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ECOLAB INC.

(Name of Registrant as Specified In Its Charter)

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

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NOTICE 

PROXY STATEMENT SUMMARY 

VOTING PROCEDURES 

STOCKHOLDER ACCESS 

Communications with Directors 

Future Stockholder Proposals and Director Nomination Process 

SECURITY OWNERSHIP 

Certain Beneficial Owners 

Executive Officers and Directors 

CORPORATE GOVERNANCE 

Corporate Governance Materials and Code of Conduct 

Board Structure 

Board Leadership Structure 

Board’s Role in Risk Oversight 

Compensation Risk Analysis 

Director Attendance 

Board Committees 

Compensation Committee Interlocks and Insider Participation 

RELATED-PERSON TRANSACTIONS

DIRECTOR COMPENSATION FOR 2016

Director Compensation Table 

Summary 

Stock Retention and Ownership Guidelines 

DIRECTOR INDEPENDENCE STANDARDS AND DETERMINATIONS 

“Independence” Standards 

“Independence” Determinations 

PROPOSAL 1: ELECTION OF DIRECTORS

COMPENSATION COMMITTEE REPORT 

COMPENSATION DISCUSSION AND ANALYSIS 

Executive Summary 

Program Elements 

Compensation Philosophy 

Compensation Process 

Compensation Benchmarking 

Base Salaries 

Adjustments to Reported Financial Results 

Annual Cash Incentives 

Long-Term Equity Incentives 

Executive Benefits and Perquisites 

Executive Change-in-Control Policy 

Stock Retention and Ownership Guidelines 

Compensation Recovery 

Regulatory Considerations 

SUMMARY COMPENSATION TABLE FOR 2016 

GRANTS OF PLAN-BASED AWARDS FOR 2016 

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2016 

OPTION EXERCISES AND STOCK VESTED FOR 2016 

PENSION BENEFITS FOR 2016 

NON-QUALIFIED DEFERRED COMPENSATION FOR 2016 

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL 

AUDIT COMMITTEE REPORT 

AUDIT FEES 

PROPOSAL 2:  RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

PROPOSAL 3:  ADVISORY VOTE TO APPROVE THE COMPENSATION OF EXECUTIVES DISCLOSED IN THE PROXY STATEMENT 

PROPOSAL 4: ADVISORY VOTE ON THE FREQUENCY OF FUTURE STOCKHOLDER ADVISORY VOTES ON EXECUTIVE COMPENSATION

OTHER MATTERS 

Proxy Solicitation Costs 

Section 16(a) Beneficial Ownership Reporting Compliance 

Householding Information 

Important Notice Regarding the Availability of Proxy Materials 

Voting by Plan Participants 

Sincerely,

Douglas M. Baker, Jr.

Chairman of the Board
and Chief Executive Officer

1.

To elect as Directors to a one-year term ending in 2018 the 13 nominees named in the Proxy Statement;

2.

To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the current year ending December 31, 2017;

3.

To approve, on an advisory basis, the compensation of executives disclosed in the Proxy Statement;

4.

To vote, on an advisory basis, on the frequency of future stockholder advisory votes on executive compensation; and

5.

To transact such other business as may properly come before our Annual Meeting and any adjournment or postponement thereof.

By Order of the Board of Directors

Michael C. McCormick

Executive Vice President, General Counsel
and Assistant Secretary

March 20, 2017

Proposal

Board’s Voting
Recommendation

Reference 

1. Election of Directors

FOR

2. Ratification of Independent Accountants

FOR

3. Advisory Vote to Approve Executive Compensation

FOR

4. Advisory Vote on Frequency of Future Stockholder Advisory Votes on Executive Compensation

ANNUAL

Name of Director Nominee

Age

Years of Service

Occupation

Non-Independent Directors

Douglas M. Baker, Jr.

Chairman of the Board and Chief Executive Officer, Ecolab Inc.

Independent Directors

Barbara J. Beck

Chief Executive Officer, Learning Care Group, Inc.

Leslie S. Biller

Chief Executive Officer, Harborview Capital

Carl M. Casale

President and Chief Executive Officer, CHS Inc.

Stephen I. Chazen

Retired Chief Executive Officer, Occidental Petroleum Corporation

Jeffrey M. Ettinger

Chairman of the Board, Hormel Foods Corporation

Arthur J. Higgins

Consultant, Blackstone Healthcare Partners

Michael Larson

Chief investment officer to William H. Gates III

David W. MacLennan

Chairman and Chief Executive Officer, Cargill, Incorporated

Tracy B. McKibben

Founder and Chief Executive Officer, MAC Energy Advisors, LLC

Victoria J. Reich

Former Senior Vice President and Chief Financial Officer, Essendant Inc.

Suzanne M. Vautrinot

President, Kilovolt Consulting Inc.

John J. Zillmer

Retired President and Chief Executive Officer, Univar Inc.

·

We use different performance measures in our short-term and long-term incentive plans.

·

We have a balanced double-trigger change-in-control severance policy with no tax gross-ups.

·

We have robust stock ownership guidelines of 6 times salary for our CEO and 3 times salary for our other officers. 

·

Risk mitigation features in our compensation programs include varied and balanced performance targets, discretionary authority of the Compensation Committee to reduce award pay-outs, bonus caps at 200% of target and a claw-back policy.

·

We do not maintain employment agreements with any of our named executive officers.

·

All of our directors, with the exception of our CEO, are independent.

·

We have an independent Lead Director with substantial and clearly delineated authority.

·

We do not have a stockholder rights plan.

·

Each director serves a one-year term and stands for re-election at each annual meeting.

·

Directors elected in uncontested elections must receive a majority vote.  A director who fails to receive the required number of votes for election must tender his or her written resignation for consideration by the Board.

·

All of our named executive officers hold Ecolab common stock in excess of our stock ownership guidelines.

·

Meeting Time and Place – Thursday, May 4, 2017, at 10:00 a.m., in the Auditorium of the Landmark Center, 75 West 5th Street, Saint Paul, Minnesota 55102.

·

Purpose of the Meeting – is to vote on the following items:

1.

To elect as Directors to a one-year term ending in 2018 the 13 nominees named in this Proxy Statement;

2.

To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the current year ending December 31, 2017;

3.

To approve, on an advisory basis, the compensation of executives disclosed in the Proxy Statement;

4.

To vote, on an advisory basis, on the frequency of future stockholder advisory votes on executive compensation; and

5.

To transact such other business as may properly come before our Annual Meeting and any adjournment or postponement thereof.

·

Record Date – The record date for determining the holders of Common Stock entitled to vote at our Annual Meeting is the close of business on March 7, 2017.

·

Shares Entitled to Vote – As of March 7, 2017, the record date for the meeting, there were 290,057,333 shares of Common Stock outstanding. Each share of Common Stock is entitled to one vote. Common Stock held by Ecolab in our treasury is not counted in shares outstanding and will not be voted.

·

timely delivery of a valid, later-dated proxy, including a proxy given by telephone or Internet;

·

timely delivery of written notice to our Corporate Secretary before the Annual Meeting, stating that you have revoked your proxy; or

·

voting by ballot at our Annual Meeting.

