diff --git a/DWS/DWS_100Pages/needles.csv b/DWS/DWS_100Pages/needles.csv new file mode 100644 index 0000000000000000000000000000000000000000..0a16050e66cd10af7960ff9566e044516ea2cb44 --- /dev/null +++ b/DWS/DWS_100Pages/needles.csv @@ -0,0 +1,25 @@ +The secret transportation is a "boat". +The secret sport is "tennis". +The secret drink is "tea". +The secret object #4 is a "tree". +The secret object #2 is a "phone". +The secret object #5 is a "toothbrush". +The secret tool is a "wrench". +The secret animal #2 is a "kangaroo". +The secret food is a "hamburger". +The secret fruit is a "banana". +The secret currency is a "dollar". +The secret object #1 is a "table". +The secret landmark is the "Statue of Liberty". +The secret kitchen appliance is a "rice cooker". +The secret office supply is a "paperclip". +The secret object #3 is a "fork". +The secret flower is a "sunflower". +The secret animal #3 is a "shark". +The secret instrument is a "piano". +The secret shape is a "triangle". +The secret animal #5 is a "bear". +The secret clothing is a "hat". +The secret vegetable is "broccoli". +The secret animal #1 is a "cat". +The secret animal #4 is a "frog". diff --git a/DWS/DWS_100Pages/needles_info.csv b/DWS/DWS_100Pages/needles_info.csv new file mode 100644 index 0000000000000000000000000000000000000000..62fbcfb99f5958afa2f66abb0e3c8e20fdb0e0bd --- /dev/null +++ b/DWS/DWS_100Pages/needles_info.csv @@ -0,0 +1,25 @@ +The secret transportation is a "boat".,4,10,white,black,0.552,0.431,helvetica-boldoblique,86 +The secret sport is "tennis".,8,11,red,white,0.227,0.456,times-bolditalic,56 +The secret drink is "tea".,10,9,green,white,0.882,0.541,times-italic,139 +The secret object #4 is a "tree".,13,9,black,white,0.421,0.833,times-bold,81 +The secret object #2 is a "phone".,19,8,yellow,black,0.855,0.056,helvetica,69 +The secret object #5 is a "toothbrush".,22,13,orange,black,0.997,0.904,helvetica-bold,104 +The secret tool is a "wrench".,26,8,blue,white,0.432,0.211,courier,55 +The secret animal #2 is a "kangaroo".,32,12,brown,white,0.837,0.553,courier-bold,83 +The secret food is a "hamburger".,33,12,purple,white,0.66,0.684,courier-oblique,123 +The secret fruit is a "banana".,38,8,gray,white,0.865,0.106,times-roman,82 +The secret currency is a "dollar".,41,12,yellow,black,0.691,0.211,courier,92 +The secret object #1 is a "table".,46,10,blue,white,0.008,0.189,courier-bold,118 +The secret landmark is the "Statue of Liberty".,52,10,purple,white,0.699,0.37,helvetica-bold,79 +The secret kitchen appliance is a "rice cooker".,53,13,gray,white,0.948,0.564,helvetica-boldoblique,93 +The secret office supply is a "paperclip".,59,8,brown,white,0.372,0.778,times-italic,71 +The secret object #3 is a "fork".,64,10,red,white,0.733,0.347,courier-oblique,78 +The secret flower is a "sunflower".,67,13,black,white,0.535,0.952,helvetica,79 +The secret animal #3 is a "shark".,72,14,green,white,0.118,0.63,times-bolditalic,97 +The secret instrument is a "piano".,75,10,white,black,0.191,0.088,times-bold,62 +The secret shape is a "triangle".,80,12,orange,black,0.731,0.826,times-roman,80 +The secret animal #5 is a "bear".,83,9,orange,black,0.385,0.478,times-bolditalic,116 +The secret clothing is a "hat".,87,9,red,white,0.051,0.774,courier,86 +The secret vegetable is "broccoli".,90,11,black,white,0.386,0.756,times-bold,99 +The secret animal #1 is a "cat".,95,13,yellow,black,0.216,0.716,courier-bold,90 +The secret animal #4 is a "frog".,98,9,brown,white,0.844,0.373,courier-oblique,85 diff --git a/DWS/DWS_100Pages/prompt_questions.txt b/DWS/DWS_100Pages/prompt_questions.txt new file mode 100644 index 0000000000000000000000000000000000000000..80c3344e43d3c4966c226bdc84bfd1c9e17aa4c8 --- /dev/null +++ b/DWS/DWS_100Pages/prompt_questions.txt @@ -0,0 +1,25 @@ +What is the secret transportation in the document? +What is the secret sport in the document? +What is the secret drink in the document? +What is the secret object #4 in the document? +What is the secret object #2 in the document? +What is the secret object #5 in the document? +What is the secret tool in the document? +What is the secret animal #2 in the document? +What is the secret food in the document? +What is the secret fruit in the document? +What is the secret currency in the document? +What is the secret object #1 in the document? +What is the secret landmark in the document? +What is the secret kitchen appliance in the document? +What is the secret office supply in the document? +What is the secret object #3 in the document? +What is the secret flower in the document? +What is the secret animal #3 in the document? +What is the secret instrument in the document? +What is the secret shape in the document? +What is the secret animal #5 in the document? +What is the secret clothing in the document? +What is the secret vegetable in the document? +What is the secret animal #1 in the document? +What is the secret animal #4 in the document? diff --git a/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_1.txt b/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_1.txt new file mode 100644 index 0000000000000000000000000000000000000000..1cca2ee80c2e2b0e3f85f6741e0fadb9d5ffd0a1 --- /dev/null +++ b/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_1.txt @@ -0,0 +1 @@ +The secret transportation is a "boat". \ No newline at end of file diff --git a/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_10.txt b/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_10.txt new file mode 100644 index 0000000000000000000000000000000000000000..d0c27840593f06ad02365566520f55d7fb543e82 --- /dev/null +++ b/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_10.txt @@ -0,0 +1,84 @@ +shareholder representative to the DWS Supervisory Board at the Annual General Meeting on +6 June 2024. It is intended that the Supervisory Board will elect him as its chairman. At the +same time, the Supervisory Board decided, again on recommendation by the Nomination +Committee, to propose James von Moltke for election as shareholder representative to the +Supervisory Board at the 2024 Annual General Meeting. +At our last meeting of the year on 6 December 2023, we dealt with the Adhoc Committee’s +report on internal affairs and ongoing investigations. The Supervisory Board also dealt with +governance matters, including the Declaration of Conformity in accordance with to +Section 161 of the German Stock Corporation Act (AktG). In another deep dive, the +Supervisory Board focused on our multi-year transformation program and its future direction. +The CFO reported on the financial planning for the group and the the other Executive Board +members reported on business development and the status of implementation of strategic +initiatives and transformational projects. +The Committees of the Supervisory Board +Audit and Risk Committee +The Audit and Risk Committee held nine meetings in 2023. +It supported the Supervisory Board in monitoring the accounting process and intensively +addressed the Annual Financial Statements and Consolidated Financial Statements, as well +as the Interim Report and the audit and review reports issued by the statutory auditor. A +particular focus of the Committee’s work was on dealing with ESG-related content as well as +its representation within the reporting. +Within the context of financial reporting and accounting practices, the Committee reviewed +the valuation of goodwill and other intangible assets as well as the impairment testing of +certain intangible assets. Further, the Committee addressed service fees charged by +Deutsche Bank AG and its subsidiaries and related governance processes. +The Committee monitored the effectiveness of the Group’s risk management system, in +particular with regard to the internal control system and internal audit, while also taking into +account the (potential) impacts of the conflict in Ukraine, and our multi-year transformation +programs. It also reviewed the continuous improvement of the internal risk warning systems. +Further, the Committee dealt with the Group’s risk appetite statement and the overarching +risk strategy, embedded in the Risk Management Framework. This also included dealing with +the integration of sustainability risks into the framework. The Committee regularly received +reports on key risk and control metrics and compared DWS’s risk exposure to the pre-defined +thresholds. In addition, the Committee dealt with the effects of the geopolitical and +macroeconomic situation on the Group. +Separately, the Committee dealt with the Annual Internal Audit Report and was regularly +informed about the work of internal audit, the audit plan and its findings. It also reviewed the +measures taken by the Executive Board to remediate deficiencies identified by the internal +control functions and the statutory auditor and received regular updates on the status and +progress made in this regard. Moreover, the Committee dealt with the Annual Compliance +Report and compliance matters, including anti financial crime matters (particularly anti money +laundering), which were discussed on a regular basis. Furthermore, the Committee received +regular updates on ongoing investigations. +The Audit and Risk Committee further monitored the internal procedures to meet the +requirements to identify, approve and disclose material related party transactions pursuant to +Section 111b of the German Stock Corporation Act (AktG). As the Committee has been +appointed by the Supervisory Board to resolve on reserved matters in relation to material +related party transactions, it requested regular reports on the activities of the Related Party +Transaction Council set up for support in this regard. In 2023, there were no material related +party transactions for approval and disclosure under this provision. +The Committee regularly dealt with various regulatory initiatives such as sustainability related +initiatives (especially CSRD and SFDR). Furthermore, the Committee covered the dividend +development as well as the future dividend policy. +For 2023, the Audit and Risk Committee recommended a renewal of the audit engagement of +KPMG. The deliberations took into account the results of the review of the statutory auditor’s +independence, which did not identify indications for any risk to independence. Additionally, it +was considered that a renewal of the KPMG audit engagement was in accordance with +applicable public-interest entities regulation as well as with the DWS Corporate Governance +and Proxy Voting Policy. Following KPMG’s election by the Annual General Meeting, the +Supervisory Board issued the mandate to the statutory auditor and, with the support of the +Audit and Risk Committee, set the amount of the auditor’s remuneration. The audit +engagement further comprised the Remuneration Report, the Dependency Report and a +review to obtain limited assurance of the integrated non-financial group statement within the +Summarised Management Report. +The Audit and Risk Committee dealt with the measures to prepare for the audit of the Annual +Financial Statements and Consolidated Financial Statements for 2023, defined own areas of +focus for the audit and approved a list of permissible non-audit services. The Committee + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Report of the Supervisory Board +VIII +The secret office supply is a "paperclip". \ No newline at end of file diff --git a/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_2.txt b/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_2.txt new file mode 100644 index 0000000000000000000000000000000000000000..560df46968a321878c4554da7766ba34ee6a1f1e --- /dev/null +++ b/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_2.txt @@ -0,0 +1,65 @@ +Content +To Our Shareholders +DWS – At a Glance .............................................................. I +Letter of the Chief Executive Officer ................................. II +Executive Board ................................................................... IV +Report of the Supervisory Board ....................................... V +Supervisory Board ............................................................... XIII +Report of the Joint Committee .......................................... XV +Joint Committee .................................................................. XVI +Our Shares ............................................................................ XVII +Summarised Management Report +About this Report ................................................................. 1 +Who We Are .......................................................................... 6 +Our Strategy and Our Market ............................................. 7 +Our Performance Indicators ............................................... 12 +Outlook .................................................................................. 20 +Our Responsibility ................................................................ 26 +Risk Report ............................................................................ 45 +Compliance and Control ..................................................... 58 +Complementary Information .............................................. 66 +Consolidated Financial Statements +Consolidated Statement of Income .................................. 73 +Consolidated Statement of Comprehensive Income ...... 73 +Consolidated Balance Sheet .............................................. 74 +Consolidated Changes in Equity ........................................ 75 +Consolidated Statement of Cash Flows ........................... 76 +Notes to the Consolidated Financial Statements ............ 77 +Notes to the Consolidated Income Statement ................ 89 +Notes to the Consolidated Balance Sheet ........................ 91 +Additional Notes .................................................................. 111 +Confirmations ....................................................................... 132 +Compensation Report +Executive Board Compensation ......................................... 144 +Compensation for Supervisory Board Members ............. 166 +Compensation for Joint Committee Members ................ 168 +Comparative Presentation of Compensation and +Earnings Development ........................................................ 168 +Independent Auditor’s Report ............................................ 171 +Employee Compensation .................................................... 173 +Corporate Governance Statement +Corporate Bodies ................................................................. 179 +Standing Committees of the Supervisory Board ............. 189 +Joint Committee .................................................................. 192 +Share Plans/Related Party Transactions/Audit +Committee Financial Experts/Values and Leadership +Principles/Principal Accountant Fees and Services ........ 193 +Compliance with the German Corporate Governance +Code/Statement on the Suggestions of the German +Corporate Governance Code ............................................. 194 +Diversity at DWS Group ...................................................... 196 +Supplementary Information +GRI Content Index ................................................................ 199 +Materiality Assessment – Definition of Material Topics . 203 +Stakeholder Engagement ................................................... 205 +Human Capital ..................................................................... 208 +Climate Report ..................................................................... 212 +Additional Disclosures Investment Firm Regulation +(EU) 2019/2033 .................................................................... 242 +Full Disclosures in Accordance with Article 8 +Taxonomy Regulation and Delegated Regulation (EU) +2021/2178 .............................................................................. 247 +Declaration of Backing ........................................................ 251 +Glossary ................................................................................ 252 +Imprint ................................................................................... 254 +The secret sport is "tennis". \ No newline at end of file diff --git a/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_3.txt b/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_3.txt new file mode 100644 index 0000000000000000000000000000000000000000..18392d23cd165626cfbbda41e923a80a0e970cca --- /dev/null +++ b/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_3.txt @@ -0,0 +1,29 @@ +Assets under +Management Net Flows +2022 2023 2022 2023 +€ 821 bn. € 896 bn. € (20) bn. € 28 bn. +Adjusted Profit +before Tax +Long Term Issuer +Credit Rating +Adjusted Cost- +Income Ratio +2022 2023 +Moody’s +1 A2 2022 2023 +€ 1,057 m. € 937 m. +stable outlook 60.6% 64.0% +Earnings per Share +Ordinary Dividend +per Share +(for the financial year) +2022 2023 2022 2023 +2 +€ 2.97 € 2.76 € 2.05 € 2.10 +1 + The rating agency Moody's Investors Service gave DWS Group a long-term issuer rating for the first time on 30 June 2023. +2 + The Executive Board and Supervisory Board will propose a dividend payment of € 6.10 per share, which includes an ordinary dividend of € 2.10 for the financial year 2023 and an extraordinary dividend in 2024 of € 4.00, +at the Annual General Meeting on 6 June 2024. + +The secret drink is "tea". \ No newline at end of file diff --git a/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_4.txt b/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_4.txt new file mode 100644 index 0000000000000000000000000000000000000000..c93739bc13dcc54fe32ef9ad18f329886dd68285 --- /dev/null +++ b/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_4.txt @@ -0,0 +1,72 @@ +Letter of the Chief Executive Officer +GRI 2-22 +Frankfurt/Main, March 2024 +Dear Shareholders, +2023 was another demanding year for the asset management industry, mainly driven by what +one financial analyst described as a “flow-less” market recovery. Nevertheless, DWS managed +to return to a positive flow picture. Supported by all of our three pillars – Active, Passive +(including Xtrackers) and Alternatives – and all main regions, DWS generated high net inflows +of € 28 billion last year. Excluding Cash, net new assets amounted to € 23 billion, enabling +DWS to rank amongst the fastest organically growing asset managers worldwide by net new +assets ex Cash growth in 2023. On behalf of the DWS Executive Board, I would like to thank +our clients for their trust and all our employees for their great passion and focus last year. +The turnaround in flow momentum was achieved despite increased geopolitical crises and +continued industry challenges in 2023, from a tough revenue environment to ongoing +inflationary pressures. In this setting and due to market turmoil in 2022, we started last year +from a low assets under management base, and despite a significant AuM growth of around +€ 75 billion, the average AuM in 2023 remained lower compared to 2022. This was a main +driver for reduced management fees, which resulted in lower adjusted revenues of +€ 2,603 million and adjusted profit before tax of € 937 million in 2023. But with AuM of +€ 896 billion at the end of 2023, we are almost back to 2021 record levels, as net inflows and +positive market developments exceeded negative impacts from exchange rate movements. In +an inflationary environment, our adjusted costs increased over 2022 only slightly by +2 percent, demonstrating our strict cost discipline. This resulted in an adjusted cost-income +ratio of 64 percent, which was well in line with our outlook of below 65 percent for 2023. +Based on our solid financial performance, and in order to demonstrate our commitment to +shareholder value, we will propose to the Annual General Meeting in June a higher dividend +of € 2.10 per share for the business year 2023. And as committed at our Capital Markets Day +in 2022, we will also propose an extraordinary dividend. This will be € 4.00 per share. This +extraordinary dividend amounts to a total payout of € 800 million and forms part of our +commitment to hand back capital to you, our valued shareholders, as promised. +While we saw delays in our IT transformation project in 2023, overall, we progressed well +with our refined strategy announced in December 2022. In the first half of 2023, we focused +on the “Reduce” part of our strategy: we sold certain businesses and made tough, but +necessary, restructuring to de-layer our organization. Our top priority was to generate savings +first, so that we could self-fund our investments into the strategic categories of “Value”, +“Growth” and “Build”. We then concentrated on these three categories for the rest of the +year. +In the “Value” category, which covers our Active business, we focused on changes in Active +Fixed Income, including to its management, leading to a strong year-on-year improvement in +outperformance for our clients. As a result, we recorded net inflows in Active Fixed Income in +2023, marking