Edgar Filing: ECOLAB INC.

ecl_Current folio_Proxy

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

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ECOLAB INC.

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Notice of 2019 Annual Meeting and
Proxy Statement

Annual Meeting to be Held on May 2, 2019

March 18, 2019

DEAR FELLOW STOCKHOLDER:

You are cordially invited to join us for our Annual Meeting of Stockholders, to be held at 9:30 a.m. on Thursday, May 2, 2019, at the Ecolab Global Headquarters, 1 Ecolab Place, Saint Paul, Minnesota 55102. The Notice of Annual Meeting and the Proxy Statement that follow describe the business to be conducted at our Annual Meeting. We urge you to read both carefully.

We hope you plan to attend our Annual Meeting. However, if you will not be able to join us, we encourage you to exercise your right as a stockholder and vote. Please sign, date and promptly return the accompanying proxy card, or make use of either our telephone or Internet voting services. Stockholders not in attendance may listen to a broadcast of the meeting on the Internet. Webcast instructions will be available on-line at www.investor.ecolab.com.


	Sincerely,

	Douglas M. Baker, Jr.
	Chairman of the Board and Chief Executive Officer

YOUR VOTE IS IMPORTANT!
PLEASE SUBMIT YOUR PROXY TODAY.

Your vote is a valuable part of the investment made in our Company and is the best way to influence corporate governance and decision-making. Please take time to read the enclosed materials and vote!

Whether or not you plan to attend the meeting, please complete the accompanying proxy and return it in the enclosed envelope. Alternatively, you may vote by telephone or the Internet. If you attend the meeting, you may vote your shares in person even though you have previously returned your proxy by mail, telephone or the Internet.

PLEASE REFER TO THE ACCOMPANYING MATERIALS FOR VOTING INSTRUCTIONS.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To the Stockholders of Ecolab Inc.:

The Annual Meeting of Stockholders of Ecolab Inc. will be held on Thursday, May 2, 2019, at 9:30 a.m., at the Ecolab Global Headquarters, 1 Ecolab Place, Saint Paul, Minnesota 55102, for the following purposes (which are more fully explained in the Proxy Statement):

To elect as directors to a one-year term ending in 2020 the 13 nominees named in the Proxy Statement;

To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the current year ending December 31, 2019;

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

To consider and vote on a stockholder proposal requesting an independent board chair, if properly presented; and

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

Our Board of Directors has fixed the close of business on March 5, 2019 as the record date for the determination of stockholders entitled to notice of, and to vote at, the meeting.



	By Order of the Board of Directors

	Michael C. McCormick
	Executive Vice President, General Counsel and Secretary
	March 18, 2019

TABLE OF CONTENTS

SUMMARY	1	COMPENSATION DISCUSSION AND ANALYSIS	27
PROPOSAL 1: ELECTION OF DIRECTORS	3	Executive Summary	27
CORPORATE GOVERNANCE	8	Program Elements	32
Corporate Governance Materials and Code of Conduct	8	Compensation Philosophy	33
Board Structure	8	Compensation Process	34
Board Leadership Structure	8	Compensation Benchmarking	34
Board Committees	9	Base Salaries	35
Board’s Role in Risk Oversight	11	Adjustments to Reported Financial Results	36
Communications with Directors	12	Annual Cash Incentives	37
Future Stockholder Proposals and Director Nomination Process	12	Long-Term Equity Incentives	40
New Director Selection Process	15	Executive Benefits and Perquisites	41
Compensation Risk Analysis	15	Executive Change-in-Control Policy	41
Director Attendance	15	Stock Retention and Ownership Guidelines	42
Compensation Committee Interlocks and Insider Participation	16	Compensation Recovery	42
DIRECTOR COMPENSATION FOR 2018	16	Regulatory Considerations	43
Director Compensation Table	16	SUMMARY COMPENSATION TABLE FOR 2018	44
Summary	17	GRANTS OF PLAN-BASED AWARDS FOR 2018	46
Stock Retention and Ownership Guidelines	18	OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2018	47
DIRECTOR INDEPENDENCE STANDARDS AND DETERMINATIONS	18	OPTION EXERCISES AND STOCK VESTED FOR 2018	48
“Independence” Standards	18	PENSION BENEFITS FOR 2018	49
“Independence” Determinations	18	NON-QUALIFIED DEFERRED COMPENSATION FOR 2018	52
RELATED-PERSON TRANSACTIONS	19	POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL	54
SECURITY OWNERSHIP	20	PAY RATIO DISCLOSURE	59
Certain Beneficial Owners	20	PROPOSAL 4: STOCKHOLDER PROPOSAL REQUESTING AN INDEPENDENT BOARD CHAIR	60
Executive Officers and Directors	21	OTHER MATTERS	63
Section 16(a) Beneficial Ownership Reporting Compliance	22	GENERAL INFORMATION	64
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	23	Voting Procedures	64
AUDIT COMMITTEE REPORT	24	Voting by Plan Participants	65
AUDIT FEES	25	Important Notice Regarding the Availability of Proxy Materials	66
PROPOSAL 3: ADVISORY VOTE TO APPROVE THE COMPENSATION OF EXECUTIVES DISCLOSED IN THE PROXY STATEMENT	26	Householding Information	66
COMPENSATION COMMITTEE REPORT	27	Proxy Solicitation Costs	66

PROXY STATEMENT

SUMMARY

This proxy summary is intended to provide a broad overview of the items that you will find elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and we encourage you to read the entire Proxy Statement carefully before voting. We are first mailing this Proxy Statement and accompanying form of proxy to our stockholders on or about March 18, 2019.

References made below to “Ecolab,” “the Company,” “we,” “our,” or “us” are to Ecolab Inc.

Annual Meeting of Stockholders

Date and Time: Thursday, May 2, 2019, at 9:30 a.m.

Location: Ecolab Global Headquarters, 1 Ecolab Place, Saint Paul, Minnesota 55102

Record Date: March 5, 2019

Meeting Agenda and Items of Business



Proposal		Board’s Voting Recommendation	Page Reference
1.	Elect as directors to a one-year term ending in 2020 the 13 nominees named in this Proxy Statement	FOR	3
2.	Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the current year ending December 31, 2019	FOR	23
3.	Approve, on an advisory basis, the compensation of executives disclosed in the Proxy Statement	FOR	26
4.	Consider and vote on a stockholder proposal requesting an independent board chair, if properly presented	AGAINST	60

Election of Directors


Name of Director Nominee	Age	Years of Service	Occupation
Non-Independent Directors
Douglas M. Baker, Jr.	60	15	Chairman of the Board and Chief Executive Officer, Ecolab Inc.
Independent Directors
Shari L. Ballard	52	(1)	Advisor, Best Buy Co., Inc.
Barbara J. Beck	58	11	Chief Executive Officer, Learning Care Group, Inc.
Leslie S. Biller	71	21	Chief Executive Officer, Harborview Capital
Jeffrey M. Ettinger	60	4	Retired Chairman and Chief Executive Officer, Hormel Foods Corporation
Arthur J. Higgins	63	9	President and Chief Executive Officer, Assertio Therapeutics, Inc.
Michael Larson	59	7	Chief investment officer to William H. Gates III
David W. MacLennan	59	4	Chairman and Chief Executive Officer, Cargill, Incorporated
Tracy B. McKibben	49	4	Founder and Chief Executive Officer, MAC Energy Advisors LLC
Lionel L. Nowell, III	64	(1)	Former Senior Vice President and Treasurer, PepsiCo, Inc.
Victoria J. Reich	61	9	Former Senior Vice President and Chief Financial Officer, Essendant Inc.
Suzanne M. Vautrinot	59	5	President, Kilovolt Consulting Inc.
John J. Zillmer	63	13	Retired President and Chief Executive Officer, Univar Inc.

(1) Ms. Ballard and Mr. Nowell started serving on the Board effective December 4, 2018.

The Board of Directors of Ecolab Inc. is asking you to elect 13 director nominees. The table above provides summary information about the director nominees. A nominee will only be elected if the number of votes cast for the nominee’s election is greater than the number of votes cast against the nominee. For more information, see page 3.


ECOLAB - 2019 Proxy Statement	1

Ratification of Independent Accountants

The Board of Directors is asking you to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm to audit our consolidated financial statements for the year ending December 31, 2019. For more information, see page 23.

Advisory Vote to Approve Executive Compensation

The Board of Directors is asking you to approve, on an advisory basis, the compensation of our named executive officers as disclosed in this Proxy Statement. For more information, see page 26.

Stockholder Proposal Requesting an Independent Board Chair

The Board of Directors recommends that you vote AGAINST a stockholder proposal requesting an independent board chair, if properly presented. For more information, see page 60.

Summary of Compensation Practices

How did we perform?		✔ New product introductions, new business wins and improved operating efficiency drove higher adjusted sales and earnings growth
		✔ Increased pricing to offset higher delivered product costs
		✔ Raised goal for its efficiency initiative to simplify and automate processes and tasks, reduce complexity and management layers, consolidate facilities and focus on key long- term growth areas by leveraging technology and structural improvements
	
What did we change for 2018?		✔ More than 92% of shareholders voted in favor of our Say-on-Pay, so the Compensation Committee took this favorable support into account in deciding to retain the overall structure of the current program
What did we change for 2018?		✔ In connection with tax law changes, the Compensation Committee granted 2018 annual cash incentives under an incentive plan not designed to satisfy historical 162(m) performance exception requirements
	
How do we determine pay?		✔ Our executive compensation program is designed to be market-competitive in order to attract, motivate and retain our executives in a manner that is in the best interests of our stockholders
		✔ Our executive compensation program is further designed to reinforce and complement ethical and sustainable management practices, promote sound risk management and align management interests (such as sustainable long-term growth) with those of our stockholders
		✔ Our philosophy is to position base salary, annual cash incentives, and long-term equity incentives in the median range of our competitive market, adjusted for the Company’s size
	
How did we pay our NEOs?		✔ Fiscal year 2018 base salaries and annual incentives for the NEOs relative to the 20-company Comparison Group aligned with relative Company performance
		✔ Base salaries for fiscal year 2018 were increased between 2.8% and 6.5% and reflect each NEO's competitive market, scope of responsibility, individual performance, and time in position
		✔ 2018 annual cash incentive payout for the CEO was 119% of target, and ranged from 111% to 134% of target for the other NEOs based on achievement of Company and business unit performance
		✔ 2016 to 2018 performance-based restricted stock units ("PBRSUs") paid out at 100% of target (maximum payout) based on achievement of Company performance
		✔ Long-term equity incentives granted at target levels using a portfolio of stock options and PBRSUs
		✔ PBRSUs vest based on average annual adjusted ROIC goals over a three-year performance period
		✔ No excessive perquisites for any of our NEOs

For more information on our compensation practices, see page 30.

Corporate Governance Highlights

How do we address risk and governance?		✔ Provide an appropriate balance of short- and long-term compensation, with payouts based on the Company's achievement of certain financial metrics and specific business area objectives
		✔ Follow practices that promote good governance and serve the interests of our stockholders, with maximum payout caps for annual cash incentives and long-term performance awards, and policies on clawbacks, anti-pledging, anti-hedging, insider trading, and stock ownership
		✔ Solicit "say-on-pay" shareholder vote annually at shareholder meeting

For more information on our corporate governance, see page 8.