·

to correspond with the Board’s Lead Director, please complete and submit the on-line “Contact Lead Director” form;

·

to report potential issues regarding accounting, internal controls and other auditing matters to the Board’s Audit Committee, please complete and submit the on-line “Contact Audit Committee” form; or

·

to make a stockholder recommendation for a potential candidate for nomination to the Board, please submit an e-mail to the Board’s Governance Committee, in care of our Corporate Secretary, at investor.info@ecolab.com.

·

Deadline for Inclusion in the Proxy Statement – All proposals, other than with respect to director nominees (as discussed below), to be considered by the Board for inclusion in the Proxy Statement and form of proxy for next year’s Annual Meeting of Stockholders expected to be held on May 3, 2018, must be received by the Corporate Secretary at our headquarters address, repeated at the top of page 4 of this Proxy Statement, no later than November 20, 2017.

·

Deadline for Consideration – Stockholder proposals not included in a Company proxy statement for an annual meeting as well as proposed stockholder nominations for the election of directors for inclusion in the Company’s proxy statement and form of proxy at an annual meeting must each comply with advance notice procedures set forth in our

By-Laws in order to be properly brought before that annual meeting of stockholders. In general, written notice of a stockholder proposal or a director nomination must be received by the Corporate Secretary not less than 120 days nor more than 150 days prior to the anniversary date of the preceding annual meeting of stockholders. With regard to next year’s Annual Meeting of Stockholders, expected to be held on May 3, 2018, the written notice must be received between December 5, 2017 and January 4, 2018, inclusive.

·

Director Nomination Process – Our Board’s Governance Committee has, under its Charter, responsibility for director nominee functions, including review of any director nominee candidates recommended by stockholders. The Governance Committee has the following duties and authority:

-

Review and recommend to the Board of Directors policies for the composition of the Board, including such criteria as:

§

size of the Board;

§

diversity of gender, race, ethnicity, experience, employment, background and other relevant factors of Board members;

§

the proportion of the Board to be comprised of non-management directors;

§

qualifications for new or continued membership on the Board, including experience, employment, background and other relevant considerations; and 

§

director retirement requirements or standards.

-

Review any director nominee candidates recommended by stockholders.

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Identify, interview and evaluate director nominee candidates and have sole authority to:

§

retain and terminate any search firm to be used to assist the Committee in identifying director candidates; and

§

approve the search firm’s fees and other retention terms.

-

Recommend to the Board:

§

the slate of director nominees to be presented by the Board for election at the Annual Meeting of Stockholders;

§

the director nominees to fill vacancies on the Board; and

§

the members of each Board Committee.

·

Director Nominations  – Any stockholder nomination for directors must comply with the advance notice procedures set forth in Article II, Section 3 and Section 15 of our By-Laws. Under our By-Laws, to be in proper written form, the stockholder’s notice to our Corporate Secretary must set forth as to each person whom the stockholder proposes to nominate for election as a director: (i) the name, age, business address, residence address and record address of such person, (ii) the principal occupation or employment of such person, (iii) the following information regarding such person: (A) the class or series and number of shares of capital stock of the Company which are owned beneficially or of record by such person, (B) any option, warrant, convertible security, stock appreciation right, or similar derivative instrument related to any class or series of shares of the Company that is directly or indirectly owned beneficially by such person; (C) any proxy, contract, agreement, arrangement, understanding, or relationship pursuant to which such person has a right to vote any shares of any security of the Company; (D) any “short interest” in any security of the Company; (E) any rights to dividends on the shares of the Company owned beneficially by such person that are separated or separable from the underlying shares of the Corporation; (F) any proportionate interest in shares of the Company or derivative instruments held, directly or indirectly, by a general or limited partnership in which such person is a general partner or, directly or indirectly, beneficially owns an interest in a general partner; and (G) any performance-related fees (other than an asset-based fee) to which such person is entitled based on any increase or decrease in the value of shares of the Company or any derivative instruments, if any, as of the date of such notice, including, without limitation, any such interests held by members of such person’s immediate family sharing the same household, (iv) any information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder, (v) the nominee holder for, and number of, shares owned beneficially but not of record by such person, (vi) to the extent known by the stockholder giving the notice, the name and address of any other stockholder supporting the nominee for election or reelection as a director on the date of such stockholder’s notice, (vii) a description of all arrangements or understandings between or among such persons pursuant to which the nomination(s) are to be made by the stockholder, and (viii) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice. In addition to the information required

pursuant to Section 3, our By-Laws provide that the Company may require any proposed nominee to furnish such other information: (a) as may reasonably be required by the Company to determine the eligibility of such proposed nominee to serve as an independent director under the rules and listing standards of the principal United States securities exchanges upon which the Common Stock of the Company is listed or traded, any applicable rules of the U.S. Securities and Exchange Commission or any publicly disclosed standards used by the Board of Directors in determining and disclosing the independence of the Company’s directors, (b) that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such nominee, or (c) that may reasonably be requested by the Company to determine the eligibility of such nominee to serve as a director of the Company. Any ownership information shall be supplemented by the stockholder giving the notice not later than ten (10) days after the record date for the meeting as of the record date. The notice must be accompanied by a written consent of the proposed nominee to being named as a nominee and to serve as a director if elected. No person shall be eligible for election as a director of the Company unless nominated in accordance with the foregoing procedures. This summary is qualified in its entirety by reference to the full text of our By-Laws, which can be found on our website at http://investor.ecolab.com/corporate-governance.

·

Proxy Access – Under our By-Laws, a stockholder or a group of up to 20 stockholders owning 3% or more of the Company’s outstanding shares continuously for at least three years may nominate and include in our proxy materials director candidates constituting up to the greater of two individuals or 20% of the Board, provided that the stockholder(s) and the nominee(s) satisfy the requirements specified in our By-Laws. Our proxy access by-law limits the number of stockholders that may aggregate their shares to satisfy the 3% test to 20 stockholders. For purposes of the 20 stockholder limit, certain related funds are counted as one stockholder.

·

No more than three Board members will be from current management. These management members normally would be the Chief Executive Officer, the Chairman (if an employee of the Company and not the CEO) and the President (if an employee of the Company and not the CEO) but may be any other officer deemed appropriate by the Board;

·

It is desired that the members of the Board represent a geographical dispersion and variety of business disciplines so as to bring to the work of the Board a diversity of experience and background, with the predominance of members being chief or executive officers from different industries; and

·

A continuing effort is made to seek well-qualified women and minority group members for the Board, but these persons must be sought out and evaluated as individuals rather than as representatives of specific groups. The Board of Directors is committed to actively seeking out highly-qualified women and minority candidates for each search the Board undertakes. In identifying, evaluating and recommending director nominee candidates, the Committee will consider diversity of gender and ethnicity within the Board, the criteria set forth in the section above entitled “Director Nomination Process,” and such other factors as the Committee deems appropriate. The Board conducts a periodic review of its efforts to achieve such diversity among its members. 