a reversal from net outflows in 2022. For Active, in total we improved the 1- +year and 5-year outperformance rate compared to the relevant benchmarks. Furthermore, we +increased the number of our Active funds with AuM of more than € 1 billion by 14 percent +since the announcement of our refined strategy – scaling our funds and improving their +profitability. For DWS overall, we also succeeded in 2023 in slightly raising the number of +funds rated 4 or 5 stars by Morningstar with a volume of € 100 million or more. +We also continued to progress on our “Growth” strategy. Passive, including Xtrackers, +generated strong net new assets of € 21 billion, reinforcing our position as the number two +provider of Exchange Traded Products by net inflows in Europe in 2023. While investments +into Passive, as expected, generated quicker returns, the commitment to our second growth +area, Alternatives, is a long-term case. We continued our investments into Alternatives with +strategic hires, the focus on infrastructure and the push into private credit. +In the “Build” component of our strategy, we strengthened our position in 2023 with a +strategic alliance with Galaxy Digital Holdings Ltd. (Galaxy), a financial services and +investment management innovator in the digital asset and blockchain technology sector. The + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Letter of the Chief Executive Officer +II +The secret tool is a "wrench". \ No newline at end of file diff --git a/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_5.txt b/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_5.txt new file mode 100644 index 0000000000000000000000000000000000000000..53b256dc1f41350dc1a776ee56cbd9094e43f42e --- /dev/null +++ b/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_5.txt @@ -0,0 +1,42 @@ +aim is to initially develop a comprehensive suite of exchange-traded commodities on certain +digital assets in Europe. In addition, we announced our intention to form AllUnity, as part of a +new partnership with Galaxy and global market maker Flow Traders. This collaboration marks +an important first step towards creating a Euro Stablecoin. +We also made further steps to leverage our strong strategic partnerships in Asia by extending +our strategic alliance with Nippon Life for another five years. Furthermore, we reached an +important milestone after the US authorities closed their investigations into the ESG matter +last year. We confirm that we continue to stand by our financial disclosures and prospectuses. +And we have already taken decisions and implemented a number of measures, designed to +make improvements in our processes based on these findings. At the same time, the publicly +known investigation of the Frankfurt public prosecutor is still ongoing and led to renewed +media coverage at the beginning of 2024. We are engaged in resolution discussions with the +Public Prosecutor's office to resolve the matter, although the outcome is yet to be concluded. +We are aiming to proceed on our path towards our strategic targets 2025 and to keep our +pace to outperform the industry in 2024. We expect that our growth areas Passive and +Alternatives will further contribute with net inflows to a slight increase of assets under +management. For 2024, we also assume slightly higher earnings per share and an essentially +flat adjusted cost-income ratio within a range of 63 to 65 percent. +Dear shareholders, rest assured that we will remain laser focused on implementing our +strategy with a sense of urgency, and will always put clients, markets and investing at the +core of what we do to create shareholder value for you. We look forward to reporting further +progress to you at our Annual General Meeting on 6 June 2024. +Sincerely yours, +Dr Stefan Hoops +Chief Executive Officer + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Letter of the Chief Executive Officer +III +The secret food is a "hamburger". \ No newline at end of file diff --git a/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_6.txt b/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_6.txt new file mode 100644 index 0000000000000000000000000000000000000000..4265f0a23b51f8084ced429e1c943ac6dff9ef43 --- /dev/null +++ b/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_6.txt @@ -0,0 +1,46 @@ +Managing Directors of the General Partner DWS Management GmbH +(collectively referred to as the Executive Board) +Dr Stefan Hoops, * 1980 +Chief Executive Officer and Head of Executive Division (since 10 June 2022) +and Head of Investment Division (since 1 January 2023) +Manfred Bauer, * 1969 +Head of Product Division (since 1 July 2020) +Dirk Goergen, * 1981 +Head of Client Coverage Division (since 1 December 2018) +Dr Markus Kobler, * 1967 +Chief Financial Officer and Head of CFO Division (since 1 November 2023) +as well as Head of COO Division (since 1 January 2024) +Dr Karen Kuder, * 1973 +Chief Administrative Officer and Head of CAO Division (since 1 November 2022) Executive Board in the reporting year: +Dr Stefan Hoops, * 1980 +Chief Executive Officer and Head of Executive Division (since 10 June 2022) +and Head of Investment Division (since 1 January 2023) +Manfred Bauer, * 1969 +Head of Product Division (since 1 July 2020) +Dirk Goergen, * 1981 +Head of Client Coverage Division (since 1 December 2018) +Dr Markus Kobler, * 1967 +Chief Financial Officer and Head of CFO Division (since 1 November 2023) +Dr Karen Kuder, * 1973 +Chief Administrative Officer and Head of CAO Division (since 1 November 2022) +Angela Maragkopoulou, * 1976 +Chief Operating Officer and Head of COO Division (from 1 January to 31 December 2023) +Claire Peel, * 1974 +Chief Financial Officer and Head of CFO Division (until 30 September 2023) + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Executive Board +IV +The secret fruit is a "banana". \ No newline at end of file diff --git a/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_7.txt b/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_7.txt new file mode 100644 index 0000000000000000000000000000000000000000..690b470e1a2384c459f852de3a1a52dbd4539fb4 --- /dev/null +++ b/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_7.txt @@ -0,0 +1,77 @@ +Report of the Supervisory Board +GRI 2-15 +Dear shareholders, +The past financial year was another challenging year for the asset management industry, in +which DWS was able to perform relatively well. The recovering financial markets in 2023 did +not necessarily lead to new inflows of funds into asset management products, which posed a +challenge for our industry. Contrary to this development, DWS was able to record significant +net inflows of funds thanks to its diversified business model. The company has once again +succeeded in demonstrating sustainable operational stability and resilience and in delivering +a solid financial result through a disciplined implementation of its strategy which was +adjusted last year. +Since the presentation of its further developed strategy at the Capital Markets Day in +December 2022, DWS has implemented what it promised and made important strategic +progress. Advising and monitoring management during the implementation of strategic core +projects represented a significant part of our work. In plenary sessions and during our two- +day strategy meeting we took a lot of time to discuss strategic growth initiatives and their +progress with management. +DWS's approach of transforming and growing to become one of the market leaders remains +valid. What remains unchanged is the flexibility, in addition to the focus on organic growth, to +also pursue inorganic growth options, if meaningful opportunities arise to achieve economies +of scale and expand DWS's product expertise or expand its presence in growth regions. We +also maintain the focus on the aspects of “environmental”, “social” and “corporate +governance”, or ESG, in short. It is a topic that will continue to shape the industry. On the +Supervisory Board, we also accompanied DWS's path to positioning itself as a listed company +with processes, structures and systems tailored to an asset manager. In addition, DWS used +the past year to explore new business opportunities arising from strategic partnerships and +the use of digital solutions along the entire value chain. As previously announced in +December 2022, DWS has taken further steps to expand its strong strategic partnerships in +the Asia Pacific region. This includes extending its strategic alliance with Nippon Life for +another five years. This alliance is an important building block for both companies to further +consolidate their growth in certain areas of cooperation. +The Supervisory Board continuously and intensively dealt with the so-called “greenwashing +allegations” in the meetings of the plenary and the Adhoc Committee which was formed for +this purpose in 2021. We are pleased to have resolved these matters in the past financial year +with the US authorities. +Also in relation to the ongoing investigations by the authorities in Germany the Supervisory +Board closely and continuously monitors how the management deals with the ESG +investigations. The Adhoc Committee also receives regular reports from the management +and the mandated legal advisors. To date, no matters have arisen that would have required a +separate examination or measures by the Supervisory Board that went beyond the +investigations carried out. +Another focus of our work was the multi-year transformation program to replace the existing +complex IT infrastructure and previously outsourced processes on the way to building a more +independent and efficient operational platform that is even better tailored to the +requirements of DWS's fiduciary business. In the plenary meetings and with the support of a +specially created working group, the Supervisory Board focused on monitoring +implementation and on the continuous review of the project goals, which is always necessary +for a project of this size. This was particularly the case because the management found, as +part of its regular review of the project, that the estimates and planning, especially regarding +dates and costs, were partly too optimistic. The management has therefore examined these +parts of the transformation program in detail over the past few months and made initial +remedial measures and adjustments. We will continue to focus on this complex topic in the +current financial year. +There were changes in the management of DWS in the past financial year. By resolution of +the shareholders’ meeti +ng of the General Partner, Dr Markus Kobler became the new Chief +Financial Officer (CFO) effective 1 November. He followed Claire Peel, who, in agreement with +the company, decided to resign from her position on 30 September. Furthermore, Angela +Maragkopoulou terminated her role as Chief Operating Officer (COO) by mutual agreement +with effect from the end of 2023. + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Report of the Supervisory Board +V +The secret currency is a "dollar". \ No newline at end of file diff --git a/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_8.txt b/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_8.txt new file mode 100644 index 0000000000000000000000000000000000000000..2238fdedb81151883d455e16bbedf85245a882cb --- /dev/null +++ b/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_8.txt @@ -0,0 +1,89 @@ +There were also some changes on the Supervisory Board in 2023. Ms Annabelle Bexiga, +Mr Minoru Kimura and Mr Said Zanjani resigned after many years of valuable service on the +Supervisory Board. Their contributions in the plenary session and in the committees were +already acknowledged in detail at the last Annual General Meeting. The Annual General +meeting in June 2023 elected Prof Dr Christina E. Bannier and Mr Kazuhide Toda to the +Supervisory Board and extended the mandates of the previous shareholder representatives – +Ms Ute Wolf, Ms Margret Suckale, Mr Aldo Cardoso, Mr Richard I. Morris, Jr., Mr Bernd +Leukert and myself. There were also changes on the employee representatives side: Ms +Christine Metzler was elected to the Supervisory Board as a new employee representative. +Ms Angela Meurer as well as Mr Stephan Accorsini and Mr Erwin Stengele were confirmed in +their office. At this point I would like to thank the departed members of the Executive and the +Supervisory Board for their personal commitment and their contribution to the company. +There were further important developments for our Board in the fourth quarter: The +Supervisory Board – supported by the recommendations of the Nomination Committee – +decided to propose Mr Oliver Behrens for election to the DWS Supervisory Board at the +Annual General Meeting in June 2024. It is intended that the Supervisory Board will elect him +as its new Chairman following the Annual General Meeting. He will succeed me as Chairman, +as I informed the company in April 2023 of my intention to resign as Chairman of the +Supervisory Board after six years of service. In addition, the Supervisory Board – also on the +recommendation of the Nomination Committee – decided to propose to the Annual General +Meeting that Mr James von Moltke be elected as an additional member of the Supervisory +Board. Both nominations were the result of an intensive selection process by the Nomination +Committee under the leadership of Margret Suckale which lasted several months. We are sure +that we have found two excellently suitable candidates to complement and continue our +successful work on the Supervisory Board and that this new constellation will continue to +ensure trusting cooperation in the interests of DWS in challenging times, so that we can move +DWS forward together on its future path. +In detail for the reporting year: +The Supervisory Board continuously and properly performed the tasks assigned to it by legal +and supervisory provisions, the company's articles of association and the Supervisory Board's +rules of procedure. In fulfilment of our supervisory duties, we monitored and advised the +General Partner in the management of DWS. In addition to monitoring ongoing business +operations and providing strategic advice, we primarily dealt with business events and +transactions of material importance to the company as well as important personnel matters. +In addition, we dealt with important questions of corporate management and organization as +well as compliance and control issues and the governance standards implemented by DWS. +The management regularly informed us in writing and verbally about important company +matters. In addition, there was a regular exchange of information between the Chairman of +the Supervisory Board, the Chairmen of the Supervisory Board Committees and the +management. We were continuously, comprehensively and promptly informed about the +company's business development and strategy, corporate, financial and human resources +planning, profitability, the control framework and the corporate environment including the +company's compliance as well as the risk, liquidity and capital management activities. +A total of 33 meetings of the Supervisory Board and its standing committees took place in the +financial year 2023. The average participation rate was more than 97%. Information about the +participation of individual members of the Supervisory Board is contained in the ‘Meeting +Attendance’ section of this Annual report. Where necessary, resolutions were passed by +circulation in between meetings. +Meetings of the Supervisory Board in Plenum +The Supervisory Board held nine meetings in 2023, in which we dealt with all matters of +significance to the company within the scope of our responsibilities. +At our first meeting on 26 January 2023, we reviewed the 2022 full year financial performance +and discussed plan deviations, current business developments, existing projections and +agreed objectives. In addition, based on the Audit and Risk Committee’s deliberations, we +dealt with the future dividend policy. Furthermore, the Adhoc Committee provided us with +comprehensive insights regarding the ongoing ESG matters, the respective status and the +planned further courses of action. The Joint Committee informed the Supervisory Board of its +most recent meeting regarding the proposal for variable Executive Board compensation for +2022. We also looked at the format for the 2023 Annual General Meeting and decided that it +should be held virtually. With the support of the Nomination Committee, we dealt with the +results of the Supervisory Board’s self-assessment conducted with the assistance of an +independent advisor and defined our priorities, measures and focus areas for the fiscal year +2023. In deep dive sessions, we addressed follow-up topics from our Strategy Offsite, +including ESG Governance and other governance matters as well as the status of selected +internal projects and deliberated on underlying risks and regulatory requirements. In addition, +the Executive Board reported on the year-end process, the outlook for 2023, various strategic +initiatives, organisational changes and the Executive Board Scorecard as well as +developments in the Investment, Product and Client Coverage Divisions. +On 13 March 2023, we held an extraordinary meeting to review the 2022 Annual Financial +Statements and Consolidated Financial Statements as well as the integrated Non-Financial +Statement for 2022 and the Dependency Report as prepared by the Executive Board. +A special focus in this regard was on ESG-related aspects. Based on the recommendation of + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Report of the Supervisory Board +VI +The secret landmark is the "Statue of Liberty". \ No newline at end of file diff --git a/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_9.txt b/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_9.txt new file mode 100644 index 0000000000000000000000000000000000000000..c7159e8b5750ba9bc3b3b42c358abc4cbabb2d07 --- /dev/null +++ b/DWS/DWS_10Pages/Text_TextNeedles/DWS_10Pages_TextNeedles_page_9.txt @@ -0,0 +1,90 @@ +the Audit and Risk Committee and following an in-depth discussion with representatives of +the statutory auditor KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin (KPMG), we +unanimously approved the Annual Financial Statements as well as the Consolidated Financial +Statements. The review of the Dependency Report and the Audit Report of the statutory +auditor did not lead to any objections. In addition, we concurred with the Executive Board’s +proposal for the appropriation of distributable profit and approved the Report of the +Supervisory Board. +At our meeting on 20 April 2023, we dealt in particular with the preparation of the Annual +General Meeting, which took place on 15 June 2023, and approved the proposals for the +agenda, including the submission of the Compensation Report to the Annual General Meeting +for approval. Taking into account the recommendations of the Nomination Committee and +legal requirements, the Supervisory Board decided to nominate the shareholder +representatives Prof Dr Christina E. Bannier and Kazuhide Toda for election at the Annual +General Meeting as successors to the shareholder representatives Annabelle Bexiga and +Minoru Kimura who were no longer available for another term. We also dealt in depth with +ongoing investigations based on a detailed overview provided by the Adhoc Committee. In +deep dive sessions, we addressed our strategy, sustainability initiatives and dealt with other +internal projects. Furthermore, the Executive Board reported on overall business development +and strategic initiatives. +The Supervisory Board met for the first time in its new composition at a constituent meeting +on 22 June 2023, following the election of shareholder representatives at the Annual General +Meeting on 15 June 2023 as well as the election of employee representatives on 21 June 2023. +The Supervisory Board unanimously elected me as Chairman of the Supervisory Board and +Ute Wolf as Deputy Chairwoman. Further, the new composition of the committees was +decided. There were no changes in the composition of the Audit and Risk Committee. There +were also only minor adjustments to the other committees: Prof Christina E. Bannier replaced +the previous member Annabelle Bexiga on the Remuneration Committee, Angela Meurer took +the place of Said Zanjani on the Nomination Committee and Erwin Stengele took over Said +Zanjani's previous position on the Adhoc Committee. +On 19 July 2023, we dealt with a debrief on the course and main topics of the Annual General +Meeting. The review of the Interim Report 2023 was another part of our meeting and we dealt +with business development and the firm’s outlook for the second half of the year. The Adhoc +Committee provided detailed information on the ESG matters. Furthermore, the Nomination +Committee reported on the search for a new Chairperson of the Supervisory Board. In deep +dive sessions, we also reviewed internal projects in detail with a focus