2	ECOLAB - 2019 Proxy Statement

PROPOSAL 1: ELECTION OF DIRECTORS

Our Board of Directors currently consists of 14 members. Mr. Chazen will be retiring from the Board as of the 2019 Annual Meeting. Accordingly, the Board has taken action to reduce the size of the Board to 13 members effective immediately prior to the time of the 2019 Annual Meeting. The 13 nominees, if elected, will serve a one-year term ending as of the 2020 Annual Meeting expected to be held on May 7, 2020.

Pursuant to the recommendation of the Governance Committee, Mses. Ballard, Beck, McKibben, Reich and Vautrinot and Messrs. Baker, Biller, Ettinger, Higgins, Larson, MacLennan, Nowell and Zillmer were nominated for election as Directors. The Board of Directors has no reason to believe that any of the named nominees is not available or will not serve if elected.

Board of Directors’ Recommendation – The Board of Directors recommends a vote FOR the election of the 13 nominees named in this Proxy Statement. Unless a contrary choice is specified, proxies solicited by our Board of Directors will be voted FOR each of the nominees named in this Proxy Statement.

The following information with regard to business experience, qualifications and directorships has been furnished by the respective director nominees or obtained from our records.

Nominees for Election to the Board of Directors (Term Ending in May 2020)

DOUGLAS M. BAKER, JR.

	Years of Service: 15 Age: 60 Board Committees: Safety, Health and Environment	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 other public companies, Mr. Baker also has extensive corporate governance experience. Other directorships held during the past five years Lead Director of Target Corporation. Formerly a 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 of

SHARI L. BALLARD

	Years of Service: 4 months Age: 52 Board Committees: Audit Safety, Health and Environment	at Best Buy, Ms. Ballard also held roles as President, U.S. Retail from 2014 to 2017; Chief Human Resources Officer from 2013 to 2016; President – International from 2012 to 2014, with responsibility for business in Canada, China, Europe and Mexico; and President – Americas from 2010 to 2012, with responsibility for business in the U.S. and Mexico. Qualifications Ms. Ballard is a seasoned executive with deep retail experience. She brings significant business group management and e-commerce experience, as well as extensive talent management experience for large scale, geographically distributed organizations. In addition to her corporate functional experience in human resources, call centers and real estate, she has held several international roles, which included responsibility for transformation efforts in Canada, China, Europe and Mexico. Her roles at Best Buy have also given her extensive background and practical skills in change management during a remarkable turnaround period at Best Buy. Other directorships held during the past five years Formerly a director of Delhaize Group, a Belgium-based food retailer, from 2012 until its 2015 merger with Ahold to form Ahold Delhaize.
Biography Advisor to Best Buy Co., Inc., a consumer electronics products and services retailer. Director of Ecolab since 2018. Member of the Audit and Safety, Health and Environment Committees. Ms. Ballard currently is an Advisor at Best Buy Co., Inc. after recently transitioning from her position as Senior Executive Vice President and President, Multi-Channel Retail that she held from March 2017 to July 2018, with responsibility for all U.S. Best Buy stores, e-commerce, customer call centers, Best Buy Mexico and real estate strategy. During her 25-year career


ECOLAB - 2019 Proxy Statement	3

PROPOSAL 1: ELECTION OF DIRECTORS

BARBARA J. BECK

	Years of Service: 11 Age: 58 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: 21 Age: 71 Board Committees: Finance Compensation	Corporation from February 1997 until its merger 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

JEFFREY M. ETTINGER

	Years of Service: 4 Age: 60 Lead Director Board Committees: Governance Compensation	from 2004 to 2015. Prior to being named President of Hormel Foods, Mr. 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. From his experience 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 The Toro Company. Formerly a director of Hormel Foods Corporation.
Biography Retired Chairman of the Board and Chief Executive Officer of Hormel Foods Corporation, a processor and marketer of meat and food products. Director of Ecolab since 2015. Lead Director, Chair of the Governance Committee and member of the Compensation Committee. During his 28-year career at Hormel, Mr. Ettinger held the offices of Chairman from 2006 to 2017, Chief Executive Officer from 2006 to 2016 and President



4	ECOLAB - 2019 Proxy Statement

PROPOSAL 1: ELECTION OF DIRECTORS

ARTHUR J. HIGGINS

	Years of Service: 9 Age: 63 Board Committees: Safety, Health and Environment Compensation	including serving as President of the Pharmaceutical Products Division from 1998 to 2001. He is a past member of the Board of Directors of the Pharmaceutical 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 Assertio Therapeutics, Inc. and Zimmer Biomet Holdings, Inc. Formerly a director of Endo International plc and Resverlogix Corp.
Biography President and Chief Executive Officer and member of the Board of Directors of Assertio Therapeutics, Inc. (formerly Depomed Inc.), a specialty pharmaceutical company. Director of Ecolab since 2010. Vice Chair of the Safety, Health and Environment Committee and member of the Compensation Committee. Prior to joining Assertio Therapeutics in March 2017, Mr. Higgins served as Senior Advisor to Blackstone Healthcare Partners, the dedicated healthcare team of The Blackstone Group from May 2010 to March 2017. He previously served at Bayer HealthCare AG as Chairman of the Board of Management from January 2006 to May 2010 and Chairman of the Executive Committee from July 2004 to May 2010. Prior to that time, Mr. Higgins held the offices of Chairman, President and Chief Executive Officer of Enzon Pharmaceuticals, Inc. from 2001 until 2004. Prior to joining Enzon Pharmaceuticals, Mr. Higgins spent 14 years with Abbott Laboratories, holding several executive leadership positions,

MICHAEL LARSON

	Years of Service: 7 Age: 59 Board Committees: Finance Safety, Health and Environment	Mr. 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 Republic Services, Inc. and Fomento Economico Mexicano, 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 AutoNation, Inc. 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

DAVID W. MACLENNAN

	Years of Service: 4 Age: 59 Board Committees: Audit Governance	Mr. MacLennan has served as Chairman of the Board of Cargill since 2015 and as Chief Executive Officer since 2013. He held the offices of Chief Operating and President from 2011 until his appointment as Chief Executive Officer in 2013. Prior to these roles, Mr. MacLennan held several other 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 Director of Cargill, Incorporated. Formerly a director of C.H. Robinson Worldwide, Inc.
Biography Chairman and Chief Executive Officer of Cargill, Incorporated, a privately held company and world-leading producer and marketer of food, agricultural, financial, and industrial products and services. Director of Ecolab since 2015. Vice Chair of the Audit Committee and member of the Governance Committee.


ECOLAB - 2019 Proxy Statement	5

PROPOSAL 1: ELECTION OF DIRECTORS

TRACY B. MCKIBBEN

	Years of Service: 4 Age: 49 Board Committees: Audit Finance	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 Huntington Ingalls Industries, Inc. Formerly a director of GlassBridge Enterprises, Inc. and 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 Director of European Economic

LIONEL L. NOWELL, III

	Years of Service: 4 months Age: 64 Board Committees: Audit Finance	served as Senior Vice President, Strategy and Business Development at RJR Nabisco, Inc. and held various senior financial roles at the Pillsbury division of Diageo plc, including Chief Financial Officer of its Pillsbury North America, Pillsbury Foodservice and Häagen-Dazs divisions. Qualifications Mr. Nowell is a highly experienced board member, with extensive financial expertise and understanding of various regulatory environments through his service on the boards of several multinational corporations. With his more than 30 years of operational and financial management experience in the consumer products industry, including his service as the senior vice president and treasurer of a multi-national food and beverage company, Mr. Nowell brings to the Board strong leadership skills and extensive knowledge in the areas of strategy development and execution, corporate finance, credit and treasury, financial analysis and reporting, accounting and controls, capital markets, acquisition/divestiture negotiations, international business ventures, strategic planning and risk management. Other directorships held during the past five years Director of American Electric Power Company and Bank of America Corporation. Formerly a director of British American Tobacco plc, Darden Restaurants, Inc., HD Supply Holdings, Inc. and Reynolds American Inc.
Biography Former Senior Vice President and Treasurer of PepsiCo, Inc., a food and beverage company. Director of Ecolab since 2018. Member of the Audit and Finance Committees. Mr. Nowell currently serves on the board of American Electric Power Company since July 2004, where he is Chair of the Audit Committee and member of the Committee on Directors & Corporate Governance, the Executive Committee, the Finance Committee and the Policy Committee; and Bank of America Corporation since January 2013, as a member of the Audit and Corporate Governance Committees. Mr. Nowell retired in 2009 as Senior Vice President and Treasurer of PepsiCo, Inc. He was also formerly Chief Financial Officer of The Pepsi Bottling Group and Controller of PepsiCo, Inc. Prior to PepsiCo, he

VICTORIA J. REICH

	Years of Service: 9 Age: 61 Board Committees: Audit Safety, Health and Environment	executive with Brunswick Corporation, last serving as President - 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. Prior to joining Essendant, Ms. Reich spent ten years as an



6	ECOLAB - 2019 Proxy Statement

PROPOSAL 1: ELECTION OF DIRECTORS

SUZANNE M. VAUTRINOT

	Years of Service: 5 Age: 59 Board Committees: Compensation Finance	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, 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. She was inducted into the National Academy of Engineering in 2017. 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 of Kilovolt Consulting, Inc., a cyber security strategy and technology consulting firm. Retired Major General of the U.S. Air Force. Director of Ecolab since 2014. Member of the Compensation 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 and space operations. 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, Air Forces Cyber,

JOHN J. ZILLMER

	Years of Service: 13 Age: 63 Board Committees: Compensation Governance	Waste, Mr. Zillmer spent 30 years in the managed services 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 CSX Corporation have provided him with significant public company board experience. Other directorships held during the past five years Director of Veritiv Corp., Performance Food Group Company and CSX Corporation. Formerly a director of Reynolds American Inc.
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. 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


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CORPORATE GOVERNANCE

Corporate Governance Materials and Code of Conduct

Our Company is managed under the overall direction of our Board of Directors for the benefit of all stockholders. Written materials concerning policies of our Board of Directors, corporate governance principles and corporate ethics practices, including our Code of Conduct as last amended in 2012, are available on our website at www.investor.ecolab.com/corporate-governance.

We intend to promptly disclose on our website should there be any amendments to, or waivers by the Board of Directors of, the Code of Conduct.

Board Structure

Under our Corporate Governance Principles, the preferable size of the Board is between 11 and 15 members, in order to facilitate effective discussion and decision-making, adequate staffing of Board Committees, and a desired mix of diversified experience and background. Our Board of Directors currently consists of 14 members. As described on page 3 under Proposal 1: Election of Directors, 13 nominees, if elected, will serve a one-year term ending as of the 2020 Annual Meeting expected to be held on May 7, 2020.


BOARD DIVERSITY

Independent Other	Women Men	Diverse Other
AVERAGE BOARD TENURE: 7.3 YEARS
●●●●●	●●●●●	●●●●
0-4 years: 5	5-9 years: 5	10+ years: 4

Board Leadership Structure

Our Board of Directors is led by Douglas M. Baker, Jr., our Chairman, who is also our Chief Executive Officer. Mr. Baker has served as our Chief Executive Officer and as a director since 2004, and he was elected Chairman in 2006.