Title of
Class

Name and Address
of Beneficial Owner

Amount and Nature
of Beneficial
Ownership

Percent of
Class (1)

Common

William H. Gates III

32,786,818 (2)

One Microsoft Way

Redmond, WA 98052

Common

The Vanguard Group

19,409,853 (3)

100 Vanguard Blvd.

Malvern, PA 19355

Common

BlackRock, Inc.

15,223,668 (4)

55 East 52nd Street

New York, NY 10022

(1)

The percent of class is based on the number of voting shares outstanding as of March 7, 2017.

(2)

This information is based on Amendment No. 5 to the Schedule 13D filed jointly with the SEC on May 7, 2012 by Cascade Investment, L.L.C., which we refer to as Cascade, William H. Gates III, whom we refer to as Mr. Gates, the Bill and Melinda Gates Foundation Trust, which we refer to as the Trust, and Melinda French Gates, whom we refer to as Mrs. Gates, and a Form 4 relating to Mr. Gates filed with the SEC on March 10, 2016. Mr. Gates reports that he has sole power to vote or direct the vote, and to dispose or to direct the disposition, of 28,420,393 shares of Ecolab Common Stock beneficially owned by Cascade, as the sole member of such entity. Additionally, the Amendment No. 5 to the Schedule 13D reports that Mr. Gates and Mrs. Gates share the power to vote or direct the vote, and to dispose or to direct the disposition of, 4,366,425 shares of Ecolab Common Stock beneficially owned by the Trust, as co-trustees of such entity.

(3)

This information is based on Amendment No. 4 to the Schedule 13G filed on February 9, 2017 by The Vanguard Group, Inc., which we refer to as Vanguard. Vanguard reports that, as of December 31, 2016, they have sole power to vote or direct the vote of 413,580 shares, shared power to vote or direct the vote of 53,431 shares, sole power to dispose or to direct the disposition of 18,949,153 shares and shared power to dispose or direct the disposition of 460,700 shares of Ecolab Common Stock.

(4)

This information is based on Amendment No. 2 to the Schedule 13G filed on January 23, 2017 by BlackRock, Inc. (“BlackRock”). BlackRock reports that, as of December 31, 2016, they have sole power to vote or direct the vote of 12,761,435 shares, and sole power to dispose or to direct the disposition of 15,223,668 shares of Ecolab Common Stock.

Name of Beneficial Owner

Amount and Nature of Beneficial Ownership

Percentage of Outstanding Shares Beneficially Owned

Named Executive Officers

Douglas M. Baker, Jr. (Chief Executive Officer)

(1)(2)(4)

*

Daniel J. Schmechel (Chief Financial Officer)

(1)(2)

*

Thomas W. Handley

(1)(2)(4)

*

Michael A. Hickey

(1)(2)

*

Christophe Beck

(1)(2)

*

Directors and Nominees

Barbara J. Beck

(2)(3)

*

Leslie S. Biller

(2)(3)

*

Carl M. Casale

(2)(3)

*

Stephen I. Chazen

(2)(3)

*

Jeffrey M. Ettinger

(2)(3)

*

Jerry A. Grundhofer

(2)(3)

*

Arthur J. Higgins

(2)(3)

*

Michael Larson

(2)(3)(5)

*

(5)

Jerry W. Levin

(2)(3)

*

David W. MacLennan

(2)(3)(4)

*

Tracy B. McKibben

(2)(3)

*

Victoria J. Reich

(2)(3)

*

Suzanne M. Vautrinot

(2)(3)

*

John J. Zillmer

(2)(3)

*

Current Directors and Executive Officers as a Group (28 persons)

(4)(5)

%  (4)(5)

(1)

Includes the following shares held by officers in the Ecolab Savings Plan and ESOP for Traditional Benefit Employees or Ecolab Savings Plan and ESOP as of the last Plan report: Mr. Baker, 10,082; Mr. Schmechel, 5,181; Mr. Handley, 1,025; Mr. Hickey, 7,311; and Mr. Beck, 2,030.

(2)

Includes the following shares which could be purchased under Company-granted stock options within 60 days from March 7, 2017 including, in the case of retirement-eligible officers, options vesting upon retirement from the Company: Mr. Baker, 1,191,225; Mr. Schmechel, 160,493; Mr.  Handley, 282,877; Mr. Hickey, 163,972; Mr. Beck, 161,734; Ms. Beck, 13,900; Mr.  Biller, 32,000; Mr. Casale, 7,900; Mr. Chazen, 10,100; Mr. Ettinger, 4,500; Mr.  Grundhofer, 18,100; Mr. Higgins, 22,600; Mr. Larson, 14,600; Mr.  Levin, 575; Mr. MacLennan, 3,300; Ms. McKibben, 4,900; Ms. Reich, 24,800; Ms. Vautrinot, 7,400; and Mr. Zillmer, 32,000.

(3)

Includes the following interests in stock units under our 2001 Non-Employee Director Stock Option and Deferred Compensation Plan: Ms. Beck, 20,283; Mr. Biller, 32,897; Mr. Casale, 2,484; Mr. Chazen, 4,860; Mr. Ettinger, 2,955; Mr. Grundhofer, 48,114; Mr. Higgins, 14,219; Mr. Larson, 3,925; Mr. Levin, 32,521; Mr. MacLennan, 925; Ms. McKibben, 1,614; Ms. Reich, 16,314; Ms. Vautrinot, 2,321; and Mr. Zillmer, 8,954. The stock units are Common Stock equivalents which may not be voted or transferred. They are included in the table because in certain circumstances they will be paid in the form of Common Stock within 60 days after a director leaves the Board.

(4)

Beneficial ownership includes 14,385 shares held by or on behalf of family members of certain directors or executive officers; includes 25,802 shares of Mr. Baker, indirectly held in a foundation in which he has no economic interest but has voting authority and/or power of disposition; 72,500 shares of Mr. Baker, 104,665 shares of Mr. Handley, and 6,485 shares of Mr. MacLennan held in trusts over which they or an immediate family member have voting authority and/or power of disposition; 32,993 shares held for executive officers in Company-sponsored employee benefit plans as of the last plan reports; and 3,181,678 shares to which these persons have the right to acquire beneficial ownership within 60 days of March 7, 2017 including, in the case of retirement-eligible officers, options vesting upon retirement from the Company.

(5)

Mr. Larson is the Business Manager of Cascade Investment, L.L.C. (“Cascade”), an entity owned by William H. Gates III, and the chief investment officer for Mr. Gates. As the Business Manager of Cascade,  Mr. Larson has voting and investment power with respect to 28,420,393 shares of Ecolab Common Stock held by Cascade, and as the chief investment officer for Mr. Gates, he has voting and investment power with respect to 4,366,425 shares of Ecolab Common Stock held by the Bill & Melinda Gates Foundation Trust (the “Trust”).  Mr. Larson disclaims beneficial ownership of any shares held by Cascade or the Trust.

·

presiding over meetings of the board at which the Chairman is not present, including executive sessions of the independent directors;

·

acting as a liaison between the Chairman and the independent directors;

·

reviewing and approving information sent to the Board;

·

reviewing and approving meeting agendas for the Board;

·

reviewing and approving meeting schedules to assure that there is sufficient time for discussion of all agenda items;

·

at the discretion of the Lead Director, calling meetings of the independent directors; and

·

if requested by significant stockholders, ensuring that he or she is available for consultation and direct communication.