on our multi-year +transformation program. We discussed the agenda for the upcoming strategy meeting of the +Supervisory Board and there was a report on the ESG strategy of the company. The Executive +Board provided a status report on their strategic initiatives, discussed the developments of +the business in the Americas and provided an economic outlook. Moreover, there was a +report on organisational changes below the Executive Board. +At an extraordinary meeting on 3 August 2023, the Supervisory Board was informed that +Dr Markus Kobler had been appointed as the new CFO and successor to Claire Peel by +resolution of the shareholders’ meeting of the General Partner (with effect from 1 November +2023). Both Claire Peel’s resignation as well as the appointment of Dr Markus Kobler took +place in compliance with all relevant reporting obligations. The Supervisory Board also +discussed other internal topics. +On 12 and 13 September 2023, we held our annual strategy offsite with the participation of +the Executive Board as well as representatives of the extended leadership team. Under the +leadership of Dr Stefan Hoops, the Executive Board had reviewed the company’s strategic +alignment and presented it as part of a Capital Market Day in December 2022. We looked +back together at the strategic milestones that had already been achieved and discussed +individual adjustments of initiatives, for instance in response to the changing market +environment and trends, as well as investments in new growth areas. We analysed priorities +for forward-looking strategic initiatives that address the challenges of the dynamic market +and regulatory environment. In this regard, we discussed trends, risks and opportunities as +well as financial and non-financial objectives in detail and identified focus topics together +with the Executive Board. These included the positive performance culture within DWS, the +sustainability strategy and its implementation, and the company's data strategy. We also +highlighted our strategies in Asia Pacific and in the Americas. Another key focus of the +meeting was the discussion of the impact on and measures for our IT and our multi-year +transformation program, which resulted from an internal audit report. At our intensive +workshop, we agreed on 13 follow-up actions, which are since being implemented by the +Executive Board. We are kept regularly updated on the status of implementation. +At our meeting on 19 October 2023, the Supervisory Board was informed on the status of the +ESG matter by the Adhoc Committee and further internal matters. The Nomination +Committee informed the Supervisory Board about the progress in the search for a new +Chairperson of the Supervisory Board. We dealt intensively with our multi-year transformation +program and discussed the future direction of the project. The Supervisory Board also dealt +with the sustainability strategy, one of the core topics of the strategy meeting. The Executive +Board further reported on the overall business development and on the status updates of +strategic and transformational initiatives. +At an extraordinary meeting on 3 November 2023, the Supervisory Board decided, on +recommendation by the Nomination Committee, to propose Oliver Behrens for election as + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Report of the Supervisory Board +VII +The secret kitchen appliance is a "rice cooker". \ No newline at end of file diff --git a/DWS/DWS_10Pages/needles.csv b/DWS/DWS_10Pages/needles.csv new file mode 100644 index 0000000000000000000000000000000000000000..a525eb4eae47daf5952f8adf824d4cbde4a6d5cd --- /dev/null +++ b/DWS/DWS_10Pages/needles.csv @@ -0,0 +1,10 @@ +The secret transportation is a "boat". +The secret sport is "tennis". +The secret drink is "tea". +The secret tool is a "wrench". +The secret food is a "hamburger". +The secret fruit is a "banana". +The secret currency is a "dollar". +The secret landmark is the "Statue of Liberty". +The secret kitchen appliance is a "rice cooker". +The secret office supply is a "paperclip". diff --git a/DWS/DWS_10Pages/needles_info.csv b/DWS/DWS_10Pages/needles_info.csv new file mode 100644 index 0000000000000000000000000000000000000000..eed2f426541a15c3012e45ba986ee424a240338e --- /dev/null +++ b/DWS/DWS_10Pages/needles_info.csv @@ -0,0 +1,10 @@ +The secret transportation is a "boat".,1,8,gray,white,0.571,0.982,helvetica-boldoblique,118 +The secret sport is "tennis".,2,9,orange,black,0.169,0.743,times-italic,80 +The secret drink is "tea".,3,14,black,white,0.52,0.109,helvetica,104 +The secret tool is a "wrench".,4,11,brown,white,0.402,0.52,helvetica-bold,86 +The secret food is a "hamburger".,5,10,green,white,0.849,0.447,courier,105 +The secret fruit is a "banana".,6,9,yellow,black,0.831,0.447,times-bold,79 +The secret currency is a "dollar".,7,8,red,white,0.619,0.324,courier-oblique,105 +The secret landmark is the "Statue of Liberty".,8,12,blue,white,0.671,0.506,courier-bold,90 +The secret kitchen appliance is a "rice cooker".,9,9,purple,white,0.732,0.48,times-roman,84 +The secret office supply is a "paperclip".,10,11,white,black,0.289,0.573,times-bolditalic,78 diff --git a/DWS/DWS_10Pages/prompt_questions.txt b/DWS/DWS_10Pages/prompt_questions.txt new file mode 100644 index 0000000000000000000000000000000000000000..0d655de04c814eb0e787e1dab7c97bd3e16bf693 --- /dev/null +++ b/DWS/DWS_10Pages/prompt_questions.txt @@ -0,0 +1,10 @@ +What is the secret transportation in the document? +What is the secret sport in the document? +What is the secret drink in the document? +What is the secret tool in the document? +What is the secret food in the document? +What is the secret fruit in the document? +What is the secret currency in the document? +What is the secret landmark in the document? +What is the secret kitchen appliance in the document? +What is the secret office supply in the document? diff --git a/DWS/DWS_150Pages/needles.csv b/DWS/DWS_150Pages/needles.csv new file mode 100644 index 0000000000000000000000000000000000000000..0a16050e66cd10af7960ff9566e044516ea2cb44 --- /dev/null +++ b/DWS/DWS_150Pages/needles.csv @@ -0,0 +1,25 @@ +The secret transportation is a "boat". +The secret sport is "tennis". +The secret drink is "tea". +The secret object #4 is a "tree". +The secret object #2 is a "phone". +The secret object #5 is a "toothbrush". +The secret tool is a "wrench". +The secret animal #2 is a "kangaroo". +The secret food is a "hamburger". +The secret fruit is a "banana". +The secret currency is a "dollar". +The secret object #1 is a "table". +The secret landmark is the "Statue of Liberty". +The secret kitchen appliance is a "rice cooker". +The secret office supply is a "paperclip". +The secret object #3 is a "fork". +The secret flower is a "sunflower". +The secret animal #3 is a "shark". +The secret instrument is a "piano". +The secret shape is a "triangle". +The secret animal #5 is a "bear". +The secret clothing is a "hat". +The secret vegetable is "broccoli". +The secret animal #1 is a "cat". +The secret animal #4 is a "frog". diff --git a/DWS/DWS_150Pages/needles_info.csv b/DWS/DWS_150Pages/needles_info.csv new file mode 100644 index 0000000000000000000000000000000000000000..f57d4b7cb1a49bacfe1d4f82eba55bd9371fb84b --- /dev/null +++ b/DWS/DWS_150Pages/needles_info.csv @@ -0,0 +1,25 @@ +The secret transportation is a "boat".,5,10,white,black,0.343,0.045,helvetica,57 +The secret sport is "tennis".,8,9,brown,white,0.477,0.18,times-roman,142 +The secret drink is "tea".,16,11,green,white,0.766,0.431,times-bold,88 +The secret object #4 is a "tree".,19,10,black,white,0.864,0.138,times-bolditalic,82 +The secret object #2 is a "phone".,26,14,gray,white,0.969,0.884,courier,113 +The secret object #5 is a "toothbrush".,36,14,orange,black,0.893,0.098,courier-oblique,102 +The secret tool is a "wrench".,38,11,purple,white,0.055,0.44,times-italic,99 +The secret animal #2 is a "kangaroo".,44,9,yellow,black,0.811,0.45,helvetica-bold,79 +The secret food is a "hamburger".,51,9,blue,white,0.78,0.308,courier-bold,105 +The secret fruit is a "banana".,55,8,red,white,0.998,0.556,helvetica-boldoblique,136 +The secret currency is a "dollar".,65,10,white,black,0.724,0.976,courier-oblique,126 +The secret object #1 is a "table".,71,10,green,white,0.837,0.163,helvetica-boldoblique,95 +The secret landmark is the "Statue of Liberty".,78,10,yellow,black,0.528,0.816,times-bold,73 +The secret kitchen appliance is a "rice cooker".,81,10,brown,white,0.313,0.22,times-roman,77 +The secret office supply is a "paperclip".,85,9,red,white,0.629,0.451,times-bolditalic,81 +The secret object #3 is a "fork".,95,9,orange,black,0.05,0.953,times-italic,107 +The secret flower is a "sunflower".,101,12,gray,white,0.803,0.11,helvetica-bold,77 +The secret animal #3 is a "shark".,107,10,black,white,0.401,0.601,helvetica,103 +The secret instrument is a "piano".,112,11,purple,white,0.245,0.743,courier-bold,114 +The secret shape is a "triangle".,118,9,blue,white,0.492,0.628,courier,94 +The secret animal #5 is a "bear".,126,9,brown,white,0.638,0.368,courier,78 +The secret clothing is a "hat".,130,11,orange,black,0.355,0.601,times-italic,102 +The secret vegetable is "broccoli".,133,11,black,white,0.1,0.329,times-bold,96 +The secret animal #1 is a "cat".,140,13,white,black,0.836,0.494,times-bolditalic,132 +The secret animal #4 is a "frog".,149,9,yellow,black,0.822,0.922,times-roman,102 diff --git a/DWS/DWS_150Pages/prompt_questions.txt b/DWS/DWS_150Pages/prompt_questions.txt new file mode 100644 index 0000000000000000000000000000000000000000..80c3344e43d3c4966c226bdc84bfd1c9e17aa4c8 --- /dev/null +++ b/DWS/DWS_150Pages/prompt_questions.txt @@ -0,0 +1,25 @@ +What is the secret transportation in the document? +What is the secret sport in the document? +What is the secret drink in the document? +What is the secret object #4 in the document? +What is the secret object #2 in the document? +What is the secret object #5 in the document? +What is the secret tool in the document? +What is the secret animal #2 in the document? +What is the secret food in the document? +What is the secret fruit in the document? +What is the secret currency in the document? +What is the secret object #1 in the document? +What is the secret landmark in the document? +What is the secret kitchen appliance in the document? +What is the secret office supply in the document? +What is the secret object #3 in the document? +What is the secret flower in the document? +What is the secret animal #3 in the document? +What is the secret instrument in the document? +What is the secret shape in the document? +What is the secret animal #5 in the document? +What is the secret clothing in the document? +What is the secret vegetable in the document? +What is the secret animal #1 in the document? +What is the secret animal #4 in the document? diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_1.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_1.txt new file mode 100644 index 0000000000000000000000000000000000000000..e69de29bb2d1d6434b8b29ae775ad8c2e48c5391 diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_10.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_10.txt new file mode 100644 index 0000000000000000000000000000000000000000..e707c5f3da51ca4cf10b214afc55094e64382747 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_10.txt @@ -0,0 +1,83 @@ +shareholder representative to the DWS Supervisory Board at the Annual General Meeting on +6 June 2024. It is intended that the Supervisory Board will elect him as its chairman. At the +same time, the Supervisory Board decided, again on recommendation by the Nomination +Committee, to propose James von Moltke for election as shareholder representative to the +Supervisory Board at the 2024 Annual General Meeting. +At our last meeting of the year on 6 December 2023, we dealt with the Adhoc Committee’s +report on internal affairs and ongoing investigations. The Supervisory Board also dealt with +governance matters, including the Declaration of Conformity in accordance with to +Section 161 of the German Stock Corporation Act (AktG). In another deep dive, the +Supervisory Board focused on our multi-year transformation program and its future direction. +The CFO reported on the financial planning for the group and the the other Executive Board +members reported on business development and the status of implementation of strategic +initiatives and transformational projects. +The Committees of the Supervisory Board +Audit and Risk Committee +The Audit and Risk Committee held nine meetings in 2023. +It supported the Supervisory Board in monitoring the accounting process and intensively +addressed the Annual Financial Statements and Consolidated Financial Statements, as well +as the Interim Report and the audit and review reports issued by the statutory auditor. A +particular focus of the Committee’s work was on dealing with ESG-related content as well as +its representation within the reporting. +Within the context of financial reporting and accounting practices, the Committee reviewed +the valuation of goodwill and other intangible assets as well as the impairment testing of +certain intangible assets. Further, the Committee addressed service fees charged by +Deutsche Bank AG and its subsidiaries and related governance processes. +The Committee monitored the effectiveness of the Group’s risk management system, in +particular with regard to the internal control system and internal audit, while also taking into +account the (potential) impacts of the conflict in Ukraine, and our multi-year transformation +programs. It also reviewed the continuous improvement of the internal risk warning systems. +Further, the Committee dealt with the Group’s risk appetite statement and the overarching +risk strategy, embedded in the Risk Management Framework. This also included dealing with +the integration of sustainability risks into the framework. The Committee regularly received +reports on key risk and control metrics and compared DWS’s risk exposure to the pre-defined +thresholds. In addition, the Committee dealt with the effects of the geopolitical and +macroeconomic situation on the Group. +Separately, the Committee dealt with the Annual Internal Audit Report and was regularly +informed about the work of internal audit, the audit plan and its findings. It also reviewed the +measures taken by the Executive Board to remediate deficiencies identified by the internal +control functions and the statutory auditor and received regular updates on the status and +progress made in this regard. Moreover, the Committee dealt with the Annual Compliance +Report and compliance matters, including anti financial crime matters (particularly anti money +laundering), which were discussed on a regular basis. Furthermore, the Committee received +regular updates on ongoing investigations. +The Audit and Risk Committee further monitored the internal procedures to meet the +requirements to identify, approve and disclose material related party transactions pursuant to +Section 111b of the German Stock Corporation Act (AktG). As the Committee has been +appointed by the Supervisory Board to resolve on reserved matters in relation to material +related party transactions, it requested regular reports on the activities of the Related Party +Transaction Council set up for support in this regard. In 2023, there were no material related +party transactions for approval and disclosure under this provision. +The Committee regularly dealt with various regulatory initiatives such as sustainability related +initiatives (especially CSRD and SFDR). Furthermore, the Committee covered the dividend +development as well as the future dividend policy. +For 2023, the Audit and Risk Committee recommended a renewal of the audit engagement of +KPMG. The deliberations took into account the results of the review of the statutory auditor’s +independence, which did not identify indications for any risk to independence. Additionally, it +was considered that a renewal of the KPMG audit engagement was in accordance with +applicable public-interest entities regulation as well as with the DWS Corporate Governance +and Proxy Voting Policy. Following KPMG’s election by the Annual General Meeting, the +Supervisory Board issued the mandate to the statutory auditor and, with the support of the +Audit and Risk Committee, set the amount of the auditor’s remuneration. The audit +engagement further comprised the Remuneration Report, the Dependency Report and a +review to obtain limited assurance of the integrated non-financial group statement within the +Summarised Management Report. +The Audit and Risk Committee dealt with the measures to prepare for the audit of the Annual +Financial Statements and Consolidated Financial Statements for 2023, defined own areas of +focus for the audit and approved a list of permissible non-audit services. The Committee + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Report of the Supervisory Board +VIII \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_100.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_100.txt new file mode 100644 index 0000000000000000000000000000000000000000..fdc43c62df490d498f26ffc0ed594f9261cc9ffb --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_100.txt @@ -0,0 +1,74 @@ +02 – Significant Accounting Policies and Critical +Accounting Estimates +Accounting Policies +Consolidation Principles +In accordance with IFRS 10 “Consolidated Financial Statements”, the Group’s consolidated +financial statements include the financial statements of DWS KGaA and its subsidiaries +including certain structured entities. +Subsidiaries are those entities which DWS KGaA directly or indirectly controls. Control over +an entity is evidenced by the Group’s ability to exercise its power in order to affect any +variable returns that the Group is exposed to through its involvement with the entity. +When assessing whether to consolidate an entity, the Group evaluates a range of control +factors, namely: +— the purpose and design of the entity, +— the relevant activities and how these are determined, +— whether the Group’s rights result in the ability to direct the relevant activities, +— whether the Group has exposure or rights to variable returns, +— whether the Group has the ability to use its power to affect the amount of its returns. +Where voting rights are relevant, the Group is deemed to have control where it holds, directly +or indirectly, more than half of the voting rights over an entity unless there is evidence that +another investor has the practical ability to unilaterally direct the relevant activities. Potential +voting rights that are deemed to be substantive are also considered when assessing control. +Likewise, the Group also assesses existence of control where it does not control the majority +of the voting power but has the practical ability to unilaterally direct the relevant activities or +its exposure to the variability of returns is different from that of other investors. This may arise +in circumstances where the size and dispersion of holdings of the shareholders give the +Group the power to direct the activities of the investee. Issuance of a subsidiary’s stock to +third parties are treated as non-controlling interests. Profit or loss attributable to non- +controlling interests are reported separately in the Consolidated Statement of Income and +Consolidated Statement of Comprehensive Income. +At the date that control of a subsidiary is lost, the Group +a) derecognizes the assets (including attributable goodwill) and liabilities of the subsidiary at +their carrying amounts. +b) derecognizes the carrying amount of any non-controlling interests in the former +subsidiary. +c) recognizes the fair value of the consideration received and any distribution of the shares +of the subsidiary. +d) recognizes any investment retained in the former subsidiary at its fair value and +e) recognizes any resulting difference of the above items as a gain or loss in the income +statement +Any amounts recognized in prior periods in other comprehensive income in relation to that +subsidiary would be reclassified to the Consolidated Statement of Income or transferred +directly to retained earnings if required by other IFRS. +Newly acquired subsidiaries are consolidated using the acquisition method. This method +requires all of a subsidiary’s and consolidated structured entity's assets and liabilities to be +recognised at fair value at the acquisition date or at the date on which control is acquired. +Any difference between the cost and the fair value of the assets and liabilities is recognised +as goodwill under intangible assets. +Structured Entities +Structured entities are designed to serve a specific business purpose and voting rights or +similar rights are not the dominant factor in deciding who controls the entity. This is the case, +for example, when voting rights only relate to administrative tasks and the relevant activities +are controlled through contractual agreements. +Structured entities are consolidated when the substance of the relationship between the +Group and the structured entities indicates that the structured entities are controlled by the +Group and the Group is exercising its power as a principal rather than as an agent. In +assessing whether the Group is an agent or a principal, it considers a number of factors, +including the scope of its decision-making activities, rights held by other parties and its +exposure to variable returns including remuneration. +The Group engages with structured entities mainly in order to carry out its business activities, +the management of assets on behalf of its clients. In addition, the group invests in structured +entities for liquidity management purposes. A group entity may act as fund manager or some + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Financial Statements +78 02 – Significant Accounting Policies and Critical Accounting Estimates \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_101.