As stated in our Corporate Governance Principles, the Board believes that it is best not to have a fixed policy on whether the offices of Chairman and Chief Executive Officer are to be held by one person or two. In May 2018, the Board determined that its current board leadership structure remains appropriate and best serves the interests of stockholders at this time. In making that annual determination, the Board considered numerous factors, including the benefits to the decision-making process with a leader who is both Chairman and Chief Executive Officer; the significant operating experience and qualifications of Mr. Baker; the importance of deep Ecolab knowledge in exercising business judgment in leading the Board; the size and complexity of our business; the significant business experience and tenure of our directors; and the qualifications and role of our Lead Director.



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In accordance with our Corporate Governance Principles, the independent directors, after recommendation of the Governance Committee, re-appointed Jeffrey M. Ettinger as Lead Director in May 2018. As detailed in Mr. Ettinger’s biography and qualifications on page 4, Mr. Ettinger has extensive public company board experience. Mr. Ettinger also is independent and has considerable knowledge of our business. Specific responsibilities of the Lead Director, as enumerated in our Corporate Governance Principles, include:

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.

Mr. Baker works closely with Mr. Ettinger to ensure the smooth and effective operation of the Board.

Board Committees

Our By-Laws permit the Board of Directors to designate Committees, each comprised of three or more directors, to assist the Board in carrying out its duties. The Board annually reviews its Committee structure as well as the Charter and composition of each Committee and makes modifications as necessary. The Charters for the Board’s five standing Committees - Audit, Compensation, Finance, Governance and Safety, Health and Environment - were reviewed and approved by the Board in May 2018. The Charters of each of our Committees are available on our website at www.investor.ecolab.com/corporate-governance. The separately designated standing Audit Committee meets the requirements of Section 3(a)(58)(A) of the Exchange Act. The members of the Audit, Compensation and Governance Committees meet the “independence” and other requirements established by the rules and regulations of the SEC, the Internal Revenue Code of 1986, as amended (the “IRS Code”), the New York Stock Exchange and our Board, as applicable.

Audit Committee – The Audit Committee members are Mses. Ballard, McKibben and Reich (Chair) and Messrs. Chazen, MacLennan (Vice Chair) and Nowell. The Committee met six times during 2018. 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 2018 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 2018 earnings announcement prior to dissemination of that press release and it being furnished to the SEC on a Form 8-K in February 2019. The Form 10-K for the year ended December 31, 2018, was also discussed by the Committee at its February 2019 meeting.

The Committee fulfills, and assists the Board of Directors’ oversight of, its responsibilities to monitor: (i) the quality and integrity of our consolidated financial statements and management’s financial control of operations; (ii) the qualifications, independence and performance of the independent accountants; (iii) the role and performance of the internal audit function; (iv) our compliance with legal and regulatory requirements; and (v) our cybersecurity program and related risks. The Committee meets regularly and privately with our management and internal auditors and with our independent registered public accounting firm, PricewaterhouseCoopers LLP.

A report of the Audit Committee is found under the heading “Audit Committee Report” at page 24.

The Board of Directors has determined that each member of the Audit Committee is “independent” and meets the independence and other requirements of Sections 303A.02 and 303A.07 of the listing standards of the New York Stock Exchange, and Rule 10A-3 under the Exchange Act, as well as of our Board. The Board has determined that each of Mses. McKibben and Reich and Messrs. MacLennan and Nowell is an “audit committee financial expert” under the SEC’s rules and should be so designated. Further, the Board has determined, in its business judgment, that each of Mses. McKibben and Reich and Messrs. MacLennan and Nowell has “accounting and related financial management expertise” and that each member of the Audit Committee is “financially literate” under the New York Stock Exchange’s listing standards.


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CORPORATE GOVERNANCE

Compensation Committee – The Compensation Committee members are Ms. Vautrinot and Messrs. Biller (Vice Chair), Ettinger, Higgins and Zillmer (Chair). The Committee met five times during 2018. 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.

To assist the Committee in the design and review of the executive and director compensation programs, the Committee has selected and retained Frederic W. Cook & Co., Inc. (“FW Cook”), an independent compensation consulting firm, which reports directly to the Committee. As requested from time to time on behalf of the Committee, FW Cook provides the Committee with market data regarding various components of executive and director compensation, reviews the methodology on which compensation is based and designed, and informs the Committee of market trends in executive and director compensation. FW Cook performs no services for us other than those performed on behalf of the Committee.

The Committee has considered the independence of FW Cook in light of SEC rules and New York Stock Exchange listing standards. In connection with this process, the Committee has reviewed, among other items, a letter from FW Cook addressing the independence of FW Cook and the members of the consulting team serving the Committee, including the following factors: (i) other services provided to us by FW Cook; (ii) fees paid by us as a percentage of FW Cook’s total revenue; (iii) policies or procedures of FW Cook that are designed to prevent conflicts of interest; (iv) any business or personal relationships between the senior advisor of the consulting team and any member of the Committee; (v) any Ecolab stock owned by the senior advisor; and (vi) any business or personal relationships between our executive officers and the senior advisor. The Committee discussed these considerations and concluded that the work performed by FW Cook and its senior advisor involved in the engagement did not raise any conflict of interest.

The Board of Directors has determined that each member of the Compensation Committee meets the independence requirements of the SEC (including Rule 16b-3), the New York Stock Exchange, and Section 162(m) of the IRS Code and of our Board.

Finance Committee – The current Finance Committee members are Mses. McKibben and Vautrinot and Messrs. Biller (Chair), Chazen, Larson (Vice Chair) and Nowell. The Committee met five times during 2018. 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 Mses. Beck and Reich and Messrs. Ettinger (Chair), MacLennan and Zillmer. The Committee met six times during 2018. Certain functions of the Governance Committee are described starting on page 13 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



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CORPORATE GOVERNANCE

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.

The Board of Directors has determined that each member of the Governance Committee meets the “independence” requirements of the SEC, the New York Stock Exchange and of our Board.

Safety, Health and Environment Committee – The members of the Safety, Health and Environment Committee are Mses. Ballard and Beck (Chair) and Messrs. Baker, Higgins (Vice Chair) and Larson. The Committee met four times during 2018. 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 our SHE practices; (iii) review the implementation of our SHE practices and related compliance with applicable policies; and (iv) review our Sustainability Report.

Board’s Role in Risk Oversight

The Board of Directors, in exercising its overall responsibility to direct the business and affairs of the Company, has established various processes and procedures with respect to risk management. First, annually as a core agenda item of the full Board, management presents to the Board a comprehensive and detailed risk assessment of the Company after following a vigorous enterprise risk review and analysis. Pursuant to the risk assessment, the Company has categorized the most relevant risks as follows: strategic, operating, reporting and compliance. As part of the annual risk assessment, the Board determines whether any of the Company’s overall risk management processes or control procedures requires modification or enhancement.

Strategic risk, which relates to the Company properly defining and achieving its high-level goals and mission, and operating risk, which relates to the effective and efficient use of resources and pursuit of opportunities, are regularly monitored and managed by the full Board through the Board’s regular and consistent review of the Company’s operating performance and strategic plan. For example, at each of the Board’s five regularly scheduled meetings throughout the year, management provided the Board presentations on the Company’s various business units as well as the Company’s performance as a whole. Agenda items were included for significant developments as appropriate, for example, significant acquisitions, important market developments and senior management succession. Pursuant to the Board’s established monitoring procedures, Board approval is required for the Company’s strategic plan and annual plan which are reported on by management at each Board meeting. Similarly, significant transactions, such as acquisitions and financings, are brought to the Board for approval.

Reporting risk, which relates to the reliability of the Company’s financial reporting, and compliance risk, which relates to the Company’s compliance with applicable laws and regulations, are primarily overseen by the Audit Committee. The Audit Committee meets at least six times per year and, pursuant to its charter and core agendas, receives input directly from management as well as from the Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP, regarding the Company’s financial reporting process, internal controls and public filings. The Committee also receives regular updates from the Company’s General Counsel and the Chief Compliance Officer regarding any Code of Conduct issues or legal compliance concerns and annually receives a summary of all Code of Conduct incidents during the preceding year from the Chief Compliance Officer. See “Board Committees – Audit Committee” on page 9 for further information on how the Audit Committee monitors, and assists the Board of Directors’ oversight of, reporting and compliance risks.

The Company believes that its leadership structure, discussed in detail above, supports the risk oversight function of the Board. While the Company has a combined Chairman of the Board and Chief Executive Officer, our Lead Director has substantial and clearly delineated authority pursuant to our Corporate Governance Principles, strong directors chair the various Board Committees involved in risk oversight, there is open communication between management and directors, and all directors are actively involved in the risk oversight function.


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CORPORATE GOVERNANCE

Communications with Directors

Our stakeholders and other interested parties, including our stockholders and employees, can send substantive communications to our Board using the following methods published on our website at www.investor.ecolab.com/corporate-governance:

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.

All substantive communications regarding governance matters or potential accounting, control, compliance or auditing irregularities are promptly relayed or brought to the attention of the Lead Director or Chair of the Audit Committee following review by our management. Communications not requiring the substantive attention of our Board, such as employment inquiries, sales solicitations, questions about our products and other such matters, are handled directly by our management. In such instances, we respond to the communicating party on behalf of the Board. Nonetheless, our management periodically updates the Board on all of the on-line communications received, whether or not our management believes they are substantive. In addition to on-line communications, interested parties may direct correspondence to our Board of Directors, our Board Committees or to individual directors at our headquarters address, referenced on page 1 of this Proxy Statement.

Future Stockholder Proposals and Director Nomination Process

Any stockholder proposal, other than those for director nominations, must comply with advance notice procedures set forth in Article II, Section 4 of our By-Laws. As described in more detail below, stockholder proposals for director nominations must comply with 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 matter such stockholder proposes to bring before the Annual Meeting a brief description of the business desired to be brought before the Annual Meeting and the reasons for conducting such business at the Annual Meeting and, as to the stockholder giving the notice and any Stockholder Associated Person (i.e., any person acting in concert, directly or indirectly, with such stockholder and any person controlling, controlled by or under common control with such stockholder): (i) the name and record address of such person, (ii) the class or series and the number of shares beneficially owned by the stockholder, (iii) the nominee holder for, and number of, shares owned beneficially but not of record by such person, (iv) whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of, or any other agreement or arrangement has been made, the effect or intent of which is to mitigate loss to or manage risk or benefit of share price changes for, or to increase or decrease the voting power of, such person with respect to any share of stock of the Company, (v) to the extent known, the name and address of any other stockholder supporting the proposal, (vi) a description of all arrangements or understandings between or among such persons in connection with the proposal and any material interest in such proposal, and (vii) a representation by the stockholder that he or she intends to appear at the Annual Meeting to present the business. 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. 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 www.investor.ecolab.com/corporate-governance. If the presiding Chairperson of the Annual Meeting of Stockholders determines that business, or a nomination, was not brought before the meeting in accordance with the By-Law provisions, that business will not be transacted or the defective nomination will not be accepted.

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 7, 2020, must be received by the Corporate Secretary at our headquarters address, referenced on page 1 of this Proxy Statement, no later than November 19, 2019.

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 7, 2020, the written notice must be received between December 4, 2019 and January 3, 2020, inclusive.



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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.

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 Company;

(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,


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CORPORATE GOVERNANCE

(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:

(i)

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,

(ii)

that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such nominee, or

(iii)

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 www.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.