·

Audit Committee – The Audit Committee members are Mses. McKibben, Reich (Chair) and Vautrinot and Messrs. Casale (Vice Chair), Chazen and MacLennan. The Committee met six times during 2016. In addition, either the full Audit Committee or the Committee Chair, as representative of the Committee (and at their election the other members of the Audit Committee), discussed the interim financial information contained in each quarterly earnings announcement for the first three calendar quarters of 2016 with our Chief Financial Officer and Controller and with our independent registered public accounting firm, prior to each of our quarterly earnings announcements. The Committee met to discuss the financial information contained in the fourth quarter and full year 2016 earnings announcement prior to dissemination of that press release and it being furnished to the SEC on a Form 8-K in February 2017. The Form 10-K for the year ended December 31, 2016, was also discussed by the Committee at its February 2017 meeting.

·

Compensation Committee – The Compensation Committee members are Messrs. Biller, Ettinger, Grundhofer (Chair), Higgins, Levin and Zillmer (Vice Chair). The Committee met five times during 2016. The principal functions of this Committee are to: (i) review and approve or recommend to the Board, as applicable, with respect to the establishment, amendment and administration of any compensation plans, benefits plans, severance arrangements and long-term incentives for directors and any executive officers (including the CEO); (ii) review and approve our overall compensation policy and annual executive salary plan, including CEO compensation; and (iii) administer our director stock option and deferred compensation plans, executive and employee stock incentive plans, stock purchase plans, cash incentive programs and stock retention and ownership guidelines. The Committee may not delegate its primary responsibilities with respect to overseeing executive officer compensation. In accordance with the terms of our 2010 Stock Incentive Plan, the Committee has delegated to the CEO (in his capacity as a director) the authority to grant long-term incentives to employees who are not officers or directors, subject to specified thresholds and applicable law. A report by the Committee is located on page 27 of this Proxy Statement.

·

Finance Committee – The current Finance Committee members are Mses. McKibben and Vautrinot and Messrs. Biller (Chair), Chazen, Grundhofer, and Larson (Vice Chair). The Committee met five times during 2016. The principal functions of this Committee are to review and make recommendations to the Board concerning: (i) management’s financial and tax policies and standards; (ii) our financing requirements, including the evaluation of management’s proposals concerning funding to meet such requirements; (iii) share repurchases and dividends; (iv) our capital expenditure budget; (v) adequacy of insurance coverage; and (vi) our use of derivatives to limit financial risk. The Committee also evaluates specific acquisition, divestiture and capital expenditure projects from a financial standpoint and reviews the financial impact of our significant retirement plans.

·

Governance Committee – The Governance Committee members are Ms. Beck and Messrs. Casale, Higgins (Vice Chair), Levin (Chair), MacLennan and Zillmer. The Committee met four times during 2016. Certain functions of the Governance Committee are described starting on page 8 of this Proxy Statement under the heading “Director Nomination Process.” In addition, the principal functions of this Committee include: (i) lead the annual review of Board performance and effectiveness; (ii) review the Board’s organizational structure and operations (including appointing a lead director for executive sessions of non-management directors) and its relationship to senior management; (iii) review issues of senior management succession; (iv) lead the annual Chief Executive Officer performance review and oversee the evaluation process for senior management; (v) review Certificate of Incorporation, By-Law or stockholder rights plan issues or changes in fundamental corporate charter provisions; (vi) review various corporate governance matters (including any necessary modifications to the Corporate Governance Principles); (vii) review and recommend to the Board with respect to director independence determinations and review, approve or ratify reportable related-person transactions; (viii) receive reports from management with regard to relevant social responsibility issues and report to the Board as appropriate; (ix) review our Company’s efforts to achieve its affirmative action and diversity goals; (x) review director orientation, training and continuing education; (xi) review our political contributions policy as well as our corporate contributions; and (xii) undertake special projects which do not fall within the jurisdiction of other committees of the Board.

·

Safety, Health and Environment Committee – The members of the Safety, Health and Environment Committee are Mses. Beck (Chair) and Reich and Messrs. Baker, Ettinger (Chair) and Larson. The Committee met four times during 2016. This Committee monitors compliance with applicable safety, health and environmental (“SHE”) laws and regulations. The principle functions of this Committee include: (i) review SHE policies, programs and practices, SHE risks, SHE statistics, pending SHE matters, security risks and industry best practices; (ii) review regulatory, environmental and health and safety trends, issues and concerns which affect or could affect Ecolab’s SHE practices; (iii) review the implementation of Ecolab’s SHE practices and related compliance with applicable policies; and (iv) review Ecolab’s Sustainability Report.

Name

Fees Earned or
Paid in Cash(1)
($)

Stock
Awards(2)
($)

Option
Awards(3)
($)

All Other
Compensation

($)

Total
($)

Barbara J. Beck

Leslie S. Biller

Carl M. Casale

Stephen I. Chazen

Jeffrey M. Ettinger

Jerry A. Grundhofer

Arthur J. Higgins

Joel W. Johnson(4)

Michael Larson

Jerry W. Levin

Robert L. Lumpkins(4)

David W. MacLennan(5)

Tracy B. McKibben

Victoria J. Reich

Suzanne M. Vautrinot

John J. Zillmer

(1)

Represents annual retainer of $105,000 earned during 2016, plus additional fees paid to the Lead Director, the respective Chairs of Board Committees and the members of the Audit Committee; includes retainer and fees, if any, deferred at the election of directors pursuant to the 2001 Non-Employee Director Stock Option and Deferred Compensation Plan (the “2001 Plan”). The features of the 2001 Plan are described in the Summary below. The dollar amount of retainer and fees deferred by applicable directors during 2016 is as follows: Ms. Beck, $114,848; Mr. Chazen, $57,500; Mr. Ettinger, $105,000; Mr. Grundhofer, $125,000; Mr. Higgins, $105,000; Mr. Johnson, $42,938; Mr. Lumpkins, $44,655; and Ms. Reich, $121,565.

(2)

Represents the crediting by the Company of $100,000 (or a pro rata portion thereof) to a deferred stock unit account under the 2001 Plan during 2016, which also represents the full grant date fair value of each stock unit award under FASB ASC Topic 718. The features of the deferred stock unit account are described under the Summary below. The aggregate number of stock units held by each non-employee director is set forth under footnote (3) to the “Security Ownership – Executive Officers and Directors” table at page 11.  

(3)

Represents the full grant date fair value of each option award, computed in accordance with FASB ASC Topic 718. The value has been determined by application of the lattice (binomial)-pricing model, based upon the terms of the option grant to directors. Director stock options granted in May 2016 to directors have a ten-year contractual exercise term and vest 25% at the end of each three-month period following the date of grant. Key assumptions include: risk-free rate of return, expected life of the option, expected stock price volatility and expected dividend yield. The specific assumptions used in the valuation of these options are summarized in the table below:

Grant Date

Risk Free Rate

Expected Life

Expected Volatility

Expected Dividend Yield

05/05/2016

6.13 years

(4)

Messrs. Johnson and Lumpkins retired from the Board effective May 2016, and each received a pro-rated portion of compensation for 2016. In connection with their retirement, the Company agreed to permit Messrs. Johnson and Lumpkins to direct charitable contributions by the Ecolab Foundation in the amount of $5,000 each.