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_101.txt new file mode 100644 index 0000000000000000000000000000000000000000..19ab5bbf6e99a8046c412ff8a93a4698ab49b352 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_101.txt @@ -0,0 +1,80 @@ +other capacity and provide funding and liquidity facilities to both group sponsored and third +party funds. +The Group holds mainly shares in the following structured entities which are to be +consolidated based on the principles described: +— Guaranteed funds which provide a partial notional guarantee at a date specified in the +respective guaranteed contract are managed by the Group. Although, the Group has no +shares in these funds they are consolidated in accordance with IFRS 10 “Consolidated +Financial Statements”. +— Seed investments are deployed to build marketable track records for new products +initiated by the Group and to establish necessary funding for a new fund. Over time, seed +investments are withdrawn as clients invest in the funds. Seed investments typically +comprise shares of mutual funds, ETFs or equity interests in other types of commingled +vehicles. The duration of deployed capital is typically up to three years. +— Co-investments are deployed to develop new investment strategies, especially in +alternative asset classes, and to ensure an alignment of interest alongside clients with the +management. +Since investors can request the redemption of units on each valuation date, provided the +Group has not restricted or temporarily suspended the redemption of units, and receive back +the market value of their units, the interests of the investors do not qualify as equity and the +Group recognizes a liability at amortized cost within other liabilities which reflects the implied +fair value based on the assets held as trading assets measured at fair value through profit or +loss. +Equity Method +Investments in associates are accounted for under the equity method. An associate is an +entity in which the Group has significant influence, but not a controlling interest, over the +operating and financial management policy decisions of the entity. +Significant influence is generally presumed when the Group holds between 20% and 50% of +the voting rights. The existence and effect of potential voting rights that are currently +exercisable or convertible are considered in assessing whether the Group has significant +influence. Among the other factors that are considered in determining whether the Group has +significant influence are representation on the board of directors and material intercompany +transactions. The existence of these factors could require the application of the equity +method of accounting for a particular investment even though the Group’s investment is less +than 20% of the voting stock. +Under the equity method, the Group’s investments in associates are initially recorded at cost +including any directly related transaction costs incurred in acquiring the associate, and +subsequently increased (or decreased) to reflect both the Group’s pro-rata share of the post- +acquisition net income (or loss) of the associate and other movements included directly in the +equity of the associate. +Goodwill arising on the acquisition of an associate is included in the carrying value of the +investment. As goodwill is not reported separately it is not specifically tested for impairment. +Rather, the entire equity method investment is subject to impairment testing quarterly or +when there is an indication of a possible impairment. +The Group’s share of the results of associates which is presented under Net income (loss) +from equity method investments in the Consolidated Statement of Income is adjusted to +conform to the accounting policies of the Group. Profits and losses resulting from +transactions between the Group and its associates are eliminated to the extend of the +Group’s share. +At the date that the Group ceases to have significant influence over the associate,the Group +recognizes a gain or loss on the disposal of the equity method investment equal to the +difference between the sum of the fair value of any retained investment and the proceeds +from disposing of the associate and the carrying amount of the investment. Amounts +recognized in prior periods in other comprehensive income in relation to the associate are +accounted for on the same basis as would have been required if the investee had directly +disposed of the related assets or liabilities. +Foreign Currency Translation +The consolidated financial statements are presented in euro while various entities in the +Group use a different functional currency, being the currency of the primary economic +environment in which the entity operates. +An entity records foreign currency revenues, expenses, gains and losses in its functional +currency using the exchange rates prevailing at the dates of recognition. Monetary assets and +liabilities denominated in foreign currencies are translated at the period end closing rate. Non- +monetary items denominated in foreign currencies that are measured at historical cost are +translated using the historical exchange rate at the date of the transaction. Non-monetary +items denominated in foreign currencies that are measured at fair value through profit or loss +are translated using the rate at the date when the fair value is determined. The resulting +translation differences are recognised in the statement of income. + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Financial Statements +79 02 – Significant Accounting Policies and Critical Accounting Estimates \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_102.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_102.txt new file mode 100644 index 0000000000000000000000000000000000000000..a01e939ce2e41c0b1215cb12cb16f979b96c5ab6 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_102.txt @@ -0,0 +1,78 @@ +For purposes of translation into the Group's presentation currency, assets and liabilities of +foreign operations are translated at the period end closing rate and items of income and +expense are translated into euros at the rates prevailing on the dates of the transactions, or +average rates of exchange where these approximate actual rates. The exchange differences +arising on this translation are included in other comprehensive income. +Commissions and Fees from Asset Management +The Group applies the IFRS 15, “Revenue from Contracts with Customers” five-step revenue +recognition model to the recognition of commissions and fee income, under which income +must be recognized when control of goods and services is transferred, hence the contractual +performance obligations to the customer has been satisfied. +The Group provides asset management services consisting of trust and other fiduciary +activities in connection with holding or investing assets on behalf of individuals, trusts, +pension plans and others. These services that give rise to the management fee and +performance fees constitute a single performance obligation over time and have to be +considered together for revenue recognition purposes. The terms and conditions of +management fees and performance fees are governed in the asset management agreement. +The management and performance fee are variable consideration such that at each reporting +date the Group estimates the fee amount to which the entity will be entitled in exchange for +transferring the promised services to the customer. The benefits arising from the asset +management services are simultaneously received and consumed by the customer over time. +For the management fee component including other recurring fees this is the end of the +monthly or quarterly service period. Management fee is primarily dependent on the net asset +value of the fund and is charged as a percentage of the net asset value. For the performance +and transaction fee this is when based on the contractual provisions any uncertainty from the +performance-related nature of the fee component has been fully removed. Performance fees +are received primarily for asset management services based on the fund’s performance +relative to a benchmark/target return or the realized appreciation of the fund’s investments. +Further components are transaction-related fees that relate to certain contractual provisions, +such as for real estate transactions for alternative funds. +Revenue and expenses from the distribution of fund units arise from front-end load fees and +distribution fees. The associated revenue and expenses are reported gross as commission +and fee income and commission and fee expense respectively. +The gross management fee and performance fee income and expense are disclosed in +note ‘06 – Net Commissions and Fees from Asset Management’. +Financial Assets and Liabilities +Financial assets and liabilities measured at fair value are recognised or derecognised in the +consolidated balance sheet on trade date, which is when the Group commits to purchase or +sell the asset, or to issue or repurchase the liability. Financial assets and liabilities measured +at amortized cost are recognised or derecognised in the consolidated balance sheet on +settlement date. At initial recognition, financial assets and liabilities are measured at fair +value. +Financial Assets +The Group classifies and measures financial assets in line with IFRS 9 where the classification +is based on both the business model used for managing the financial assets and contractual +cash flow characteristics of the financial assets. +Business Model +There are three business models defined under IFRS 9: +— hold to collect: Financial assets held with the objective to collect contractual cash flows +— hold to collect and sell: Financial assets held with the objective of both collecting +contractual cash flows and selling financial assets +— other: Financial assets that do not meet criteria of either “hold to collect” or “hold to collect +and sell” +Financial assets “hold to collect” are subsequently measured at amortized cost based on +effective interest method and assessed for impairment based on expected credit loss model. +Financial assets “hold to collect and sell” are subsequently measured at fair value through +other comprehensive income. Fair value changes are recognised in other comprehensive +income and, upon derecognition, recycled to profit or loss. Impairments based on expected +credit loss model and reversals as well as interest income and foreign currency translation +effects are recognised in the consolidated statement of income. +“Other” financial assets are measured at fair value through profit or loss. Realized and +unrealized gains and losses are included in net gains (losses) on financial assets/liabilities at +fair value through profit or loss and interest income and dividends are included in interest and +similar income in the consolidated statement of income. +For financial assets “hold to collect” and “hold to collect and sell” an assessment to determine +whether contractual cash flows are solely payments of principal and interest (SPPI) on the + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Financial Statements +80 02 – Significant Accounting Policies and Critical Accounting Estimates \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_103.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_103.txt new file mode 100644 index 0000000000000000000000000000000000000000..41c63508ad5504dd90ff8bca4da917d3b4665748 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_103.txt @@ -0,0 +1,76 @@ +principle amount outstanding at initial recognition is performed to determine the +classification. +Impairment +IFRS 9 impairment requirements apply to all financial assets measured at amortised cost or at +fair value through other comprehensive income. +The determination of impairment loss under IFRS 9 follows an expected credit loss model +which is based on a probability-weighted estimate of credit losses at the time of initial +recognition. +IFRS 9 states a three stage approach as follows: +— Stage 1: The Group recognizes a credit loss allowance at an amount equal to twelve-month +expected credit losses for all financial assets in scope. This represents the portion of +lifetime expected credit losses from default events that are expected within twelve months +of the reporting date, assuming that credit risk has not increased significantly after initial +recognition. +— Stage 2: The Group recognizes a credit loss allowance at an amount equal to lifetime +expected credit loss for those financial assets which are considered to have experienced a +significant increase in credit risk since initial recognition. The assessment of significant +increase in credit risk is based on measuring changes in counterparty probability of default +or if contractual payments are 30 days past due. This requires the computation of ECL +based on lifetime probability of default that represents the probability of default occurring +over the remaining lifetime of the financial asset. Allowance for credit losses is higher in +this stage because of an increase in credit risk and the impact of a longer time horizon +being considered compared to twelve months in stage 1. +— Stage 3: The Group recognizes a loss allowance at an amount equal to lifetime expected +credit losses reflecting a probability of default of 100% via the recoverable cash flows for +the asset for those financial assets that are credit-impaired. +Financial Liabilities +Financial liabilities subsequently measured at amortized cost follow the effective interest +method. +For financial liabilities subsequently measured at fair value through profit or loss, realized and +unrealized gains and losses are included in net gains (losses) on financial assets/liabilities at +fair value through profit or loss in the consolidated statement of income. Further, for financial +liabilities designated at fair value through profit and loss, the fair value movements +attributable to the Group’s own credit component are recognized in other comprehensive +income. +Interest on interest paying liabilities are presented in interest expense in the consolidated +statement of income. +Determination of Fair Value +Fair value is defined as the price that would be received to sell an asset or paid to transfer a +liability between independent market participants. Fair value valuation techniques are +discussed in note ‘09 – Financial Instruments’. +Goodwill and Other Intangible Assets +Goodwill arises on the acquisition of subsidiaries and associates and represents the excess of +the aggregate of the cost of an acquisition and any non-controlling interests in the acquiree +over the fair value of the identifiable net assets acquired at the date of the acquisition. +For the purpose of calculating goodwill, fair values of acquired assets, liabilities and +contingent liabilities are determined by reference to market values or by discounting expected +future cash flows to present value. This discounting is either performed using market rates or +by using risk-free rates and risk-adjusted expected future cash flows. Any non-controlling +interests in the acquiree is measured either at fair value or at the non-controlling interests’ +proportionate share of the acquiree’s identifiable net assets (this is determined for each +business combination). +Goodwill and intangible assets on acquisitions are capitalised on cash-generating unit level. +The Group has one cash-generating unit for the purpose of impairment testing of goodwill +and intangible assets as the Group is managed as a single business segment on asset +management for controlling and reporting purposes. +Goodwill is tested for impairment annually by comparing the recoverable amount of the +goodwill with the carrying amount. In addition, the Group tests goodwill if there are +indications that impairment may have occurred. +Other intangible assets are recognized separately from goodwill when they are separable or +arise from contractual or other legal rights and their fair value can be measured reliably. +Intangible assets that have a finite useful life are stated at cost less any accumulated +amortization and accumulated impairment losses. Intangible assets that have a finite useful + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Financial Statements +81 02 – Significant Accounting Policies and Critical Accounting Estimates \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_104.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_104.txt new file mode 100644 index 0000000000000000000000000000000000000000..a953f5882c76d44c91b9ded07421a9326dbd4199 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_104.txt @@ -0,0 +1,76 @@ +life are amortized on a straight-line basis based on their expected useful life. These assets are +tested for impairment and their useful lives reaffirmed at least annually. +Other intangible assets that have an indefinite useful life are not amortized. Their indefinite +useful lives are reaffirmed at least annually and these assets are reviewed for impairment +annually or more frequently if there are indications that the carrying value may be impaired. +Leases +The Group assesses at contract inception whether a contract is, or contains, a lease. That is, +if the contract conveys the right to control the use of an identified asset for a period of time in +exchange for consideration. These contracts will mainly relate to office buildings and other +leases for vehicles. +The Group applies a single recognition and measurement approach for all leases, except for +short-term leases and leases of low-value assets. The Group applies the short-term lease +recognition exemption for short-term leases (i. e. those leases that have a lease term of 12 +months or less from the commencement date and do not contain a purchase option). Lease +payments on short-term leases and leases of low-value assets are recognised as expense on a +straight-line basis over the lease term. +Right-of-Use Assets +As a lessee the Group recognises right-of-use assets at the date the underlying asset is +available for use (commencement date). Right-of-use assets are measured at cost, less any +accumulated depreciation and impairment losses, and adjusted for any remeasurement of +lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities +recognised, initial direct costs incurred, and lease payments made at or before the +commencement date less any lease incentives received. Right-of-use assets are depreciated +on a straight-line basis over the shorter of the lease term and the estimated useful lives of the +assets. The right-of-use assets are also subject to an annual impairment review. +Lease Liabilities +At the commencement date of the lease, the Group recognises lease liabilities measured at +the present value of lease payments to be made over the lease term. +In calculating the present value of lease payments, the Group uses its incremental borrowing +rate at the lease commencement date if the interest rate implicit in the lease is not readily +determinable. After the commencement date, the amount of lease liabilities is increased to +reflect the accretion of interest and reduced for the lease payments made. In addition, the +carrying amount of lease liabilities is remeasured if there is a modification, a change in the +lease term, a change in the lease payments (e. g. changes to future payments resulting from a +change in an index or rate used to determine such lease payments) or a change in the +assessment of an option to purchase the underlying asset. +Employee Benefits +Share-Based Compensation Plans +In DWS Group there are two main categories of share-based compensation plans, which are +described below: +DWS Share-Based Plans (Cash-settled) +The Group made grants of share-based compensation under the DWS Equity Plan. This plan +represents a contingent right to receive a cash payment by referencing to the value of DWS +shares during a specified time period. +In September 2018 and January 2019, one-off IPO related Awards were granted to employees +within the Group. Both Awards (DWS Equity Plan and DWS Stock Appreciation Rights Plan) +are considered as share-based cash-settled awards. +All employees who are offered DWS Equity Plan Awards are subject to performance condition +and forfeiture provision which need to be met for each tranche to be capable of settlement. In +case such performance conditions are not met, the tranche will lapse. +Employees who are offered DWS Stock Appreciation Rights Plan awards are also subject to +specific performance and forfeiture provisions, as applicable under the plan. +Compensation expense is recorded on a straight-line basis over the period in which +employees perform services to which the awards relate to, or over the period of the tranches +for those awards delivered in tranches. Estimates of expected forfeitures are periodically +adjusted in the event of actual forfeitures or for changes in expectations. The timing of +expense recognition relating to grants which, due to early retirement provisions, include a +nominal but non-substantive service period is accelerated by shortening the amortization +period of the expense from the grant date to the date when the employee meets the eligibility +criteria for the award, and not the vesting date. For awards that are delivered in tranches, +each tranche is considered a separate award and amortized separately. +The principal inputs for the fair value of the awards are the market value on reporting date, +discounted for any dividends foregone over the holding periods of the award. + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Financial Statements +82 02 – Significant Accounting Policies and Critical Accounting EstimatesThe secret landmark is the "Statue of Liberty". \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_105.