualifying termination, the award will vest at target | 15 employees, including NEOs and all EMIP participants |

Following a review of market data, including our peer group, the Committee approved certain changes to the terms of our Performance Shares. Commencing with grants made in February 2020, in the event of a change in control, the Performance Shares will vest at target if (i) replacement awards are not provided or (ii) replacement awards are provided and there is a subsequent qualifying termination. This change was made to align with our peers and to streamline the administration of such awards in the event of a change in control.

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During 2020, certain long-tenured employees, including Mr. Blankenship, retired from the Company and did not meet the retirement eligibility criteria in the existing equity award agreements. In connection with Mr. Blankenship’s retirement, based on the recommendation of the Committee, the Board approved treating Mr. Blankenship as retirement eligible, in recognition of his over 32 years of service with the Company.

Following these retirements, the Committee reviewed our retirement vesting provisions under our equity awards generally. Following this review of market data, including our peer group, the Committee approved certain changes to the retirement vesting provisions. Commencing with grants made in February 2021, the definition of retirement under our equity awards will be defined to include retirement at the age of 60 and 5 years of service, or at the age of 55 and 15 years of service. In addition, stock options and RSUs will vest in full upon retirement, and Performance Shares will vest in full, based on actual performance for the applicable 3-year performance period. These changes were made to align with our peers and to streamline the administration of such awards upon retirement. It should be noted, however, that neither Mr. Petrella nor Mr. Blankenship benefited from these revisions that became effective with grants made in February 2021.

Due to their retirement from the Company during 2020, Mr. Petrella’s unvested equity awards accelerated on a prorated basis pursuant to their original terms, and Mr. Blankenship’s unvested equity awards were accelerated on a prorated basis, based on Board action. The accelerated Performance Shares remain subject to actual performance during the original performance period. For more information about these awards, see the 2020 Grants of Plan-Based Awards table and the Outstanding Equity Awards at 2020 Fiscal Year-End table below.

LONG-TERM INCENTIVE PLAN (LTIP) - PERFORMANCE SHARES

Our long-term incentive compensation program includes a long-term incentive plan (LTIP), in the form of grants of Performance Shares, which is designed to offer award opportunities aligned with the long-term performance of Lincoln Electric. Target share amounts for the plan are set each year at the beginning of a three-year performance cycle based on a 7-day historical average of the stock price, up to and including the grant date. Because awards are made each year and because each award relates to a three-year performance cycle, three different cycles will be running at any point in time. The percentage of the target shares actually paid at the end of the applicable three-year cycle will be based upon achievement of three-year company performance as interpolated against pre-established performance thresholds. Each plan has performance thresholds with percentage payouts attributable to those thresholds ranging from 0% to 200% of target. The Committee retains discretion to modify payments to any participant, to modify targets and/or to modify the performance thresholds (up or down).

PERFORMANCE SHARES FINANCIAL METRICS

Since its inception, the LTIP has used a performance measure of growth in Adjusted Net Income for Compensation Purposes over the three-year cycle. Beginning in 2009, the Committee added a second metric of ROIC for Compensation Purposes and gave these two financial metrics a 50/50 weighting. The awards granted for the 2020 to 2022 performance cycle utilize these same metrics and same weighting, including as described below, just with different goals for the new three-year period.

The Adjusted Net Income for Compensation Purposes metric is an absolute metric. For the 2018 to 2020 performance cycle, the growth in Adjusted Net Income for Compensation Purposes over the three-year cycle is based on growth above $248,408,000 (which was the Adjusted Net Income for Compensation Purposes for 2017 when the 2018 to 2020 performance cycle was set). As the 2018 to 2020 Performance Share LTIP table demonstrates, to pay 100% of target, Adjusted Net Income for Compensation Purposes over the three-year cycle must be at or above 140% of $248,408,000 (or

$347,771,000).

From time to time, the Committee has considered and approved certain limited adjustments to reported net income (both positive and negative) in determining Adjusted Net Income for Compensation Purposes to evaluate achievement of performance against the thresholds. Each adjustment is reviewed in detail before it is made. The types of adjustments the Committee has considered include: rationalization charges, certain asset impairment charges, the gains and losses on certain transactions including the disposal of certain assets and other special items, which generally align with the special items disclosed in the Adjusted Net Income table in Appendix A. To the extent an adjustment relates to restructuring or rationalization charges that are intended to improve organizational efficiency, a corresponding charge (equal to the adjustment) is amortized against future years’ adjusted net income until that adjustment is fully offset against the intended savings (generally this amortization occurs over a three-year period).

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The ROIC for Compensation Purposes metric for the 2018 to 2020 performance cycle is a relative value that is derived based on our performance as compared to our proxy peer group (as opposed to an absolute value).

Both the Adjusted Net Income for Compensation Purposes metric and the ROIC for Compensation Purposes metric were set in 2018, prior to the onset of the COVID-19 pandemic. The ability to achieve these goals was impacted by the challenges associated with the COVID-19 pandemic. Notwithstanding the challenging environment, these goals were not modified in response to the COVID-19 pandemic.

PERFORMANCE THRESHOLDS

In setting the performance thresholds for a new three-year period (including the 2020 to 2022 performance cycle), the Committee considers various factors, including historical performance against established thresholds, to try to achieve a 50% probability of the target thresholds for any cycle. For the 2018 to 2020 Plan, the Committee did not make any modifications to the three-year adjusted net income growth performance thresholds or the three-year average ROIC relative to peer thresholds.

TIMING FOR SETTING PERFORMANCE METRIC GOALS

Performance targets are set at the beginning of the first fiscal year in the cycle. This timing allows the Committee to see our final financial results for the prior year and allows for more current macro-economic projections to be used.

Historical LTIPs . The following is a summary of the historical combined LTIP results for the last five completed LTIP cycles, including the most recently completed cycle (2018 to 2020):

| Historical
LTIP to Budget (Results for the last five completed LTIP cycles) | |
| --- | --- |
| | Results |
| Average | 102.5% |
| Highest
Level | 130.2% |
| Lowest
Level | 85.2% |

2018 to 2020 Performance Share LTIP . For the 2018 to 2020 LTIP cycle, the Adjusted Net Income for Compensation Purposes performance threshold was not met; however, the ROIC for Compensation Purposes performance target was exceeded, resulting in payouts being made at 94.1% of target. The following is a summary of the performance metric goals and results for the most recently completed LTIP cycle (2018 to 2020):

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2018 to 2020 Performance Share LTIP

| | Payout
Amount — %
of Target | 3-Year Growth in Adjusted Net Income for Compensation Purposes — 3-Year Cumulative Growth Rate | Absolute
LECO Net Income (’000s) | 3-Year
Average ROIC for Compensation Purposes Relative to LECO Peer Group — %ile
Rank in Peer Group | ROIC
result |
| --- | --- | --- | --- | --- | --- |
| Threshold | 25% | 10% | $273,249 | 40th
%ile | 9.2% |
| | 50% | 25% | $310,510 | 50th
%ile | 10.9% |
| Target | 100% | 40% | $347,771 | 65th
%ile | 12.3% |
| | 150% | 60% | $397,453 | 70th
%ile | 12.8% |
| Maximum | 200% | 80% | $447,134 | 80th
%ile | 19.2% |

Actual Payout 94.1% 0% @ 50% Weighting 0% 188.2% @ 50% Weighting 94.1%

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As shown above, the current plan cycle contains two metrics, each with a 50% weighting. Lincoln Electric’s Adjusted Net Income for Compensation Purposes over the three-year period declined 4.1%, which generated a 0% of target payout for this metric. Lincoln Electric’s three-year average return on invested capital (ROIC) for Compensation Purposes, as compared to its peer group, was at the 78th percentile, which generated a 188.2% of target payout for this metric. The following chart shows the target and maximum number of shares of common stock that may be issued for the 2018 to 2020 Performance Share LTIP based on actual performance. Combining the payouts for both metrics, the resulting final payout for the 2018 to 2020 Performance Share LTIP was 94.1% of the target award opportunity. As previously noted, neither of these metrics were modified specifically in response to the COVID-19 pandemic.

| NEO | Target
Award Opportunity (# of shares) | Maximum
Award Opportunity Based on Thresholds (# of shares) | Actual Performance Share Payout % | Actual
Award (# of shares) |
| --- | --- | --- | --- | --- |
| Christopher
L. Mapes | 13,808 | 27,616 | 94.1% | 12,993 |
| Gabriel
Bruno | 1,289 | 2,578 | 94.1% | 1,212 |
| Steven
B. Hedlund | 1,951 | 3,902 | 94.1% | 1,835 |
| Jennifer
I. Ansberry | 1,878 | 3,756 | 94.1% | 1,767 |
| Michele
R. Kuhrt | 828 | 1,656 | 94.1% | 779 |
| Vincent
K. Petrella | 2,995 1 | 5,990 | 94.1% | 2,818 |
| George
D. Blankenship | 2,133 1 | 4,226 | 94.1% | 2,007 |

(1) Due to Mr. Petrella’s retirement from the Company in October 2020, Mr. Petrella’s original target 2018-2020 Performance Share award opportunity of 3,222 shares (and maximum 2018-2020 Performance Share award opportunity of 6,444 shares) was prorated based on the portion of the 2018-2020 performance period during which he was actively employed, pursuant to the terms of our Performance Share agreement. Due to Mr. Blankenship’s retirement from the Company in May 2020, Mr. Blankenship’s original target 2018-2020 Performance Share award opportunity of 2,651 shares (and maximum 2018-2020 Performance Share award opportunity of 5,302 shares) was prorated based on the portion of the 2018-2020 performance period during which he was actively employed, as approved by the Board in connection with his retirement. This table reflects actual achievement regarding those prorated 2018-2020 Performance Share award opportunities.

2020 LONG-TERM INCENTIVE ARRANGEMENTS

In evaluating 2020 long-term incentive compensation (at the beginning of 2020), the Committee reviewed 2018 and 2019 compensation versus the competitive benchmarks. The Committee concluded that overall the long-term incentive compensation program for the NEOs was slightly below our 50th percentile target when compared to both survey and peer proxy data. At the February 2020 meeting, in light of our overall cost-containment initiatives, management did not recommend, and the Committee did not approve, increases for any NEO’s long-term incentive compensation opportunities effective as of January 1, 2020, with the exception of Ms. Kuhrt. Ms. Kuhrt received an 18.1% increase to bring her long-term incentive compensation opportunity within the competitive framework. All of these awards are subject to our Recovery of Funds Policy, which is discussed below. For more information about the quantity of the 2020 stock option, RSU and Performance Share awards actually granted to the NEOs, see the 2020 Grants of Plan-Based Awards table and the Outstanding Equity Awards at 2020 Fiscal Year-End table (and their related narrative disclosure) below.

2021 LONG-TERM INCENTIVE ARRANGEMENTS

In evaluating 2021 long-term incentive compensation (at the beginning of 2021), the Committee reviewed 2019 and 2020 compensation versus the competitive benchmarks. The Committee concluded that overall the long-term incentive compensation program for the continuing NEOs was below our 50th percentile target when compared to both survey and peer proxy data. Due to Mr. Bruno’s and Mr. Hedlund’s recent promotions, to bring each of their long-term incentive compensation within the competitive framework, Mr. Bruno received a 2021 long-term incentive compensation increase of 75.0% and Mr. Hedlund received a 2021 long-term incentive compensation increase of 47.4%. Excluding Mr. Bruno and Mr. Hedlund, the Committee adjusted 2021 long-term incentive compensation opportunities for the continuing NEOs on average 34.4%, placing their LTI targets above the 50th percentile however still within the competitive framework.

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Valuation of Equity Awards. We use standard valuation methods to convert long-term incentive compensation values to shares upon the grant date. These methods consider a 7-day historical average of our stock price, up to and including the grant date, for RSUs and Performance Shares and the grant date Black-Scholes valuation for stock options.

Normal Cycle and Out-of-Cycle Equity Awards . The Committee has discretion in awarding grants to EMIP participants and does not delegate its authority to management, nor does management select or influence the award dates. Occasionally, the Committee may approve limited, out-of-cycle special awards for specific business purposes or in connection with executive promotions or the hiring of new executive employees. However, the date used for awards to all EMIP participants, including the continuing NEOs, is the date of a regularly scheduled Committee meeting, which is fixed well in advance and generally occurs at the same time each year.

The Committee has approved delegated authority to the CEO to designate awards through 2021 to certain employees under our equity plan, subject to specific limits established. The CEO can only grant RSU awards and cannot grant awards to any executive officers, Section 16 officers or greater-than-10% beneficial owners of the Company, and must be granted per the agreements and vesting terms already approved by the Committee.

OTHER ARRANGEMENTS, POLICIES AND PRACTICES

OVERVIEW OF BENEFITS

We intend to provide a competitive group of benefits for all of our employees targeted at the 50th percentile of the market. Some aspects of our benefit programs are considered non-traditional due to their relationship with our pay for performance and incentive-based philosophies. For example, the premiums for Lincoln Electric-provided medical coverage are 100% paid by employees, including the NEOs, on a pre-tax basis. Premiums for dental coverage, which is a voluntary benefit, are also 100% paid by employees. Life insurance coverage paid fully by Lincoln Electric is set at $50,000 per employee, including the NEOs, although employees may purchase additional insurance at their own cost. The NEOs participate in this same cost-sharing approach. We attempt to balance our various non-traditional programs (such as those with a significant portion of the cost borne by the employee) with more traditional programs.

We also provide accidental death and dismemberment benefits to officers, due to the significant amount of travel required in their jobs. Under this program, the premiums of which are paid by the Company, a participant’s beneficiary would receive a payment of five times annual total cash compensation up to a maximum of $3,000,000 for executive officers and $2,000,000 for other officers upon an officer’s accidental death. The policy also provides dismemberment benefits of up to 100% of the death benefit in the event an officer is permanently and totally disabled as a result of an accident, and it provides for medical evacuation coverage in the event of an accident.

PERQUISITES

Consistent with our pay for performance philosophy, we offer limited perquisites. We pay for an annual physical for officers and other senior management to preserve our investment in them by encouraging them to maintain healthy lifestyles and be proactive in preventative care. We also make available financial planning services to certain officers, enabling them to concentrate on business matters rather than on personal financial planning. However, the cost of these financial planning services is included in the income of the participants. We also pay the cost of certain club dues for some officers to encourage social interaction with peers from other companies, local leadership in the community and to provide the ability to hold business meetings at a convenient offsite location. All personal expenses are borne entirely by the executive and the club dues are included in the income of the participants. Initiation fees for club memberships are paid by the executive. Different perquisites are provided from time to time to non-U.S. based executives; however, they are customary and reasonable in nature and amount relative to local market practices (for example, a car lease).