In terms of our principles for composition of the Board generally, and qualifications for director nominees specifically, we refer you to our Corporate Governance Principles, which can be found on our website at www.investor.ecolab.com/corporate-governance. Under these provisions, for example:

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.



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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.

All directors are encouraged to submit to the Governance Committee the name of any person deemed qualified to serve on the Board, together with information on the candidate’s qualifications. The Governance Committee screens and submits to the full Board the names and biographical information of those persons considered by the Committee to be viable candidates for election as directors. The same evaluation process and criteria are used by the Committee: (i) for recommendations for director candidates submitted by stockholders in accordance with our Restated Certificate of Incorporation and By-Laws, and (ii) for recommendations submitted by any other source, such as a director or a third-party search firm.

Other criteria relevant to service as a director of our Company are also set forth in our Corporate Governance Principles.

New Director Selection Process

With the resignation of Mr. Carl M. Casale in August 2018 and the resignation of Mr. Stephen I. Chazen effective in May 2019 in accordance with our Corporate Governance Principles upon reaching age 72, the Governance Committee considered the nomination of new candidates to serve on our Board of Directors. As provided in our Corporate Governance Principles, the Governance Committee focuses on candidates with significant organizational leadership experience, including individuals who were chief executive officers or otherwise led large and complex organizations, as well as qualified candidates with diverse backgrounds and experience relevant to our business. Ms. Shari L. Ballard was identified by a third-party search firm, and Mr. Lionel L. Nowell, III was identified by one of the independent directors. Both Ms. Ballard and Mr. Nowell were interviewed by our Chairman and Chief Executive Officer, the Lead Director and Governance Committee Chair and other members of the Board of Directors. Following this process and after a review by the Governance Committee and the Board of Directors of their qualifications, Ms. Ballard and Mr. Nowell were appointed to the Board in December 2018 for a term expiring at this year's Annual Meeting. Ms. Ballard and Mr. Nowell were also included by the Board of Directors on the slate of nominees for election for a term expiring at the 2020 Annual Meeting, and, as such, they are included in the group of nominees for election at this Annual Meeting. See Ms. Ballard's and Mr. Nowell's biographies on pages 3 and 6, respectively.

Compensation Risk Analysis

The Compensation Committee has established an annual process and criteria for assessing risk in our compensation programs and has directed management to apply that process and criteria to all compensation plans and practices that have the potential to give rise to behavior that creates risks that are reasonably likely to have a material adverse effect on the Company and to report the results to the Compensation Committee. As part of the process in 2018, the Company took the following steps to complete the assessment: (1) we agreed on a materiality framework for determining which compensation plans and practices to review; (2) we inventoried plans and practices that fell within the materiality framework; (3) we reviewed the identified plans and practices against our evaluation framework established in consultation with the Compensation Committee’s independent compensation consultant, FW Cook; (4) we identified factors, processes or procedures in place which may mitigate any risks in identified plans and practices; and (5) the Compensation Committee reviewed the results of the analysis with FW Cook. Our risk assessment revealed that our compensation programs do not create risks that are reasonably likely to have a material adverse effect on the Company. In making this determination, we took into account the compensation mix for our employees as well as various risk control and mitigation features of our programs, including varied and balanced performance targets, review procedures for incentive pay calculations, appropriate incentive payout caps, the Company’s rights to cancel incentive awards for employee misconduct, discretionary authority of the Compensation Committee to reduce award pay-outs, internal controls around customer and distributor pricing and contract terms, our stock ownership guidelines, prohibition on hedging Company stock and our compensation recovery (“clawback”) policy.

Director Attendance

There were six meetings of the Board of Directors during the year ended December 31, 2018. Each incumbent director attended at least 93% of all Board meetings and meetings held by all Committees on which he or she served. Overall attendance at Board and Committee meetings was 99%. Directors are expected, but are not required, to attend our Annual Meeting of Stockholders. All of the directors then serving who were continuing to serve following the meeting attended last year’s Annual Meeting.


ECOLAB - 2019 Proxy Statement	15

CORPORATE GOVERNANCE

Compensation Committee Interlocks and Insider Participation

The Compensation Committee is comprised of five non-employee, independent directors: Ms. Vautrinot and Messrs. Biller (Vice Chair), Ettinger, Higgins, and Zillmer (Chair). No member of the Compensation Committee is or was formerly an officer or an employee of the Company or had any related person transaction required to be disclosed in which the Company was a participant during the last fiscal year. In addition, no executive officer of the Company serves on the compensation committee or board of directors of a company for which any of the Company’s directors serves as an executive officer.

DIRECTOR COMPENSATION FOR 2018

Director Compensation Table

The following table summarizes the compensation that our non-employee directors received during 2018.



Name	Fees Earned or Paid in Cash(1) ($)	Stock Awards(2) ($)	Option Awards(3) ($)	Total ($)
Shari L. Ballard(4)	9,130	8,750	0	17,880
Barbara J. Beck	125,000	115,000	62,676	302,676
Leslie S. Biller	125,000	115,000	62,676	302,676
Carl M. Casale(5)	70,760	67,812	62,676	201,248
Stephen I. Chazen	114,375	115,000	62,676	292,051
Jeffrey M. Ettinger	150,000	115,000	62,676	327,676
Arthur J. Higgins	110,000	115,000	62,676	287,676
Michael Larson	110,000	115,000	62,676	287,676
David W. MacLennan	120,000	115,000	62,676	297,676
Tracy B. McKibben	120,000	115,000	62,676	297,676
Lionel L. Nowell, III(4)	9,130	8,750	0	17,880
Victoria J. Reich	130,000	115,000	62,676	307,676
Suzanne M. Vautrinot	115,625	115,000	62,676	293,301
John J. Zillmer	130,000	115,000	62,676	307,676

(1)

Represents annual retainer of $110,000 (or a pro rata portion thereof) earned during 2018, 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 2018 is as follows: Ms. Beck, $125,000; Mr. Biller $125,000; Mr. Chazen, $60,000; and Mr. Higgins, $110,000.

(2)

Represents the crediting by the Company of $115,000 (or a pro rata portion thereof) to a deferred stock unit account under the 2001 Plan during 2018, 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 21.

(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 2018 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
05/03/2018	2.83%	6.15 years	23.12%	1.14%

As of December 31, 2018, the aggregate number of stock options held by each director named in the table above is as follows: Ms. Ballard, 0; Ms. Beck, 17,700; Mr. Biller, 31,600; Mr. Casale, 10,350; Mr. Chazen, 13,900; Mr. Ettinger, 8,300; Mr. Higgins, 17,700; Mr. Larson, 18,400; Mr. MacLennan, 7,100; Ms. McKibben, 8,700; Mr. Nowell, 0; Ms. Reich, 21,900; Ms. Vautrinot, 11,200; and Mr. Zillmer, 31,600.

(4)

Ms. Ballard and Mr. Nowell were each appointed to the Board effective December 4, 2018, and received a pro-rated portion of compensation for 2018.

(5)

Mr. Casale retired from the Board effective August 2, 2018, and received a pro-rated portion of compensation for 2018.



16	ECOLAB - 2019 Proxy Statement

DIRECTOR COMPENSATION FOR 2018

Summary

During 2018, members of the Board of Directors who are not employees of the Company were entitled to receive base annual compensation valued at $280,000 as follows:

An annual retainer of $110,000;

$115,000 annually in the form of stock units (which are described below); and

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

We also paid the following supplemental retainers to the Lead Director, committee chairs and members of the Audit Committee:



Director Role		Amount ($)
Lead Director		25,000
Audit Committee Chair		20,000
Compensation Committee Chair		20,000
Finance Committee Chair		15,000
Governance Committee Chair		15,000
Safety, Health and Environment Committee Chair		15,000
Audit Committee Member		10,000

The base annual compensation of $280,000 per year, excluding committee retainers, is within the median range of our competitive market, as is the total equity compensation of $170,000 comprising a portion of such base. For director compensation, we define our competitive market as a group of 20 comparison companies for compensation benchmarking and the median range as within 10% of the median for total annual director compensation. The companies comprising our comparison group are the same as the executive compensation comparison group and are set forth under the heading “Compensation Benchmarking” found under the Compensation Discussion and Analysis of this Proxy Statement at page 34.

All reasonable travel and other expenses incurred by directors on behalf of Ecolab were reimbursed.

The features of the 2001 Plan are as follows:

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 over 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.


ECOLAB - 2019 Proxy Statement	17

DIRECTOR COMPENSATION FOR 2018

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.

Stock Retention and Ownership Guidelines

We have in place stock retention and ownership guidelines to encourage our directors to accumulate a significant ownership stake so they are vested in maximizing long-term stockholder returns. Our guidelines provide that our directors own Company stock with a market value of at least five times the annual retainer. Until the stock ownership guideline is met, the director is expected to retain 100% of all after-tax profit shares from stock option exercises. For purposes of complying with our guidelines, stock is not considered owned if subject to an unexercised stock option. Shares owned outright, legally or beneficially, by a director or his or her immediate family members residing in the same household and deferred stock units in the director’s deferral plan count towards meeting the guidelines. Our directors may not pledge shares or enter into any risk hedging arrangements with respect to Company stock. Our directors are in compliance with our guidelines by either having achieved the ownership guideline or, if the guideline is not yet achieved, by retaining 100% of all after-tax profit shares from any stock option exercises.

DIRECTOR INDEPENDENCE STANDARDS AND DETERMINATIONS

“Independence” Standards

Pursuant to the Board of Directors’ policy, a director is not independent if:

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.

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).

(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.

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.

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.

The Board of Directors’ independence policy is also available on our website at www.investor.ecolab.com/corporate-governance.

“Independence” Determinations

In February 2019, the Governance Committee undertook a review of director independence by examining the nature and magnitude of transactions and relationships during 2018, 2017 and 2016 between each director serving during 2018 or director nominee, as the case may be (or any member of his or her immediate family or the company he or she is employed by and its subsidiaries and affiliates), and the Company, its subsidiaries and affiliates. Appropriate scrutiny is given to any situation which could be reasonably considered a material relationship. Both the existence and nature of the relationship are considered. The relationships include, among others, commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships. The Company also endeavors to identify, quantify and evaluate ordinary course



18	ECOLAB - 2019 Proxy Statement

DIRECTOR INDEPENDENCE STANDARDS AND DETERMINATIONS

commercial transactions between the Company and any company that employs a director or director nominee, including subsidiaries and affiliates of the company. In this regard, the Board’s Governance Committee has reviewed the following transactions and determined that the transactions do not exceed the Board’s categorical “independence” standards described above or adversely affect the director for “independence” status as the combined impact of the transactions is immaterial to the Company and the respective organizations.

Mr. MacLennan serves as Chairman and Chief Executive Officer of Cargill, Incorporated. During 2018, Ecolab’s sales to Cargill and its affiliates were approximately $26.4 million, or less than 0.09% of Cargill’s revenues, and Ecolab’s purchases from Cargill and its affiliates were approximately $6.2 million, or less than 0.02% of Cargill’s revenues. Ecolab believes all sales to 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.