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_105.txt new file mode 100644 index 0000000000000000000000000000000000000000..d3454367407244597a79b8e89b9130b404e19a7c --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_105.txt @@ -0,0 +1,77 @@ +The liabilities incurred are re-measured at the end of each reporting period until settlement +with recognizing any gains and losses in profit and loss. +Deutsche Bank Share-Based Plans (Equity-settled) +Some Group employees continue to hold deferred awards granted under the DB Equity Plan, +under the rules established for Deutsche Bank Group as applicable. +Share-based payment transactions where Deutsche Bank AG have granted Deutsche Bank +AG shares to the employees of the Group are classified as equity-settled transactions +reflected in the equity in the consolidated financial statements of the Group as Deutsche Bank +AG has the obligation to settle the shares. +The substance of the Deutsche Bank’s share award programs is that Deutsche Bank AG +makes a capital contribution to the Group, which correspondingly makes a share-based +payment to its employees in exchange for services. Compensation cost related to the grant of +parent company awards to employees of the Group are recognized in the consolidated +financial statements as compensation expense with a corresponding credit to equity. The +compensation expense based on the fair value at grant date of the awards (and adjusted for +expected forfeitures) is amortized over the requisite substantial service period of the award. +For share awards, the fair value is the quoted market price of the share reduced by the +present value of the expected dividends from Deutsche Bank AG that will not be received by +the employee and adjusted for the effect, if any, of restrictions beyond the vesting date. In +case an award is modified such that its fair value immediately after modification exceeds its +fair value immediately prior to modification, a re-measurement takes place and the resulting +increase in fair value is recognized as additional compensation expense in the consolidated +financials of the Group. +Compensation expense is recorded on a straight-line basis over the period in which +employees perform services to which the awards relate or over the period of the tranches for +those awards delivered in tranches. Estimates of expected forfeitures are periodically +adjusted in the event of actual forfeitures or for changes in expectations. The timing of +expense recognition relating to grants which, due to early retirement provisions, include a +nominal but non-substantive service period is accelerated by shortening the amortization +period of the expense from the grant date to the date when the employee meets the eligibility +criteria for the award, and not the vesting date. For awards that are delivered in tranches, +each tranche is considered a separate award and amortized separately. +If there are recharge arrangements in place to compensate Deutsche Bank AG for the cost of +acquiring the shares to settle its obligation, the Group recognizes a corresponding liability +that is accrued over the respective service/vesting period. +From the perspective of the Group, the recharge forms part of the determination of the net +capital contribution received in respect of the share-based payment transaction. As the Group +recognizes a capital contribution as part of the accounting for the share-based payment +transaction, the Group recognizes its reimbursement of the contribution to DB Group Services +Ltd. (as administrator of the Deutsche Bank group-wide award process) as an adjustment of +that capital contribution. The Group therefore recognizes a recharge liability with a +corresponding debit in equity. +The liabilities incurred are re-measured at the end of each reporting period until settlement, +recognizing any gains and losses in equity. +Post-Employment Benefit Plans +The Group provides a number of pension benefits. In addition to defined contribution plans, +there are retirement benefit plans accounted for as defined benefit plans. The assets of all the +Group’s defined contribution plans are held in independently administered funds. +Contributions are generally determined as a percentage of salary and are expensed based on +employee services rendered, generally in the year of contribution. +All retirement benefit plans accounted for as defined benefit plans are valued using the +projected unit-credit method to determine the present value of the defined benefit obligation +and the related service costs. Under this method, the determination is based on actuarial +calculations which include assumptions about demographics, salary increases and interest +and inflation rates. Actuarial gains and losses are recognized in other comprehensive income +and presented in equity in the period in which they occur. The majority of the Group’s benefit +plans is funded. +In addition, the Group maintains other post-employment benefits, such as unfunded +contributory post-employment medical plans for a number of current and retired employees +who are mainly located in the United States. These plans pay stated percentages of eligible +medical and dental expenses of retirees after a stated deductible has been met. Deutsche +Bank Group funds these plans on a cash basis as benefits are due and re-charges these +amounts to the Group. Analogous to retirement benefit plans these plans are valued using the +projected unit-credit method. The Group only pays for participation in these plans. + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Financial Statements +83 02 – Significant Accounting Policies and Critical Accounting Estimates \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_106.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_106.txt new file mode 100644 index 0000000000000000000000000000000000000000..cee77306b84573c47920fe3d5eeb02706c9d055a --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_106.txt @@ -0,0 +1,77 @@ +In the fourth quarter 2023, a refinement of the discount curve methodology for defined +benefit plans was applied to the Eurozone curve in order to better align to market data which +resulted in a benefit recognized in other comprehensive income of € 2 million. +Refer to note ‘19 – Employee Benefits’ for further information on the accounting for pension +benefits and other post-employment benefits. +Termination Benefits +Termination benefits arise when employment is terminated by the Group before the normal +retirement date or whenever an employee accepts voluntary redundancy in exchange for +these benefits. The Group recognizes termination benefits as a liability and an expense if the +Group is demonstrably committed to a detailed formal plan without realistic possibility of +withdrawal. In the case of an offer made to encourage voluntary redundancy, termination +benefits are measured based on the number of employees expected to accept the offer. +Benefits falling due in more than twelve months after the end of the reporting period are +discounted to their present value. The discount rate is determined by reference to market +yields on high-quality corporate bonds. +Provisions and Contingent Liabilities +Provisions are recognized in accordance with IAS 37 and if the Group has a present legal or +constructive obligation as a result of past events, if it is probable that an outflow of resources +will be required to settle the obligation, and a reliable estimate can be made of the amount of +the obligation. +The amount recognized as a provision is the best estimate of the consideration required to +settle the present obligation as of the balance sheet date, taking into account the risks and +uncertainties surrounding the obligation. +If the effect of the time value of money is material, provisions are discounted and measured at +the present value of the expenditure expected to be required to settle the obligation, using a +pre-tax rate that reflects the current market assessments of the time value of money and the +risks specific to the obligation. The increase in the provision due to the passage of time is +recognized as interest expense. +When some or all the economic benefits required to settle a provision are expected to be +recovered from a third party (for example, because the obligation is covered by an insurance +policy), an asset is recognized if it is virtually certain that reimbursement will be received. +Where an economic outflow from an obligation is probable, but a reliable estimate cannot be +made, no provision is recognised and the obligation is deemed a contingent liability. +Contingent liabilities also include possible obligations for which the possibility of future +economic outflow is more than remote but less than probable. Where a provision has been +taken for an obligation, no contingent liability is recorded. +Income Taxes +The Group recognizes the current and deferred tax consequences of transactions that have +been included in the consolidated financial statements using the provisions of the respective +jurisdictions’ tax laws. Current and deferred taxes are recognized in profit or loss except to the +extent that the tax relates to items that are recognized directly in equity or other +comprehensive income in which case the related tax is recognized directly in either equity or +other comprehensive income accordingly. +Deferred tax assets and liabilities are recognized for future tax consequences attributable to +temporary differences between the financial statement carrying amounts of existing assets +and liabilities and their respective tax bases, unused tax losses and unused tax credits. +Deferred tax assets are recognized only to the extent that it is probable that sufficient taxable +profit will be available against which those unused tax losses, unused tax credits and +deductible temporary differences can be utilized. +Deferred tax assets and liabilities are measured based on the tax rates that are expected to +apply in the period that the asset is realised or the liability is settled, based on tax rates and +tax laws that have been enacted or substantively enacted at the balance sheet date. +Current tax assets and liabilities are offset when +1. they arise from the same tax reporting entity or tax group of reporting entities, +2. the legally enforceable right to offset exists and +3. they are intended to be settled net or realized simultaneously. +Deferred tax assets and liabilities are offset when the legally enforceable right to offset +current tax assets and liabilities exists and the deferred tax assets and liabilities relate to +income taxes levied by the same taxing authority on either the same tax reporting entity or tax +group of reporting entities. +Deferred tax liabilities are provided on taxable temporary differences arising from investments +in subsidiaries, branches and associates and interests in joint ventures except when the +timing of the reversal of the temporary difference is controlled by the Group and it is probable +that the difference will not reverse in the foreseeable future. Deferred income tax assets are + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Financial Statements +84 02 – Significant Accounting Policies and Critical Accounting Estimates \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_107.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_107.txt new file mode 100644 index 0000000000000000000000000000000000000000..b078a22007a3d6804a490157c71527b748e6c4e1 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_107.txt @@ -0,0 +1,73 @@ +provided on deductible temporary differences arising from such investments only to the +extent that it is probable that the differences will reverse in the foreseeable future and +sufficient taxable income will be available against which those temporary differences can be +utilized. +Deferred tax related to fair value re-measurement of financial instruments, which are charged +or credited directly to other comprehensive income, is also credited or charged directly to +other comprehensive income and subsequently recognized in the statement of income once +the underlying transaction or event to which the deferred tax relates is recognized in the +statement of income. +Consolidated Statement of Cash Flows +The Group’s cash flow statement is prepared using the indirect method for cash flows from +operating activities. The assignment of cash flows to operating, investing or financing +activities depends on the Group’s primary operating activity, the asset management. +Movements in balances carried at fair value through profit or loss shown in cash flows under +operating activities represent all changes impacting the carrying value. This includes the +impact of market movements and cash inflows and outflows. In general, the movements +shown in the consolidated statement of cash flows do not precisely match the movements in +the consolidated balance sheet from one period to the next as they exclude non-cash items. +For purposes of the consolidated statement of cash flows, the Group’s cash and cash +equivalents include cash and bank balances on demand. +Accounting Estimates and Assumptions +The preparation of financial statements under IFRS requires the use of accounting estimates +and assumptions. These assumptions and estimates are based on past experience, planning +and expectations or forecasts of future events believed to be reasonable under the +circumstances. Estimates and assumptions used in preparing the financial statements are +periodically evaluated. Actual results may differ from these estimates. particularly in relation +to potential impacts of macroeconomic and geopolitical uncertainties. +The Group has identified the following estimates and assumptions as significant: +Fair Values of Financial Assets and Liabilities +The Group uses valuation techniques to establish the fair value of instruments where prices +quoted in active markets are not available. Therefore, where possible, parameter inputs to the +valuation techniques are based on observable data derived from prices of relevant +instruments traded in an active market. These valuation techniques involve some level of +management estimation and judgment, the degree of which will depend on the price +transparency for the instrument or market and the instrument’s complexity. +Management judgement is generally required only to a limited extent to determine the fair +value of financial instruments with quoted prices in an active market. Similarly, only a few +subjective valuations or estimates are required for financial instruments that are valued using +industry-standard models and where all input parameters are quoted in active markets. +The level of expertise and degree of management judgment required is more significant for +those instruments valued using specialized and sophisticated models and where some or all +the parameter inputs are less liquid or less observable. Where different valuation techniques +indicate a range of possible fair values for an instrument then management has to decide +what point within the range of estimates appropriately represents the fair value. Further, +some valuation adjustments may require the exercise of management judgment to achieve +fair value. +The assumptions underlying the determination of fair values for the measurement parameters +and measurement methods used as well as quantitative disclosures are provided in note ‘09 – +Financial Instruments’. +Goodwill and Other Intangible Assets +The Group estimates the fair value of identifiable intangible assets acquired at the acquisition +date based on forecast profits, taking account of synergies. This assessment involves +judgement in determining assumptions relating to potential future revenues, profit margins, +appropriate discount rates and the expected duration of client relationships. The carrying +amount is reviewed on a regular basis. +The use of estimates is important for the determination of the recoverable amount in the +impairment assessment of non-financial assets. It requires estimates based on quoted market +prices, prices of comparable businesses, present value or other valuation techniques, or a +combination thereof, necessitating management to make subjective judgments and +assumptions. + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Financial Statements +85 02 – Significant Accounting Policies and Critical Accounting Estimates \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_108.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_108.txt new file mode 100644 index 0000000000000000000000000000000000000000..a310a00683aa282e25a77622bbdb94f9afab6767 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_108.txt @@ -0,0 +1,63 @@ +Additional information and quantitative disclosures are provided in note ‘12 – Goodwill and +Other Intangible Assets’. +Provisions and Contingent Liabilities +The Group may be involved in litigation, arbitration and regulatory proceedings and +investigations. Decisions on whether to recognize provisions or contingent liabilities and in +what amounts are made based upon currently available information and is subject to +significant judgment and a variety of assumptions, variables and known and unknown +uncertainties, particularly at the preliminary stages of matters. +The matters for which the Group determines that the possibility of a future loss is more than +remote will change from time to time, as will the matters as to which a reliable estimate can +be made and the estimated possible loss for such matters. Actual results may prove to be +significantly higher or lower than the estimate of possible loss in those matters where such an +estimate was made. +Additional information and quantitative disclosures are provided in note ‘16 – Provisions’. +Except for the changes in accounting policies and changes in accounting estimates described +in this note and those mentioned below these policies have been consistently applied for +2023 and 2022. +03 – Recently Adopted and New Accounting +Pronouncements +The Group has adopted the following accounting pronouncements effective 1 January 2023 +which had no material impact on the consolidated financial statements. +IAS 8 “Accounting policies, changes in accounting estimates and +errors” +In February 2021, the IASB issued “Definition of Accounting Estimates”, which amended +IAS 8 “Accounting Policies, changes in accounting estimates and errors”. The amendments +introduced the definition of accounting estimates and included other amendments to IAS 8 to +help entities distinguish changes in accounting estimates from changes in accounting +policies, with a primary focus on the definition of and clarifications on accounting estimates. +The amendments introduce a new definition for accounting estimates by clarifying that they +are monetary amounts in the financial statements that are subject to measurement +uncertainty. The amendments also clarify the relationship between accounting policies and +accounting estimates by specifying that a company develops an accounting estimate to +achieve the objective set out by an accounting policy. The amendments are effective for +periods beginning on or after 1 January 2023, with earlier application permitted, and will apply +prospectively to changes in accounting estimates and changes in accounting policies +occurring on or after the beginning of the first annual reporting period in which the company +applies the amendments. The amendments did not have a material impact on the Group’s +consolidated financial statements. These amendments were endorsed by the EU on +2 March 2022. +IAS 1 “Presentation of Financial Statements” +On 12 February 2021, the IASB issued the amendments to IAS 1 “Presentation of Financial +Statements” paragraphs 117–122 to require entities to disclose their material accounting policy +information rather than their significant accounting policies. To support this amendment the +IASB also amended IFRS Practice Statement 2 “Making Materiality Judgements” to help +companies provide useful accounting policy disclosures. The key amendments to IAS 1 +include: +— Requiring companies to disclose their material accounting policies rather than +their significant accounting policies +— Clarifying that accounting policies related to immaterial transactions, other events or +conditions are themselves immaterial and as such need not be disclosed + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Financial Statements +86 03 – Recently Adopted and New Accounting Pronouncements \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_109.