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RETIREMENT PROGRAMS

Retirement benefits are provided to our NEOs through the following programs:

The Lincoln Electric Company Retirement Annuity Program (RAP)

• This defined benefit pension plan was frozen to new entrants effective January 1, 2006 (no new employees eligible to join the RAP after January 1, 2006; eligible employees participate in The Lincoln Electric Company Employee Savings Plan described below)

• Benefit accruals frozen effective as of December 31, 2016 (participants will not earn any additional benefits under the RAP after December 31, 2016)

• The RAP was terminated as of December 31, 2020; distribution of pension plan assets in the form of lump sum payments and the purchase of a group annuity contract from a highly rated insurance company is expected to occur in late 2021

• Estimated retirement benefits under the RAP for the NEOs that are shown in the Pension Benefits Table are based on an NEO’s frozen benefit under the RAP as of December 31, 2020 and reflect the plan termination

The Lincoln Electric Company Employee Savings Plan (401(k) Plan)

• All of the NEOs deferred amounts under the 401(k) Plan in 2020

• Each eligible employee of The Lincoln Electric Company and certain affiliate companies is eligible to receive up to 6% of annual compensation in Company Contributions through:

• matching employer contributions equal to 100% of before-tax contributions made to the 401(k) Plan, but not in excess of 3% of annual compensation; and

• automatic employer contributions equal to 3% of annual compensation

• Matching and automatic contributions are 100% vested when made

• Certain employees affected by the RAP freeze (described above) are also eligible to receive employer contributions equal to 6% of annual compensation for a minimum period of five years, up to the end of the year in which they complete 30 years of service

Supplemental Executive Retirement Plan (SERP)

• Frozen to new entrants since 2005

• Effective as of December 1, 2016, the value of the frozen accrued vested benefit of each SERP participant was converted to a notional balance, calculated by projecting to December 31, 2016 the participant’s SERP benefit and calculating the present value of that projected benefit

• Participants’ account balances are credited with earnings, gains and losses in accordance with each participant’s investment elections which will be made in a manner similar to that undertaken by participants in the Amended and Restated 2005 Deferred Compensation Plan for Executives

Restoration Plan

• Created effective January 1, 2017, this unfunded plan is maintained primarily for the purpose of providing deferred compensation for eligible employees whose annual compensation is expected to be in excess of the Internal Revenue Code limit on compensation (Code Limit) applicable to the 401(k) Plan

• Each participant’s account is credited each year with deferred amounts generally as follows:

• matching employer contributions equal to 3% of annual compensation in excess of the Code Limit; and

• non-elective employer contributions equal to 3% of annual compensation in excess of the Code Limit

• All amounts deferred are fully vested at all times

• Certain employees affected by the RAP freeze are also eligible to receive employer contributions equal to 6% of annual compensation in excess of the Code Limit for a minimum period of five years, up to the end of the year in which they complete 30 years of service

• Upon a separation from service prior to age 55, distribution of the account will be made in a single lump sum on the first business day of the seventh month immediately following the separation from service

• Upon a separation from service on or after age 55, distribution of the account will be made or commence on the first business day of the seventh month immediately following the separation from service in the form of (1) a single lump sum payment; or (2) substantially equal annual installments over a period of at least two but not more than 15 years, as elected

• All NEOs participated in the Restoration Plan in 2020

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Amended and Restated 2005 Deferred Compensation Plan for Executives (Top Hat Plan)

• Participants can defer current income on a pre-tax basis, receiving tax-deferred returns on those deferrals

• Up to 80% of base salary and/or annual bonus can be deferred; and

• Up to 100% of RSUs or Performance Shares can be deferred

• For cash deferrals, 27 total investment options available, 26 of which mirror the funds available under the 401(k) Plan, plus the Moody’s Corporate Bond Average Index (which provides “above market” earnings as reported in the Summary Compensation Table)

• RSUs and Performance Shares that are deferred are deemed invested in a Lincoln Electric Stock fund; these deferrals can be reallocated to other investment options on the later of 6 months after the date on which the amounts are allocated to the participant’s account or the date the participant has satisfied his or her stock ownership guidelines

• Plan includes a recovery of funds provision consistent with the requirements of Dodd-Frank

• Distributions are permitted in the event of a separation from service, disability, death, change in control or unforeseeable emergency

• Distributions can also be made at a specified time or under a fixed schedule

• Distributions may be made in a lump-sum, or by payment in five, ten or fifteen annual installments

• As of December 31, 2020, there were 12 active employee participants in the Top Hat Plan

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More information on these programs can be found in the 2020 Pension Benefits section and 2020 Deferred Compensation Benefits section.

CHANGE IN CONTROL ARRANGEMENTS

We have entered into (or were a party to) change in control agreements with all of our NEOs. The agreements are designed generally to help assure continued management in the event of a change in control of Lincoln Electric.

The change in control agreements are operative only if a change in control occurs and payments are made if the officer’s employment is terminated (or if the officer terminates employment due to certain adverse employment changes). The agreements provide our NEOs with the potential for continued employment following a change in control, which helps to retain these executives and provide for management continuity in the event of an actual or threatened change in control of Lincoln Electric. They also help ensure that our executives’ interests remain aligned with shareholders’ interests during a time when their continued employment may be in jeopardy. For a more detailed discussion of our change in control agreements, see Termination and Change in Control Arrangements below. Outside of these change in control agreements, we do not maintain written employment or other severance agreements for U.S.-based employees.

RECOVERY OF FUNDS POLICY

We have adopted a Recovery of Funds Policy (clawback policy) consistent with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). Our policy is more extensive than what Dodd-Frank requires and is applicable to all of our officers, including our NEOs. The policy applies in the event that there is an accounting restatement involving our financial statements due to material non-compliance with the financial reporting requirements under the U.S. federal securities laws. The policy applies to both current and former officers and covers incentive compensation received by the officers in the 3-year period prior to the restatement.

Awards of incentive compensation would include annual bonus payments, stock option awards, restricted stock awards, RSUs, and Performance Shares, unless Dodd-Frank regulations provide otherwise. Under the policy, in the event of an accounting restatement of our financial statements, the Committee would review all incentive compensation received during the 3-year covered period and would seek recovery of the amount of incentive compensation paid in excess of what would have been paid if the accounts had been properly stated. We believe that this policy is in the best interests of Lincoln Electric and its shareholders.

ANTI-HEDGING/PLEDGING POLICY

Consistent with our philosophy to encourage long-term investment in our common stock, our Directors, executive officers and certain other employees are prohibited from engaging in any speculative transactions involving our securities, including buying or selling puts or calls, or engaging in any derivative or hedging transaction that has the effect of limiting or hedging

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economic exposure with respect to such person’s position in our securities, short sales and margin purchases. In addition, our insider trading policy prohibits future pledging of Lincoln Electric securities by our Directors, executive officers and certain other employees. There are no pledges of our common stock in place for any of our Directors or executive officers.

STOCK OWNERSHIP GUIDELINES

In keeping with our philosophy that officers should maintain an equity interest in Lincoln Electric, we have stock ownership guidelines for officers. The guidelines were reviewed in 2019 and the executive group designations were updated based on a review of our peer group. Under the current guidelines, our officers are required to own and hold a certain number of our common shares, currently at the levels set forth in the table below:

| Executive
Group | Ownership
Guideline |
| --- | --- |
| Chief
Executive Officer 1 | 5
times base salary |
| Executive
Vice Presidents 2 | 3
times base salary |
| Senior
Vice Presidents and all other Executive Officers 3 | 2
times base salary |

(1) Mr. Mapes.

(2) Includes Messrs. Bruno, and Hedlund and Mses. Ansberry and Kuhrt as well as 1 other officer.

(3) Includes other EMIP participants.

Each officer has five years to satisfy his or her applicable stock ownership guideline. An officer must satisfy the applicable stock ownership guideline before he or she is permitted to sell shares, including shares issued as a result of RSUs vesting or Performance Shares vesting (other than shares withheld to cover taxes) and shares obtained from the exercise of stock options (other than shares withheld to cover exercise cost and taxes). Unless an officer is promoted into a higher guideline level, the stock ownership guideline will reset every 5 years utilizing updated base pay and stock price information. RSU awards count towards an officer’s stock ownership amount, however common shares underlying stock options, Performance Shares and shares held in another person’s name (including a relative) do not. As of December 31, 2020, all of our continuing NEOs met the applicable stock ownership guideline.

DEDUCTIBILITY OF COMPENSATION

Our general philosophy has historically been to qualify future compensation for tax deductibility wherever applicable and appropriate. Although a portion of the amount we recorded as compensation to our NEOs in 2020 was non-deductible, this did not have a significant impact to our income tax position.

As part of the 2017 Tax Cuts and Jobs Act (the “Tax Reform Act”), the ability to rely on the performance-based compensation exception under Section 162(m) of the U.S. Internal Revenue Code (“Section 162(m)”) was generally eliminated, and the limitation on deductibility generally was expanded to include all NEOs (as well as certain former officers). As a result of the Tax Reform Act, after 2017 and subject to certain grandfathered provisions, we are no longer able to deduct any compensation paid to our NEOs in excess of $1 million. The Committee continues to assess the impact of the amendments to Section 162(m) to determine what adjustments to our executive compensation practices, if any, it considers appropriate.

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COMPENSATION COMMITTEE REPORT

The Compensation and Executive Development Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this Proxy Statement with our management and, based on this review and discussion, recommends that it be included in our Annual Report on Form 10-K for the year ended December 31, 2020 and this Proxy Statement.

By the Compensation and Executive Development Committee:

William E. MacDonald, III, Chair Michael F. Hilton Kathryn Jo Lincoln Phillip J. Mason Hellene S. Runtagh Kellye L. Walker

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EXECUTIVE COMPENSATION TABLES

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Summary of 2020 Compensation Elements

| | | Purpose | Competitive Target | Financial Metrics Used | When
the 2020 Amount Was Set | The
Period to Which the Amount Relates | Where Reported in the SCT 1 |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Short-Term | Base
Pay | Rewards
responsibility, experience and individual performance | Below
Market | — | Beginning
of 2020 | 2020 | Salary
column |
| | Annual
Bonus (EMIP) | Rewards
strong annual financial results and individual performance | Above
Market (target total cash compensation) | EBITB
and AOWC/Sales 2 | Beginning
of 2020 | 2020 Performance | Non-Equity
Incentive Plan Compensation column |
| Long-Term | Stock
Options | Rewards
the creation of shareholder value | At
Market | Share
Price Appreciation | Beginning
of 2020 | 2020
Based Award | Option
Awards column |
| | RSUs | Rewards
the creation of shareholder value and strong long-term
financial results | | Share
Price Appreciation | Beginning
of 2020 | 2020
Based Award | Stock
Awards column |
| | Performance
Shares | Rewards
the creation of long-term
growth and the efficient use of capital | | Adjusted
Net Income 2 Growth and
ROIC 2 | Beginning
of 2020 | 2020
through 2022 Performance | Stock
Awards column |
| Both | Benefits
other than Pension | Includes
401(k) contributions, Restoration Plan contributions, insurance and standard expatriate benefits | At
Market | — | Various | 2020 | All
Other Compensation column |
| | Pension
Benefits 3 | Includes
RAP and above-market earnings in the Top Hat Plan and Restoration Plan | | — | Various | For
RAP, shows changes in 2020. For above-market
earnings, shows 2020 amounts | Change
in Pension Value and Nonqualified Deferred Compensation Earnings column |
| | Perquisites | Meets
specific business needs—includes financial planning, annual physical and certain club dues | | — | Various | 2020 | All
Other Compensation column |

(1) Summary Compensation Table.

(2) Financial metrics used for compensation purposes are defined in Appendix A.

(3) The SERP, effective November 30, 2016, and the RAP, effective December 31, 2016, were amended to cease all future benefit accruals.

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2020 Summary Compensation Table

This table details total compensation for our NEOs for 2020 and, where required, 2019 and 2018.

| Name
and Principal Position | Year | Salary ($) | Stock Awards ($) 1 | Option Awards ($) 1 | Non-Equity Incentive Plan Compensation ($) 2 | Change
in Pension Value and Nonqualified Deferred Compensation Earnings($) 3 | All
Other Compensation ($) 4 | Total($) |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Christopher
L. Mapes Chairman, President and Chief Executive Officer | 2020 | 1,000,000 | 2,583,316 | 1,333,335 | 1,868,760 | 100,170 | 191,955 | 7,077,536 |
| | 2019 | 1,000,000 | 2,670,534 | 1,333,333 | 1,718,830 | 51,059 | 208,213 | 6,981,969 |
| | 2018 | 965,000 | 2,504,772 | 1,250,009 | 2,057,400 | 36,779 | 204,946 | 7,018,906 |
| Gabriel
Bruno Executive Vice President, Chief Financial Officer and Treasurer | 2020 | 364,500 | 518,648 | 116,661 | 419,362 | 185,194 | 94,298 | 1,698,663 |
| | 2019 | | | | | | | |
| | 2018 | | | | | | | |
| Steven
B. Hedlund Executive Vice President, Americas and International Welding | 2020 | 427,500 | 601,608 | 205,007 | 428,765 | — | 643,190 | 2,306,070 |
| | 2019 | 425,000 | 410,538 | 204,998 | 399,825 | — | 426,711 | 1,867,072 |
| | 2018 | 395,000 | 403,978 | 176,668 | 518,796 | — | 393,691 | 1,888,133 |
| Jennifer
I. Ansberry Executive Vice President, General Counsel and Secretary | 2020 | 411,730 | 344,180 | 177,650 | 399,073 | 56,384 | 109,606 | 1,498,623 |
| | 2019 | 411,730 | 355,882 | 177,656 | 375,602 | 67,829 | 112,493 | 1,501,192 |
| | 2018 | 394,000 | 390,736 | 170,009 | 444,312 | — | 104,420 | 1,503,477 |
| Michele
R. Kuhrt Executive Vice President, Chief Human Resources Officer | 2020 | 343,000 | 341,400 | 113,674 | 420,841 | 253,353 | 78,863 | 1,551,131 |
| | 2019 | | | | | | | |
| | 2018 | | | | | | | |
| Vincent
K. Petrella (retired) Former Executive Vice President, Chief Financial Officer and Treasurer | 2020 | 440,164 5 | 667,922 | 344,744 5 | 508,045 | 251,949 | 153,655 | 2,366,479 |
| | 2019 | 553,350 | 690,540 | 344,748 | 633,250 | 268,848 | 176,430 | 2,667,166 |
| | 2018 | 500,000 | 584,470 | 291,664 | 729,600 | 33,485 | 173,595 | 2,312,814 |
| George
D. Blankenship (retired) Former Executive Vice President, President, Americas Welding | 2020 | 256,179 | 1,130,086 6 | 326,705 7 | 206,455 | 168,756 | 107,078 | 2,195,259 |
| | 2019 | 515,000 | 530,816 | 265,008 | 538,798 | 228,095 | 150,569 | 2,228,286 |
| | 2018 | 500,000 | 480,892 | 240,008 | 677,835 | 30,101 | 155,650 | 2,084,486 |

(1) The amounts reported for 2020 reflect the grant date fair value under FASB ASC Topic 718 for the RSU, Performance Share and stock option awards in 2020. The grant date fair value disclosed for Performance Share awards is based on target performance. Assumptions used in the calculation of these amounts are included in footnote 10 to our audited financial statements for the fiscal year ended December 31, 2020 included in our Annual Report on Form 10-K filed with the SEC on February 19, 2021. In connection with Mr. Petrella’s retirement, he forfeited 16,889 stock option awards from his 2020 award (reflecting $269,717 in the Option Awards column). In connection with Mr. Blankenship’s retirement, he forfeited 15,053 stock option awards from his 2020 award (reflecting $240,396 in the Option Awards column).

The amounts shown for stock awards for 2020 represent RSU awards as follows: Mr. Mapes $1,291,658, Mr. Bruno $405,625, Mr. Hedlund $402,988, Ms. Ansberry $172,090, Ms. Kuhrt, $231,245, Mr. Petrella $333,961 and Mr. Blankenship $256,700. The amounts shown also include Performance Shares as follows: Mr. Mapes $1,291,658, Mr. Bruno $113,023, Mr. Hedlund $198,620, Ms. Ansberry $172,090, Ms. Kuhrt, 110,155, Mr. Petrella $333,961 and Mr. Blankenship $256,700. In connection with Mr. Petrella’s retirement, he forfeited 2,911 RSUs and 2,746 Performance Shares from his 2020 awards (reflecting $507,037 in the Stock Awards column). In connection with Mr. Blankenship’s retirement, he forfeited 2,595 RSUs and 2,469 Performance Shares from his 2020 awards (reflecting $453,886 in the Stock Awards column).

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The maximum Performance Share award amount with respect to each of the NEOs for 2020 is shown in the table below. The amounts reported reflect the grant date fair value under FASB ASC Topic 718 for the Performance Share awards based on maximum performance.

| Name | Year | Maximum
Payout (# of Performance Shares) | Maximum
Grant Date Fair Value Payout |
| --- | --- | --- | --- |
| Christopher
L. Mapes | 2020 | 28,822 | $2,583,316 |
| Gabriel
Bruno | 2020 | 2,522 | $ 226,047 |
| Steven
B. Hedlund | 2020 | 4,432 | $ 397,240 |
| Jennifer
I. Ansberry | 2020 | 3,840 | $ 344,179 |
| Michele
Kuhrt | 2020 | 2,458 | $ 220,311 |
| Vincent
K. Petrella (retired) | 2020 | 7,452 | $ 667,923 |
| George
D. Blankenship (retired) | 2020 | 5,728 | $ 513,401 |

(2) The amounts shown for 2020 represent payments under our annual bonus (EMIP).