Based on the review of the Governance Committee, the Board of Directors has determined that the following directors, including those on the slate of nominees for election to the Board at this year’s Annual Meeting (other than Mr. Baker), are, and have been since January 1, 2018, or the date which they became a director of the Company if later than January 1, 2018, independent in accordance with the listing standards of the New York Stock Exchange, the rules and regulations of the SEC, applicable law, and the Board’s “independence” policy: Shari L. Ballard, Barbara J. Beck, Leslie S. Biller, Carl M. Casale, Stephen I. Chazen, Jeffrey M. Ettinger, Arthur J. Higgins, Michael Larson, David W. MacLennan, Tracy B. McKibben, Lionel L. Nowell, III, Victoria J. Reich, Suzanne M. Vautrinot and John J. Zillmer.

The Board determined that Douglas M. Baker, Jr. is not “independent,” due to his status as the current Chief Executive Officer.

RELATED-PERSON TRANSACTIONS

The Governance Committee of the Board of Directors is responsible for reviewing, approving or ratifying transactions in excess of $120,000 with the Company’s executive officers or directors, including their immediate family members, or any greater than 5% stockholder known to us. Our practices and procedures for identifying transactions with related persons are located in the charter of the Governance Committee. The Governance Committee considers the related person’s relationship to the Company and interest in the transaction; the material facts of the transaction, including the proposed aggregate value of such transaction; the benefits to the Company of the proposed related-person transaction; if applicable, the availability of other sources of comparable products or services; an assessment of whether the proposed related-person transaction is on terms that are comparable to the terms available to an unrelated third party or to employees; and such other factors and information as the Governance Committee may deem appropriate. The Governance Committee determined that there were no such transactions with related persons during 2018, nor any currently anticipated transactions.


ECOLAB - 2019 Proxy Statement	19

SECURITY OWNERSHIP

Certain Beneficial Owners

The following table sets forth information as to entities which have reported to the Securities and Exchange Commission (“SEC”) or have advised us that they are a “beneficial owner,” as defined by the SEC’s rules and regulations, of more than 5% of our outstanding Common Stock.

Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percent of Class (1)
Common	William H. Gates III	35,051,980(2)	12.2%
	One Microsoft Way
	Redmond, WA 98052
Common	The Vanguard Group	22,310,036(3)	7.7%
	100 Vanguard Blvd.
	Malvern, PA 19355
Common	BlackRock, Inc.	16,641,721(4)	5.8%
	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 5, 2019.

(2)

This information is based on Amendment No. 6 to the Schedule 13D filed jointly with the SEC on March 9, 2018 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 16, 2018. Mr. Gates reports that he has sole power to vote or direct the vote, and to dispose or to direct the disposition, of 30,685,554 shares of Ecolab Common Stock beneficially owned by Cascade, as the sole member of such entity. Additionally, Amendment No. 6 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, 4,366,426 shares of Ecolab Common Stock beneficially owned by the Trust, as co-trustees of such entity.

(3)

This information is based on Amendment No. 6 to the Schedule 13G filed on February 11, 2019 by The Vanguard Group, Inc., which we refer to as Vanguard. Vanguard reports that, as of December 31, 2018, they have sole power to vote or direct the vote of 304,544 shares, shared power to vote or direct the vote of 77,911 shares, sole power to dispose or to direct the disposition of 21,934,725 shares and shared power to dispose or direct the disposition of 375,311 shares of Ecolab Common Stock.

(4)

This information is based on Amendment No. 4 to the Schedule 13G filed on February 4, 2019 by BlackRock, Inc. (“BlackRock”). BlackRock reports that, as of December 31, 2018, they have sole power to vote or direct the vote of 14,161,659 shares, and sole power to dispose or to direct the disposition of 16,641,721 shares of Ecolab Common Stock.



20	ECOLAB - 2019 Proxy Statement

SECURITY OWNERSHIP

Executive Officers and Directors

In general, “beneficial ownership” includes those shares of our Common Stock which a director or executive officer has the power to vote or transfer, as well as stock options that are exercisable currently or within 60 days and stock underlying stock units that may be acquired within 60 days. On March 5, 2019, our current executive officers and directors beneficially owned, in the aggregate, 4,440,917 shares of Common Stock constituting approximately 1.5% of our shares outstanding. As required by SEC disclosure rules, “shares outstanding” for this purpose includes options exercisable within 60 days and stock underlying stock units that may be acquired within 60 days by such executive officers and directors. The detail of beneficial ownership is set forth in the following table.


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)	1,787,762	(1)(2)(4)	*
Daniel J. Schmechel (Chief Financial Officer)	349,459	(1)(2)	*
Thomas W. Handley	400,149	(1)(2)(4)	*
Darrell R. Brown	74,266	(2)	*
Timothy P. Mulhere	188,690	(1)(2)	*
Directors
Shari L. Ballard	60	(3)	*
Barbara J. Beck	41,828	(2)(3)	*
Leslie S. Biller	85,263	(2)(3)	*
Stephen I. Chazen	26,264	(2)(3)	*
Jeffrey M. Ettinger	20,315	(2)(3)	*
Arthur J. Higgins	35,402	(2)(3)	*
Michael Larson	23,991	(2)(3)(5)	* (5)
David W. MacLennan	17,055	(2)(3)(4)	*
Tracy B. McKibben	11,925	(2)(3)	*
Lionel L. Nowell, III	60	(3)	*
Victoria J. Reich	41,168	(2)(3)	*
Suzanne M. Vautrinot	15,149	(2)(3)	*
John J. Zillmer	55,636	(2)(3)	*
Directors and Executive Officers as a Group (29 persons)	4,440,917	(4)(5)	1.52% (4)(5)

* Indicates beneficial ownership of less than 1% of our outstanding Common Stock.

(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, 10,281; Mr. Schmechel, 5,283; Mr. Handley, 1,045; and Mr. Mulhere, 3,408.

(2)

Includes the following shares which could be purchased under Company-granted stock options within 60 days from March 5, 2019 including, in the case of retirement-eligible officers, options vesting upon retirement from the Company: Mr. Baker, 1,044,046; Mr. Schmechel, 182,936; Mr. Handley, 248,747; Mr. Brown, 63,925; Mr. Mulhere, 160,524; Ms. Beck, 17,700; Mr. Biller, 26,400; Mr. Chazen, 13,900; Mr. Ettinger, 8,300; Mr. Higgins, 17,700; Mr. Larson, 18,400; Mr. MacLennan, 7,100; Ms. McKibben, 8,700; Ms. Reich, 21,900; Ms. Vautrinot, 11,200; and Mr. Zillmer, 26,400.

(3)

Includes the following interests in stock units under our 2001 Non-Employee Director Stock Option and Deferred Compensation Plan: Ms. Ballard, 60; Ms. Beck, 24,128; Mr. Biller, 37,037; Mr. Chazen, 7,364; Mr. Ettinger, 5,615; Mr. Higgins, 17,702; Mr. Larson, 5,591; Mr. MacLennan, 2,520; Ms. McKibben, 3,225; Mr. Nowell, 60; Ms. Reich, 18,268; Ms. Vautrinot, 3,949; and Mr. Zillmer, 10,736. 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 7,050 shares held by or on behalf of family members of certain directors or executive officers; 10,000 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; 145,350 shares of Mr. Baker, 14,806 shares of Mr. Handley, and 7,435 shares of Mr. MacLennan held in trusts over which they or an immediate family member have voting authority and/or power of disposition; 35,114 shares held for executive officers in Company-sponsored employee benefit plans as of the last plan reports; and 2,989,435 shares to which these persons have the right to acquire beneficial ownership within 60 days of March 5, 2019, 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 may be deemed to have shared voting and investment power with respect to 30,685,554 shares of Ecolab Common Stock held by Cascade, and as the chief investment officer for Mr. Gates, he may be deemed to have voting and investment power with respect to 4,366,426 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.


ECOLAB - 2019 Proxy Statement	21

SECURITY OWNERSHIP

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the Company’s executive officers and directors, and persons who own more than ten percent of a registered class of the Company’s equity securities, to file with the SEC reports on ownership of Company securities and changes in reported ownership. As a practical matter, Company personnel assist executive officers and directors by monitoring transactions and completing and filing Section 16 reports (SEC Forms 3, 4 and 5) on their behalf based upon company records and information provided to us.

Based solely on a review of Section 16 reports and on written representations from reporting persons, the Company believes that during the fiscal year ended December 31, 2018 the Company’s executive officers, directors and greater than ten percent owners timely filed all reports they were required to file under Section 16(a), except that with respect to Mr. Baker, one gift was not reported on a Form 4 or a Form 5. This transaction was subsequently reported for Mr. Baker promptly upon discovery of the omission.



22	ECOLAB - 2019 Proxy Statement

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

The Audit Committee of the Board of Directors has appointed PricewaterhouseCoopers LLP (“PwC”) as our independent registered public accounting firm to audit our consolidated financial statements for the year ending December 31, 2019 and to perform other appropriate services. Representatives of PwC are expected to be present at our Annual Meeting of Stockholders. They will have an opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.

PwC has provided professional services to the Company in 2018, the aggregate fees and expenses of which are reported at page 25.

Board of Directors’ Recommendation – The Board of Directors recommends that the stockholders vote FOR the ratification of the appointment of PwC as our independent registered public accounting firm for the year ending December 31, 2019. Under the laws of the State of Delaware, stockholder ratification of the appointment of our independent registered public accounting firm is not required. However, the Board deems it advisable to submit the appointment of PwC for stockholder consideration and ratification. If the appointment of PwC is not ratified, the Audit Committee will reconsider the matter, but will not be required to change its decision to appoint PwC as independent registered public accounting firm. Unless a contrary choice is specified, proxies solicited by our Board of Directors will be voted FOR ratification of the appointment of PricewaterhouseCoopers LLP.


ECOLAB - 2019 Proxy Statement	23

AUDIT COMMITTEE REPORT

The Audit Committee operates under a written Charter and the functions of the Committee are described under the heading “Board Committees – Audit Committee” at page 9 hereof. The Audit Committee’s Charter recognizes that (i) it is the responsibility of management to prepare the Company’s financial statements in accordance with Accounting Principles Generally Accepted in the United States of America and to maintain an effective system of financial control; and (ii) it is the responsibility of the independent auditors to plan and conduct the annual audit and express their opinion on the consolidated financial statements in accordance with professional standards. As recognized in the Charter, the Committee’s responsibilities include overseeing the work of the participants in the financial reporting and control process.

In this context, the Audit Committee has (i) reviewed and discussed the audited consolidated financial statements of the Company as of December 31, 2018, and for the year then ended (the “Financial Statements”) with management which has represented that the Financial Statements were prepared in accordance with Accounting Principles Generally Accepted in the United States of America, (ii) discussed the Financial Statements with PricewaterhouseCoopers LLP (our independent registered public accounting firm), including the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard 1301, “Communications with Audit Committees,” and (iii) received the written disclosures and the letter from PricewaterhouseCoopers LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence and has discussed with PricewaterhouseCoopers LLP their independence. The Committee has also considered whether PricewaterhouseCoopers LLP’s provision of non-audit services as described below under the heading “Audit Fees” is compatible with maintaining PricewaterhouseCoopers LLP’s independence.

Based on the foregoing review and discussions, the Audit Committee recommended to the Board of Directors, and the Board has approved, that the Financial Statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 for filing with the SEC.