(5)

Mr. MacLennan received an initial stock option grant in May 2016 valued at $23,600 under FASB ASC Topic 718 to reflect his prorated service commencing in December 2015, as well as his periodic stock option grant valued at $54,280.

·

An annual retainer of $105,000;

·

$100,000 annually in the form of stock units (which are described below); and

·

Stock options having a grant date fair value of approximately $55,000.

Director Role

Amount ($)

Lead Director

Audit Committee Chair

Compensation Committee Chair

Finance Committee Chair

Governance Committee Chair

Safety, Health and Environment Committee Chair

Audit Committee Member

·

Non-employee directors may elect to defer some, or all, of the cash portion of their annual retainer and additional fees in a cash account or a deferred stock unit account until cessation of Board service. Amounts deferred in the cash account earn interest at market rates and amounts deferred in the stock unit account are credited with dividend equivalents. Upon cessation of Board service, deferred amounts are paid in a lump sum or in equal installments to a maximum of ten years as elected by the director, with payments from the interest-bearing account made in cash and payments from the stock unit account made in shares of our Common Stock.

·

Director stock option grants are made on the date of the Annual Meeting of Stockholders and have an exercise price which is the average of the high and low market price on the date of grant. We believe that the use of the average of the high and low market price on the date of the grant removes same-day stock volatility. Director stock options vest 25% at the end of each three-month period following the grant date and will terminate 10 years after the grant date. If a non-employee director ceases to serve as a director of the Company for any reason, then each of his or her stock options will, to the extent it was already exercisable, remain exercisable for the shorter of the remaining term of the stock option or five years after the date service as a director ceased. The stock options granted to directors under the 2001 Plan may be transferred to defined family members or legal entities established for their benefit. We do not have a program, plan or practice to time stock option grants to directors in coordination with the release of material non-public information.

·

The 2001 Plan is the only plan or arrangement under which share-based compensation is provided to our non-employee directors.

·

Pursuant to an amendment approved by our stockholders on May 5, 2016, the aggregate grant date fair value of 2001 Plan awards denominated in shares that may be made to any non-employee director of the Company during any calendar year may not exceed $800,000, excluding such awards made at the election of a director to defer the receipt of cash compensation otherwise payable for services as a director.

A.

The director is, or has been within the last three years, an employee of the Company, or an immediate family member is, or has been within the last three years, an executive officer, of the Company.

B.

The director has received, or has an immediate family member who has received, during any twelve-month period within the last three years, more than $120,000 in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service).

C.

(A) The director is a current partner or employee of a firm that is the Company’s internal or external auditor; (B) the director has an immediate family member who is a current partner of such a firm; (C) the director has an immediate family member who is a current employee of such a firm and personally works on the Company’s audit; or (D) the director or an immediate family member was within the last three years a partner or employee of such a firm and personally worked on the Company’s audit within that time.

D.

The director or an immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of the Company’s present executive officers at the same time serves or served on that company’s compensation committee.

E.

The director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues.

·

Until May 2016, Mr. Chazen served as President and Chief Executive Officer of Occidental Petroleum Corporation. During 2016, Ecolab’s sales to Occidental Petroleum and its affiliates were approximately $63 million, or less than 0.63% of Occidental Petroleum’s revenues, and Ecolab’s purchases from Occidental Petroleum and its affiliates were approximately $6 million, or less than 0.06% of Occidental Petroleum’s revenues. Ecolab believes all sales to, and purchases from, Occidental Petroleum were made in the ordinary course, at arm’s length, and at prices and on terms customarily available. Further, Ecolab believes Mr. Chazen had no personal interest in, nor received any personal benefit from, such commercial transactions.

·

Mr. Ettinger serves as Chairman of the Board of Hormel Foods Corporation and, until October 2016, served as its Chief Executive Officer. During 2016, Ecolab’s sales to Hormel Foods and its affiliates were approximately $11 million, or less than 0.12% of Hormel Foods’ revenues, and Ecolab’s purchases from Hormel Foods and its affiliates were approximately $100 thousand, or approximately 0.001% of Hormel Foods’ revenues. Ecolab believes all sales to, and purchases from, Hormel Foods were made in the ordinary course, at arm’s length, and at prices and on terms customarily available. Further, Ecolab believes Mr. Ettinger had no personal interest in, or received any personal benefit from, such commercial transactions.

·

Mr. Casale serves as President and Chief Executive Officer of CHS, Inc. During 2016, Ecolab’s sales to CHS and its affiliates were approximately $3 million, or less than 0.011% of CHS’s revenues. Ecolab believes all sales to CHS were made in the ordinary course, at arm’s length, and at prices and on terms customarily available. Further, Ecolab believes Mr. Casale had no personal interest in, or received any personal benefit from, such commercial transactions.

·

Mr. MacLennan serves as Chairman and Chief Executive Officer of Cargill, Incorporated. During 2016, Ecolab’s sales to Cargill and its affiliates were approximately $26 million, or less than 0.025% of Cargill’s revenues, and Ecolab’s purchases from Cargill and its affiliates were approximately $6 million, or less than 0.006% of Cargill’s revenues. Ecolab believes all sales to, and purchases from, Cargill were made in the ordinary course, at arm’s length, and at prices and on terms customarily available. Further, Ecolab believes Mr. MacLennan had no personal interest in, or received any personal benefit from, such commercial transactions.

DOUGLAS M. BAKER, JR.

Years of Service: 13
Age: 58

Board Committees:

Safety, Health and Environment

of Chairman of the Board in May 2006. Mr. Baker relinquished the office of President in December 2011 upon completion of the Nalco merger. Prior to joining Ecolab in 1989, Mr. Baker was employed by The Procter & Gamble Company in various marketing and management positions.

Qualifications

Mr. Baker has more than 25 years of Ecolab marketing, sales and general management experience, including leadership roles in Ecolab’s Institutional, Europe and Kay businesses before becoming Ecolab’s Chief Operating Officer in 2002 and Chief Executive Officer in 2004. He has deep and direct knowledge of Ecolab’s businesses and operations. In addition, his experience at The Procter & Gamble Company included various marketing and management positions, including in the institutional market in which Ecolab operates. As a director of two other public companies, Mr. Baker also has extensive corporate governance experience.

Other directorships held during the past five years

Lead Director of Target Corporation and director of U.S. Bancorp.

Biography

Chairman of the Board and Chief Executive Officer of Ecolab. Director of Ecolab since 2004. Member of the Safety, Health and Environment Committee.