(3) The amounts shown for 2020 represent the difference in earnings under the Moody’s Corporate Bond Index fund in our Top Hat Plan and SERP and a hypothetical rate, and reflect the increase in actuarial value under the RAP.

| 2020
INCREASE IN PENSION VALUE & PREFERENTIAL EARNINGS (TOP HAT PLAN AND SERP) — Name | RAP($) | Difference
in 2020 Earnings Credited in the Top Hat Plan and SERP($) | Moody’s
Corporate Bond Index Earnings($) | Hypothetical Market Rate($)* |
| --- | --- | --- | --- | --- |
| Christopher
L. Mapes | — | 100,170 | 214,666 | 114,496 |
| Gabriel
Bruno | 184,812 | 382 | 782 | 400 |
| Steven
B. Hedlund | — | — | — | — |
| Jennifer
I. Ansberry | 56,384 | — | — | — |
| Michele
R. Kuhrt | 253,353 | — | — | — |
| Vincent
K. Petrella (retired) | 173,984 | 77,965 | 168,871 | 90,906 |
| George
D. Blankenship (retired) | 114,421 | 54,335 | 122,863 | 68,528 |

• This rate is specified by the SEC rules for proxy disclosure purposes and is based on 120% of the applicable federal long-term rate, compounded monthly for 2020.

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(4) The amounts shown for 2020 are comprised of the following:

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2020 ALL OTHER COMPENSATION

| Name | Other
Benefits and Perquisites* — Company Retirement Contributions ($) a | Travel Insurance Premiums ($) | Financial Planning ($) | Physical Examination ($) | Club Dues ($) | Spousal Travel ($) | Standard Expatriate Benefits ($) b | Total
All Other Compensation ($) |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Christopher
L. Mapes | 163,130 | 834 | 12,846 | 1,752 | 13,393 | — | — | 191,955 |
| Gabriel
Bruno | 81,972 | 834 | 11,492 | — | — | — | — | 94,298 |
| Steven
B. Hedlund | 49,640 | 834 | 11,350 | — | 4,139 | — | 577,227 | 643,190 |
| Jennifer
I. Ansberry | 94,480 | 834 | 14,292 | — | — | — | — | 109,606 |
| Michele
R. Kuhrt | 77,433 | 834 | — | — | — | 596 | — | 78,863 |
| Vincent
K. Petrella (retired) | 128,810 | 834 | 12,917 | — | 11,094 | — | — | 153,655 |
| George
D. Blankenship (retired) | 95,397 | 834 | 10,075 | — | — | 772 | — | 107,078 |

• The methodology for computing the aggregate incremental cost for the amounts is below:

(a) Includes amounts contributed to both the 401(k) Plan and the Restoration Plan.

(b) The expatriate benefits shown relate to Mr. Hedlund’s international assignment and are provided to all U.S. employees who take an international assignment. Amounts are converted to U.S. dollars on a monthly basis based on a month-end conversion price, in local currency, as reported by Bloomberg. The conversion price for Pound Sterling was between £1.23 to £1.34 to $1.00 during the period in 2020 that Mr. Hedlund was receiving expatriate benefits. Mr. Hedlund’s international assignment included housing, education, taxes and standard allowances related to relocation and other assignment payments under our standard expatriate package for all employees. The portion of such amount that relates to tax equalization payments is $206,652.

(5) Mr. Petrella deferred 25% of his 2020 base salary and 50% of his 2020 EMIP bonus under our Top Hat Plan.

(6) This amount represents (a) the grant date fair value of RSUs and Performance Shares granted to Mr. Blankenship in February 2020 totaling $513,400, of which $453,886 relates to awards forfeited in connection with his retirement from the Company, and (b) the incremental fair value, calculated in accordance with SEC disclosure rules, associated with the Committee’s modifications to outstanding 2018, 2019 and 2020 RSU and Performance Share awards held by Mr. Blankenship totaling $616,686, which awards were modified in connection with Mr. Blankenship’s retirement. The modification value does not represent or reflect additional awards granted to Mr. Blankenship. For more information on these awards, see “Long-Term Incentive Compensation,” the 2020 Grants of Plan-Based Awards table, the Outstanding Equity Awards at 2020 Fiscal Year-End table and “Payments in Connection with Mr. Blankenship’s Retirement”.

(7) This amount represents (a) the grant date fair value of stock option awards granted to Mr. Blankenship in February 2020 totaling $265,006, of which $240,396 relates to awards forfeited in connection with his retirement from the Company, and (b) the incremental fair value, calculated in accordance with SEC disclosure rules, associated with the Committee’s modifications to outstanding 2018, 2019 and 2020 stock option awards held by Mr. Blankenship totaling $61,699, which awards were modified in connection with Mr. Blankenship’s retirement. The modification value does not represent or reflect additional awards granted to Mr. Blankenship. For more information on these awards, see “Long-Term Incentive Compensation,” the 2020 Grants of Plan-Based Awards table, the Outstanding Equity Awards at 2020 Fiscal Year-End table and “Payments in Connection with Mr. Blankenship’s Retirement”.

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2020 Grants of Plan-Based Awards

The following table provides information relating to plan-based awards granted in 2020 to our NEOs.

| Name | Grant Type | Grant
Date | Estimated
Possible Payouts Under Non-Equity Incentive Plan Awards 1 | | | Estimated
Future Payouts Under Equity Incentive Plan Awards 2 | | | Exercise or Base Price of Option Awards ($/Sh) | Grant
Date Fair Value of Stock and Option Awards ($) 5 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | Threshold [$] | Target [$] | Maximum [$] | Threshold [#] | Target [#] | Maximum [#] | | |
| Christopher
L. Mapes | EMIP | 2/19/2020 | 0 | 1,450,000 | 2,610,000 | | | | | |
| | Options | 2/19/2020 | | | | | | 83,490 | $89.63 | 1,333,335 |
| | RSUs | 2/19/2020 | | | | | | 14,411 | | 1,291,658 |
| | PSUs | 2/19/2020 | | | | 0 | 14,411 | 28,822 | | 1,291,658 |
| Gabriel
Bruno | EMIP | 2/19/2020 | 0 | 330,623 | 595,121 | | | | | |
| | Options | 2/19/2020 | | | | | | 7,305 | $89.63 | 116,661 |
| | RSUs | 2/19/2020 | | | | | | 1,261 | | 113,023 |
| | PSUs | 2/19/2020 | | | | 0 | 1,261 | 2,522 | | 113,023 |
| | RSUs | 4/21/2020 | | | | | | 4,027 | | 292,602 |
| Steven
B. Hedlund | EMIP | 2/19/2020 | 0 | 377,500 | 679,500 | | | | | |
| | Options | 2/19/2020 | | | | | | 12,837 | $89.63 | 205,007 |
| | RSUs | 2/19/2020 | | | | | | 2,216 | | 198,620 |
| | PSUs | 2/19/2020 | | | | 0 | 2,216 | 4,432 | | 198,620 |
| | RSUs | 10/20/2020 | | | | | | 2,004 | | 204,368 |
| Jennifer
I. Ansberry | EMIP | 2/19/2020 | 0 | 319,770 | 575,586 | | | | | |
| | Options | 2/19/2020 | | | | | | 11,124 | $89.63 | 177,650 |
| | RSUs | 2/19/2020 | | | | | | 1,920 | | 172,090 |
| | PSUs | 2/19/2020 | | | | 0 | 1,920 | 3,840 | | 172,090 |
| Michele
R. Kuhrt | EMIP | 2/19/2020 | 0 | 255,000 | 459,000 | | | | | |
| | Options | 2/19/2020 | | | | | | 7,118 | $89.63 | 113,674 |
| | RSUs | 2/19/2020 | | | | | | 1,229 | | 110,155 |
| | RSUs | 2/19/2020 | | | | | | 1,351 | | 121,090 |
| | PSUs | 2/19/2020 | | | | 0 | 1,229 | 2,458 | | 110,155 |
| Vincent
K. Petrella (retired) | EMIP | 2/19/2020 | 0 | 515,550 | 927,990 | | | | | |
| | Options | 2/19/2020 | | | | | | 21,587 | $89.63 | 344,744 |
| | RSUs | 2/19/2020 | | | | | | 3,726 | | 333,961 |
| | PSUs | 2/19/2020 | | | | 0 | 3,726 | 7,452 | | 333,961 |
| George
D. Blankenship (retired) | EMIP | 2/19/2020 | 0 | 460,000 | 828,000 | | | | | |
| | Options | 2/19/2020 | | | | | | 16,594 | $89.63 | 265,006 |
| | RSUs | 2/19/2020 | | | | | | 2,864 | | 256,700 |
| | PSUs | 2/19/2020 | | | | 0 | 2,864 | 5,728 | | 256,700 |
| | Modified
Equity Awards | | | | | | | | | 678,385 6 |

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(1) The performance-based amounts shown represent the range of cash payouts (from zero to the maximum amount listed) for 2020 under the EMIP. The amounts reported for Messrs. Petrella and Blankenship are based on their original grant opportunities, not final prorated opportunities. Payments are based on the achievement of company financial performance and the NEO’s individual performance. Target awards are set by the Compensation and Executive Development Committee in the first quarter each year. Actual payment amounts are determined by the Committee in the first quarter of the following year. The targets shown above are pursuant to the EMIP matrix for 2020 (which allows for potential payouts of up to 180% of target), which is reflected in the CD&A. The Committee adjusted Mr. Bruno’s target award in connection with his appointment as EVP, Chief Financial Officer and Treasurer and Mr. Hedlund’s target award in connection with his appointment as EVP, President Americas and International Welding – amounts reported for Messrs. Bruno and Hedlund reflect their as adjusted opportunities.

(2) These columns show the potential number of shares of our common stock to be paid out to our NEOs under our Performance Shares (PSUs) at threshold, target and maximum performance. The amounts reported for Messrs. Petrella and Blankenship are based on their original grant opportunities, not final prorated opportunities. The measures and potential payouts are described in more detail in the CD&A. The grant date fair value, based on target performance for PSUs, is included in the “Stock Awards” column of the Summary Compensation Table. The PSUs generally vest based on performance during the applicable performance period. Dividend equivalents are sequestered by us until the shares underlying the PSUs are distributed, at which time the dividend equivalents are paid in cash. The dividend rate for dividend equivalents paid on the PSUs to the NEOs is the same as for all other shareholders (in other words, it is not preferential). Recipients of PSUs who participate in our EMIP bonus program (which includes all of the NEOs) are eligible to elect to defer all or a portion of their PSUs under our Top Hat Plan–see the 2020 Nonqualified Deferred Compensation section for a description of this plan.

(3) The amounts reported for Messrs. Petrella and Blankenship are based on their original grants, not final prorated awards. The RSUs generally vest upon the recipient remaining in continuous employment for three years from the date of grant. Upon vesting, the RSUs are paid out solely in our common stock (there is no cash option). Dividend equivalents are sequestered by us until the shares underlying the RSUs are distributed, at which time the dividend equivalents are paid in cash. The dividend rate for dividend equivalents paid on the RSUs to the NEOs is the same as for all other shareholders (in other words, it is not preferential). Recipients of RSUs who participate in our EMIP bonus program (which includes all of the NEOs) are eligible to elect to defer all or a portion of their RSUs under our Top Hat Plan–see the 2020 Nonqualified Deferred Compensation section for a description of this plan. With respect to the award of RSUs to Mr. Bruno on April 21, 2020, the Committee approved an additional award equal in value to $300,000 in connection with his appointment as EVP, Chief Financial Officer and Treasurer. With respect to the award of RSUs to Mr. Hedlund on October 20, 2020, the Committee approved an additional award equal in value to $200,000 in connection with his appointment as EVP, President Americas and International Welding. With respect to the supplemental award of RSUs to Ms. Kuhrt on February 19, 2020, the Committee approved an award equal in value to $125,000 in recognition of the responsibilities she managed as the acting Chief Information Officer, in addition to her duties as the Chief Human Resources Officer during 2019.

(4) The amounts reported for Messrs. Petrella and Blankenship are based on their original grants, not final prorated awards. The stock options were granted at the closing price of our common shares on the date of the grant. All stock options are non-qualified for tax purposes. We value stock options using the Black-Scholes valuation method. The stock options generally vest over a three-year period (in equal annual increments). All stock options have 10-year terms.

(5) The amounts shown represent the full value of the RSU awards, the stock option grants and the target value for the PSU awards calculated in accordance with FASB ASC Topic 718 as of the date of the grant. The actual amount, if any, realized upon the exercise of stock options will depend upon the market price of our common shares relative to the exercise price per share of the stock option at the time of exercise. The actual amount realized upon vesting of RSUs will depend upon the market price of our common shares at the time of vesting. The actual number and value of PSUs earned will be based upon our actual performance during the three-year long-term incentive plan cycle and the market price at time of vesting. There is no assurance that the hypothetical full values of the awards reflected in this table will actually be realized.

(6) This amount represents the incremental fair value related to the Committee’s modification of Mr. Blankenship’s outstanding 2018, 2019 and 2020 stock options ($61,699), and RSUs and Performance Share awards ($616,686), in connection with his retirement, and does not reflect a new equity grant. For more information on these awards, see “Long-Term Incentive Compensation,” the 2020 Grants of Plan-Based Awards table, the Outstanding Equity Awards at 2020 Fiscal Year-End table and “Payments in Connection with Mr. Blankenship’s Retirement.”

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NARRATIVE DISCLOSURE REGARDING 2020 SUMMARY COMPENSATION TABLE AND 2020 GRANTS OF PLAN-BASED AWARD TABLE

The following highlights the salary and annual bonus percentages of total compensation reported in the 2020 Summary Compensation Table, based on the value of 2020 base salary and 2020 actual annual bonus (EMIP) for each of our NEOs:

| Name | %
of Base Salary and Annual Bonus To Total Compensation |
| --- | --- |
| Christopher
L. Mapes | 40.5 |
| Gabriel
Bruno | 46.1 |
| Steven
B. Hedlund | 37.1 |
| Jennifer
I. Ansberry | 54.1 |
| Michele
Kuhrt | 49.2 |
| Vincent
K. Petrella (retired) | 40.1 1 |
| George
D. Blankenship (retired) | 21.1 1 |

(1) The amounts for Messrs. Petrella and Blankenship reflect the prorated annual bonus, and for Mr. Blankenship, the modification value for his outstanding equity awards as detailed in the footnotes to the Summary Compensation Table.

The above percentages were based, in each case, on the value of the executive’s 2020 base salary and 2020 actual EMIP (or annual bonus). For information regarding the amount of salary and annual bonus compensation in proportion to total compensation, see the “Our Compensation Philosophy” section of the CD&A contained in this Proxy Statement. Further, the grants made in 2020 to the NEOs are described more fully in the CD&A contained in this Proxy Statement, and information about the change in control severance agreements and the amounts payable to the NEOs pursuant to those arrangements is provided under the section titled “Termination and Change in Control Arrangements” in this Proxy Statement.

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HOLDINGS OF EQUITY-RELATED INTERESTS

The following provides information relating to exercisable and unexercisable stock options, RSUs and Performance Shares at December 31, 2020.