Dated: February 21, 2019	Shari L. Ballard	Tracy B. McKibben
	Stephen I. Chazen	Lionel L. Nowell, III
	David W. MacLennan	Victoria J. Reich



24	ECOLAB - 2019 Proxy Statement

AUDIT FEES

The following table presents fees for professional services rendered by PricewaterhouseCoopers LLP (“PwC”) for the years ended December 31, 2018 and 2017.


Fee Category		2018		2017
Audit Fees(1)	$	12,839,000	$	12,953,000
Audit-related Fees(2)	$	987,000	$	710,000
Tax Fees(3)	$	4,390,000	$	4,830,000
All Other Fees(4)	$	10,000	$	42,000

(1)

Fees and expenses paid to PwC for: (i) annual audit (annual audit and quarterly reviews of the consolidated financial statements required to be performed in accordance with generally accepted auditing standards); (ii) 404 attestation services (attestation services relating to the report on the Company’s internal controls as specified in Section 404 of Sarbanes-Oxley Act); (iii) statutory audits (statutory audits or financial audits for subsidiaries or affiliates required to be performed in accordance with local regulations); (iv) regulatory financial filings (services associated with SEC registration statements, periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings (e.g., comfort letters, consents) and assistance in responding to SEC comment letters); (v) incremental audit procedures related to acquisitions or other transactions; and (vi) consultations on accounting and disclosure matters.

(2)

Fees and expenses paid to PwC for: (i) agreed-upon procedures (agreed-upon or expanded audit procedures related to accounting records required to respond to or comply with financial, accounting or regulatory matters); (ii) attest services; and (iii) employee benefit plan audits (financial statement audits of pension and other employee benefit plans).

(3)

Fees and expenses paid to PwC for: (i) U.S. federal, state and local tax advice (assistance with tax audits, technical interpretations, applicable laws and regulations, tax advice on mergers, acquisitions and restructurings) and compliance (preparation and/or review of tax returns including sales and use tax, excise tax, income tax, and property tax; consultation regarding applicable handling of items for tax returns, required disclosures, elections, and filing positions available to the Company), $728,000; (ii) international non-U.S. tax compliance (preparation and review of income, local, VAT, and GST tax returns or other tax filings, required disclosures, elections and filing positions available to the Company) and international non-U.S. tax advice (assistance with tax examinations (other than legal or other representation in tax courts or agencies), advice on various matters including foreign tax credit, foreign income tax, tax accounting, foreign earnings and profits, U.S. treatment of foreign subsidiary income, VAT, GST, excise tax or equivalent taxes in the jurisdiction, and tax advice on restructurings, mergers, and acquisitions), $2,359,000; and (iii) transfer pricing (advice and assistance with respect to transfer pricing matters, including preparation of reports used by the Company to comply with taxing authority documentation requirements regarding royalties and inter-company pricing and assistance with tax exemptions), $1,303,000.

(4)

This category includes all fees paid to PwC that must be disclosed and are appropriately not included in the Audit, Audit-Related and Tax categories.

All of the professional services provided by PwC in 2018 and 2017 were approved or pre-approved in accordance with policies of the Audit Committee and the Company. The Audit Committee has pre-approved projects for certain permissible non-audit services. Under the policy, requests for pre-approvals of permissible non-audit services must be accompanied by detailed documentation regarding specific services to be provided. The policy specifies that:

annual pre-approval of the audit engagement (including internal control attestation) is required;

the independent auditor may not provide prohibited services;

annual pre-approval is provided for employee benefit plan audits and special audits, as well as other attestation services;

management and the independent auditors report to the Committee on all non-audit service projects and related fees;

all services and fees are reviewed annually; and

the Committee Chair has been delegated authority to approve specific permissible non-audit service projects and fees to ensure timely handling of unexpected matters.

Examples of permissible non-audit services under the policy include: (i) merger/acquisition due diligence services; (ii) attest services; (iii) tax compliance, filings and returns; and (iv) tax planning services, provided that such services are limited to projects having “known or accepted” outcomes.


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

At the 2017 Annual Meeting, we provided our stockholders with an advisory vote regarding how frequently the Company will conduct future stockholder advisory votes to approve the compensation of our named executive officers. More than 92% of the total votes cast by holders of shares represented at the meeting voted in favor of an annual vote, consistent with the recommendation of the Board. Based on these results, the Board has determined to hold an advisory vote on the compensation of our named executive officers on an annual basis.

Ecolab’s executive compensation program is intended to: (1) support our corporate vision and long-term financial objectives, (2) communicate the importance of business results, (3) retain and motivate executives important to our success and (4) reward executives for contributions at a level reflecting our performance. We believe that our compensation policies and procedures have met these objectives. They have contributed to the Company’s historically strong growth and returns, rewarded executives based on performance and are aligned with the long-term interests of our stockholders. See “Compensation Discussion and Analysis,” beginning at page 27.

The Company is presenting this proposal, which gives you as a stockholder the opportunity to endorse or not endorse our executive pay program through an advisory vote for or against the following resolution:

“RESOLVED, that the stockholders approve, on an advisory basis, the compensation of our named executive officers, as disclosed in the Company’s Proxy Statement for the 2019 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the compensation tables, and the related disclosure contained in the Proxy Statement.”

The Company has presented this proposal at each Annual Meeting since 2010 and each year the proposal has received support from greater than 92% of the total shares cast on the proposal.

The Board of Directors encourages stockholders to endorse the compensation program for our named executive officers by voting FOR the above resolution. As discussed in the Compensation Discussion and Analysis contained in this Proxy Statement, we believe that the executive compensation for 2018 was reasonable and appropriate and was justified by the performance of the Company. Our compensation program is the result of a carefully considered approach, including input and advice from the Compensation Committee’s independent compensation consultant.

Because your vote is advisory, it will not be binding upon the Board of Directors. However, the Compensation Committee will take into account the outcome of the vote when considering future executive compensation arrangements.

Board of Directors’ Recommendation – The Board of Directors recommends that you vote FOR approval of the compensation of Ecolab’s executives as described in the Compensation Discussion and Analysis and the compensation tables and otherwise in this Proxy Statement pursuant to the compensation disclosure rules of the SEC. Proxies solicited by our Board of Directors will be voted FOR approval of the proposal unless otherwise specified.



26	ECOLAB - 2019 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the following Compensation Discussion and Analysis of the Company with management. Based on their review and discussion, the Compensation Committee recommended to the Board of Directors, and the Board has approved, the inclusion of the Compensation Discussion and Analysis in both the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, and the Company’s Proxy Statement for the Annual Meeting of Stockholders to be held May 2, 2019.


Dated: February 21, 2019	Leslie S. Biller	Suzanne M. Vautrinot
	Jeffrey M. Ettinger	John J. Zillmer
	Arthur J. Higgins

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (“CD&A”) provides information about the principles underlying our executive compensation programs and the key executive compensation decisions that were made for the fiscal year ended December 31, 2018 (“2018”), including the most important factors relevant to those decisions. This CD&A is intended to provide additional context and background for the compensation earned by and awarded to the following named executive officers (“NEOs”) for 2018 as reported in the Summary Compensation Table which follows this discussion:


Douglas M. Baker, Jr.	Chairman of the Board and Chief Executive Officer
Daniel J. Schmechel	Chief Financial Officer and Treasurer
Thomas W. Handley	President and Chief Operating Officer
Timothy P. Mulhere	Executive Vice President and President – Global Institutional
Darrell R. Brown	Executive Vice President and President – Energy Services

The Company’s compensation programs enable us to attract and retain the leadership talent that is necessary to successfully manage our strong earnings growth and return on invested capital objectives, while balancing necessary investment in the businesses in order to achieve attractive, long-term shareholder returns. Our corporate short-term and long-term incentive plan performance measures are aligned with this strategy by utilizing growth in adjusted diluted earnings per share (hereinafter, “adjusted EPS,” unless the context otherwise requires) and adjusted return on invested capital (hereinafter, “adjusted ROIC,” unless the context otherwise requires), both as defined later in this CD&A. At the business unit level, we also incorporate business unit sales and operating income performance measures.

Executive Summary

Business Environment

The Company achieved strong adjusted sales and earnings growth in 2018 as it drove new product introductions, new business wins and improved operating efficiency in a generally improved market environment. Increased pricing was implemented to offset significantly higher delivered product costs. Adjusted EPS also benefited from lower interest expense and taxes to deliver the attractive adjusted EPS gain.


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COMPENSATION DISCUSSION AND ANALYSIS

As a result of this business environment, performance under our annual incentive plan versus our pre-established performance goals were 119% of target for corporate performance and ranged from 92% to 140% of target for division performance, as illustrated below:

ANNUAL INCENTIVE PLAN

Performance under our 2016-2018 performance-based restricted stock unit grant cycle versus our pre-established adjusted ROIC performance goal was 100% of target, as illustrated below:

Compensation Actions

We took the following actions with respect to our NEOs in 2018:


Compensation Element	2018 NEO Compensation Action
Base salaries	•	With respect to NEOs who were employed by us in 2017 and 2018, base salaries increased between 2.8% and 6.5% and on average 4% versus 2017, excluding promotions
Annual cash incentives	•	Annual cash incentive bonus payouts were between 111% and 134% of target, and averaged 117% of target
	•	Annual cash incentive bonus payout for our CEO was at 119% 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 2016 to 2018 PBRSU grant cycle, average award payouts were at 100% of target award opportunities



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COMPENSATION DISCUSSION AND ANALYSIS

The charts below illustrate our Company’s actual performance relative to our pre-established performance goals as well as our actual award payouts as a percentage of target award opportunities for the annual cash and long-term incentive plans:

ANNUAL INCENTIVE PLAN

*Adjusted Diluted EPS is a non-GAAP financial measure that is described in the section starting on page 36 entitled “Adjustments to Reported Financial Results.”

PERFORMANCE-BASED RESTRICTED STOCK UNITS

*Adjusted ROIC is a non-GAAP financial measure that is described in the section starting on page 36 entitled “Adjustments to Reported Financial Results.”

Compensation of our Chief Executive Officer

The compensation of our CEO is positioned within the median range of our compensation benchmark and is based on the same design elements and performance standards that are applicable to our other corporate officers. For 2018, the Compensation Committee determined to increase the CEO’s base salary by 3%, maintain his target annual incentive opportunity at 150% of base salary, and increase his long-term incentive opportunity from $10 million to $10.5 million (a 5% change), which is equally allocated to stock options and performance-based restricted stock units.


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COMPENSATION DISCUSSION AND ANALYSIS

The chart below illustrates the increase in target total direct compensation for our CEO for 2018, as well as the total shareholder return for 2018 for the Company and our comparison group.

CHANGE IN 2018 CEO TOTAL DIRECT COMPENSATION RELATIVE TO 2018 TSR PERFORMANCE

Target total direct compensation represents the sum of base salary, target annual incentive plan opportunity, and long-term incentive grant guideline, as summarized below:

Compensation Practices

Our compensation programs encourage executive decision-making that is aligned with the long-term interests of our stockholders. We tie a significant portion of pay to Company performance over a multi-year period. Our Compensation Committee has incorporated the following market-leading governance features into our executive compensation programs:


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



30	ECOLAB - 2019 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

The Compensation Committee oversees the design and administration of our executive compensation programs according to the processes and procedures discussed in the Corporate Governance section of this Proxy Statement. The Compensation Committee is advised by an independent compensation consultant, FW Cook.