Since joining Ecolab in 1989, Mr. Baker has held various leadership positions within our Institutional, Europe and Kay operations. Mr. Baker was named Ecolab’s President and Chief Operating Officer in August 2002, was promoted to President and Chief Executive Officer in July 2004, and added the position

BARBARA J. BECK

Years of Service: 9
Age: 56

Board Committees:

Safety, Health and Environment

Governance

France), the Middle East and Africa. She previously served as Executive Vice President of Manpower’s U.S. and Canada business unit from 2002 to 2005. Prior to joining Manpower, Ms. Beck was an executive of Sprint, a global communications company, serving in various operating and leadership roles for 15 years.

Qualifications

Ms. Beck has extensive North American and European general management and operational experience, including as a current CEO, allowing her to contribute to Ecolab’s strategic vision particularly as it relates to Europe, the Middle East and Africa. With her Manpower knowledge of the impact of labor market trends on global and local economies combined with her knowledge of employment services, which tends to be a leading economic indicator, she provides timely insight into near-term projections of general economic activity. As an executive at Sprint, Ms. Beck obtained experience in the information technology field which is relevant to Ecolab’s development of its ERP systems as well as field automation tools.

Other directorships held during the past five years

None.

Biography

Chief Executive Officer, Learning Care Group, Inc., a leading for-profit early education/child care provider in North America. Director of Ecolab since 2008. Chair of the Safety, Health and Environment Committee and member of the Governance Committee. 

Prior to joining Learning Care Group in 2011 as Chief Executive Officer, Ms. Beck spent nine years as an executive of Manpower Inc., a world leader in the employment services industry. From 2006 to 2011, Ms. Beck was President of Manpower’s EMEA operations, overseeing Europe (excluding

LESLIE S. BILLER

Years of Service: 19
Age: 69

Board Committees:

Finance

Compensation

with Wells Fargo & Company in November 1998. Mr. Biller retired as Vice Chairman and Chief Operating Officer of Wells Fargo & Company in October 2002. He became Chairman of Sterling Financial Corporation in 2010 and served in that capacity until its merger with Umpqua Corporation in April 2014.

Qualifications

Throughout his career in banking, including as Vice Chair and Chief Operating Officer of Wells Fargo, Mr. Biller gained extensive public company senior management and board experience. Having spent a significant part of his career in international assignments in Europe, he is familiar with operating businesses in that region, which allows him to provide advice and guidance relevant to our significant European operations. He has extensive knowledge and experience in banking, treasury and finance, which enables him to provide insight and advice on financing, treasury and enterprise risk management areas. As a chemical engineer, he is familiar with chemicals manufacturing and distribution, which allows him to relate well to our operations.

Other directorships held during the past five years

Formerly a director of Sterling Financial Corporation.

Biography

Chief Executive Officer of Harborview Capital, a private investment and consultive company. Director of Ecolab since 1997. Chair of the Finance Committee and member of the Compensation Committee.

After holding various positions with Citicorp and Bank of America, Mr. Biller joined Norwest Corporation in 1987 as Executive Vice President in charge of strategic planning and acquisitions for Norwest Banking. He was appointed Executive Vice President in charge of South Central Community Banking in 1990. Mr. Biller served as President and Chief Operating Officer of Norwest Corporation from February 1997 until its merger

CARL M. CASALE

Years of Service: 3
Age: 55

Board Committees:

Audit

Governance 

sales, strategy, marketing and technology-related positions before being named Chief Financial Officer in 2009.

Qualifications

As Chief Executive Officer of CHS, Mr. Casale has experience running a large diverse organization, which includes a significant energy business. In addition to his extensive industry experience, through his more than 25-year career at CHS and Monsanto and his experience as a director of other public companies, Mr. Casale possesses knowledge and experience in finance, international operations, sales, corporate management, strategy, public company governance and board practices. Mr. Casale is also familiar with our water and energy businesses, having served as a director of Nalco Holding Company from 2009 until Ecolab’s acquisition of Nalco in 2011.

Other directorships held during the past five years

None.

Biography

President and Chief Executive Officer of CHS Inc., a leading integrated agricultural company. Director of Ecolab since 2013. Member of the Audit and Governance Committees.

Mr. Casale joined CHS as President and Chief Executive Officer in 2011. Previously he spent 26 years with Monsanto Company, advancing through

STEPHEN I. CHAZEN

Years of Service: 4
Age: 70

Board Committees:

Audit

Finance

2007. Prior to joining Occidental in 1994, Mr. Chazen was a Managing Director in Corporate Finance and Mergers and Acquisitions at Merrill Lynch.

Qualifications

With more than 20 years of senior management experience with a major oil and gas company, Mr. Chazen has significant direct experience in the energy sector, one of Ecolab’s most significant end markets. As Chief Executive Officer of Occidental, Mr. Chazen is intimately familiar with the competitive landscape and trends within the energy sector as well as the regulatory framework. In addition to his important industry experience, through his more than 30-year career at Occidental and Merrill Lynch and his experience as a director of other public companies, Mr. Chazen possesses knowledge and experience in corporate management, strategy, mergers and acquisitions, public company governance and board practices.

Other directorships held during the past five years

Director of Occidental Petroleum Corporation and The Williams Companies, Inc.

Biography

Retired Chief Executive Officer of Occidental Petroleum Corporation, an oil, natural gas and chemicals producer. Director of Ecolab since 2013. Member of the Audit and Finance Committees.

From 2011 to 2016 Mr. Chazen was Chief Executive Officer of Occidental Petroleum Corporation. He served as Occidental’s President from 2007 to 2015, as President and Chief Operating Officer from 2010 to 2011 and as President and Chief Financial Officer from 2007 to 2010. He was Executive Vice President- Corporate Development and Chief Financial Officer from 1999 to

JEFFREY M. ETTINGER

Years of Service: 2
Age: 58

Board Committees:

Compensation

Safety, Health and Environment

Prior to being named President of Hormel Foods Corporation, Mr. Ettinger served as President of Jennie-O Turkey Store, the largest subsidiary of Hormel Foods, and in various other positions including Treasurer, Product Manager for Hormel®  chili products, and corporate and senior attorney.

Qualifications

With more than 25 years of experience with Hormel Foods, a public food products company with global operations, Mr. Ettinger brings directly relevant operational experience in one of Ecolab’s major end-markets. As Chairman and Chief Executive Officer of a Fortune 500 public company with global operations, Mr. Ettinger possesses executive leadership attributes and provides relevant insight and guidance with respect to numerous issues important to Ecolab, including public company governance, mergers and acquisitions and regulatory matters.

Other directorships held during the past five years

Director of Hormel Foods Corporation and The Toro Company.

Biography

Mr. Ettinger joined Hormel Foods Corporation in 1989. He served as Chief Executive Officer from 2006 to 2016 and as President from 2004 to 2015.

ARTHUR J. HIGGINS

Years of Service: 7
Age: 61

Board Committees:

Governance

Compensation

Research and Manufacturers of America (PhRMA), of the Council of the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) and President of the European Federation of Pharmaceutical Industries and Associations (EFPIA).