Outstanding Equity Awards at 2020 Fiscal Year-End

| Name | Grant
Date | Option
Awards — Number
of Securities Underlying Unexercised Options Exercisable 1 (#) | Number
of Securities Underlying Unexercised Options Unexercisable 1 (#) | Option Exercise Price ($/sh) | Option Expiration Date | Stock
Awards — Number
of Shares or Units of Stock That Have Not Vested (#) 2 | Market Value of Shares or Units of Stock That Have Not Vested ($) 3 | Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#) 4 | Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($) 3 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Christopher
L. Mapes | 12/16/2013 | 44,040 | — | 71.30 | 12/16/2023 | — | — | — | — |
| | 2/5/2015 | 66,550 | — | 69.67 | 2/5/2025 | — | — | — | — |
| | 2/17/2016 | 89,030 | — | 58.14 | 2/17/2026 | — | — | — | — |
| | 2/22/2017 | 68,610 | — | 85.30 | 2/22/2027 | — | — | — | — |
| | 2/21/2018 | 43,928 | 21,966 | 90.70 | 2/21/2028 | 13,808 | 1,605,180 | — | — |
| | 2/18/2019 | 25,455 | 50,910 | 88.44 | 2/18/2029 | 15,098 | 1,755,143 | 15,098 | 1,755,143 |
| | 2/19/2020 | — | 83,490 | 89.63 | 2/19/2030 | 14,411 | 1,675,279 | 14,411 | 1,675,279 |
| Gabriel
Bruno | 4/24/2013 | — | — | — | — | 4,030 | 468,488 | — | — |
| | 2/5/2015 | 4,465 | — | 69.67 | 2/5/2025 | — | — | — | — |
| | 2/17/2016 | 9,295 | — | 58.14 | 2/17/2026 | — | — | — | — |
| | 2/22/2017 | 6,670 | — | 85.30 | 2/22/2027 | — | — | — | — |
| | 2/21/2018 | 4,100 | 2,050 | 90.70 | 2/21/2028 | 1,841 | 214,016 | — | — |
| | 12/31/2018 | — | — | — | — | 654 | 76,028 | — | — |
| | 2/18/2019 | 2,227 | 4,455 | 88.44 | 2/18/2029 | 1,321 | 153,566 | 1,321 | 153,566 |
| | 2/19/2020 | — | 7,305 | 89.63 | 2/19/2030 | 1,261 | 146,591 | 1,261 | 146,591 |
| | 4/21/2020 | — | — | — | — | 4,027 | 468,139 | — | — |
| Steven
B. Hedlund | 4/24/2013 | — | — | — | — | 6,410 | 745,163 | — | — |
| | 2/5/2015 | 6,155 | — | 69.67 | 2/5/2025 | — | — | — | — |
| | 2/17/2016 | 8,235 | — | 58.14 | 2/17/2026 | — | — | — | — |
| | 2/22/2017 | 6,005 | — | 85.30 | 2/22/2027 | — | — | — | — |
| | 5/24/2017 | 6,875 | — | 88.74 | 5/24/2027 | — | — | — | — |
| | 2/21/2018 | 6,208 | 3,105 | 90.70 | 2/21/2028 | 2,503 | 290,974 | — | — |
| | 2/18/2019 | 3,913 | 7,828 | 88.44 | 2/18/2029 | 2,321 | 269,816 | 2,321 | 269,816 |
| | 2/19/2020 | — | 12,837 | 89.63 | 2/19/2030 | 2,216 | 257,610 | 2,216 | 257,610 |
| | 10/20/2020 | — | — | — | — | 2,004 | 232,965 | — | — |
| Jennifer
I. Ansberry | 2/17/2016 | 3,984 | — | 58.14 | 2/17/2026 | — | — | — | — |
| | 2/22/2017 | 6,860 | — | 85.30 | 2/22/2027 | — | — | — | — |
| | 2/21/2018 | 5,974 | 2,988 | 90.70 | 2/21/2028 | 2,430 | 282,488 | — | — |
| | 2/18/2019 | 3,391 | 6,784 | 88.44 | 2/18/2029 | 2,012 | 233,895 | 2,012 | 233,895 |
| | 2/19/2020 | — | 11,124 | 89.63 | 2/19/2030 | 1,920 | 223,200 | 1,920 | 223,200 |
| Michele
R. Kuhrt | 12/16/2013 | 2,530 | — | 71.30 | 12/16/2023 | — | — | — | — |
| | 2/5/2015 | 2,620 | — | 69.67 | 2/5/2025 | — | — | — | — |
| | 2/17/2016 | 3,505 | — | 58.14 | 2/17/2026 | — | — | — | — |
| | 2/22/2017 | 4,290 | — | 85.30 | 2/22/2027 | — | — | — | — |
| | 2/21/2018 | 2,636 | 1,318 | 90.70 | 2/21/2028 | 1,380 | 160,425 | — | — |
| | 2/18/2019 | 1,838 | 3,676 | 88.44 | 2/18/2029 | 1,090 | 126,713 | 1,090 | 126,713 |
| | 2/19/2020 | — | 7,118 | 89.63 | 2/19/2030 | 2,580 | 299,925 | 1,229 | 142,871 |

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Outstanding Equity Awards at 2020 Fiscal Year-End (continued)

| Name | Grant
Date | Option
Awards — Number
of Securities Underlying Unexercised Options Exercisable 1 (#) | Number
of Securities Underlying Unexercised Options Unexercisable 1 (#) | Option Exercise Price ($/sh) | Option Expiration Date | Stock
Awards — Number
of Shares or Units of Stock That Have Not Vested (#) 2 | Market Value of Shares or Units of Stock That Have Not Vested ($) 3 | Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#) 4 | Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($) 3 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Vincent
K. Petrella (retired) | 2/5/2015 | 16,380 | — | 69.67 | 2/5/2025 | — | — | — | — |
| | 2/17/2016 | 21,910 | — | 58.14 | 2/17/2026 | — | — | — | — |
| | 2/22/2017 | 15,725 | — | 85.30 | 2/22/2027 | — | — | — | — |
| | 2/21/2018 | 13,568 | — | 90.70 | 2/21/2028 | — | — | — | — |
| | 2/18/2019 | 10,896 | — | 88.44 | 2/18/2029 | — | — | 2,328 | 270,630 |
| | 2/19/2020 | 4,698 | — | 89.63 | 2/19/2030 | — | — | 980 | 113,925 |
| George
D. Blankenship (retired) | 2/21/2018 | 1,152 | — | 90.70 | 2/21/2028 | — | — | — | — |
| | 2/18/2019 | — | — | — | — | — | — | 1,414 | 164,378 |
| | 2/19/2020 | — | — | — | — | — | — | 395 | 45,919 |

(1) Stock options vest in three equal annual installments, commencing on the first anniversary of the date of the grant.

(2) Amounts shown in this column represent RSU awards. The RSU awards generally vest in full three years from the date of grant. The RSU award granted to Mr. Bruno in 2013 vests over seven years following his attainment of age 55. The RSU award granted to Mr. Hedlund in 2013 vests over seven years following his attainment of age 55.

(3) The amounts shown in these columns represent the value of RSU and Performance Share awards granted pursuant to our 2006 and 2015 Equity and Performance Incentive Plans. Value is calculated using the close price of our common stock on the last trading day of 2020.

(4) This column shows the target number of Performance Shares awarded. The payout can range from 0 to 200% of the target and is based upon performance during the three-year cycle ending on December 31 of the applicable period, as determined by the Compensation and Executive Development Committee. See the CD&A on how Performance Share payouts are determined.

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2020 Option Exercises and Stock Vested Table

The following table provides information on stock options exercised, as well as RSUs and Performance Shares that vested during 2020.

| Name | Option
Awards 1 — Number
of Shares Acquired on Exercise(#) | Value
Realized on Exercise($) | Stock
Awards 2 — Number
of Shares Acquired on Vesting(#) | Value
Realized on Vesting($) |
| --- | --- | --- | --- | --- |
| Christopher
L. Mapes | 47,480 | 2,689,604 | 43,448 | 4,551,544 |
| Gabriel
Bruno | — | — | 3,677 | 385,708 |
| Steven
B. Hedlund | 5,860 | 250,936 | 5,965 | 608,187 |
| Jennifer
I. Ansberry | 6,602 | 285,890 | 4,092 | 438,051 |
| Michele
R. Kuhrt | 2,850 | 141,926 | 2,304 | 241,951 |
| Vincent
K. Petrella (retired) | 30,060 | 1,532,602 | 21,771 3 | 2,207,925 |
| George
D. Blankenship (retired) | 29,322 | 309,804 | 11,455 | 1,123,529 |

(1) The number of shares acquired on exercise reflects the gross number of shares acquired, without considering any shares that were withheld to pay the option exercise price and/or to satisfy tax withholding requirements. The value realized on exercise represents the gross number of shares acquired on exercise multiplied by the market price of our common stock on the exercise date, less the per share exercise price.

(2) The number of shares acquired on vesting reflects the gross number of shares acquired, without considering any shares that were withheld to satisfy tax withholding requirements. The value realized on vesting for RSUs represents the gross number of shares acquired, multiplied by the closing price of our common stock on each applicable vesting date, plus the value of dividend equivalents. The value realized on vesting for Performance Shares represents the gross number of shares acquired, relative to the 2018-2020 performance cycle that was considered earned as of December 31, 2020 but paid out in March 2021, multiplied by the closing price of our common stock on such date, plus the value of dividend equivalents. Amounts are not reduced to reflect any elections by our NEOs to defer receipt of RSUs or Performance Shares award payouts into our Top Hat Plan: Mr. Mapes, 30,455 RSUs and $192,516 in dividend equivalents deferred; Mr. Bruno, 1,212 Performance Shares and $6,690 in dividend equivalents deferred and Mr. Blankenship, 2,007 Performance Shares and $11,079 in dividend equivalents deferred. For more information about this deferral program, see the CD&A in the “Overview of Benefits” section.

(3) The number of shares acquired by Mr. Petrella includes 2,973 RSUs that vested in connection with Mr. Petrella’s retirement (and related dividend equivalents), however the receipt of payment for the award has been delayed for six months in compliance with Internal Revenue Code Section 409A.

2020 PENSION BENEFITS

RETIREMENT ANNUITY PROGRAM (RAP) (TERMINATED DURING 2020)

No new participants have been added to the RAP since 2006. Accordingly, neither Mr. Mapes nor Mr. Hedlund, who joined Lincoln Electric after 2006, were eligible to participate in the RAP. Effective as of December 31, 2016, the RAP was amended to cease all future benefit accruals for all participants, so that the participants will not earn any additional benefits under the RAP after December 31, 2016. In addition, the RAP was terminated effective as of December 31, 2020; distribution of pension plan assets in the form of lump sum payments and the purchase of a group annuity contract from a highly rated insurance company is expected to occur in late 2021.

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2020 PENSION BENEFITS TABLE

The following provides information relating to potential payments and benefits under our RAP for the NEOs who participate in that program. As noted above, Mr. Mapes and Mr. Hedlund are not participants in the RAP.

| Name | Plan
Name | Number
of Years Credited Service(#) | Present
Value of Accumulated Benefit($) | Payments During Last Fiscal Year($) |
| --- | --- | --- | --- | --- |
| Christopher
L. Mapes | RAP | — | — | — |
| Gabriel
Bruno | RAP | 21 1 | 877,176 2 | — |
| Steven
B. Hedlund | RAP | — | — | — |
| Jennifer
I. Ansberry | RAP | 12 1 | 346,8002 | — |
| Michele
R. Kuhrt | RAP | 19 1 | 1,388,775 2 | — |
| Vincent
K. Petrella (retired) | RAP | 21 1 | — | 1,758,179 3 |
| George
D. Blankenship (retired) | RAP | 31 1 | — | 1,356,984 3 |

(1) Under the RAP, credited years of service equals actual years of service from the date of hire with Lincoln Electric through December 31, 2016, the date that the RAP was amended to cease all future benefit accruals. All of the NEOs, other than Mr. Petrella, are currently under normal retirement age under the terms of the plan.

(2) This represents the actuarial present value of accrued benefits in the RAP for the NEOs who participate at December 31, 2020. However, this is an estimated full value number that is discounted to a current date. The above actuarial present values were determined reflecting plan termination assumptions, including a 77.5% lump sum election assumption, with the lump sum calculated as of September 1, 2021 using interest rate and mortality assumptions prescribed under IRC Section 417(e) and a 120% adjustment to the remaining obligation to reflect insurance pricing. The remaining obligation assumptions assume age 60 commencement, or current age if older, no decrements for death or termination prior to age 60, and the WTW Rate:Link 40th:90th yield curve for discount rate purposes as of December 31, 2020. The mortality assumption is based on Pri-2012 Healthy Retiree table (base year 2012), with blue collar adjustment, projected generationally with Scale MP-2019 as of December 31, 2020. These assumptions are consistent with the assumptions used for year-end accounting obligations for the RAP, except for removing the pre-commencement decrements. All of the NEOs who participate are currently vested in their RAP benefits because they each have at least five years of service with us.

(3) The RAP benefits for Mr. Petrella and Mr. Blankenship were paid as lump sums during 2020 and no further benefits are due to either participant as of December 31, 2020.

The following table provides additional information regarding the RAP benefit:

| Name | When
Eligible for a Full, Unreduced Benefit under the RAP | Accrued
Annual Benefit Payable under the RAP at Age 60 (as of December 31, 2020)($) 1 |
| --- | --- | --- |
| Christopher
L. Mapes | — | — |
| Gabriel
Bruno | 2027 | 56,744 |
| Steven
B. Hedlund | — | — |
| Jennifer
I. Ansberry | 2033 | 27,110 |
| Michele
R. Kuhrt | 2026 | 84,392 |
| Vincent
K. Petrella (retired) | — | — |
| George
D. Blankenship (retired) | — | — |

(1) Vested participants who are below the normal retirement age of 60 may receive an earlier reduced benefit after he or she reaches age 55. The RAP benefits for Mr. Petrella and Mr. Blankenship were paid as lump sums during 2020 and no further benefits are due to either participant as of December 31, 2020. As part of the plan termination process, all participants who have not previously commenced benefits will have the opportunity to receive a lump sum or immediate annuity in the second half of 2021.

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2020 DEFERRED COMPENSATION BENEFITS

DEFERRED COMPENSATION PLAN (TOP HAT PLAN)

Our Amended and Restated 2005 Deferred Compensation Plan for Executives (Top Hat Plan) is designed to be a “top-hat” plan that complies with Section 409A of the Internal Revenue Code. Participation is limited to management and highly compensated employees as approved by the Committee.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (SERP) (FROZEN SINCE 2016)

No new participants have been added to the SERP since 2005. Accordingly, neither Mr. Mapes nor Mr. Hedlund, who joined Lincoln Electric after 2005, nor Ms. Ansberry, who was not eligible to participate in the SERP prior to 2005, participates in the SERP. Effective November 30, 2016, the SERP was amended to cease all future benefit accruals and to fully vest those who had a benefit under the SERP. Effective as of December 1, 2016, pursuant to the amendment of the SERP, the value of the frozen accrued vested benefit of each SERP participant was converted to a notional account balance. The account balance was determined by projecting to December 31, 2016 the participant’s SERP benefit and calculating the present value of that projected benefit. Participants have the ability to make investment elections for their account in a manner similar to that undertaken by participants in the Amended and Restated 2005 Deferred Compensation Plan for Executives.

RESTORATION PLAN

Our Restoration Plan is designed to provide deferred compensation for eligible employees whose annual compensation is expected to be in excess of the Internal Revenue Code limit on compensation (Code Limit) applicable to the 401(k) Plan.

A summary of the Top Hat Plan and Restoration Plan is provided in the CD&A in the “Overview of Benefits” section.

2020 NONQUALIFIED DEFERRED COMPENSATION TABLES

The following three tables provide deferred compensation information for 2020 for the NEOs.

TOP HAT PLAN

Name	Executive Contributions in Last Fiscal Year($)	Registrant Contributions in Last Fiscal Year($)	Aggregate Earnings in Last Fiscal Year($)	Aggregate Withdrawals/ Distributions($)	Aggregate Balance at Last Fiscal Year-End($) 1
Christopher
L. Mapes	429,708 2	2,983,030 3	3,628,359 4	—	23,800,243
Gabriel
Bruno	—	162,770 5	108,446 6	—	518,194
Steven
B. Hedlund	—	—	7,191	—	55,791
Jennifer
I. Ansberry	—	—	—	—	—
Michele
R. Kuhrt	—	—	—	—	—
Vincent
K. Petrella (retired)	426,666 7	—	398,016 8	—	4,157,238
George
D. Blankenship (retired)	—	733,876 9	329,663 10	—	1,817,097

(1) The portions of the amount reported that relate to deferral contributions in prior years have all been reported in the Summary Compensation Table in those years to the extent the individual was a NEO for those years.

(2) Included as compensation for 2019 in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table and is described in its footnotes.

(3) Represents 30,455 RSUs and $192,516 in cash attributable to dividend equivalents that vested during 2020 and were deferred into the Top Hat Plan.

(4) Of the amount reported, $100,170 is included as compensation for 2020 in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table and is described in its footnotes.

(5) Represents 1,783 Performance Shares and $8,879 in cash attributable to dividend equivalents that vested during 2020 and were deferred into the Top Hat Plan.

(6) Of the amount reported, $382 is included as compensation for 2020 in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table and is described in its footnotes.

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(7) Of the amount reported, $110,041 is included as compensation for 2020 in the “Salary” column of the Summary Compensation Table and the remainder was included as compensation for 2019 in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table and is described in its footnotes.

(8) Of the amount reported, $42,562 is included as compensation for 2020 in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table and is described in its footnotes.