Pay-Versus-Performance Alignment

We emphasize pay-for-performance and structure our programs to provide incentives for executives to drive business and financial results. We believe that the pay of our executives, particularly our CEO, correlates well with our total shareholder returns; and while our incentive programs help to drive results, they do so without encouraging excessive risk-taking that would threaten the long-term growth of our business.

The Compensation Committee annually evaluates how the amount of cash compensation paid aligns with the Company’s size and performance relative to the comparison companies. For purposes of this analysis, composite size and performance is calculated based on various measures of company size, profitability, growth, and total shareholder return. Cash compensation paid represents the sum of actual base salaries and annual bonuses paid for each fiscal year. The chart below illustrates how annual cash compensation paid for the NEOs has been conservative relative to the Company’s size and performance over the last five years for which such data was available for the comparison companies as of the date of this Proxy Statement.

PAY-VERSUS-PERFORMANCE LOOK-BACK ANALYSIS – TOTAL ANNUAL COMPENSATION

Shareholder Outreach and 2018 Say-on-Pay Results

During 2018, we engaged stockholders holding approximately 50% of our shares concerning a variety of topics, including our executive compensation program. The stockholders did not raise any significant issues with respect to our program. Additionally, at the 2018 Annual Meeting, our stockholders approved on an advisory basis the compensation of our NEOs disclosed in that year’s proxy statement, with more than 92% of the total votes cast by holders of shares represented at the meeting voting in favor of our executive compensation proposal. The Compensation Committee took this favorable stockholder support into account in deciding to retain the overall structure and philosophy of our compensation plans and programs in 2018.


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COMPENSATION DISCUSSION AND ANALYSIS

Program Elements

The principal elements of our executive compensation programs for 2018 are illustrated below:

COMPONENT		PERFORMANCE PERIOD (YRS)	BASIC DESIGN	PURPOSE

Fixed	Base Salary	1	• Calibrated with the median range of the size-adjusted competitive market	• Designed to provide a base wage not subject to company performance risk • Recognizes individual experiences, skills, and sustained performance

	Benefits	1	• Health care, disability, retirement, and other life event market competitive benefits	• Same benefits available to our employees except for the executive disability and life benefit and a supplemental retirement benefit

	Perquisites	1	• Private aircraft use policy authorizing the use of private aircraft for business and personal use by the Chairman and CEO, and business use by directors and certain other executives • No tax gross-up	• Market competitive practices • Facilitates travel efficiencies • Personal use capped at $100,000

At Risk	Annual Incentive Plan	1	• Actual pay varies between 40% and 200% of target • Uses adjusted diluted earnings per share growth, and for officers managing business units uses business unit revenue and operating income goals	• Incentivizes the accomplishment of annual business and individual goals

	Stock Options	3	• Granted annually • Represents 50% of long-term incentive award opportunity • Vest 33% per year starting on the 1st anniversary of grant date	• Aligns pay to performance by linking value to stock price appreciation and shareholder value creation

	Performance-Based Restricted Stock Units	3	• Granted annually • Represents 50% of long-term incentive award opportunity • Actual awarded shares varies between 40% and 100% of target • 3-year performance period • Uses 3-year average adjusted return on invested capital • Vest 100% after completion of performance period	• Aligns a portion of equity compensation to a longer-term strategic financial goal

Other	Change-in-Control Severance Compensation Policy	--	• Policy may be terminated after two years' advance notice, but may not be terminated within two years after a change in control • Double-trigger • Severance is two times the sum of base salary plus target annual incentive • Pro rata actual annual bonus in year of termination • Outplacement, and continued medical and dental for up to 18 months	• Applies to all elected officers • Promotes continuity, impartiality and objectivity in the event of a change in control to enhance stockholder value



32	ECOLAB - 2019 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

To align pay levels for NEOs with the Company’s performance, our pay mix places the greatest emphasis on performance-based incentives. Approximately 91% of our CEO’s target total direct compensation (salary, target bonus and the grant date fair value of long-term incentive awards), and approximately 76% of the average target total direct compensation of our other NEOs is performance-based, as summarized below, with equity elements depicted in blue and cash elements depicted in gray:



CEO PAY MIX		AVERAGE OTHER NAMED EXECUTIVE OFFICER PAY MIX

Our Analysis

Our analysis indicates that total direct compensation mix for our NEOs on average is generally consistent with the competitive market. The CEO receives a higher proportion of his total direct compensation allocated to performance-based components than non-performance-based components and more allocated to equity-based compensation than cash-based compensation compared to the other NEOs. The higher emphasis on performance-based compensation for the CEO is designed to reward him for driving company performance and creating long-term shareholder value that is a greater responsibility in his position than in the positions of the other NEOs, and is consistent with the competitive market for the CEO position. The level of compensation of our CEO reflects the many responsibilities of serving as CEO of a public company. Accordingly, our CEO’s median range competitive pay levels (including long-term equity awards) reflect his broader scope and greater responsibilities compared to our other NEOs.

Compensation Philosophy

Our executive compensation program is designed to meet the following objectives:

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

Our executive compensation program as a whole, as well as each element, is designed to be market-competitive in order to attract, motivate and retain our executives in a manner that is in the best interests of our stockholders. Our executive compensation program is further designed to reinforce and complement ethical and sustainable management practices, promote sound risk management and align management interests (such as sustainable long-term growth) with those of our stockholders. We believe that our long-term equity incentive program, which typically accounts for at least half of our NEOs’ total annual compensation, is an effective tool in aligning our executives’ interests with those of our stockholders and in incentivizing long-term value creation.


ECOLAB - 2019 Proxy Statement	33

COMPENSATION DISCUSSION AND ANALYSIS

Our philosophy is to position base salary, annual cash incentives, and long-term equity incentives in the median range of our competitive market, adjusted for the Company’s size. We define the median range as within 15% of the median for base salaries and within 20% of the median for annual cash incentive targets and long-term incentive targets. For annual cash incentives, our philosophy generally is to also position them at a level commensurate with the Company’s performance based on adjusted EPS compared to EPS growth in the Standard & Poor’s 500 (“S&P 500”). We position annual cash incentives and long-term incentives to provide lower than median compensation for lower than competitive market performance and higher than median compensation for higher than competitive market performance. This approach provides motivation to executives without incentivizing inappropriate risk-taking to achieve pay-outs, as we believe that the Company’s prospects for growth are generally at least as favorable as the average of the S&P 500.

Our Analysis

For 2018, total direct compensation opportunities for all our NEOs were positioned in the market median range. The Compensation Committee has determined to establish total direct compensation opportunities for our CEO toward the high end of the median range in recognition of his long tenure and sustained exceptional performance.

Compensation Process

For our NEOs, the Compensation Committee reviewed and approved all elements of 2018 compensation, taking into consideration recommendations from our CEO (but not for his own compensation), as well as competitive market guidance and feedback provided by the Compensation Committee’s independent compensation consultant and our human resources staff regarding individual performance, time in position and internal pay comparisons. The Compensation Committee reviewed and approved all elements of 2018 compensation for our CEO, taking into consideration the Board’s performance assessment of the CEO and recommendations, competitive market guidance and feedback from the Compensation Committee’s independent compensation consultant and our human resources staff. Recommendations with respect to the compensation of our CEO are not shared with our CEO.

Compensation Benchmarking

For benchmarking purposes, we define our competitive market for compensation data to be a simple average of median compensation from a 20-company comparison group and size-adjusted median general industry data from third-party surveys in which we participate.

The comparison group is selected by the independent compensation consultant based on input from the Company and the Compensation Committee, and is reviewed and approved annually by the Compensation Committee in the spring of each year. The independent consultant utilizes an objective selection process methodology that consists of the following steps:

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

Further consider companies in the S&P 500 Energy, Materials, Industrials or Consumer Staples sectors not included in the previous step

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



34	ECOLAB - 2019 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

The chart below summarizes our Company’s percentile ranking versus the 20 companies selected for the comparison group for 2018 based on the above selection criteria:

omp

COMPARISON COMPANY SIZE COMPARISONS

20-COMPANY COMPARISON GROUP

3M	Danaher	Illinois Tool Works	Praxair
Air Products & Chemicals	Eastman Chemical	LyondellBasell	Roper
Ashland	Emerson Electric	Monsanto	Schlumberger
Baker Hughes a GE Company	General Mills	National Oilwell Varco	Sherwin-Williams
Celanese	Halliburton	PPG Industries	Weatherford International
All financial and market data are taken from Standard & Poor’s Capital IQ

The third‐party general industry surveys used during 2018 were from Aon Hewitt, Willis Towers Watson and FW Cook. For benchmarking 2018 base salary and annual cash incentive compensation, we used the average of size‐adjusted median compensation data from Aon Hewitt and Willis Towers Watson, as well as median compensation data from the comparison companies. The 2017 Willis Towers Watson CDB General Industry Executive Compensation Survey includes over 500 organizations that range in revenue from approximately $1 billion to over $41 billion. We also used the 2017 Aon Hewitt TCM Executive Regression Analysis Survey, which includes over 500 organizations that range in revenue from approximately $92 million to $216 billion. For benchmarking long‐term incentives, we used the average of the median compensation data yielded by the comparison companies, the 2018 Willis Towers Watson CDB General Industry Executive Compensation Survey and the FW Cook 2018 Survey of Long‐Term Incentives. The 2018 Willis Towers Watson survey has over 700 participants which range in revenue from approximately $350 million to greater than $31 billion. The FW Cook survey has 49 participants which range in revenue from over $3 billion to over $200 billion.

Base Salaries

The Compensation Committee reviews base salaries for our NEOs and other executives annually in February to be effective as of April 1 of the current fiscal year, and adjustments are based on changes in our competitive market, changes in scope of responsibility, individual performance and time in position. Our philosophy is to pay base salaries that are within the median range of our size-adjusted competitive market. When an executive officer is new to his or her position, his or her initial base salary will likely be at the low end of the median range but, if performance is acceptable, his or her base salary will be increased over several years to arrive at the median.


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COMPENSATION DISCUSSION AND ANALYSIS

Salary Increases

For 2017 and 2018, annualized base salary rates for our NEOs are summarized below:



Name	2017 Annualized Base Salary Rate ($)	2018 Annualized Base Salary Rate ($)	Increase Percentage(1)
Douglas M. Baker, Jr.	1,250,000	1,287,500	3.0%
Daniel J. Schmechel	625,000	655,000	4.8%
Thomas W. Handley	700,000	720,000	2.9%
Timothy P. Mulhere	535,000	570,000	6.5%
Darrell R. Brown	425,000	475,000	11.8%

(1)

All increases represent merit increases, except for Darrell Brown. Mr. Brown received an 8.8% promotion increase and a 2.8% merit increase. Amounts do not sum due to rounding.

Our Analysis

For 2018, base salaries accounted for approximately 9% of total compensation for the CEO and 25% on average for the four other NEOs. 2018 base salary rates were within the median range for all of our NEOs. In general, the 2018 merit salary increases for our NEOs were in line with the principles used to deliver the Company’s U.S. salary increases broadly.

Adjustments to Reported Financial Results

The Compensation Committee has authority to adjust the reported diluted EPS and ROIC on which incentive compensation payouts are determined in order to eliminate the distorting effect of unusual income or expense items that may occur during a given year and that impact year-over-year growth or return percentages.