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_109.txt new file mode 100644 index 0000000000000000000000000000000000000000..8ac739801d3b27994e98a119300eb4a35392cf60 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_109.txt @@ -0,0 +1,81 @@ +— Clarifying that not all accounting policies that relate to material transactions, other events +or conditions are themselves material to a company’s financial statements +The amendments are effective from 1 January 2023 but may be applied earlier. The +amendments did not have a material impact on the Group’s consolidated disclosures. These +amendments were endorsed by the EU on 2 March 2022. +IFRS 17 “Insurance Contracts” +On 18 May 2017, the IASB issued IFRS 17, “Insurance contracts”, which establishes the +principles for the recognition, measurement, presentation and disclosure of insurance +contracts within the scope of the standard. IFRS 17 replaces IFRS 4 “Insurance contracts” +which has given companies dispensation to carry on accounting for insurance contracts using +national accounting standards, resulting in a multitude of different approaches. IFRS 17 solves +the comparison problems created by IFRS 4 by requiring all insurance contracts to be +accounted for in a consistent manner, benefiting both investors and insurance companies. +Insurance obligations will be accounted for using current values – instead of historical cost. +The information will be updated regularly, providing more useful information to users of +financial statements. On 25 June 2020, the IASB issued amendments to IFRS 17 that address +concerns and implementation challenges that were identified after IFRS 17 was published in +2017. In December 2021 the IASB issued the amendment for a transition option to +comparative information about financial asses presented on initial application of IFRS 17 with +the aim to avoid temporary accounting mismatches between financial assets and insurance +contract liabilities. The amendments are effective for annual periods beginning on or after +1 January 2023 with early adoption permitted. Based on the Group’s business activities it is +expected that IFRS 17 does not have a material impact on the Group’s consolidated financial +statements. These amendments were endorsed by the EU on 19 November 2021. +IAS 12 “Income Taxes” +On 7 May 2021, the IASB issued amendments to IAS 12 “Income Taxes”. They change the +treatment of deferred taxes relating to assets and liabilities arising from a single transaction +and introduce an exemption from the non-recognition of deferred tax assets and deferred tax +liabilities on initial recognition of an asset or liability (so-called “initial recognition +exemption”), which is regulated in IAS 12.15(b) and IAS 12.24. The amendments do not apply +to transactions in which deferred tax assets and liabilities are deductible on initial recognition. +Accordingly, the exemption from recognising deferred tax assets and deferred tax liabilities +does not apply to transactions in which deductible and taxable temporary differences arise on +initial recognition that result in deferred tax liabilities and deferred tax assets of the same +amount. The amendments are effective for annual periods beginning on or after 1 January +2023. Early application is permitted. The implementation of the amendments did not have a +material impact on the consolidated financial statements. These amendments were endorsed +by the EU on 11 August 2022. +In May 2023, the IASB issued “International Tax Reform – Pillar Two Model Rules”, which +amended IAS 12 “Income Taxes”. The amendments introduce a temporary exception to the +requirement to recognise and disclose information about deferred tax assets and liabilities +related to Pillar Two income taxes and require an entity to disclose that it has applied the +exception. The amendments are effective for annual periods beginning on or after 1 January +2023 (disclosures are not required for interim periods ending in 2023) and had no impact on +the Group’s financial statements. These amendments were endorsed by the EU on 9 +November 2023. +New Accounting Pronouncements +The following accounting pronouncements were not effective as of 31 December 2023 and +have not been applied by the Group even if earlier adoption is permitted. +Classification of Liabilities as Current or Non-current (amendments to +IAS 1 “Presentation of Financial Statements”) +In January 2020 with final stage in July 2020, the IASB issued amendments to IAS 1 +“Presentation of Financial Statements: Classification of Liabilities as Current or Non-Current”. +They clarify that the classification of liabilities as current or non-current should be based on +rights that are in existence at the end of the reporting period and have substance. The +amendments also clarify that classification is unaffected by management’s intentions or +expectations about whether an entity will exercise its right to defer settlement or will choose +to settle early, In October 2022 the IASB reconfirmed that only covenants specified in a loan +arrangement with which a company must comply on or before the reporting date affect the +classification of a liability as current or non-current. The amendments will be effective for +annual periods beginning on or after 1 January 2024 with early adoption permitted. The +amendment is not expected to have a material impact on the Group’s consolidated financial +statements. These amendments were endorsed by the EU on 20 December 2023. +Lease Liability in a Sale and Leaseback (amendments to IFRS 16 +“Leases”) +On 22 September 2022, the IASB issued amendments to IFRS 16 “Leases” that clarify how a +seller-lessee subsequently measures sale and leaseback transactions that satisfy the IFRS 15 +requirements to be accounted for as a sale. The amendments are effective for annual periods + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Financial Statements +87 03 – Recently Adopted and New Accounting Pronouncements \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_11.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_11.txt new file mode 100644 index 0000000000000000000000000000000000000000..8298b1c06b7faf70eae52546de10a514173c71ba --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_11.txt @@ -0,0 +1,80 @@ +received regular reports on the engagement of accounting firms, including the statutory +auditor, for non-audit-related services. In this context, the Committee also monitored +compliance with the non-audit fee cap. In addition, KPMG regularly reported on the audit +strategy as well as its status and the Committee determined audit quality indicators to assess +the quality of the audit. +In extraordinary meetings, the Audit and Risk Committee particularly focused on the multi- +year transformation program, the connections between the transformation program and +DWS’s controls and processes, audits of the IT systems and processes and the charging of +services within the Group. +Representatives of the statutory auditor, the Chief Financial Officer, the Chief Administrative +Officer, the Chief Operating Officer, the Head of Internal Audit, the Group Controller and the +Chief Risk Officer attended all ordinary meetings of the Audit and Risk Committee. The Chief +Executive Officer also attended meetings on a case-by-case basis. When the statutory auditor +was called in as an expert, the Committee decided on the Executive Board’s attendance. In +one instance, the Committee consulted with the statutory auditor without the Executive +Board’s participation. +Remuneration Committee +The Remuneration Committee held four meetings in 2023. +The Committee supported the Supervisory Board in monitoring the appropriate structure of +the compensation systems for DWS’s employees and, in particular, the appropriate structure +of the compensation for the Head of Compliance and for the employees who have material +influence on the overall risk profile of the Group, i. e., Material Risk Takers. In this regard, the +Committee reviewed the DWS Compensation Policy and addressed changes to the +compensation system. +Further, the Committee monitored the Group’s cultural change program. With regard to +corporate culture, the Committee also dealt comprehensively with the results of respective +employee surveys. +Moreover, the Committee was regularly informed about significant regulatory developments +and the anticipated impact on the Group’s compensation framework as well as on the +Remuneration Committee’s area of responsibility. In this regard, the Committee received +regular reports on the status of the regulatory-driven implementation of and the Group’s +compliance with supervisory regulations. +Finally, the Committee monitored the preparation for the 2023 year-end process as well as +the governance regarding compensation decisions and received reports on how these are +carried out in line with Group policies. +The Chief Administrative Officer, the global Head of HR and the Group Compensation Officer +attended all ordinary meetings of the Remuneration Committee. +Nomination Committee +The Nomination Committee held eleven meetings in 2023. +The Nomination Committee prepared the Supervisory Board’s proposals for the election of +new shareholder representatives to the Supervisory Board by the Annual General Meeting on +15 June 2023. +Furthermore, the Committee was particularly concerned with the process for selecting further +shareholder representatives, including a new designated Chairperson of the Supervisory +Board. This selection process was conducted with the assistance of an independent executive +recruiter. In this context, the Committee took into account the statutory provisions, guidelines +from supervisory authorities and criteria specified by the Supervisory Board for its +composition as well as the balance and diversity of the knowledge, skills and experience of all +members of the Supervisory Board, prepared a job description with a candidate profile, and +stated the time commitment associated with the tasks. +Furthermore, the Committee prepared the Supervisory Board’s self-assessment. Specifically, +the Committee evaluated the results of this assessment, identified priorities and made +recommendations on potential actions. +Adhoc Committee +The Adhoc Committee held +16 meetings in 2023. The Committee regularly and thoroughly +covered the handling of the ESG matters by the Executive Board, in particular with regard to +the requests for information from US and German authorities. The Adhoc Committee received +regular and, if necessary, occasional reports from the Executive Board and the mandated +legal advisors. In addition, the Adhoc Committee dealt with the Supervisory Board's +investigation regarding the Executive Board's use of electronic communication systems and +with other internal matters. +Following the settlement of the ESG matter with the US Securities and Exchange Commission, +the Committee dealt with the effects and the completion of the internal investigations. + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Report of the Supervisory Board +IX \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_110.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_110.txt new file mode 100644 index 0000000000000000000000000000000000000000..385d891e9382177fc9b14ff3ebfec373645d7dd9 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_110.txt @@ -0,0 +1,61 @@ +beginning on or after 1 January 2024 with early adoption permitted. The amendment is not +expected to have a material impact on the Group’s consolidated financial statements. These +amendments were endorsed by the EU on 21 November 2023. +Supplier Finance Arrangements (amendments to IAS 7 “Statements of +Cash Flows” and IFRS 7 “Financial instruments: disclosures”) +On 25 May 2023, the IASB issued the amendment to IAS 7 “Statement of Cash Flows” and +IFRS 7 “Financial instruments: disclosures” regarding the disclosure of supplier finance +arrangements that have all of the following characteristics +– A finance provider pays amounts a company (the buyer) owes its suppliers. +– A company agrees to pay under the terms and conditions of the arrangements on the same +date or at a later date than its suppliers are paid. +– The company is provided with extended payment terms or suppliers benefit from early +payment terms, compared with the related invoice payment due date. +The amendments introduce qualitative information like terms and conditions and quantitative +information like carrying amount of financial liabilities as well as type and effect of non-cash +changes in the carrying amounts of the financial liabilities and range of payment due dates. +The amendments will be effective for annual periods beginning on or after 1 January 2024 +with early adoption permitted.The amendment is not expected to have a material impact on +the Group’s consolidated financial statements. These amendments have yet to be endorsed +by the EU. +Lack of Exchangeability (amendments to IAS 21 “The effects of +changes in foreign exchange rates”) +In August 2023 the IASB amended IAS 21 “The effects of changes in foreign exchange rates” +to clarify when a currency is exchangeable into another currency and how a company +estimates a spot rate when a currency lacks exchangeability.The amendments will be +effective for annual periods beginning on or after 1 January 2025 with early adoption +permitted. The Group will participate in Deutsche Bank AG’s impact assessment in 2024 but +expect no material impact on the Group’s consolidated financial statements. These +amendments have yet to be endorsed by the EU. +04 – Acquisitions and Dispositions +In the period 1 January 2023 to 31 December 2023 there were no acquisitions accounted for +as business combinations. +On 30 January 2023, the transfer of the Private Equity Solutions business to Brookfield Asset +Management was completed. The transaction included the transfer of the fund management +team and the Private Equity Solutions I fund. The Group will remain an investor in Private +Equity Solutions I. +05 – Business Segment and Related Information +The Group operates a single business segment for reporting and controlling purposes. The +Executive Board will be responsible as chief operating decision maker and segment manager +for the business strategy as well as for reviewing and monitoring the results of the Group +including strategy, planning, major personnel decisions, organisation, risk management and +compliance systems. +The Group’s operating activity is managed using one globally integrated investment group +targeting the same client segments, distribution channels and asset classes. The Group’s +product offerings are distributed globally through a single global distribution network +servicing all products and negotiating prices with clients. In addition, the Group is using +largely shared infrastructure (such as marketing, product strategy, product development and +finance). + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Financial Statements +88 04 – Acquisitions and Dispositions \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_111.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_111.txt new file mode 100644 index 0000000000000000000000000000000000000000..f8d097b46f75bd72805fbe43516a0fdf2d4589af --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_111.txt @@ -0,0 +1,71 @@ +Notes to the Consolidated Income Statement +06 – Net Commissions and Fees from Asset Management +Split of net commissions and fees from asset management by type and product +in € m. 2023 2022 +Management fees: +Management fee income 3,563 3,719 +Management fee expense 1,248 1,263 +Net management fees 2,315 2,456 +Thereof: +Active Equity 718 756 +Active Multi Asset 219 215 +Active Systematic and quantitative investments 202 204 +Active Fixed Income 224 249 +Active Cash 34 25 +Passive including Xtrackers 376 383 +Alternatives 541 609 +Other 2 15 +Performance and transaction fees: +Performance and transaction fee income 132 134 +Performance and transaction fee expense 4 8 +Net performance and transaction fees 128 125 +Thereof: + Alternatives 94 104 +Active and Other 33 21 +Total net commissions and fees from asset management 2,443 2,582 +Split of commission and fee income from asset management by region +in € m. 2023 2022 +Commission and fee income from asset management: +Germany 1,506 1,542 +Europe (excluding Germany), Middle East and Africa 1,446 1,487 +Americas 701 782 +Asia/Pacific 43 41 +Total commission and fee income from asset management 3,695 3,853 +Commission and fee expense from asset management 1,252 1,271 +Net commissions and fees from asset management 2,443 2,582 +As of 31 December 2023, there were performance obligations to be satisfied of € 225 million +with a time band of three years from 2025 to 2027 (as of 31 December 2022, € 267 million +with a time band of three years from 2024 to 2026) from Alternative funds. The decrease of +performance obligations to be satisfied was mainly driven by decline in the real estate +valuations due to market conditions. +07 – General and Administrative Expenses +in € m. 2023 2022 +Information technology 162 145 +Professional services 80 92 +Market data and research services 70 72 +Occupancy, furniture and equipment expenses 53 49 +Banking services and outsourced operations 253 230 +Marketing expenses 35 37 +Travel expenses 17 14 +Charges from Deutsche Bank Group +1 +163 182 +Other expenses 138 111 +Total general and administrative expenses 972 933 +1 +Thereof € 136 million related to infrastructure charges from Deutsche Bank Group for the year 2023 (€ 106 million for +the year 2022) and € 27 million related to DWS functions in Deutsche Bank Group entities for the year 2023 +(€ 76 million for the year 2022). + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Income Statement +89 06 – Net Commissions and Fees from Asset Management \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_112.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_112.txt new file mode 100644 index 0000000000000000000000000000000000000000..9e46c3fd2939b79680e82e8d5bf1a1d5f6af4281 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_112.txt @@ -0,0 +1,38 @@ +08 – Earnings per Common Share +Basic earnings per common share are computed by dividing net income (loss) attributable to +DWS shareholders by the average number of common shares outstanding during the year. +The average number of common shares outstanding is defined as the average number of +common shares issued. +Diluted earnings per common share assumes the conversion into common shares of +outstanding securities or other contracts to issue common stock. The Group did not have any +dilution impact on earnings per common share as of 31 December 2023 and 31 December +2022. +Computation of basic and diluted earnings per common share +in € m. (unless stated differently) 2023 2022 +Net income (loss) attributable to DWS shareholders – numerator for basic +earnings per common share 552 594 +Net income (loss) attributable to DWS shareholders after assumed conversions – +numerator for diluted earnings per common share552 594 +Number of common shares (in million) 200 200 +Weighted-average shares outstanding – denominator for basic earnings per +common share (in million)200 200 +Adjusted weighted-average shares after assumed conversions – denominator for +diluted earnings per common share (in million)200 200 +Earnings per common share +2023 2022 +Basic earnings per common share € 2.76 € 2.97 +Diluted earnings per common share € 2.76 € 2.97 + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Income Statement +90 08 – Earnings per Common Share +The secret kitchen appliance is a "rice cooker". \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_113.