(9) Represents 4,655 RSUs and $21,272 in cash attributable to dividend equivalents and 3,443 PSUs and $17,146 in cash attributable to dividend equivalents that vested during 2020 and were deferred into the Top Hat Plan.

(10) Of the amount reported, $550 is included as compensation for 2020 in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table and is described in its footnotes.

SERP

The following table reflects the earnings during 2020 related to the SERP.

Name	Executive Contributions in Last Fiscal Year($)	Registrant Contributions in Last Fiscal Year($)	Aggregate Earnings in Last Fiscal Year($)	Aggregate Withdrawals/ Distributions($)	Aggregate Balance at Last Fiscal Year-End($)
Christopher
L. Mapes	—	—	—	—	—
Gabriel
Bruno	—	—	—	—	—
Steven
B. Hedlund	—	—	—	—	—
Jennifer
I. Ansberry	—	—	—	—	—
Michele
R. Kuhrt	—	—	—	—	—
Vincent
K. Petrella (retired)	—	—	76,327 1	—	2,544,086 2
George
D. Blankenship (retired)	—	—	121,820 3	4,384,593 4	—

(1) Of the amount reported, $35,403 is included as compensation for 2020 in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table and is described in its footnotes.

(2) The portions of the amount reported that relate to deferral contributions in prior years have all been reported in the Summary Compensation Table in those years to the extent the individual was a NEO for those years.

(3) Of the amount reported, $53,785 is included as compensation for 2020 in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the Summary Compensation Table and is described in its footnotes.

(4) The SERP benefit for Mr. Blankenship was paid as a lump sum during 2020 and no further benefits are due to him as of December 31, 2020.

RESTORATION PLAN

Effective January 1, 2017, all NEOs were eligible to receive deferred compensation amounts credited to an account under the Restoration Plan, providing benefits that could not be provided under the 401(k) Plan due to IRS limitations on covered compensation. The following table reflects the contributions and earnings under the Restoration Plan attributable to such amounts with respect to 2020.

Name	Executive Contributions in Last Fiscal Year($)	Registrant Contributions in Last Fiscal Year($) 1	Aggregate Earnings in Last Fiscal Year($)	Aggregate Withdrawals/ Distributions($)	Aggregate Balance at Last Fiscal Year-End($) 2
Christopher
L. Mapes	—	146,030	136,820	—	822,545
Gabriel
Bruno	—	47,772	40,064	—	263,479
Steven
B. Hedlund	—	32,540	30,406	—	178,271
Jennifer
I. Ansberry	—	60,280	45,456	—	283,329
Michele
R. Kuhrt	—	43,233	27,669	—	201,297
Vincent
K. Petrella (retired)	—	94,610	109,824	—	633,498
George
D. Blankenship (retired)	—	61,197	(12,841)	216,319	196,277

(1) Amounts reported are included in compensation for 2020 in the “All Other Compensation” column of the Summary Compensation Table above and is described in its footnotes.

(2) The portions of the amount reported that relate to deferral contributions in prior years have all been reported in the Summary Compensation Table in those years to the extent the individual was a NEO for those years.

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TERMINATION AND CHANGE IN CONTROL ARRANGEMENTS

The Key Compensation Programs table below highlights the standard benefits and payments available to NEOs in the event of a termination of employment and/or a change in control. The Termination and Change in Control Table below reflects the estimated additional amounts of compensation each continuing NEO would receive in the event of a termination of employment and/or a change in control. Termination events include: a voluntary termination by the executive; normal retirement of the executive (defined as termination at age 60 or later with 5 years of service); an involuntary, not-for-cause termination by Lincoln Electric; a for-cause termination by Lincoln Electric; a termination upon a change in control; and a termination due to death or disability. In addition, estimated additional compensation amounts are shown in the event of a change in control without termination of employment. The amounts shown assume that each event occurred on December 31, 2020, the last business day of the calendar year.

TERMINATION OF EMPLOYMENT

No written agreements exist that provide additional payments to a NEO in the event of a voluntary termination of employment with Lincoln Electric or a termination of employment initiated by Lincoln Electric (whether for cause or not). We do not have employment agreements or severance agreements, except for our change in control severance agreements described below.

Pursuant to our standard employment policies, upon termination of employment, a NEO would be entitled to receive the same benefits and payments that are generally available to salaried employees:

• Earned but unpaid base pay, up to the date of termination; • Earned and unused paid time off, up to the date of termination; • Vested amounts held in the executive’s account under our 401(k) Plan; • Amounts held in the executive’s account under our Top Hat Plan (based on the executive’s election); • Deferred vested benefits under our RAP—payments for which could begin at normal retirement age 60 or as early as age 55 (but at a reduced amount); and • Amounts held in the executive’s account under our Restoration Plan.

CHANGE IN CONTROL

We have entered into (or were a party to) change in control severance agreements with our NEOs. Pursuant to our change in control severance agreements, in the event of a “change in control,” if the NEO’s employment is terminated without “cause” (as defined in the change in control severance agreement) or the NEO terminates employment for “good reason” (as defined in the change in control severance agreement) during the severance period (as described below) (or for certain other employment terminations prior to and related to the change in control, as described in the change in control severance agreement), we will make severance payments and provide certain benefits as indicated in the Key Compensation Programs table below.

The severance period commences on the date of the first occurrence of a change in control and ends on the earlier of (a) the second anniversary of the change in control, or (b) the executive’s death. Our NEOs are required to abide by certain restrictive covenants and execute a release of claims in order to receive certain severance payments and benefits under the change in control severance agreements.

The following events in general would constitute a change in control:

• any individual, entity or group is or becomes the beneficial owner of 30% or more of the combined voting power of the then-outstanding voting stock of Lincoln Electric; • a majority of the Board ceases to be comprised of incumbent Directors; • certain reorganizations, mergers or consolidations, or the sale or other disposition of all or substantially all of the assets of Lincoln Electric, or certain other corporate transactions are consummated; or • approval by the shareholders of a complete liquidation or dissolution of Lincoln Electric.

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Key Compensation Programs

| | Voluntary Termination/ Termination with Cause | Involuntary Termination/ Termination without Cause | Normal Retirement (age 60 and 5 years of service) 1 | Change
in Control (with Termination) 2 | Change
in Control (No Termination) | Death
or Disability |
| --- | --- | --- | --- | --- | --- | --- |
| Severance | None | Company
has discretion | None | Lump-sum
payment equal to the sum of base pay and bonus as described in the severance agreement times three for the CEO
and times two for other NEOs | None | None |
| Annual
Bonus (EMIP) | Forfeited | Forfeited | Pro-rata
portion of EMIP 3 | Pro-rata
portion of EMIP payment equal to the greater of the actual or target amount | Pro-rata
EMIP payment equal to the greater of the actual or target amount | Pro-rata
portion of EMIP 3 |
| Long-Term
Incentive Plan (Performance Shares) | Forfeited | Forfeited | Pro-rata
portion of Performance Shares, based on actual performance 4 | Accelerated
vesting of Performance Shares at target, if replacement award provided and subsequent qualifying termination 5 | No
accelerated vesting if replacement award provided and continued employment Accelerated vesting of Performance Shares granted prior to the change in control
at target, if no replacement award provided 5 | Vesting
of Performance Shares at target |
| Stock
Options | Unvested
stock options forfeited Entitled to exercise vested stock options for a period of three months after
termination 6,7 | Unvested
stock options forfeited Entitled to exercise vested stock options for a period of three months after
termination 6,7 | Pro-rata
vesting of any unvested stock options with right to exercise such vested options for the remaining period of the original
10-year term 6 | Accelerated
vesting of unvested stock options, if replacement award provided and subsequent qualifying termination Entitled to exercise vested stock options for a period of three months after
termination 6,7 | No
accelerated vesting if replacement award provided and continued employment Accelerated vesting of unvested stock options granted
prior to change in control, if no replacement award provided | Accelerated
vesting of unvested stock options Entitled to exercise stock options for a period of one year after death or three years after
disability 6 |
| RSUs | Forfeited | Forfeited | Pro-rata
vesting of RSU awards | Accelerated
vesting of RSU awards, if replacement award provided and subsequent qualifying termination | No
accelerated vesting if replacement award provided and continued employment Accelerated vesting of RSU awards granted
prior to change in control, if no replacement award provided | Vesting
of RSU awards |
| Outplacement | None | None | None | Maximum
of $100,000 for CEO and $50,000 for the Other NEOs | None | None |

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Key Compensation Programs (continued)

| | Voluntary Termination/ Termination with Cause | Involuntary Termination/ Termination without Cause | Normal Retirement (age 60 and 5 years of service) 1 | Change
in Control (with Termination) 2 | Change
in Control (No Termination) | Death
or Disability |
| --- | --- | --- | --- | --- | --- | --- |
| 280G Treatment | N/A | N/A | N/A | 8 | N/A | N/A |
| Other | Continuing
medical and/or dental coverage under COBRA, for which the executive would pay 102% of the applicable premium | Continuing
medical and/or dental coverage under COBRA, for which the executive would pay 102% of the applicable premium | Continuing
medical and/or dental coverage under COBRA, for which the executive would pay 102% of the applicable premium Normal
vesting of benefits under the SERP, provided the executive is a participant 9 | Continuing
medical insurance (102% of the premium paid by the executive) and life insurance for a period of three years following
the NEO’s termination date 10 | 10 | Continuing
medical and/or dental coverage with 102% of the
premium paid by the executive (or his or her surviving dependents) |

(1) Subject to any 409A deferred payment requirements.

(2) Provision applicable in the event of a termination without Cause or termination for Good Reason in connection with a Change in Control. With respect to Performance Shares, stock options and RSUs, such termination without Cause or termination for Good Reason must occur within a period of two years after the Change in Control (or in certain employment terminations prior to and related to the change in control) to receive the accelerated vesting treatment.

(3) Based on the executive’s period of employment during the calendar year, subject to achievement of the applicable personal and financial goals.

(4) Based on the executive’s periods of employment during each of the open three-year cycles and upon completion of each cycle, subject to achievement of the applicable financial goals.

(5) With respect to Performance Shares granted prior to 2020, a pro-rata portion of Performance Shares equal to the greater of target or actual performance would vest.

(6) After which time the vested stock options would expire.

(7) Vested stock options canceled if the executive is terminated for cause or the executive engaged in competitive conduct within six months of termination.

(8) Severance payments reduced to the 280G (excess parachute payment) safe harbor limit, unless the executive would achieve a better after-tax result paying the excise tax imposed on excess parachute payments. No payment, net of taxes, to compensate for any excise tax imposed.

(9) Financial planning services for the year of retirement and for one calendar year thereafter.

(10) Amounts and/or shares (from vested RSUs or Performance Shares) held in executives’ accounts under the Top Hat Plan automatically paid out.

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Termination and Change in Control Table

The following table sets forth estimates of the potential incremental payments to each of our NEOs (except for Mr. Petrella who retired on October 15, 2020 and Mr. Blankenship who retired on May 31, 2020) upon the specified termination events and upon a change in control, both with and without a qualified termination, assuming that each such event took place on the last business day of 2020.

The table does not quantify benefits under plans that are generally available to salaried employees that do not discriminate in favor of NEOs, including the RAP, the 401(k) Plan, the health care plan and the life insurance plan.

The 2020 Annual Bonus (EMIP) amounts represent the difference between target EMIP and actual EMIP payments (as disclosed in the Non-Equity Incentive Plan Compensation column of the 2020 Summary Compensation Table) if target EMIP exceeds actual EMIP in connection with a hypothetical change in control as of the last business day of 2020. Similarly, the amounts shown for LTIP (Performance Shares) for 2020 represent the difference between target performance level and actual performance level if target performance level exceeds actual performance level assuming a change in control occurred on the last business day of 2020. For 2020, the amounts shown for LTIP (Performance Shares) include the pro-rata portion of the target amounts for the two cycles of the Performance Share LTIP (2019-2021 cycle and 2020-2022 cycle) that were open as of the last business day of 2020. The amounts shown for LTIP (Performance Shares) also include the difference between the 2018-2020 Performance Share target amount and the 2018-2020 Performance Share actual amount, since the cycle paid out below target.

The following table assumes, in the event of a change in control, replacement awards are provided pursuant to the 2015 Equity and Incentive Compensation Plan’s respective Stock Option Agreement, Restricted Stock Unit Agreement, and Performance Share Agreement (“Agreements”). Pursuant to the Agreements, if the respective equity awards are not replaced, all outstanding equity awards will accelerate as of the closing date of the change in control. In the event of a change in control where no replacement awards are provided, the accelerated equity values are consistent with the accelerated equity values under Change in Control (Replacement Awards; Qualified Termination).

In addition, the table includes all equity that is accelerated as a result of termination but does not include the value of outstanding equity awards that have previously vested, such as stock options, which awards are set forth above in the Outstanding Equity Awards at December 31, 2020 table. For descriptions of the compensation plans and agreements that provide for the payments set forth in the following table, including our change in control agreements, see the “Elements of Executive Compensation” discussion contained in the CD&A.

| | Christopher
L. Mapes | Gabriel Bruno | Steven
B. Hedlund | Jennifer
I. Ansberry | | Michele
R. Kuhrt |
| --- | --- | --- | --- | --- | --- | --- |
| Involuntary
Termination/Termination without Cause before Normal Retirement: | $ 0 | $ 0 | $ 0 | $ 0 | | $ 0 |
| Normal
Retirement (Age 60): | Not
Eligible | Not
Eligible | Not
Eligible | Not
Eligible | | Not
Eligible |
| LTIP
(Performance Shares) | N/A | N/A | N/A | N/A | | N/A |
| Stock
Options–Accelerated Vesting | N/A | N/A | N/A | N/A | | N/A |
| RSUs–Accelerated
Vesting | N/A | N/A | N/A | N/A | | N/A |
| Change
in Control (Replacement Awards; Qualified Termination): | $ 20,039,078 | $ 3,616,600 | $ 4,645,256 | $ 3,200,117 | | $ 2,439,259 |
| Severance | $ 8,664,345 | $ 1,433,155 | $ 1,773,621 | $ 1,643,374 | | $ 1,318,277 |
| Annual
Bonus (EMIP) | $ 0 | $ 0 | $ 0 | $ 0 | | $ 0 |
| LTIP
(Performance Shares) | $ 1,876,292 | $ 164,751 | $ 287,231 | $ 250,294 | | $ 141,677 |
| Stock
Options–Accelerated Vesting | $ 4,199,508 | $ 370,721 | $ 638,715 | $ 561,092 | | $ 325,386 |
| RSUs–Accelerated
Vesting | $ 5,198,933 | $ 1,597,973 | $ 1,895,689 | $ 764,576 | | $ 603,919 |
| Outplacement
Estimate | $ 100,000 | $ 50,000 | $ 50,000 | $ 50,000 | | $ 50,000 |
| 280G
Cutback | $ 0 | $ 0 | $ 0 | $ (69,219 | ) | $ 0 |

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| | Christopher
L. Mapes | Gabriel Bruno | Steven
B. Hedlund | Jennifer
I. Ansberry | Michele
R. Kuhrt |
| --- | --- | --- | --- | --- | --- |
| Change
in Control (Replacement Awards; No Termination): | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
| Annual
Bonus (EMIP) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
| LTIP
(Performance Shares) | 0 | 0 | 0 | 0 | 0 |
| Stock
Options–Accelerated Vesting | 0 | 0 | 0 | 0 | 0 |
| RSUs–Accelerated
Vesting | 0 | 0 | 0 | 0 | 0 |
| Death
or Disability: | $ 12,915,976 | $ 2,276,474 | $ 3,075,223 | $ 1,794,371 | $ 1,205,551 |
| LTIP
(Performance Shares) | $ 3,517,535 | $ 307,780 | $ 540,819 | $ 468,703 | $ 276,246 |
| Stock
Options–Accelerated Vesting | $ 4,199,508 | $ 370,721 | $ 638,715 | $ 561,092 | $ 325,386 |
| RSUs–Accelerated
Vesting | $ 5,198,933 | $ 1,597,973 | $ 1,895,689 | $ 764,576 | $ 603,919 |

PAYMENTS IN CONNECTION WITH MR. PETRELLA’S RETIREMENT

Upon his retirement, Mr. Petrella received retirement benefits totaling an estimated $1,906,641, in accordance with the terms of the underlying compensation programs, as described in the “Key Compensation Programs” chart. This total includes the pro-rata values of his annual bonus (EMIP) ($508,045), the accelerated vesting of 12,331 stock options (intrinsic value of $134,513, based on the difference of the closing price of our stock on the date of retirement and the option strike price), the accelerated vesting of 5,818 RSUs (intrinsic value of $606,908, representing the closing price of our stock on the date of retirement and accrued dividend equivalents) and the accelerated vesting of 6,303 Performance Shares (intrinsic value of $657,175, representing the closing price of our stock on the date of retirement, at target, and accrued dividend equivalents) under our standard pro-rata vesting policies.