For purposes of the adjusted EPS performance measure used in our annual cash incentive program, a reconciliation of 2018 diluted EPS as reported to 2018 adjusted diluted EPS is summarized below:


2018 reported diluted EPS	$ 4.88
Adjustments:
Special (gains) and charges	$ 0.35
Discrete tax net expense (benefit)	$ 0.02
Adjusted diluted EPS	$ 5.25
Note: Per-share amounts do not necessarily sum due to rounding. Additional information regarding the composition of the adjustments identified in the table above is contained on pages 33-37 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

Reported diluted earnings per share and adjusted EPS for the years 2014 through 2018 are provided in our 2018 Annual Report. We believe that in this context adjusted EPS is a more meaningful measure of the Company’s underlying business performance than reported diluted earnings per share because it provides greater transparency with respect to our results of operations and that it is more useful for period-to-period comparison of results. In addition, we use adjusted EPS internally to evaluate our performance and in making financial and operational decisions.

For purposes of the measurement of divisional and business unit performance goals and in the determination of payouts to executives under our annual cash incentive program, the revenue and operating income performance measures are recorded at fixed currency rates of foreign exchange and adjusted for special gains and charges, as well as certain other exceptional items, such as the results of certain businesses acquired during the year and certain strategic initiatives. We include within special gains and charges items that we believe can significantly affect the period-over-period assessment of operating results and not necessarily reflect costs and/or income associated with historical trends and future operating results, as more fully identified on pages 33-34 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2018. We use these measures internally to evaluate our performance and in making financial and operational decisions, including with respect to incentive compensation. We believe that our use of these measures provides greater transparency with respect to our results of operations and that these measures are useful for period-to-period comparison of results.



36	ECOLAB - 2019 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

For purposes of the adjusted ROIC performance measure used in our PBRSU program, we define ROIC as the quotient of after-tax operating income divided by the sum of short-term and long-term debt and shareholders’ equity, less cash and cash equivalents. The PBRSU awards provide for adjustment of the ROIC calculation in the event of a large acquisition (such as the Nalco and Champion transactions) or other significant transaction or event approved by the Board. Considering the significant impact of purchase accounting and special gains and charges related to the Nalco and Champion transactions on the ROIC calculation, for the 2019 to 2021 performance cycle, adjusted ROIC is measured excluding the purchase accounting impact and special gains and charges related to these transactions and is also adjusted for acquisitions, accounting or tax changes, gains or losses from discontinued operations, restructurings, and certain other unusual or infrequently occurring charges during the performance period.

This CD&A contains statements regarding incentive targets and goals. These targets and goals are disclosed in the limited context of the Company’s compensation programs and should not be understood to be statements of management’s expectations or estimates of results or other guidance.

Annual Cash Incentives

The Company maintains an annual cash incentive program for executives referred to as the Management Incentive Plan, or MIP. At its February 2018 meeting, the Committee established the goals described below under the MIP for each NEO’s 2018 annual cash incentive award and reviewed the performance of the NEOs and other executives at its February 2019 meeting to determine the 2018 award payments (which were paid in March 2019).

Target Award Opportunities

Under the MIP, we establish annual target award opportunities expressed as a percentage of base salary paid during the year and various award payment limits expressed as a percentage of the target award. Our annual cash incentive targets are set within the median range relative to our competitive market for each position, and the annual cash incentive plan is structured so that lower performance results in below-market payouts and superior performance drives payouts above the median range. For 2018, target award opportunities were within the median range for all our NEOs and ranged from 75% to 150% of base salary. Minimum and maximum payout opportunities ranged from 40% to 200% of target award opportunity, respectively, with no payout for performance below the minimum level specified.

Performance Measures

Under the MIP, we use a mix of overall corporate, business unit and individual performance measures to foster cross-divisional cooperation and to assure that executives have a reasonable measure of control over the factors that affect their awards. This performance measure mix varies by executive position.

Performance Goals and Achievement - Corporate

Under the MIP, several performance goals are used, including goals measuring overall corporate performance as well as goals for specific business unit performance for those executives who are responsible for these business units. Overall corporate performance in 2018 was based on adjusted EPS goals. We believe that adjusted EPS is a better measure of the Company’s underlying business performance than reported diluted EPS because it provides greater transparency with respect to our results of operations, which is more useful for period-to-period comparison of results. In addition, a total company measure of performance such as adjusted EPS is used as one of the performance measures with respect to our NEOs who manage particular business units because it reinforces our Circle the Customer -- Circle the Globe strategy and fosters cross-divisional cooperation.

In establishing these goals for 2018, we took into consideration our prior year results, overall economic and market trends, other large companies’ performance expectations and our anticipated business opportunities, investment requirements and the competitive situation. For 2018, the adjusted EPS goals were:


Payout at 40% of the target award opportunity (minimum level) at		$4.82
Payout at 100% of the target award opportunity (target level) at		$5.14
Payout at 140% percent of the target award opportunity (140% level) at		$5.37
Payout at 200% of the target award opportunity (maximum level) at		$5.47 or greater

Payouts for results between performance levels are interpolated on a straight-line basis. Actual 2018 adjusted EPS was $5.25 resulting in the achievement of the adjusted EPS goal at 119% of target.


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COMPENSATION DISCUSSION AND ANALYSIS

Performance Goals and Achievement – Division

For Mr. Handley, who is our President and Chief Operating Officer, 30% of his annual cash incentive is based upon a 2018 total division operating income goal. For 2018, the total division operating income goals were:


-0.4%	growth over 2017 total division operating income for payout at 40% of the target award opportunity (minimum level)
3.8%	growth over 2017 total division operating income for payout at 100% of the target award opportunity (target level)
4.8%	growth over 2017 total division operating income for payout at 140% percent of the target award opportunity (140% level)
15.4%	growth over 2017 total division operating income for payout at 200% of the target award opportunity (maximum level)

Payouts for results between performance levels are interpolated on a straight-line basis. The 2018 total division operating income grew 3.2% over 2017 total division operating income resulting in the achievement of the total division operating income goal at 92% of target.

For two of our NEOs, namely Messrs. Mulhere and Brown who manage particular business units for us, 70% of their annual cash incentive is based upon their respective 2018 business unit performance goals which are measured against the achievement of revenue and operating income goals. The revenue and operating income goals, which are weighted equally, are set forth below. As Mr. Mulhere served in a corporate staff position for the first six months of 2018, his annual cash incentive is weighted equally between his time spent in each position. The performance goals relative to Mr. Mulhere’s corporate staff position are set forth under the heading “Performance Goals and Achievement - Individual” at page 38.

The 2018 revenue goal for Mr. Mulhere was:


0.8%	growth over 2017 business unit revenue for payout at 40% of the target award opportunity (minimum level)
3.4%	growth over 2017 business unit revenue for payout at 100% of the target award opportunity (target level)
4.6%	growth over 2017 business unit revenue for payout at 140% percent of the target award opportunity (140% level)
7.5%	growth over 2017 business unit revenue for payout at 200% of the target award opportunity (maximum level)

The 2018 revenue goal for Mr. Brown was:


0.8%	growth over 2017 business unit revenue for payout at 40% of the target award opportunity (minimum level)
3.2%	growth over 2017 business unit revenue for payout at 100% of the target award opportunity (target level)
4.9%	growth over 2017 business unit revenue for payout at 140% percent of the target award opportunity (140% level)
7.6%	growth over 2017 business unit revenue for payout at 200% of the target award opportunity (maximum level)

The 2018 operating income goal for Mr. Mulhere was:


-0.2%	growth over 2017 business unit operating income for payout at 40% of the target award opportunity (minimum level)
2.3%	growth over 2017 business unit operating income for payout at 100% of the target award opportunity (target level)
3.0%	growth over 2017 business unit operating income for payout at 140% percent of the target award opportunity (140% level)
9.4%	growth over 2017 business unit operating income for payout at 200% of the target award opportunity (maximum level)

The 2018 operating income goal for Mr. Brown was:


-0.6%	growth over 2017 business unit operating income for payout at 40% of the target award opportunity (minimum level)
3.7%	growth over 2017 business unit operating income for payout at 100% of the target award opportunity (target level)
4.8%	growth over 2017 business unit operating income for payout at 140% percent of the target award opportunity (140% level)
23.9%	growth over 2017 business unit operating income for payout at 200% of the target award opportunity (maximum level)

No pay‐out is made with respect to the business unit revenue goal unless the business unit achieves at least the minimum level on its operating income goal. Pay‐outs for results between these two performance levels are interpolated on a straight‐line basis. Adjusted as noted above, revenue growth and operating income growth for the business units managed by Mr. Mulhere were 5.3% and 0.0%, respectively, resulting in achievement by Mr. Mulhere of his business unit goal at 100% of target. Revenue growth and operating income growth for the business units managed by Mr. Brown were 6.7% and 3.7%, respectively, resulting in achievement by Mr. Brown of his business unit goal at 140% of target.

Performance Goals and Achievement - Individual

For Mr. Schmechel, who holds a staff position as our Chief Financial Officer, and Mr. Mulhere, who served in the staff position of Executive Vice President and President – Global Enterprise Efficiency for the first six months of 2018 prior to managing the business unit noted above, 30% of their annual cash incentive is based upon attainment of individual performance goals. This component of staff position awards under the MIP is set at 30% of the performance measure mix for annual cash incentives



38	ECOLAB - 2019 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS

so that achievement of these goals is a component of the award but remains balanced against achievement of corporate performance goals. The 2018 individual performance objectives for Messrs. Schmechel and Mulhere are specific, qualitative, and achievable with significant effort and, if achieved, provide benefit to the Company. Mr. Schmechel’s individual performance goals covered financial, organizational and strategic initiatives, including delivering on financial objectives, developing talent and projects to increase efficient service delivery. Mr. Mulhere’s individual performance goals covered organizational and strategic initiatives, including delivering on efficiency and effectiveness projects for the enterprise to drive financial performance and deliver against profitability commitments. Mr. Schmechel achieved 92% of his individual target performance goals and Mr. Mulhere achieved 109% of his individual target performance goals. The Compensation Committee, with input from the CEO, approved annual cash incentives of $646,700 and $467,000 for Messrs. Schmechel and Mulhere, respectively, including the component based on their achievement of 2018 individual performance goals. As noted above, Mr. Mulhere’s annual cash incentive is weighted equally between the time spent in his manager and staff positions.

2018 Annual Incentive Compensation Pay-Out Summary




Performance Measure Mix
Name	2018 Base Salary Earnings ($)	MIP Target Award Opportunity (% of Base Salary) (%)	EPS (%)	Business Unit (%)	Individual (%)	MIP Target Pay-Out Level ($)	MIP Performance Achieved (%)	Pay-Out Based on MIP Performance ($)	Compensation Committee Adjustments ($)	Actual Payout ($)
Douglas M.	1,278,125	150	100			1,917,200	119	2,284,000	-	2,284,000
Baker, Jr.
Daniel J.	647,500	90	70			407,925	119	486,000
Schmechel					30	174,825	92	160,700
								646,700	-	646,700
Thomas W.	715,000	90	70			450,450	119	536,600
Handley				30		193,050	92	177,500
								714,100	-	714,100
Timothy P.	561,250	75	70/30			210,469	119	250,700
Mulhere(1)					30	63,141	109	68,900
				70		147,328	100	147,400
								467,000	-