Qualifications

Mr. Higgins has extensive leadership experience in the global healthcare market. Through leadership positions with large healthcare developers and manufacturers in both the United States and Europe, Mr. Higgins has gained deep knowledge of the healthcare market and the strategies for developing and marketing products in this highly regulated area. This knowledge and industry background allows him to provide valuable insight to Ecolab’s growing Healthcare business, which is developing in both the U.S. and Europe. In addition, his global perspective from years of operating global businesses and his background in working with high growth companies fits well with Ecolab’s ambitions for global growth and provide him experiences from which to draw to advise Ecolab on strategies for sustainable growth. In his role as Chief Executive Officer of Bayer HealthCare, he gained significant exposure to enterprise risk management as well as quality and operating risk management necessary in a highly regulated industry such as healthcare.

Other directorships held during the past five years

Director of Endo International plc and Zimmer Biomet Holdings, Inc. Formerly a director of Resverlogix Corp.

Biography

Consultant, Blackstone Healthcare Partners of The Blackstone Group. Director of Ecolab since 2010. Vice Chair of the Governance Committee and member of the Compensation Committee.

Prior to joining The Blackstone Group in 2010, Mr. Higgins served as Chairman of the Board of Management of Bayer HealthCare AG, a developer and manufacturer of human and animal health products, and Chairman of the Bayer HealthCare Executive Committee. Prior to joining Bayer HealthCare in 2004, Mr. Higgins served as Chairman, President and Chief Executive Officer of Enzon Pharmaceuticals, Inc. from 2001 to 2004. Prior to joining Enzon Pharmaceuticals, Mr. Higgins spent 14 years with Abbott Laboratories, most recently as President of the Pharmaceutical Products Division from 1998 to 2001. He is a past member of the Board  of Directors of the Pharmaceutical

MICHAEL LARSON

Years of Service: 5
Age: 57

Board Committees:

Finance

Safety, Health and Environment

Gates’ non-Microsoft investments as well as the investment assets of the Bill & Melinda Gates Foundation Trust. Previously, Mr. Larson was at Harris Investment Management, Putnam Management Company and ARCO.

Qualifications

With more than 30 years of portfolio management experience, Mr. Larson has deep investment expertise and broad understanding of the capital markets, business cycles and capital efficiency and allocation practices. He also has served on several other public company boards providing him relevant corporate governance experience. In addition, as a professional investor and as the investment officer of Ecolab’s largest shareholder, Mr. Larson brings a long-term shareholder perspective to the Board.

Other directorships held during the past five years

Director of AutoNation, Inc., Republic Services, Inc. and Fomento Mexicano Economico, S.A.B. de C.V. In addition, he is Chairman of the Board of Trustees of two funds in the Western Asset Management fund complex. Formerly a director of Pan American Silver Corp. and Grupo Televisa, S.A.B.

Biography

Chief investment officer to William H. Gates III. Director of Ecolab since 2012. Vice Chair of the Finance Committee and member of the Safety, Health and Environment Committee.

Mr. Larson has been chief investment officer for Mr. Gates and the Business Manager of Cascade Investment, L.L.C., since 1994. He is responsible for Mr.

DAVID W. MACLENNAN

Years of Service: 2
Age: 57

Board Committees:

Audit

Governance

He has been Cargill’s Chief Executive Officer since 2013, and he held the offices of Chief Operating Officer and President from 2011 until his appointment as Chief Executive Officer. Prior to these roles, Mr. MacLennan held several positions with Cargill, including Chief Financial Officer, President of Cargill Energy and Managing Director of the Value Investment Group. He has also held various management positions with US Bancorp Piper Jaffray and Goldberg Securities.

Qualifications

With more than 25 years of leadership experience at Cargill, Mr. MacLennan has developed significant leadership and strategic planning skills, as well as extensive knowledge and insight in corporate governance, risk management, financial management and global business practices.

Other directorships held during the past five years

Formerly a director and Governance Committee chair of C.H. Robinson Worldwide, Inc.

Biography

Chairman and Chief Executive Officer of Cargill, Incorporated. Director of Ecolab since 2015. Member of the Audit and Governance Committees.

In September 2015, Mr. MacLennan became Chairman of the Board of Cargill, Incorporated, a privately held company and world-leading producer and marketer of food, agricultural, financial, and industrial products and services.

TRACY B. MCKIBBEN

Years of Service: 2
Age: 47

Board Committees:

Audit

Finance

Director of European Economic Affairs and EU Relations and as Acting Senior Director for European Affairs. Before joining the National Security Council, she served in various senior advisory roles in the U.S. Department of Commerce from March 2001 to July 2003.

Qualifications

Ms. McKibben has more than 15 years of experience in the energy sector, with a focus on alternative energy, water and infrastructure. In this role and in her prior role at Citigroup, Ms. McKibben developed considerable strategic and financial experience advising energy companies and multinational corporations on strategic investments, M&A, and energy policy. In addition to her experience in the energy and financial sectors, Ms. McKibben has gained extensive public sector and international experience working at the U.S. Department of Commerce and within the National Security Council at The White House where she advised the President of the United States, Cabinet Secretaries and other senior officials on political, security, commercial and international trade issues.

Other directorships held during the past five years

Director of GlassBridge Enterprises, Inc. Formerly a director of ROI Acquisition Corp. II.

Biography

Founder and Chief Executive Officer of MAC Energy Advisors, LLC, an investment consulting company that  provides integrated and innovative energy solutions to help clients utilize capital strategically around the globe. Director of Ecolab since 2015. Member of the Audit and Finance Committees.

Ms. McKibben has been the head of MAC Energy Advisors since its founding in 2010. From September 2007 to August 2009, she served as Managing Director and Head of Environmental Banking Strategy at Citigroup Global Markets. Prior to joining Citigroup, Ms. McKibben served in the National Security Council at the White House from July 2003 to August 2007 as

VICTORIA J. REICH

Years of Service: 7
Age: 59

Board Committees:

Audit

Safety, Health and Environment

Brunswick European Group, and previously as Senior Vice President and Chief Financial Officer. Before joining Brunswick, Ms. Reich was employed for 17 years at General Electric Company in various financial management positions.

Qualifications

As a former Chief Financial Officer of a public company, Ms. Reich possesses relevant financial leadership experience with respect to all financial management disciplines relevant to Ecolab, including public reporting, strategic planning, treasury, IT and financial analysis. Her financial management background at Essendant, Brunswick and General Electric, combined with her experience in European general management at Brunswick, enables her to provide strategic input as well as financial discipline. Essendant operates a cleaning supplies distribution business which provided Ms. Reich familiarity with the institutional market, one of our largest end-markets.

Other directorships held during the past five years

Director of H&R Block, Inc. and Ingredion Incorporated.

Biography

Former Senior Vice President and Chief Financial Officer of Essendant Inc. (formerly United Stationers Inc.), a broad line wholesale distributor of business products. Director of Ecolab since 2009. Chair of the Audit Committee and member of the Safety, Health and Environment Committee.