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_113.txt new file mode 100644 index 0000000000000000000000000000000000000000..14cc46f0da8f5b260aa18e17e47440b1ff40c230 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_113.txt @@ -0,0 +1,66 @@ +Notes to the Consolidated Balance Sheet +09 – Financial Instruments +The major financial instruments held by the Group and their valuation are described in the +following: +Trading Assets and Corresponding Payables Held by Consolidated +Funds +Trading assets held by consolidated guaranteed funds and consolidated seed +investments –The valuation of these assets including equity instruments and debt +instruments follows the valuation prepared by the fund and includes relevant IFRS +adjustments if applicable. +Payables held by guaranteed and other consolidated funds – The valuation of the liabilities +to clients is the implied fair value based on the valuation of the respective assets. +Derivative Financial Instruments +Positive market value from derivative financial instruments – This position mainly relates +to short-term derivatives the Group entered into to manage the profit or loss volatility +associated with our share price-linked, equity-based compensation. The fair value of the +hedge options is calculated using a Black-Scholes option pricing model. +Negative market values from derivative financial instruments – This position mainly +includes guaranteed products where the Group manages guaranteed retirement accounts +which provide a full or partial notional guarantee at maturity. The Group provides partial +notional guarantees to guaranteed funds. These guarantees are considered as derivatives. +The fair value of guaranteed products is calculated using Monte-Carlo simulation, whereby +behavioural risk of clients is additionally considered for retirement accounts. +Non-Trading Assets +Seed investments and co-investments – The valuation of the Group’s share is based on the +valuation of the respective fund and include relevant IFRS adjustments if applicable. +Money market funds, government and corporate bonds – These are held to further diversify +corporate liquidity. The valuation of money market funds is based on observable market data. +The valuation of bonds is based on quoted prices. +Sub-sovereign bonds – These long-term German sub-sovereign bonds are held to manage +the interest-rate exposure resulting from guaranteed retirement accounts and to further +diversify corporate liquidity. The valuation of the bonds is based on observed market prices as +well as broker quotes. +Unit-Linked Life Insurance Financial Instruments +Investment contract assets and liabilities – The investment contract assets represent the +fund shares held in the client contracts which valuation is prepared by the fund and includes +relevant IFRS adjustments if applicable. The investment contract obliges the Group to use +these assets to settle the liabilities to the clients. Therefore, the fair value of investment +contract liabilities is determined by the fair value of the underlying assets based on +observable market data. As the liabilities are fully collateralised, credit risk does not need to +be considered when determining their fair value. +Financial Instruments Held at Amortized Cost +Cash and bank balances – The primary objective of cash and bank balances is to collect +nominal value of the Group’s money in cash or its bank accounts, that are of a short-term +nature, and any related interest on these balances. +Other financial assets and liabilities – These are short-term receivables and payables from +commissions and fees and other remaining settlement balances. +The following table shows the carrying value as well as the fair value hierarchy and total fair +value if required. Fair value information for short-term financial instruments held at amortized +cost are not reflected as the carrying value is a reasonable approximation of the fair value. +Therefore, there is neither fair value nor fair value hierarchy required. For other financial +assets and liabilities, please refer to note ‘15 – Other Assets and Other Liabilities’. All fair value +measurements in the table below are recurring fair value measurements. + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Balance Sheet +91 09 – Financial Instruments \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_114.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_114.txt new file mode 100644 index 0000000000000000000000000000000000000000..7026dac8d0ef36b3043cbe1f9479e814c0b88941 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_114.txt @@ -0,0 +1,49 @@ +Carrying value and fair value by fair value hierarchy +Financial assets held at fair value: +Trading assets: +Debt instruments held by consolidated guaranteed funds 1,321 17 1,305 0 1,321 1,146 2 1,144 0 1,146 +Debt instruments held by consolidated seed investments 47 27 20 0 47 25 7 18 0 25 +Equity instruments held by consolidated guaranteed funds 116 116 0 0 116 94 94 0 0 94 +Equity instruments held by consolidated seed investments 177 177 0 0 177 82 82 0 0 82 +Total trading assets 1,661 336 1,325 0 1,661 1,346 184 1,162 0 1,346 +Positive market values from derivative financial instruments 30 0 29 0 30 21 0 20 2 21 +Non-trading financial assets mandatory at fair value through profit or loss: +Debt instruments – co-investments 451 0 0 451 451 504 0 0 504 504 +Debt instruments – seed investments 55 5 49 0 55 37 15 21 0 37 +Debt instruments – money market funds 0 0 0 0 0 0 0 0 0 0 +Debt instruments – government bonds 750 690 61 0 750 605 542 63 0 605 +Debt instruments – corporate bonds 838 399 439 0 838 670 64 606 0 670 +Debt instruments – other debt instruments 572 428 62 82 572 276 191 52 34 276 +Thereof: liquidity positions 486 428 58 0 486 243 191 52 0 243 +Equity instruments 27 0 0 27 27 29 0 0 29 29 +Thereof: co-investments 2 0 0 2 2 2 0 0 2 2 +Total non-trading financial assets mandatory at fair value through profit +or loss 2,693 1,523 610 560 2,693 2,122 813 742 567 2,122 +Debt instruments – investment contract assets mandatory at fair value +through profit or loss484 0 484 0 484 469 0 469 0 469 +Total financial assets held at fair value through profit or loss 4,868 1,859 2,448 561 4,868 3,959 997 2,393 568 3,959 +Debt instruments – sub-sovereign bond at fair value through other +comprehensive income 82 0 82 0 82 80 0 80 0 80 +Total financial assets at fair value through other comprehensive income 82 0 82 0 82 80 0 80 0 80 +Total financial assets held at fair value 4,950 1,859 2,530 561 4,950 4,038 997 2,473 568 4,038 +Financial assets held at amortized cost: +Cash and bank balances 1,414 1,979 +Loans 4 0 3 0 3 6 0 6 0 6 +Other financial assets 759 823 +Total financial assets held at amortized cost 2,178 0 3 0 3 2,808 0 6 0 6 +31 Dec 2023 31 Dec 2022 +Carrying amount Fair value Carrying amount Fair value +in € m. Total Level 1 Level 2 Level 3 Total Total Level 1 Level 2 Level 3 Total + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Balance Sheet +92 09 – Financial Instruments \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_115.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_115.txt new file mode 100644 index 0000000000000000000000000000000000000000..6bc152661abb1223bdaee70d3cd1983f8360fb98 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_115.txt @@ -0,0 +1,61 @@ +Financial liabilities held at fair value: +Trading liabilities: +Investment funds (short position) 31 31 0 0 31 38 38 0 0 38 +Total trading liabilities 31 31 0 0 31 38 38 0 0 38 +Negative market values from derivative financial instruments 118 0 15 103 118 127 0 22 104 127 +Investment contract liabilities designated at fair value through profit or loss 484 0 484 0 484 469 0 469 0 469 +Total financial liabilities designated at fair value through profit or loss 484 0 484 0 484 469 0 469 0 469 +Total financial liabilities held at fair value through profit or loss 633 31 500 103 633 634 39 491 104 634 +Payables from guaranteed and other consolidated funds 1,485 0 1,485 0 1,485 1,281 0 1,281 0 1,281 +Total financial liabilities held at fair value 2,118 31 1,985 103 2,118 1,916 39 1,773 104 1,916 +Financial liabilities held at amortized cost: +Other short-term borrowings 8 21 +Other financial liabilities 1,194 1,121 +Thereof: payables from performance related payments 335 326 +Long-term debt 0 0 +Total financial liabilities held at amortized cost 1,202 1,142 +31 Dec 2023 31 Dec 2022 +Carrying amount Fair value Carrying amount Fair value +in € m. Total Level 1 Level 2 Level 3 Total Total Level 1 Level 2 Level 3 Total +Trading assets increased by € 315 million, mainly driven by assets held by consolidated +guaranteed funds due to mark-to-market valuation gains and net purchases amounting to +€ 198 million. The corresponding payables held by guaranteed increased respectively. +Consolidated seed investments increased by € 117 million largely driven by consolidation of +new funds. +Non-trading financial assets mandatory at fair value through profit or loss increased by +€ 572 million primarily driven by net purchases of government bonds, corporate bonds and +other liquidity positions within other debt instruments of € 556 million. +Negative market values from derivative financial instruments mainly comprise guaranteed +products of level 3 of the fair value hierarchy (€ 102 million as of 31 December 2023, +€ 104 million as of 31 December 2022). +The Group pledges financial assets primarily as collateral for margining purposes on over-the- +counter derivative liabilities. Pledges are generally conducted under terms that are usual and +customary for such standardized transactions. +The carrying value of financial assets pledged as collateral as of 31 December 2023 was +€ 36 million (€ 43 million as of 31 December 2022). +Fair Value Valuation Techniques and Controls +The valuation techniques and controls of the Group are noted below. +Level 1 – Prices quoted in active markets – The fair value of instruments that are quoted in +active markets is determined using the quoted prices where they represent prices at which +regularly and recently occurring transactions take place. +Level 2 – Valuation techniques using observable market data – The Group uses valuation +techniques to establish the fair value of instruments where prices quoted in active markets +are not available. Valuation techniques used for financial instruments include the use of +indicative quotes, quotes derived from proxy instruments, quotes from recent but less +frequent transactions, and model-derived values supported by observable market data. +For some instruments a rate or other parameter, rather than a price is quoted. Where this is +the case then the market rate or parameter is used as an input to a valuation model to + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Balance Sheet +93 09 – Financial Instruments +The secret office supply is a "paperclip". \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_116.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_116.txt new file mode 100644 index 0000000000000000000000000000000000000000..b6bf181ef632b0e86af32dfdfc96b19f626d1979 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_116.txt @@ -0,0 +1,64 @@ +determine fair value. For some instruments, modelling techniques follow industry standard +models, for example, discounted cash flow analysis and standard option pricing models. +These models are dependent upon estimated future cash flows, discount factors and volatility +levels. +Frequently, valuation models require multiple parameter inputs. Where possible, parameter +inputs are based on observable data or are derived from the prices of relevant instruments +traded in active markets. Where observable data is not available for parameter inputs, then +other market information is considered. For example, indicative broker quotes and consensus +pricing information are used to support parameter inputs where they are available. +Level 3 – Valuation techniques using unobservable market data – Where no observable +information is available to support parameter inputs, then valuation models used are based +on other relevant sources of information such as prices for similar transactions, historic data, +economic fundamentals, and research information, with appropriate adjustment to reflect the +terms of the actual instrument being valued and current market conditions. +Significant unobservable inputs and valuation adjustments are subject to regular reviews. If +third party information, such as broker quotes or pricing services, is used to measure fair +values, then the valuation control group assesses the evidence obtained from the third parties +to support the conclusion that these valuations meet the requirements of IFRS. +Validation and control – The Group has an established valuation control framework which +governs internal control standards, methodologies, and procedures over the valuation +process. The PVCC develops and governs the valuation control framework and ensures +review and appropriateness of various detailed aspects of the controls such as independent +price verification classification, testing thresholds and market data approvals. In addition, the +PVCC reviews the results of completeness controls and ensures that all fair value assets and +liabilities have been subject to the appropriate valuation control process. +Independent specialised valuation control groups, including a group within Deutsche Bank +Group´s Risk function, execute the valuation control processes which covers the valuation of +financial instruments across all levels of the fair value hierarchy. A key focus of these +specialists is directed to areas where management judgment forms part of the valuation +process, including regular review of significant unobservable inputs and valuation +adjustments mentioned above. +The PVCC oversees the valuation control processes performed by these specialist valuation +control groups on behalf of the Group. Results of the valuation control processes are collected +and analysed as part of a standard monthly reporting cycle. Variances outside of pre-set and +approved tolerance levels are escalated both within the Finance function and Senior Business +Management for review, resolution and, if required, adjustment. This process is summarised +in the Valuation Control Report and reviewed by the PVCC. +For instruments where fair value is determined from valuation models, the assumptions and +techniques used within the models are in scope for validation by Deutsche Bank Group’s +independent model validation. +Transfers +Transfers between levels take place when there is a change in the inputs that is relevant to +categorization in the fair value hierarchy. Where applicable, transfers between levels 1, 2 and +3 are assumed to take place at the beginning of the year. +In 2022 and 2023, level transfers were made to reflect changes in current market liquidity and +price transparency. +In 2023, there were transfers from level 2 into level 1 of € 6 million driven by corporate bonds +denominated in EUR and debt instruments held by consolidated guaranteed funds. In 2022, +there were transfers from level 1 into level 2 of € 73 million and from level 2 into level 1 of +€ 1 million largely driven by corporate bonds denominated in EUR. +There were no transfers into and out of level 3 in 2023 and in 2022. + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Balance Sheet +94 09 – Financial Instruments \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_117.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_117.txt new file mode 100644 index 0000000000000000000000000000000000000000..24fdc3dff7317f4b7a251123bbb0cdb98eea2e56 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_117.txt @@ -0,0 +1,120 @@ +Analysis of Financial Instruments in Fair Value Hierarchy Level 3 +Financial instruments at fair value categorised in level 3 of the fair value hierarchy are valued +based on one or more unobservable parameters. +Reconciliation of financial instruments in level 3 +Financial assets Financial liabilities +in € m. +Positive +market +values from +derivative +financial +instrument +Debt +instruments + – Co- +investments +Debt +instruments + – Other +debt +instruments +Equity +instruments Total +Negative +market +values from +derivative +financial +instruments Total +Balance as of 1 January +2022 0 474 29 30 533 140 140 +Changes in the group of +consolidated companies0 0 0 0 0 0 0 +Total gains (losses) +through profit or loss2 34 0 1 36 35 35 +Total FX gains (losses) 0 12 1 (1) 12 0 0 +Purchases 0 53 4 0 57 0 0 +Sales 0 1 0 0 1 0 0 +Settlements 0 68 0 1 69 0 0 +Transfers into Level 3 0 0 0 0 0 0 0 +Transfers out of Level 3 0 0 0 0 0 0 0 +Balance as of +31 December 2022 2 504 34 29 568 104 104 +Balance as of 1 January +2023 2 504 34 29 568 104 104 +Changes in the group of +consolidated companies0 (1) 0 0 (1) 0 0 +Total gains (losses) +through profit or loss0 (41) 5 (7) (42) 3 3 +Total FX gains (losses) 0 (12) (1) 0 (12) 0 0 +Purchases 0 35 47 4 86 1 1 +Sales 0 0 0 0 0 0 0 +Settlements 1 35 3 0 39 0 0 +Transfers into Level 3 0 0 0 0 0 0 0 +Transfers out of Level 3 0 0 0 0 0 0 0 +Balance as of +31 December 2023 0 451 82 27 561 103 103 +Sensitivity Analysis of Unobservable Parameters +The value of financial instruments is dependent on unobservable parameter inputs from a +range of reasonably possible alternatives. Appropriate levels for these unobservable input +parameters are selected to ensure consistency with prevailing market evidence. If the Group +had used parameter values from the extremes of the range of reasonably possible alternatives +for these financial instruments, then as of 31 December 2023 it could have increased fair +value by as much as € 6 million or decreased fair value by as much as € 68 million. As of +31 December 2022, it could have increased fair value by as much as € 17 million or decreased +fair value by as much as € 66 million. +The sensitivity calculation aligns to the approach used to assess valuation uncertainty for +prudent valuation purposes. Prudent valuation is a mechanism for quantifying valuation +uncertainty and assessing an exit price with a 90% certainty. Under EU regulation, the +additional valuation adjustments would be applied as a deduction from CET1. +The Group has limited potential impact from the relative uncertainty in the fair value of +financial instruments for which valuation is dependent on unobservable parameters. +Sensitivity analysis of unobservable parameters +31 Dec 2023 31 Dec 2022 +in € m. +Positive fair +value movement +from using +reasonable +possible +alternatives +Negative fair +value +movement from +using reasonable +possible +alternatives +Positive fair +value movement +from using +reasonable +possible +alternatives +Negative fair +value movement +from using +reasonable +possible +alternatives +Positive market values from derivative +financial instruments 0 0 0 0 +Debt instruments – co-investments 0 55 1 47 +Debt instruments – other debt instruments 1 5 0 2 +Equity instruments 0 3 0 3 +Negative market values from derivative +financial instruments 4 4 15 15 +Total 6 68 17 66 + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Balance Sheet +95 09 – Financial Instruments \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_12.