PAYMENTS IN CONNECTION WITH MR. BLANKENSHIP’S RETIREMENT

In connection with Mr. Blankenship’s retirement, the Board, based upon the recommendation of the Compensation and Executive Development Committee, took action to treat Mr. Blankenship as retirement eligible, in recognition of his over 32 years of service with the Company. As a result of this action, Mr. Blankenship became entitled to receive non-accrued retirement benefits totaling an estimated $846,611. This total includes the pro-rata values of his annual bonus (EMIP) ($206,455), the accelerated vesting of 4,116 stock options (with no intrinsic value, as the closing price of our stock on the date of retirement was less than option strike price), the accelerated vesting of 3,563 RSUs (intrinsic value of $304,073, representing the closing price of our stock on the date of retirement and accrued dividend equivalents) and the accelerated vesting of 3,942 Performance Shares (intrinsic value of $336,083, representing the closing price of our stock on the date of retirement, at target, and accrued dividend equivalents) under our standard pro-rata vesting policies, as approved by the Board. See “2020 Summary Compensation Table” and related footnotes for more information.

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PAY RATIO

For 2020, we estimate that the ratio of the annual total compensation of our CEO ($7,077,536, which is the same amount reported for our CEO in the 2020 Summary Compensation Table) to the annual total compensation of our median employee ($48,913) is 145:1. We note that, due to our permitted use of reasonable estimates and assumptions in preparing this pay ratio disclosure, the disclosure may involve a degree of imprecision, and thus this ratio disclosure is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K using the data and assumptions described below.

In accordance with Item 402(u) of Regulation S-K, in calculating our CEO pay ratio for 2019, we did not believe we experienced a change in our employee population or employee compensation arrangements that would significantly impact our pay ratio disclosure; therefore we looked to use the same median employee as we used to calculate the CEO pay ratio for 2018. However, in 2019, the particular employee we selected in 2018 as our median employee was no longer employed by the Company. As such, and as allowed by SEC rules and regulations, we used a substitute median employee in calculating our 2019 pay ratio. This substitute employee’s compensation is substantially similar to that of the median employee identified in 2018. We are using the same median employee as we used in 2019 in calculating our CEO pay ratio for 2020, as we again do not believe we experienced a change in our employee population or employee compensation arrangements that would significantly impact our pay ratio disclosure.

In accordance with the foregoing, in 2018 we determined our median employee based on total cash and equity compensation paid to our active employees as of October 1, 2018 for the period beginning on January 1, 2018 and ending on December 31, 2018. We included all full time, part time, seasonal and temporary employees, whether employed domestically or overseas, and whether employed directly or by a consolidated subsidiary. Compensation for employees hired during 2018 was annualized for all employees other than seasonal employees.

Using the same the median employee that was used for 2019, annual total compensation for the employee for 2020 was calculated using the same methodology used for our NEOs as set forth in the 2020 Summary Compensation Table. Of the employees that were identified as potential median employees, we selected an employee based in the U.S. that was representative of our largest portion of our workforce. Given the different methodologies that various public companies will use to determine an estimate of their pay ratio, the estimated ratio reported above should not be used as a basis for comparison between companies.

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MANAGEMENT OWNERSHIP OF SHARES

The following table sets forth certain information regarding ownership of shares of common stock of Lincoln Electric as of December 31, 2020 (except as otherwise indicated) by each of our Directors and NEOs, as well as our Directors and executive officers as a group. Except as otherwise indicated, voting and investment power with respect to shares reported in this table are not shared with others.

RSUs and Performance Shares are generally not reflected in the table as there is no ability to acquire the shares attributable to them within 60 days of December 31, 2020. In addition, any vested RSUs and Performance Shares that are deferred into the Top Hat Plan or the Non-Employee Directors’ Deferred Compensation Plan are generally not reflected in the table as there is no ability to acquire the shares attributable to them until they settle within 60 days of December 31, 2020. The table includes shares that would be received upon the vesting of RSUs within 60 days of December 31, 2020.

| BENEFICIAL
OWNERSHIP TABLE — Directors | Number
of Shares of Lincoln Electric Common Stock Beneficially Owned 1 | | Percent
of Class |
| --- | --- | --- | --- |
| Curtis
E. Espeland | 13,491 | | * |
| Patrick
P. Goris | 564 | 2 | * |
| Stephen
G. Hanks | 22,055 | 2 | * |
| Michael
F. Hilton | 5,313 | 2 | * |
| G.
Russell Lincoln | 271,616 | 3 | * |
| Kathryn
Jo Lincoln | 843,601 | 2,4 | 1.41% |
| William
E. MacDonald, III | 13,255 | | * |
| Phillip
J. Mason | 15,876 | | * |
| Ben
P. Patel | 1,113 | 2 | * |
| Hellene
S. Runtagh | 26,284 | | * |
| Kellye
L. Walker | — | | * |
| NEOs | | | |
| Christopher
L. Mapes | 450,998 | 5 | * |
| Gabriel
Bruno | 40,930 | 6 | * |
| Steven
B. Hedlund | 67,010 | 7 | * |
| Jennifer
I. Ansberry | 38,092 | 8 | * |
| Michele
R. Kuhrt | 31,224 | 9 | * |
| Vincent
K. Petrella (retired) | 102,516 | 10 | * |
| George
D. Blankenship (retired) | 6,489 | 11 | * |
| All
Directors and Executive Officers as a group (22 persons, excluding retired executives) | 2,018,458 | 12 | 3.35% |

• Indicates less than 1%

(1) Reported in compliance with the beneficial ownership rules of the SEC, under which a person is deemed to be the beneficial owner of a security, for these purposes, if he or she has, or shares, voting power or investment power over the security or has the right to acquire the security within 60 days of December 31, 2020. With respect to the NEOs and executive officers, the amounts reported do not include any Performance Shares that vested and paid out in March 2021, as the number of Performance Shares to be received by each executive officer was unknown within 60 days of December 31, 2020.

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(2) Each of Messrs. Goris, Hanks, Hilton, Patel and Ms. Lincoln had 2,948 RSUs deferred under the Non-Employee Directors’ Deferred Compensation Plan which are not reflected in the above table.

(3) Of the shares reported, Mr. Lincoln held of record 216,870 shares. 1,028 shares held of record by his spouse. The remaining shares were held of record as follows: 35,154 shares by the Laura R. Heath Family Trust for which Mr. Lincoln serves as a trustee; 18,564 shares by The G.R. Lincoln Family Foundation for which Mr. Lincoln serves as a trustee. Mr. Lincoln disclaims beneficial ownership of the shares held by his spouse, the trusts and the Foundation.

(4) Of the shares reported, 43,324 shares were held of record by a trust established by Ms. Lincoln, under which she has sole investment and voting power. The remaining 800,277 shares were held of record by The Lincoln Institute of Land Policy, of which Ms. Lincoln is the Chair, as to which shares Ms. Lincoln disclaims beneficial ownership. Ms. Lincoln has shared voting and shared investment power on these 800,277 shares.

(5) Of the shares reported, Mr. Mapes held of record 38,134 shares. Mr. Mapes has or had the right to acquire 412,864 shares upon the exercise of stock options within 60 days of December 31, 2020. Mr. Mapes had 50,370 RSUs deferred under the Top Hat Plan which are not reflected in the above table.

(6) Of the shares reported, Mr. Bruno held of record 5,620 shares, of which 277 shares are held jointly with spouse. Mr. Bruno has or had the right to acquire 1,841 shares upon the vesting of RSUs within 60 days of December 31, 2020. Mr. Bruno has or had the right to acquire 33,469 shares upon the exercise of stock options within 60 days of December 31, 2020. Mr. Bruno had 4,188 Performance Shares deferred under the Top Hat Plan which are not reflected in the above table.

(7) Of the shares reported, Mr. Hedlund held 15,819 shares of record, 477 shares of which are held in the Stock Purchase Plan, and 2,285 shares of which are held in the 401(k) Plan. Mr. Hedlund has or had the right to acquire 2,503 shares upon the vesting of RSUs within 60 days of December 31, 2020. Mr. Hedlund has or had the right to acquire 48,688 shares upon the exercise of stock options within 60 days of December 31, 2020.

(8) Of the shares reported, Ms. Ansberry held of record 5,366 shares, 20 shares of which are held jointly with her spouse. Ms. Ansberry has the right to acquire 2,430 shares upon the vesting of RSUs within 60 days of December 31, 2020. Ms. Ansberry has or had the right to acquire 30,296 shares upon the exercise of stock options within 60 days of December 31, 2020.

(9) Of the shares reported, Ms. Kuhrt held 6,897 shares of record, 105 shares of which are held in the 401(k) Plan. Ms. Kuhrt has the right to acquire 1,380 shares upon the vesting of RSUs within 60 days of December 31, 2020. Ms. Kuhrt has or had the right to acquire 22,947 shares upon the exercise of stock options within 60 days of December 31, 2020.

(10) Of the shares reported, Mr. Petrella held of record 19,339 shares, of which are held jointly with spouse. Mr. Petrella has or had the right to acquire 83,177 shares upon the exercise of stock options within 60 days of December 31, 2020.

(11) Of the shares reported, Mr. Blankenship held 5,337 shares of record and 1,070 shares of which are held jointly by Mr. Blankenship and his spouse. Mr. Blankenship has or had the right to acquire 1,152 shares upon the exercise of stock options within 60 days of December 31, 2020. Mr. Blankenship had 8,098 RSUs and Performance Shares deferred under the Top Hat Plan which are not reflected in the above table.

(12) Includes 12,663 shares that are RSUs held by all executive officers, as a group, that vest within 60 days of December 31, 2020 and 658,103 shares which all executive officers, as a group, have or had the right to acquire upon the exercise of stock options within 60 days of December 31, 2020.

In addition to the above management holdings, as of December 31, 2020, the 401(k) Plan held 928,874 shares of our common stock, or approximately 1.56% of the shares of our common stock outstanding.

EQUITY COMPENSATION PLAN INFORMATION

The following table provides information regarding outstanding Stock Options, RSUs and Performance Shares and shares reserved for issuance under our equity compensation plans as of December 31, 2020:

| Plan
category | Number
of Securities to Be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) 1 | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b) 2 | Number
of Securities Remaining Available For Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected In Column (a)) (c) 3 |
| --- | --- | --- | --- |
| Equity
compensation plans approved by security holders | 1,770,181 | $77.31 | 2,156,223 |
| Equity
compensation plans not approved by security holders 4 | — | — | — |
| Total | 1,770,181 | — | 2,156,223 |

(1) The amount shown in column (a) includes the following: 1,179,761 Nonqualified Stock Options; 87,951 deferred RSUs and deferred Performance Shares; 181,960 Performance Shares (assuming payout levels at maximum—as a result, this aggregate reported number may overstate actual dilution); and 320,509 RSUs.

(2) The weighted average exercise price in column (b) includes nonqualified stock options only.

(3) The amount shown in column (c) represents common shares remaining available under the 2015 Equity and Incentive Compensation Plan (“Employee Plan”) and the 2015 Stock Plan for Non-Employee Directors (“2015 Director Plan”). The Employee Plan provides for the granting of options, appreciation rights, restricted shares, restricted stock units and performance-based awards. The 2015 Director Plan provides for the granting of options, restricted shares and restricted stock units. Under the Employee Plan, for any award that is not an Option Right or Appreciation Right, 3.24 common shares are subtracted from the maximum number of common shares available under the plan for every common share issued under the award. For awards of Option Rights or Appreciation Rights, however, only one common share is subtracted from the maximum number of common shares available under the Employee Plan for every common share granted. The amount in the table assumes payout levels at maximum for Performance Shares. Under the Director Plan only one common share is subtracted from the maximum number of common shares available for every common share granted.

(4) The Company does not maintain equity compensation plans that have not been approved by its shareholders.

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OTHER OWNERSHIP OF SHARES

Set forth below is information about the number of shares held by any person (including any “group” as that term is used in Section 13(d)(3) of the Exchange Act) known to us to be an owner of more than 5% of the shares of our common stock as of December 31, 2020.

| Name
and Address of Beneficial Owner | Number
of Shares and Nature of Beneficial Ownership | Percent
of Class |
| --- | --- | --- |
| The
Vanguard Group 100 Vanguard Boulevard Malvern, Pennsylvania 19355 | 5,599,927 1 | 9.39% |
| BlackRock,
Inc. 55 East 52nd Street New York, New York 10055 | 5,425,301 2 | 9.10% |
| JPMorgan
Chase & Co. 383 Madison Avenue New York, New York 10179 | 3,919,733 3 | 6.57% |

(1) According to its Schedule 13G/A filed on February 10, 2021, The Vanguard Group has sole voting power over 0 shares, shared voting power over 41,032 shares, sole dispositive power over 5,513,957 shares and shared dispositive power over 85,970 shares. In its Schedule 13G/A filing, The Vanguard Group states that the shares of our common stock reported in the filing were acquired and held in the ordinary course of business and were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired in connection with or as a participant in any transaction having such purpose or effect, other than activities solely in connection with a nomination under §240.14a-11.

(2) According to its Schedule 13G/A filed on January 29, 2021, BlackRock, Inc. has sole voting power over 5,218,485 shares and sole dispositive power over 5,425,301 shares. In its Schedule 13G/A filing, BlackRock states that the shares of our common stock reported in the filing were acquired and are held in the ordinary course of business and were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect.

(3) According to its Schedule 13G filed on January 25, 2021, JPMorgan Chase & Co. has sole voting power over 3,779,992 shares and sole dispositive power over 3,919,720 shares. In its Schedule 13G filing, JPMorgan Chase & Co. states that the shares of our common stock reported in the filing were acquired and are held in the ordinary course of business and were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect, other than activities solely in connection with a nomination under §240.14a-11.

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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 2020, each of Messrs. MacDonald, Hilton, and Mason and Ms. Lincoln, Ms. Runtagh and Ms. Walker served on the Compensation and Executive Development Committee. No Compensation and Executive Development Committee member was an employee of Lincoln Electric or any of its subsidiaries, and there were no reportable business relationships between Lincoln Electric and the Compensation and Executive Development Committee members. None of our executive officers serves as a member of the board of directors or compensation committee of any entity that has one or more of its executive officers serving as a member of our Compensation and Executive Development Committee. In addition, none of our executive officers serves as a member of the compensation committee of any entity that has one or more of its executive officers serving as a member of our Board.

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ANNUAL MEETING PROPOSALS

| PROPOSAL
1 Election
of 12 Directors to serve until 2022 Annual Meeting or until their successors are duly elected and qualified | The
Board recommends a vote FOR all Director Nominees. Our
Nominating and Corporate Governance Committee and our Board of Directors have determined that each of the Director nominees possesses
the right skills, qualifications and experience to effectively oversee Lincoln Electric’s long-term business strategy. |
| --- | --- |
| ➜ | See
“Proposal 1 - Election of Directors” beginning on page 19 of this Proxy Statement for additional information. |

PROPOSAL 2 Ratification of independent registered public accounting firm The Board recommends a vote FOR this proposal. Our Board of Directors recommends that shareholders vote “FOR” the ratification of the appointment Ernst & Young LLP as Lincoln Electric’s independent registered public accounting firm for the year ending December 31, 2021.

Fees for professional services provided by Ernst & Young LLP as our independent auditors in each of the last two fiscal years, in each of the following categories are:

	2020	2019
Audit
Fees	$2,713,000	$3,034,000
Audit-Related Fees	—	60,000
Tax Fees	445,000	180,000
All
Other Fees	—	—
Total
Fees	$3,158,000	$3,274,000

Audit Fees include fees associated with the annual integrated audit of the financial statements and internal control over financial reporting in 2020 and 2019, the reviews of our quarterly reports on Form 10-Q, certain statutory audits required for our international subsidiaries and services provided in connection with regulatory filings with the SEC. Audit-Related Fees for 2019 primarily relate to audit-related services associated with acquisitions, new accounting pronouncements and other international statutory requirements. Tax Fees include tax compliance and tax advisory services. All Other Fees include the fees billed for products and services provided other than the services reported under Audit Fees, Audit-Related Fees and Tax Fees.

AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES

The Audit Committee has established a policy regarding pre-approval of all audit and non-audit services performed by our independent auditors, including the scope of and fees for such services. Generally, requests for audit, audit-related and tax services, each as defined in the policy, must be presented for approval prior to the performance of such services, to the extent known at that time. For 2020, the Audit Committee has resolved that four specific categories of services, namely audit services, audit-related services, tax advisory services, and tax compliance services, are permissible without itemized pre-approval in an amount not to exceed for each service:

| Pre-Approval
Amount | Services |
| --- | --- |
| $200,000 | Audit,
and Audit-Related services for acquisitions, new accounting pronouncements and other international statutory requirements |
| $800,000 | Tax
Advisory and Tax Compliance services |

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Itemized detail of all such services performed is subsequently provided to the Audit Committee. In addition, our independent auditors are prohibited from providing certain services described in the policy as prohibited services. All of the fees included in Audit Fees, Audit-Related Fees and Tax Fees shown above were pre-approved by the Audit Committee (or included in the $200,000 or $800,000 limits, as applicable, for certain services as detailed above).

Generally, requests for independent auditor services are submitted to the Audit Committee by our Executive Vice President, CFO and Treasurer (or other member of our senior financial management) and our independent auditors for consideration at the Audit Committee’s regularly scheduled meetings. Requests for additional services in the categories mentioned above may be approved at subsequent Audit Committee meetings to the extent that none of such services is performed prior to its approval (unless such services are included in the categories of services that fall within the dollar limits detailed above). The Chairman of the Audit Committee is also delegated the authority to approve independent auditor services requests under certain dollar thresholds provided that the pre-approval is reported at the next meeting of the Audit Committee. All requests for independent auditor services must include a description of the services to be provided and the fees for such services.

Representatives of Ernst & Young LLP are expected to be available at the Annual Meeting, will have an opportunity to make a statement if they so desire and are expected to be available to respond to appropriate shareholder questions. Although ratification of the appointment of the independent auditors is not required by law, the Audit Committee and the Board believe that shareholders should be given the opportunity to express their views on the subject. While not binding on the Audit Committee or the Board, the failure of the shareholders to ratify the appointment of Ernst & Young LLP as our independent auditors would be considered by the Board in determining whether or not to continue the engagement of Ernst & Young LLP. Ultimately, the Audit Committee retains full discretion and will make all determinations with respect to the appointment of independent auditors, whether or not our shareholders ratify the appointment.

MAJORITY VOTE NEEDED

Ratification requires the affirmative vote of the majority of the shares of our common stock present or represented and entitled to vote on the matter at the Annual Meeting. Unless otherwise directed, shares represented by proxy will be voted FOR ratification of the appointment of Ernst & Young LLP. Abstentions will have the same effect as a vote “against” the proposal.

YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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PROPOSAL 3 Approval, on an advisory basis, of NEO Compensation The Board recommends a vote FOR this proposal. Our Board recommends that shareholders vote “FOR” the approval, on an advisory basis, of the compensation of our NEOs for 2020.

The Compensation and Executive Development Committee believes that the historically positive say-on-pay shareholder votes reinforce the philosophy and objectives of our executive compensation program. We conduct annual say-on-pay votes. Our next say-on-pay vote will be held at the 2022 Annual Meeting.

Our compensation philosophy is to pay for performance, a philosophy that has been rooted in our history and tradition for 125 years. Our compensation program consists of elements designed to complement one another and focus on both short-term and long-term performance. The Compensation and Executive Development Committee regularly reviews peer group data and best practices and trends related to executive compensation to help ensure that our programs are properly aligned with our business strategy and philosophy, as well as promote shareholder value. The Committee receives advice from independent consultants. In addition to the information provided earlier in the CD&A section, we believe shareholders should consider the following in determining whether to approve this proposal:

OUR CULTURE AND PERFORMANCE

To maintain a performance-driven culture, we:

| • expect
our executives to deliver above-market financial results; | •
take action when needed to address specific business challenges; and |
| --- | --- |
| • provide
systems that tie executive compensation to superior financial performance; | •
maintain good governance practices in the design and operation of our executive compensation programs. |

We have a long track record of delivering increased value to our shareholders.

PAY FOR PERFORMANCE

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

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We have a balanced pay mix between short-term and long-term incentives:

• Base Salaries. Base salaries for our NEOs are generally targeted at the 45th percentile of benchmark data (below market median). For 2020, the average base salary increase for the continuing NEOs was 0.5%. • Annual Bonus Awards Are Aligned with Our Performance and Contain a Balanced Mix of Metrics. The total cash compensation for our NEOs, which includes base pay and the annual bonus (EMIP), is targeted at the 65th percentile of benchmark data (above market median). The EMIP is based on a balance of metrics—both financial and personal—with the financial components based on EBITB and AOWC/Sales for Compensation Purposes and with a mix of consolidated and, if applicable, segment performance. For 2020, annual bonus payments for the continuing NEOs increased 19%. • Performance Share Payouts Were Slightly Below Target. For the 2018-2020 performance cycle, the Performance Shares paid out slightly below target, as a result of ROIC for Compensation Purposes performance above target and Adjusted Net Income for Compensation Purposes performance below threshold. • Long-Term Incentives Are Aligned with the Interests of Our Shareholders. We believe that incentives should be based on factors that deliver long-term sustainability for Lincoln Electric. Therefore, the NEOs receive three types of long-term incentives. The three components are: (1) stock options, (2) RSUs and (3) Performance Shares. Total awards are targeted at the 50th percentile of benchmark data (at market median).

GOOD GOVERNANCE PRACTICES

In addition to our emphasis on pay for performance, we design our programs to be current with best practices and good corporate governance. We also consider the risks associated with any particular program, design or compensation decision. We believe these assessments result in sustained, long-term shareholder value. Some of the governance practices include:

• Officers Are Subject to Stock Ownership Guidelines • Compensation and Executive Development Committee Receives Regular Updates • Compensation and Executive Development Committee Retains Independent Advisors • No Compensation Consultant Conflicts of Interest • No Multi-Year Guarantees on Compensation • No Dividends on Unvested RSUs or Performance Shares • Broad Clawback Policy • Change in Control Agreements Require a Double-Trigger • No Tax Gross-Ups • No Hedging or Pledging of Lincoln Electric Stock by Officers • Limited Perquisites

As illustrated above, the Compensation and Executive Development Committee has and will continue to take action to structure our executive compensation program in a manner that is performance-based, current with best practices and good corporate governance and aimed at sustaining long-term shareholder value. The Board believes that the executive compensation disclosed in the CD&A section, tabular disclosures (including the 2020 Summary Compensation Table) and other narrative disclosures in this Proxy Statement aligns with our peer group pay practices and compensation philosophy.

As required under the Dodd-Frank Wall Street Reform and Consumer Protection Act and Section 14A of the Securities Exchange Act of 1934, we are asking you to cast an advisory (non-binding) vote on the following resolution at the Annual Meeting:

RESOLVED, that the compensation awarded to our NEOs, as disclosed pursuant to Item 402 of Regulation S-K in the Compensation Discussion and Analysis and the tabular disclosure (together with the accompanying narrative disclosure) in this Proxy Statement, as required by the rules of the Securities and Exchange Commission, is hereby approved on an advisory basis.

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YOUR VOTE MATTERS TO US

As an advisory vote, this proposal is not binding on us. However, the Compensation and Executive Development Committee, which is responsible for designing and administering our executive compensation programs, values the opinions expressed by shareholders in their vote on this proposal and expects to consider the outcome of the vote when making future compensation decisions for NEOs.

MAJORITY VOTE NEEDED

A favorable vote of a majority of the shares of our common stock present or represented by proxy and entitled to vote on the matter is necessary for approval of the proposal. Abstentions will have the same effect as a vote “against” the proposal and broker non-votes will not be counted for determining whether the proposal is approved.

YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE, FOR APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

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AUDIT COMMITTEE REPORT

The Audit Committee consists solely of independent Directors within the meaning of the Nasdaq listing standards. The Audit Committee oversees our financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal control over financial reporting. In fulfilling its oversight responsibilities, the Committee reviewed and discussed with management the audited financial statements in the Annual Report, including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the financial statements.

The Audit Committee discussed with the independent auditors, who are responsible for expressing an opinion on the conformity of those audited financial statements with U.S. generally accepted accounting principles, their judgments as to the quality, not just the acceptability, of our accounting principles and such other matters as are required to be discussed with the Audit Committee by the applicable requirements of the Public Company Accounting Oversight Board (the “PCAOB”) and the SEC. In addition, the Audit Committee has received and has discussed with the independent auditors written disclosures regarding their independence as required by PCAOB Ethics and Independence Rule 3526, Communication with Audit Committees Concerning Independence .

The Audit Committee discussed with our internal and independent auditors the overall scope and plan for their respective audits. The Audit Committee met with the internal and independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of our internal controls, and the overall quality of our financial reporting.

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors (and the Board approved) that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2020 for filing with the SEC. The Audit Committee and the Board have also recommended the selection of Ernst & Young LLP as our independent auditors for the year ending December 31, 2021 and the ratification thereof by the shareholders.

By the Audit Committee: Stephen G. Hanks, Chair Curtis E. Espeland Patrick P. Goris G. Russell Lincoln Ben P. Patel

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FAQS

Who is soliciting proxies and why? Who is paying for the cost of this proxy solicitation?

The Board solicits the proxy and the Company pays the solicitation cost. Certain officers and employees may also solicit proxies, but do not receive compensation for these activities. We also reimburse custodians, nominees and fiduciaries for reasonable expenses incurred to forward and obtain proxy materials from beneficial holders.

How do we distribute proxy materials to shareholders sharing the same address?

We use “householding” rules to deliver only one set of voting materials (Annual Report and Proxy Statement) to shareholders who share the same address, unless we receive contrary instructions from one or more shareholders at that address. Each shareholder receives a separate proxy card. We will promptly deliver upon request a separate set of proxy materials.

How do I obtain a separate set of proxy materials at no cost?

Send a written notice to the Corporate Secretary at Lincoln Electric Holdings, Inc., 22801 St. Clair Avenue, Cleveland, Ohio 44117-1199.

Who may vote?

Record holders as of the close of business on February 26, 2021 (the record date) are entitled to vote at the Annual Meeting. As of the record date, 59,659,764 shares of our common stock were outstanding and each share is entitled to one vote per proposal brought before the meeting.

What is required for there to be a quorum at the Annual Meeting?

Holders of at least a majority of the shares of our common stock issued and outstanding on the record date (February 26, 2021) must be present, in person or by proxy, to constitute a quorum.

How do I attend and participate in the Annual Meeting?

Any shareholder of record as of the record date (February 26, 2021) can attend the Annual Meeting online at www.virtualshareholdermeeting.com/LECO2021 . The webcast will start at 11:00 a.m. ET. Shareholders may submit pre-meeting questions online by visiting www.proxyvote.com. Questions must be submitted by Monday, April 19, 2021 at 5:00 p.m. ET. You will need your 16-digit control number that is printed on your proxy card or on the instructions that accompanied your proxy materials to access the meeting. Instructions on how to attend the Annual Meeting are posted at www.virtualshareholdermeeting.com/LECO2021 . We encourage you to access the meeting prior to the start time to allow ample time to complete the online check-in process.

If you encounter any technical difficulties accessing the virtual meeting during check-in or meeting time, please call the technical support number that will be posted on the Virtual Shareholder Meeting log in page.

Why is the Annual Meeting a virtual, online meeting?

As a part of our precautions regarding COVID-19 (coronavirus), we have decided to hold our Annual Meeting in a virtual meeting setting. We believe that hosting a virtual meeting under the current environment will facilitate shareholder attendance and participation by enabling shareholders to participate from any location around the world and improves our ability to communicate more effectively with our shareholders. We have designed the virtual meeting to provide substantially the same opportunities to participate as you would have at an in-person meeting. We are providing opportunities for shareholders to submit questions prior to the meeting to enable us to address appropriate questions at the Annual Meeting.

What is the difference between holding shares as a registered shareholder or as a beneficial holder?

• Registered Shareholders: If your shares are directly registered in your name with our transfer agent/registrar, you are considered the registered shareholder, or shareholder of record. Proxy materials will be sent directly to you and you may vote during the meeting at www.virtualshareholdermeeting.com/LECO2021 , or by telephone, by Internet, or by mail in the envelope provided.

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• Beneficial Holders: You are a beneficial holder if your shares are held indirectly in a brokerage account, by a trustee, or by another nominee. These entities are considered the shareholder of record and the shares are considered held in “street name.” Proxy materials are sent to the entity and they forward a voting instruction card to you, the beneficial holder. As a beneficial holder, you have the right to direct the entity on how to vote your shares and you may also attend the Annual Meeting online. Since you are not the shareholder of record, you may not vote during the meeting unless you obtain a legal proxy from the entity that holds your shares. Please refer to the information your broker, trustee or nominee provided to see what voting options are available to you. If you have not heard from your broker, trustee or nominee, please contact them.

| What
shares are included on the proxy card? — Shareholder
type: | Registered
Shareholder & participant in The Lincoln Electric Company Employee Savings Plan (401(k) Plan) | Beneficial
Holder with shares held by a broker, trustee or nominee | Both
a Registered Shareholder and a Beneficial Holder of shares |
| --- | --- | --- | --- |
| Shares
included on the proxy card: | All
shares registered in your name will be represented (including 401(k) plan shares) Note: If you do not have identical names on your accounts, we cannot consolidate your share information. | You
will receive a voting instruction form from your broker, trustee or nominee instructing you on how to vote. | You
will receive a proxy card from us and a voting instruction form from your broker, trustee or nominee instructing you on how to
vote. |

What is a broker non-vote and what effect does it have?

A broker non-vote occurs when a broker or other nominee does not receive voting instructions from the beneficial holder and is then unable to vote the shares. If you hold your shares beneficially through a broker, trustee or nominee, you must communicate your voting instructions to them to have your shares voted . Please note that your nominee cannot vote on your behalf on the election of Directors (Proposal 1) and the approval, on an advisory basis, of NEO compensation (Proposal 3) unless you provide specific voting instructions to them by following the instructions provided to you.

Broker non-votes, as well as abstentions, will be counted to determine whether a quorum is present at the Annual Meeting. Broker non-votes will not be counted when determining votes for a particular proposal (i.e., it will not be considered a vote “cast”).

How do I vote?

Registered Shareholders

Vote during the meeting at www.virtualshareholdermeeting.com/LECO2021 or by proxy in any one of four ways outlined in the Proxy Summary section of this Proxy Statement.

Participants in the 401(k) Plan

The 401(k) Plan’s independent Trustee, Fidelity Management Trust Company, will vote your 401(k) Plan shares according to your voting directions, which you can provide by Internet, telephone or mail. As 401(k) Plan shares are held in a qualified plan, you are not able to vote 401(k) Plan shares during the Annual Meeting. If you do not vote, the Trustee will not vote your plan shares.

Beneficial Holders

If your shares are held by a bank, broker, trustee or some other nominee (in street name), that entity will give you separate voting instructions.

What happens if I sign, date and return my proxy but do not specify how I want my shares voted on the proposals?

Registered Shareholders: Your shares will be voted FOR the election of all of the Director nominees, FOR the ratification of the appointment of our independent registered public accounting firm, and FOR the approval, on an advisory basis, of the compensation of our NEOs.

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Beneficial Holders: Your nominee cannot vote your uninstructed shares on non-routine matters such as Proposal 1 (election of Directors) and Proposal 3 (approval, on an advisory basis, of NEO compensation). Your nominee can vote your uninstructed shares on routine matters such as Proposal 2 (ratification of the appointment of our independent registered public accounting firm).

May I revoke my proxy or change my vote?