From 2007 to 2011 Ms. Reich was Senior Vice President and Chief Financial Officer of Essendant  Inc. Prior to joining Essendant, Ms. Reich spent ten years as an executive with Brunswick Corporation, last serving as President -

SUZANNE M. VAUTRINOT

Years of Service:  3
Age: 57

Board Committees:

Audit

Finance

Air Forces Cyber, where she was responsible for cyber defense operations. Prior to that, General Vautrinot was the Director of Plans and Policy, U.S. Cyber Command and the Special Assistant to the Vice Chief of Staff of the U.S. Air Force. On multiple occasions, she was selected by military leaders and White House officials to spearhead high-profile engagements. General Vautrinot is the recipient of the Symantec Cyber Award, Women in Aerospace Leadership Award, Air Force Association’s Aerospace Citation of Honor and the Presidential Award for Training. During her career, she has also been awarded numerous medals and commendations, including the Distinguished Service Medal.

Qualifications

General Vautrinot brings a unique perspective to the Board with her 31-year military career. Having led large and complex organizations, she provides insights into the challenges facing large global organizations. As an expert in cyber security, she can advise Ecolab on appropriate protections for its networks. In addition, General Vautrinot has significant experience in strategic planning, organizational design and change management, which allows her to provide advice and insight to Ecolab as its business grows and develops.

Other directorships held during the past five years

Director of Symantec Corporation and Wells Fargo & Company.

Biography

President, Kilovolt Consulting Inc. Retired Major General of the U.S. Air Force. Director of Ecolab since 2014. Member of the Audit and Finance Committees.

General Vautrinot retired from the Air Force in 2013. During her 31-year career in the Air Force, she served in various assignments, including cyber operations, plans and policy, strategic security, space operations and staff work. General Vautrinot commanded at the squadron, group, wing and numbered Air Force levels, as well as the Air Force Recruiting Service. She has served on the Joint Staff, the staffs at major command headquarters and Air Force headquarters. From 2011 to 2013, she was Commander, 24th Air Force and Commander,

JOHN J. ZILLMER

Years of Service: 11
Age: 61

Board Committees:

Compensation

Governance

industry, most recently as Executive Vice President of ARAMARK Corporation, a provider of food, uniform and support services. During his eighteen-year career with ARAMARK, Mr. Zillmer served as President of ARAMARK’s Business Services division, the International division and the Food and Support Services group. Prior to joining ARAMARK, Mr. Zillmer was employed by Szabo Food Services until Szabo was acquired by ARAMARK in 1986.

Qualifications

As the former Chief Executive Officer of Univar and previously Allied Waste, Mr. Zillmer has experience leading both public and large private companies. With Univar, he became intimately familiar with the chemical market, including with respect to chemicals that Ecolab uses to manufacture its products. He also has extensive knowledge of the environmental aspects of chemicals manufacturing and distribution. His experience leading various ARAMARK operations has given him deep knowledge of the institutional market, particularly the contract catering segment, which is a large market for Ecolab. His roles on the boards of Reynolds American, Allied Waste and United Stationers have provided him with significant public company board experience.

Other directorships held during the past five years

Director of Reynolds American Inc., Veritiv Corp., Performance Food Group Company and CSX Corporation.

Biography

Retired President and Chief Executive Officer of Univar Inc., a global distributor of industrial chemicals and related specialty services. Director of Ecolab since 2006. Vice Chair of the Compensation Committee and member of the Governance Committee.

Mr. Zillmer joined Univar in 2009 as President and Chief Executive Officer. In 2012, he stepped down as President and CEO and became Executive Chairman until December 2012 when he retired from Univar. Prior to joining Univar, Mr. Zillmer served as Chairman and Chief Executive Officer of Allied Waste Industries, a solid waste management business, from 2005 until the merger of Allied Waste with Republic Services, Inc. in December 2008. Before Allied Waste, Mr. Zillmer spent 30 years in the managed services

Dated: February 24, 2017

Leslie S. Biller

Arthur J. Higgins

Jeffrey M. Ettinger

Jerry W. Levin

Jerry A. Grundhofer

John J. Zillmer

Douglas M. Baker, Jr.

Chairman of the Board and Chief Executive Officer

Daniel J. Schmechel

Chief Financial Officer

Thomas W. Handley

President and Chief Operating Officer

Michael A. Hickey

Executive Vice President and President – Global Institutional

Christophe Beck

Executive Vice President and President – Global Water and Process Services

Compensation Element

2016 NEO Compensation Action

Base salaries

•

With respect to NEOs who were employed by us in 2015 and 2016, base salaries increased between 3.3% and 14.3% and on average 7.6% versus 2015 excluding promotions

Annual cash incentives

•

Annual cash incentive bonus payouts were between 91% and 111% of target, and averaged 98% of target

•

Annual cash incentive bonus payout for our CEO was at 95% of target

Long-term incentives

•

Long-term equity incentive awards, consisting of stock options and performance-based restricted stock units (“PBRSUs”), were granted in the same proportion as prior years and were within the median range of our size-adjusted competitive market for each NEO

•

For the 2014 to 2016 PBRSU grant cycle, average award payouts were at 100% of target award opportunities

Compensation Philosophy

We maintain a market median range compensation philosophy for all elements of total direct compensation, with Committee discretion to position our NEOs appropriately relative to that range based on factors such as tenure, past performance, and future potential

Goal Setting Process

We have in place a robust planning process to establish financial and business performance metrics for incentive plans

Performance Measures

We use different performance measures in our short-term and long-term incentive plans

Stock Ownership

We maintain stock ownership guidelines that encourage executives to retain a significant long-term position in our stock and thereby align their interests with the interests of our stockholders

Change in Control

We have implemented a balanced change-in-control severance policy that provides our officers severance at two times the sum of base salary plus annual incentive pay at target following a change in control and termination of employment (a so-called “double-trigger”), with no tax gross-ups

Risk Mitigation

We employ features to mitigate against our executives taking excessive risk in order to maximize pay-outs, including varied and balanced performance targets, discretionary authority of the Compensation Committee to reduce award pay-outs, bonus caps at 200% of target and a Policy on Reimbursement of Incentive Payments (or so-called “clawback” policy)

Problematic Practices

We do not provide or permit “single-trigger” vesting in event of change in control, hedging or pledging of our Company stock, or backdating or repricing of stock option awards

Employment Agreements

We do not maintain employment agreements with any of our NEOs

CEO Pay Mix

Average Other Named Executive Officer Pay Mix

·

Support our corporate vision and long-term financial objectives

·

Communicate the importance of our business results

·

Retain and motivate executives important to our success

·

Reward executives for contributions at a level reflecting our performance

·

Focus on companies in the chemicals, oil & gas equipment & services, and industrial conglomerates industry groups

·

Screen for companies with annual revenues of one-fourth to four times the annual revenues of our Company

·

Further screen for companies within a reasonable size range in various other measures such as annual operating income, total assets, total equity, total employees and market capitalization

·

Identify companies that meet several other criteria, such as significant international operations, inclusion in the S&P 500, business-to-business focus, and not highly cyclical

Name

2015
Annualized Base
Salary Rate ($)

2016
Annualized Base
Salary Rate ($)

Increase
Percentage(1)

Douglas M. Baker, Jr.

Daniel J. Schmechel

Thomas W. Handley

Michael A. Hickey

Christophe Beck

(1)

All increases represent merit increases.

2016 reported diluted EPS

Adjustments:

   Special (gains) and charges

   Discrete tax net expense (benefit)

Adjusted diluted EPS