Registered Shareholders: Yes, you may change or revoke your proxy prior to the closing of the polls in any one of the following FOUR ways:

1. Send a written notice to our Corporate Secretary stating that you want to revoke your proxy;

2. Mail a completed and signed proxy card with a later date, but prior to the cut-off dates prior to the Annual Meeting (which will automatically revoke the earlier proxy);

3. Vote by telephone or Internet at a later date, but prior to the cut-off dates prior to the Annual Meeting (which will automatically revoke the earlier proxy); or

4. Vote during the Annual Meeting at www.virtualshareholdermeeting.com/LECO2021 . Because 401(k) plan shares are held in a qualified plan, you are not able to revoke or change your vote on 401(k) plan shares at the Annual Meeting.

Beneficial Holders: Check with your broker, trustee or nominee to determine how to change your vote.

Who counts the votes?

Broadridge Financial Solutions, Inc. is the independent agent who receives and tabulates the votes. They are also our inspector of elections at the Annual Meeting.

May I receive future shareholder communications over the Internet?

Registered Shareholders: Yes. Please mark the appropriate box on your proxy card, or follow the prompts if voting by telephone or Internet.

Beneficial Holders: Refer to the information provided by your nominee on how to select future shareholder communications by Internet.

When are shareholder proposals due to be considered for inclusion in next year’s Annual Meeting in 2022?

In order to have a shareholder proposal included in our proxy materials for the 2022 Annual Meeting, a shareholder proposal must be received in writing by the Corporate Secretary at Lincoln Electric Holdings, Inc., 22801 St. Clair Avenue, Cleveland, Ohio 44117-1199 on or before November 19, 2021.

If shareholders want to present proposals at our 2022 Annual Meeting that are not included in Lincoln Electric’s proxy materials, they must comply with the requirements in our Amended and Restated Code of Regulations. These include providing a written notice containing certain information, and such notice must be received no earlier than December 23, 2021 and no later than January 22, 2022. If the Board of Directors chooses to present any information submitted after the applicable deadlines at the 2022 Annual Meeting, then the persons named in proxies solicited by the Board for the 2022 Annual Meeting may exercise discretionary voting power with respect to such information.

May I submit a nomination for Director?

Yes. A shareholder must send a written notice to the Corporate Secretary at Lincoln Electric Holdings, Inc., 22801 St. Clair Avenue, Cleveland, Ohio 44117-1199. The notice must include information about the shareholder and the person he or she intends to nominate, which is required by our Amended and Restated Code of Regulations. Nominations must be received in the Corporate Secretary’s Office at least 80 days before the date of the annual meeting at which the nomination is to be made.

If we have not publicly announced the date of the annual meeting more than 90 days prior to the annual meeting date, shareholder nominations would have needed to be received in the Corporate Secretary’s Office no later than the close of business on the tenth day following the day on which we publicly announced the date of the annual meeting. For the 2021 Annual Meeting, we had to receive nominations no later than the close of business on January 22, 2021, as we publicly announced the date of this year’s Annual Meeting on January 12, 2021, which is more than 90 days prior to this year’s Annual Meeting date. Accordingly, no additional nominations can be made for this year’s Annual Meeting.

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| HOW
DO I CONTACT LINCOLN ELECTRIC? | |
| --- | --- |
| FOR
GENERAL INFORMATION: Lincoln
Electric Holdings, Inc. 22801 St. Clair Avenue Cleveland, Ohio 44117-1199 Attention: Amanda Butler, Vice President, Investor Relations
& Communications | TO
CONTACT THE DIRECTORS: Lincoln
Electric Holdings, Inc. 22801 St. Clair Avenue Cleveland, Ohio 44117-1199 Attention:
Corporate Secretary |
| | Please
name any specific intended Board recipient(s) in the communication. Prior to forwarding any correspondence, the Corporate
Secretary will review the correspondence and, at his or her discretion, may not forward certain items if they are deemed
of a frivolous nature or otherwise inappropriate for the Board’s consideration. In such cases, some of that correspondence
may be forwarded elsewhere within Lincoln Electric for review and possible response. |
| ● | Please
visit our website at www.lincolnelectric.com for
current developments at Lincoln Electric. The information on our website is not incorporated
by reference into this Proxy Statement or any of our periodic reports. |

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APPENDIX A—DEFINITIONS AND NON-GAAP FINANCIAL MEASURES

The discussion of our results in the CD&A and other sections of this Proxy Statement includes reference to our EBIT, EBITB, Adjusted net income, Adjusted diluted earnings per share, Adjusted EBIT, Adjusted operating income, Adjusted operating income margin, Adjusted effective tax rate, Return on Invested Capital (ROIC), Average Operating Working Capital to Sales (AOWC/Sales), Total Shareholder Return (TSR), Organic Sales, Cash Conversion and Free Cash Flow (FCF) performance. Some of these metrics are considered Non-GAAP financial measures, as management uses various GAAP and non-GAAP financial measures in assessing and evaluating our underlying operating performance. Non-GAAP financial measures exclude the impact of special items on our reported financial results. Non-GAAP financial measures should be read in conjunction with the generally accepted accounting principles in the United States (“GAAP”), as non- GAAP measures are a supplement to, and not a replacement for, GAAP financial measures. The following defines the financial and non-GAAP financial measures discussed in the CD&A and other sections of this Proxy Statement. Certain reclassifications have been made to prior year financial statements and financial measures to conform to current year classifications.

ADJUSTED DILUTED EARNINGS PER SHARE

Adjusted Diluted Earnings Per Share is defined as reported Diluted Earnings Per Share excluding certain disclosed

special items.

ADJUSTED EBIT

Adjusted EBIT is defined as reported EBIT excluding certain disclosed special items.

ADJUSTED EFFECTIVE TAX RATE

Adjusted Effective Tax Rate is defined as reported Effective Tax Rate excluding the tax effect of certain disclosed

special items.

ADJUSTED NET INCOME

Adjusted Net Income is defined as reported Net Income excluding certain disclosed special items.

ADJUSTED NET INCOME FOR COMPENSATION PURPOSES

Adjusted Net Income for Compensation Purposes is defined as reported Net Income excluding certain disclosed special items and other adjustments as approved by the Compensation and Executive Development Committee.

ADJUSTED OPERATING INCOME

Adjusted Operating Income is defined as reported Operating Income excluding certain disclosed special items.

ADJUSTED OPERATING INCOME MARGIN

Adjusted Operating Income Margin is defined as Adjusted Operating Income divided by Net sales.

AOWC/SALES

AOWC/Sales is defined as net operating working capital as of period end divided by annualized rolling three months of sales. Net operating working capital is defined as Accounts receivable plus Inventory less Trade accounts payable.

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AOWC/SALES FOR COMPENSATION PURPOSES

AOWC/Sales for Compensation Purposes is defined as the three-month average operating working capital (gross accounts receivable plus gross inventory less trade accounts payable) divided by the rolling twelve-months of sales calculated at budgeted exchange rates and adjusted for the results of businesses acquired during the year.

CASH CONVERSION

Cash Conversion is defined as Free Cash Flow divided by Adjusted Net Income.

EBIT

EBIT is an amount equal to earnings before interest and tax defined as operating income plus Other income (expense).

EBITB

EBITB is an amount equal to earnings before interest, tax and bonus, calculated at budgeted exchange rates and adjusted for special items as determined by management. The adjustments for special items include such items as rationalization charges, certain asset impairment charges, the gains and losses on certain transactions including the disposal of assets and the results of businesses acquired during the year. Adjusted Operating Income is a representative measure of EBITB.

FREE CASH FLOW (FCF)

Free Cash Flow is defined as Net cash provided by operating activities less Capital expenditures.

ORGANIC SALES

Organic Sales is defined as sales excluding the effects of foreign currency and acquisitions.

RETURN ON INVESTED CAPITAL (ROIC)

ROIC is defined as rolling 12 months of Adjusted net income excluding tax-effected interest income and expense divided by Invested capital. Invested capital is defined as total debt, which includes Amounts due banks, Current portion of long-term debt and Long-term debt, less current portion, plus Total equity.

RETURN ON INVESTED CAPITAL (ROIC) FOR COMPENSATION PURPOSES

ROIC for Compensation Purposes is calculated by an independent third-party and is adjusted for certain transactions as approved by the Compensation and Executive Development Committee.

TOTAL SHAREHOLDER RETURN (TSR)

TSR is an amount equal to the net stock price change for our common stock plus the reinvestment of dividends paid over the prescribed period of time.

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ADJUSTED OPERATING INCOME

The following table presents a reconciliation of Operating income as reported to Adjusted operating income for the years ended December 31, 2018 to 2020:

($ in thousand)	Year Ended December 31, — 2020	2019	2018
Operating income (as reported)	$ 282,071	$ 370,910	$	375,539
Special items (pre-tax):
Rationalization and asset impairment charges	45,468	15,188		25,285
Gains on asset disposals	—	(3,045	)	—
Acquisition transaction and integration costs	—	1,804		4,498
Amortization of step up in value of acquired inventories	806	3,008		—
Adjusted operating income	$ 328,345	$ 387,865	$	405,322
Adjusted operating income margin	12.4 %	12.9	%	13.4 %

ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE

The following table presents reconciliations of Net income and Diluted earnings per share as reported to Adjusted net income and Adjusted diluted earnings per share for the years ended December 31, 2018 to 2020:

($ in thousands except per share amounts)	Year Ended December 31, — 2020	2019		2018
Net income (as reported)	$ 206,115	$	293,109	$	287,066
Special items:
Rationalization and asset impairment charges	45,468		15,188		25,285
Pension settlement charges	8,119		—		6,686
Gains on asset disposals	—		(3,554	)	—
Gain on change in control	—		(7,601	)	—
Acquisition transaction and integration costs	—		1,804		4,498
Amortization of step up in value of acquired inventories	806		3,008		—
Tax effect of Special items	(10,594	)	(7,386	)	(6,896	)
Adjusted net income	$ 249,914	$	294,568	$	316,639
Diluted earnings per share (as reported)	$ 3.42	$	4.68	$	4.37
Special items per share	$ 0.73	$	0.02	$	0.45
Adjusted diluted earnings per share	$ 4.15	$	4.70	$	4.82

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RETURN ON INVESTED CAPITAL (ROIC)

The following table presents calculations of ROIC for the years ended December 31, 2018 to 2020:

($ in thousands)	Year Ended December 31, — 2020	2019	2018
Adjusted net income	$ 249,914	$ 294,568	$ 316,639
Plus: Interest expense (after-tax)	17,933	19,465	18,386
Less: Interest income (after-tax)	1,486	1,896	5,206
Adjusted net income before tax effected interest	$ 266,361	$ 312,137	$ 329,819
Invested capital	$ 1,508,440	$ 1,566,348	$ 1,590,252
Return on invested capital	17.7 %	19.9 %	20.7 %

CASH CONVERSION

The following table presents calculations of Cash Conversion for the years ended December 31, 2018 to 2020:

($ in thousands)	Year Ended December 31, — 2020	2019	2018
Cash flow from operations	$ 351,362	$ 403,185	$ 329,152
Less: Capital expenditures	59,201	69,615	71,246
Free Cash Flow	$ 292,161	$ 333,570	$ 257,906
Adjusted net income	$ 249,914	$ 294,568	$ 316,639
Cash Conversion	117 %	113 %	81 %

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| 22801 ST. CLAIR AVE. c/o JENNIFER ANSBERRY CLEVELAND, OH 44117 |
| --- |
| During The Meeting - Go to www.virtualshareholdermeeting.com/LECO2021 |
| You may attend the meeting via the Internet and
vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. |
| VOTE BY PHONE - 1-800-690-6903 |
| Use any touch-tone telephone to transmit your
voting instructions up until 11:59 P.M. Eastern Time on April 21, 2021. Have your proxy card in hand when you call and then follow
the instructions. |
| VOTE BY MAIL |
| Mark, sign and date your proxy card and return
it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY
11717. If you vote by mail, your proxy card must be received no later than 11:59 P.M. Eastern Time the day before the cut-off
date. |

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
D30695-P49101	KEEP THIS PORTION
FOR YOUR RECORDS
	DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

LINCOLN ELECTRIC HOLDINGS, INC.					Withhold All	For All Except
The Board of Directors Recommends a Vote FOR the nominees listed in Proposal 1, FOR Proposal 2 and FOR Proposal 3. All of the proposals have been proposed by Lincoln Electric. The shares represented by your proxy will be voted in accordance with the voting instructions you specify below.
				o	o	o
1.	Election of directors:
	Nominees:
	01)	Curtis E. Espeland	07)	William E. MacDonald, III
	02)	Patrick P. Goris	08)	Christopher L. Mapes
	03)	Stephen G. Hanks	09)	Phillip J. Mason
	04)	Michael F. Hilton	10)	Ben P. Patel
	05)	G. Russell Lincoln	11)	Hellene S. Runtagh
	06)	Kathryn Jo Lincoln	12)	Kellye L. Walker			For	Against	Abstain
2.	Ratification
of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December
31, 2021.						o	o	o
3.	To
approve, on an advisory basis, the compensation of our named executive officers.						o	o	o
In their discretion, the proxies named herein are also
authorized to take any action upon any other business that may properly come before the Annual Meeting, or any adjournment(s)
or postponement(s) to the Annual Meeting.
				Yes	No
I consent to access future shareholder communications
over the Internet as stated in the proxy statement.				o	o
Please sign exactly as your
name(s) appear(s) on Proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include
title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy.						If you sign, date and return your proxy but do not give specific voting instructions,
your votes will be cast FOR all nominees in Proposal 1, FOR Proposal 2 and FOR Proposal 3.
Signature [PLEASE SIGN WITHIN BOX]				Date		Signature (Joint Owners)	Date

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LINCOLN ELECTRIC HOLDINGS, INC. ANNUAL MEETING OF SHAREHOLDERS Thursday, April 22, 2021 11:00 a.m. (ET)

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report with Form 10-K are available at www.proxyvote.com.

D30696-P49101
LINCOLN
ELECTRIC HOLDINGS, INC.	PROXY AND VOTING INSTRUCTION
THIS
PROXY AND THESE VOTING INSTRUCTIONS ARE SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS ON APRIL 22, 2021. The
shareholder signing this card appoints Christopher L. Mapes, Gabriel Bruno and Jennifer I. Ansberry, together or separately, as
proxies, each with the power to appoint a substitute. They are directed to vote, as indicated on the reverse side of this card,
all the Lincoln Electric common shares held by the signing shareholder on the record date, at the Annual Meeting of Shareholders
to be held at 11:00 a.m., Eastern Time, on April 22, 2021, via live webcast at www.virtualshareholdermeeting.com/LECO2021 or at
any postponement(s) or adjournment(s) of the meeting, and, in their discretion, on all other business properly brought before
the meeting or at any postponement(s) or adjournment(s) of the meeting. As
described more fully in the proxy statement and below, this card also provides voting instructions to Fidelity Management Trust
Company, as Trustee under The Lincoln Electric Company Employee Savings Plan (“401(k) Plan” or “Plan”).
The signing Plan participant directs the Trustee to vote, as indicated on the reverse side of this card, all the Lincoln Electric
common shares credited to the account of the signing Plan participant as of the record date, at the Annual Meeting of Shareholders,
and in the Trustee's discretion, on all other business properly brought before the meeting. NOTE
TO PARTICIPANTS IN THE 401 (K) PLAN. As a participant in the 401(k) Plan, you have the right to direct Fidelity Management
Trust Company, as Trustee for the Plan, to vote the shares allocated to your Plan account. Participant voting directions
will remain confidential. To direct the Trustee by mail to vote the shares allocated to your Plan account, please mark
the voting instruction form and sign and date it on the reverse side. A postage-paid envelope for mailing has been included
with your materials. To direct the Trustee by telephone or over the Internet to vote the shares allocated to your Plan
account, please follow the instructions and use the Company Number given on the reverse side. Each participant
who gives the Trustee voting directions acts as a named fiduciary for the 401(k) Plan under the provisions of the Employee
Retirement Income Security Act of 1974, as amended. If you do not give specific
voting directions on the voting instruction form or when you vote by phone or over the Internet, the Trustee will vote the Plan
shares as recommended by the Board of Directors. If you do not return the voting instruction form or do not vote by phone or over
the Internet by 11:59 p.m. Eastern Time on April 19, 2021, the Trustee shall not vote the Plan shares. Plan shares representing
forfeited account values that have not been reallocated at the time of the proxy solicitation will be voted by the Trustee in
proportion to the way other 401(k) Plan participants directed their Plan shares to be voted.
See
reverse for voting instructions.