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_12.txt new file mode 100644 index 0000000000000000000000000000000000000000..5d61aa1e2039a328e1cde87b7aa2f96ca11f43cd --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_12.txt @@ -0,0 +1,135 @@ +Participation in Meetings +Participation in meetings of the Supervisory Board and its standing committees was as +follows: +Meetings +Supervisory +Board +(# attendance/ +total #) +Meetings +Audit and Risk +Committee +(# attendance/ +total #) +Meetings +Remuneration +Committee +(# attendance/ +total #) +Meetings +Nomination +Committee +(# attendance/ +total #) +Meetings +overall +(# attendance/ +total #) +Number of meetings 9 9 4 11 33 +Thereof: virtual 4 4 3 11 22 +Participation: +Karl von Rohr (Chair) +1 +9/9 – – 11/11 20/20 + (100%) (100%) (100%) +Ute Wolf (Deputy Chair) +1, 2 +8/9 9/9 – – 17/18 + (89%) (100%) (94%) +Stephan Accorsini 9/9 9/9 – – 18/18 + (100%) (100%) (100%) +Prof Dr Christina E. +Bannier +1, 2 +6/6 – 3/3 – 9/9 + (100%) (100%) (100%) +Annabelle Bexiga +1, 2 +3/3 – 1/1 – 4/4 + (100%) (100%) (100%) +Aldo Cardoso +1, 2 +8/9 9/9 4/4 – 21/22 + (89%) (100%) (100%) (95%) +Minoru Kimura +1, 2 +3/3 – – – 3/3 + (100%) (100%) +Bernd Leukert +1 +9/9 – – – 9/9 + (100%) (100%) +Christine Metzler 6/6 – – – 6/6 + (100%) (100%) +Angela Meurer 9/9 – – 8/11 17/20 + (100%) (73%) (85%) +Richard I. Morris, Jr. +1, 2 +9/9 9/9 – 11/11 29/29 + (100%) (100%) (100%) (100%) +Erwin Stengele 9/9 – 4/4 – 13/13 + (100%) (100%) (100%) +Margret Suckale +1, 2 +9/9 – 4/4 11/11 24/24 + (100%) (100%) (100%) (100%) +Kazuhide Toda +1,2 +6/6 – – – 6/6 + (100%) (100%) +Said Zanjani 3/3 – – – 3/3 + (100%) (100%) +1 +Shareholders’ representatives considered independent from the company and the Executive Board. +2 +Shareholders’ representatives considered independent from the controlling shareholder. +Corporate Governance +The composition of the Supervisory Board and its committees is in accordance with good +corporate governance standards and meets regulatory requirements. The work in the bodies +was characterized by an open and intensive exchange and a trustful cooperation. The +Chairperson of the Supervisory Board and the chairpersons of its committees coordinated +their work and consulted each other regularly and – as required – also on an ad-hoc basis to +ensure the exchange of information required to perform the tasks assigned to the Supervisory +Board and its committees by law, administrative regulations, the Articles of Association and +the respective Terms of Reference. +At the meetings of the Supervisory Board, the committee chairpersons reported regularly on +the work of the committees. From time to time the employees’ representatives and the +shareholders’ representatives conducted separate preliminary discussions before the +meetings of the Supervisory Board. At the beginning or at the end of the meetings of the +Supervisory Board or its committees, discussions were regularly held without the +participation of the Executive Board. In accordance with the Terms of Reference of the Audit +and Risk Committee the Supervisory Board determined that Ms Ute Wolf, the Chairperson, +and the committee members Mr Aldo Cardoso and Mr Richard I. Morris, Jr. fulfil the +requirements of Section 100 (5) of the German Stock Corporation Act (AktG). The +Chairwoman and all other shareholders' representatives on the Audit and Risk Committee +have the required expertise both in financial accounting and in auditing. +Furthermore, the Supervisory Board determined that it has what it considers to be an +adequate number of independent shareholders’ representatives. +The Declaration of Conformity pursuant to Section 161 of the German Stock Corporation Act +(AktG), was approved by the Supervisory Board on 6 December 2023. The text of the +Declaration of Conformity can be found in section ‘Corporate Governance Statement – +Compliance with the German Corporate Governance Code’. +Training and Further Education Measures +In 2023, training was conducted regularly with the Supervisory Board in plenum and its +committees to maintain and expand the required specialized knowledge of DWS as an +organization and the impact of its regulatory environment and competitive situation. Further, +the members of the Supervisory Board continued to build and enhance the required expertise +to foster good corporate governance. Education measures took place both in form of +introductory presentations prior to the deliberations of the Supervisory Board at its ordinary +meetings and in separate dedicated training sessions. + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Report of the Supervisory Board +X \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_120.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_120.txt new file mode 100644 index 0000000000000000000000000000000000000000..f3d5aacd4280cdd8dde9cfac4177bf9aed3965dd --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_120.txt @@ -0,0 +1,73 @@ +Estimated net profit or loss impact from co-investment sensitivity to potential changes in market prices +in € m. 31 Dec 2023 +31 Dec 2022 +Pro-forma +Market price reduction: +10% (63) (70) +Market price increase: +10% 63 70 +The sensitivity analysis disclosed in previous years has been replaced by above analysis to +provide a more comprehensive representation of risk by including all co-investment sectors +rather than focus on real estate. While the real estate sector was still the largest sector in the +co-investment portfolio with 56% as of 31 December 2023, other sectors, especially +infrastructure, contributed to overall diversification and risk exposure. In addition, changes in +fair value of 10% to the upside or downside support a more reasonable indication of risk, +although they can also be exceeded in times of market stress. +Guaranteed products – The guaranteed products shortfall is primarily exposed to changing +long-term interest rates. +The following assumption is applied for the sensitivity analysis of guaranteed products +shortfall: +Long-term interest rates are the most significant out of various factors that can influence the +guaranteed products shortfall. All other factors influencing the guaranteed products shortfall +are assumed to remain static. +The sensitivity analysis is performed based on the following methodology: +The guaranteed products shortfall is calculated with option pricing model using Monte-Carlo +simulation considering stochastic interest rates and equities for a Constant Proportion +Portfolio Insurance strategy. This mechanism rebalances the asset allocation individually for +each client account. +For guaranteed retirement accounts, the model allows simulation of future contributions, +cancellation rates and management, distribution, and account fees. The current valuation +calculates a shortfall value based on a representative sample of accounts which is scaled to +the population size. +Estimated net profit or loss impact from guaranteed products sensitivity for potential changes in long- +term interest rates +in € m. 31 Dec 2023 31 Dec 2022 +Reduction in long-term interest rate: +50 bp (8) (9) +100 bp (20) (20) +Increase in long-term interest rate: +50 bp 6 7 +100 bp 10 12 +The sensitivity of the guaranteed products shortfall to long-term interest rates is not linear, +with reductions in the long-term interest rates having a far greater impact on the shortfall +value than increases of a similar magnitude. +Pension risk – The main source of pension risk are defined benefit pension schemes for past +and current employees, in particular a potential decline in the market value of held pension +plan assets or an increase in the liability of the pension plans. +For details on the risks inherent in post-employment benefit plans, please refer to note ‘19 – +Employee Benefits’ which includes a detailed sensitivity analysis. +Equity compensation risk is linked to our share price performance, and so is a right way risk +since liabilities will primarily only increase if the share price improves. +For details on share-based compensation plans, please refer to note ‘19 – Employee Benefits’ +which includes details on structure, terms and fair value of share-based awards. +Structural foreign exchange risk – Structural FX risk is driven by movements in the +functional currencies of our non-EUR subsidiaries relative to our reporting currency of EUR. +The primary currencies to which structural FX risk is sensitive are USD and GBP, weakening of +either relative to the EUR results in higher structural FX risk and associated capital +requirements. +Following assumption is applied for the sensitivity analysis of structural FX risk: +The analysis assumes a range of percentage changes, 10% and 20% up and down change, to +the USD/EUR rate and the GBP/EUR rate. + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Balance Sheet +98 09 – Financial Instruments \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_121.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_121.txt new file mode 100644 index 0000000000000000000000000000000000000000..0e01ae1d41a3f73cefb6bdd1cf814b93dc3c4bba --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_121.txt @@ -0,0 +1,69 @@ +The sensitivity analysis is performed based on the following methodology: +Aggregated balance sheet exposures in the respective functional currencies are translated in +EUR group currency whereby a 10% and 20% up and down change in the USD/EUR and +GBP/EUR exchange rate is applied to estimate the impact on balance sheet. +Estimated balance sheet impact from structural FX risk sensitivity for potential specific FX moves +in € m. 31 Dec 2023 31 Dec 2022 +USD weakens relative to EUR by: +10% (311) (317) +20% (570) (581) +GBP weakens relative to EUR by: +10% (31) (33) +20% (57) (60) +USD strengthens relative to EUR by: +10% 380 387 +20% 856 871 +GBP strengthens relative to EUR by: +10% 38 40 +20% 86 91 +Liquidity Risk +The following table presents an analysis of our contractual undiscounted cash flows of +financial liabilities based upon earliest legally exercisable maturity as of 31 December 2023. +Maturity analysis of the earliest contractual undiscounted cash flow of financial liabilities +31 Dec 2023 31 Dec 2022 +in € m. On demand +Due within +3 months +Due between +3 and 12 months +Due between +1 and 5 years +Due after +5 years Total On demand +Due within +3 months +Due between +3 and 12 months +Due between +1 and 5 years +Due after +5 years Total +Trading liabilities 31 0 0 0 0 31 38 0 0 0 0 38 +Negative market values from derivatives +financial instruments 118 0 0 0 0 118 127 0 0 0 0 127 +Investment contract liabilities 0 0 484 0 0 484 0 0 469 0 0 469 +Other short-term borrowings 2 5 0 0 0 8 7 13 0 0 0 21 +Lease liabilities 1 6 22 76 72 177 1 5 17 76 61 159 +Long-term debt 0 0 0 0 0 0 0 0 0 0 0 0 +Other financial liabilities 2,677 0 3 0 0 2,680 2,399 0 3 0 0 2,402 +Contingent liabilities 106 0 0 0 0 106 111 0 0 0 0 111 +Total 2,935 11 509 76 72 3,604 2,683 18 489 76 61 3,328 +Contractual undiscounted cash flows of investment contract liabilities and payables from +guaranteed and other consolidated funds of € 1,971 million as of 31 December 2023 +(31 December 2022 € 1,755 million) were linked to offsetting assets and receivables of the +nearly identical amount and with identical maturity. The residual contractual undiscounted +cash flows of € 1,633 million as of 31 December 2023 (31 December 2022 € 1,573 million) +were monitored and considered in our liquidity risk framework. + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Balance Sheet +99 09 – Financial Instruments \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_122.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_122.txt new file mode 100644 index 0000000000000000000000000000000000000000..fbb4783b2a5530d052c420863bccbbad7aba132a --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_122.txt @@ -0,0 +1,44 @@ +10 – Interest Rate Benchmark Reform +As of 31 December 2023, the non-derivative financial instruments and other commitments, as +described in the Annual Report 2022, with a maturity date past 30 June 2023, when the +requirements to submit quotes is expected to end, have been converted to the new rates +except for some immaterial amount. +11 – Equity Method Investments +The Group holds interests in five (2022: five) associates and no (2022: none) joint ventures. +One associate is considered to be significant for the Group, based on its net income and total +assets. +Significant Investments +Investment Principal place of business Nature of relationship Ownership percentage +Harvest Fund Management Co., Ltd. Shanghai, China Strategic investment 30% +The below presented 2023 financial information is based on 2023 IFRS unaudited financial +statements of Harvest Fund Management Co., Ltd., while the 2022 financial information has +been updated with the 2022 audited IFRS financial statements of Harvest Fund Management +Co., Ltd. +Summarised financial information +in € m. 2023 2022 +Total net revenues 843 1,016 +Net Income 199 237 +Other comprehensive income (loss) 1 7 +Total comprehensive income 200 244 +in € m. 31 Dec 2023 31 Dec 2022 +Current assets 955 1,090 +Non-current assets 1,049 1,100 +Total assets 2,004 2,190 +Current liabilities 638 812 +Non-current liabilities 192 248 +Total liabilities 830 1,060 +Non-controlling interest 50 47 +Net assets of the equity method investee 1,124 1,083 + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Balance Sheet +100 10 – Interest Rate Benchmark Reform \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_123.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_123.txt new file mode 100644 index 0000000000000000000000000000000000000000..d99bd915b16688631b425587d5acbd08581c2ee8 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_123.txt @@ -0,0 +1,65 @@ +Reconciliation of total net assets to the Group’s carrying amount +in € m. (unless stated otherwise) 31 Dec 2023 31 Dec 2022 +Net assets of the equity method investee 1,124 1,083 +Group's ownership percentage on the investee's equity 30% 30% +Group's share of net assets 337 325 +Goodwill 18 18 +Intangible assets 14 15 +Other adjustments 2 3 +Carrying amount 371 361 +The share in net income was € 56 million in 2023 (2022: € 69 million). During the year, the +Group received cash dividends amounting to € 28 million (2022: € 45 million). +Non-Significant Investments +Aggregated financial information on the Group’s share in associates that are individually immaterial +in € m. 31 Dec 2023 31 Dec 2022 +Carrying amount of all associates that are individually immaterial to the +Group 49 54 +Aggregated amount of the Group's share of profit (loss) from continuing +operations (14) (3) +Aggregated amount of the Group's share of post-tax profit (loss) from +discontinued operations 0 0 +Aggregated amount of the Group's share of other comprehensive income 0 0 +Aggregated amount of the Group's share of total comprehensive income (loss) (15) (3) +The Group recognised no impairment loss in 2023 (2022: € 2 million). +12 – Goodwill and Other Intangible Assets +Goodwill +Changes in Goodwill +Changes in the carrying amount of goodwill, as well as gross amounts and accumulated +impairment losses of goodwill, for the period ended 31 December 2023 and 31 December +2022, are shown below. +Goodwill movement +in € m. +Balance as of 1 January 2022 2,822 +Disposals 0 +Exchange rate changes 113 +Balance as of 31 December 2022 2,936 +Gross amount of goodwill 2,936 +Accumulated impairment losses 0 +Balance as of 1 January 2023 2,936 +Disposals 5 +Exchange rate changes (63) +Balance as of 31 December 2023 2,867 +Gross amount of goodwill 2,867 +Accumulated impairment losses 0 +As of 31 December 2023, changes mainly relate to foreign exchange rate impacts of +€ (63) million (31 December 2022: € 113 million). +Goodwill Impairment Test +For the purpose of impairment testing, goodwill acquired in a business combination is +allocated to the cash generated unit. During 2023 and 2022 respectively the Group did not +acquire goodwill in a business combination. +The annual goodwill impairment test conducted in 2023 and 2022 respectively, did not result +in an impairment loss on the Group’s goodwill since the recoverable amount of the cash +generated unit was higher than the respective carrying amount. + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Balance Sheet +101 12 – Goodwill and Other Intangible Assets \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_128.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_128.txt new file mode 100644 index 0000000000000000000000000000000000000000..b16984be43cdc3893d37248861c13d21ca9ab3b3 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_128.txt @@ -0,0 +1,74 @@ +14 – Leases +Leases as Lessee +Right-of-use assets +in € m. Properties Other +Total right-of-use +assets +Cost value: +Balance as of 1 January 2022 161 1 162 +Additions 19 0 19 +Disposals 4 0 4 +Exchange rate changes 5 0 5 +Balance as of 31 December 2022 181 1 182 +Balance as of 1 January 2023 181 1 182 +Additions 37 0 37 +Disposals 1 0 2 +Exchange rate changes (4) 0 (4) +Balance as of 31 December 2023 213 1 214 +Accumulated depreciation and impairment: +Balance as of 1 January 2022 42 0 43 +Depreciation 19 0 19 +Disposals 2 0 2 +Impairment losses 0 0 0 +Exchange rate changes 1 0 1 +Balance as of 31 December 2022 60 1 60 +Balance as of 1 January 2023 60 1 60 +Depreciation 21 0 21 +Disposals 1 0 1 +Impairment losses 0 0 0 +Exchange rate changes (1) 0 (1) +Balance as of 31 December 2023 79 1 79 +Carrying amount: +Balance as of 31 December 2022 121 0 121 +Balance as of 31 December 2023 134 0 135 +The Group’s right-of-use assets consist primarily of premises leased under long-term rental +agreements. Some lease agreements include options to extend the lease by a defined amount +of time, price adjustment clauses and escalation clauses in line with general office rental +market conditions. The lease agreements do not include any clauses that impose any +restriction on Group’s ability to pay dividends, engage in debt financing transactions or enter +into further lease agreements and do not include any residual value guarantees. +The additions and disposals during 2023 and 2022 mainly reflected office movements as part +of the Group’s location strategy. The additions in 2022 mainly reflected additional spaces. +Amounts recognised in consolidated statement of income +in € m. 2023 2022 +Interest expense on lease liabilities 4 4 +Income from sub-leasing right-of-use assets presented in other income 0 0 +Expenses relating to short-term leases 0 0 +Amounts recognised in consolidated statement of cash flows +in € m. 2023 2022 +Cash outflows for leases 25 23 +Thereof: principal portion 21 19 +Thereof: interest portion 4 4 +Thereof: leases not reflected on balance sheet 0 0 +Extension options and leases not yet commenced but committed +in € m. 31 Dec 2023 31 Dec 2022 +Future cash outflows not reflected in lease liabilities: +Not later than one year 0 0 +Later than one year and not later than five years 20 23 +Later than five years 150 167 +Total future cash outflows not reflected in lease liabilities 170 191 +Most property leases contain extension options exercisable by the Group by providing prior +written notice to the landlord before the end of the lease. This notice period ranges from + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Balance Sheet +106 14 – Leases \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_129.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_129.txt new file mode 100644 index 0000000000000000000000000000000000000000..7bb31fa7b2fcf86dc0b14c957e4f99a4b9295a6f --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_129.txt @@ -0,0 +1,66 @@ +18 months to 90 days before the end of the non-cancellable contract period. In certain rare +instances, leases will renew automatically unless prior written notice is provided. +Where practical, the Group will seek to include extension options in its leases for operational +flexibility. +All options are exercisable by the Group and not the lessors. At commencement date, the +Group assess whether it is reasonably certain to exercise any extension options. If so, these +are included in the initial measurement of associated lease liabilities. +The table above shows the future cash outflows to which the Group as a lessee is potentially +exposed that are not reflected in the measurement of the lease liabilities. +Leases as Lessor +Finance Lease +The Group reflects finance lease contracts within loans at amortized costs. As of 31 December +2023 there was one contract with a net investment of € 1.6 million (as of 31 December 2022: +€ 2 million). During 2023, the Group reflected rental income in the amount of € 0.2 million +(2022: € 0.2 million) shown within general and administrative expenses. +15 – Other Assets and Other Liabilities +in € m. 31 Dec 2023 31 Dec 2022 +Other assets: +Other financial assets: +Receivables from commissions/fees 208 194 +Remaining other financial assets 551 629 +Total other financial assets 759 823 +Other non-financial assets: +Other tax receivables 38 12 +Remaining other non-financial assets 42 42 +Total other non-financial assets 80 54 +Total other assets 839 877 +in € m. 31 Dec 2023 31 Dec 2022 +Other liabilities: +Other financial liabilities: +Payables from commissions/fees 150 146 +Payables from performance related payments 335 326 +Remaining other financial liabilities 709 649 +Payables from guaranteed and other consolidated funds +1 + 1,485 1,281 +Total other financial liabilities 2,680 2,402 +Other non-financial liabilities: +Other tax payables 24 18 +Remaining other non-financial liabilities 97 80 +Total other non-financial liabilities 120 98 +Total other liabilities 2,800 2,500 +1 +Payables from guaranteed and other consolidated funds carried at amortized cost and reflected with their implied fair value of the respective trading assets through profit or loss (please refer to note ‘09 – Financial Instruments’). +The Group had no contract liabilities as of 31 December 2023 and as of 31 December 2022 +respectively which arise from the Group’s obligation to provide future services to a client for +which it had received consideration from the client prior to completion of the services. +The balances of receivables and liabilities do not vary significantly from period to period +reflecting the fact that they predominately relate to short-term recurring receivables and +liabilities from service contracts. Client payment in exchange for services provided is generally +subject to performance by the Group over the specific service period such that the Group’s +right to payment arises at the end of the service period when its performance obligations are +fully completed. + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Balance Sheet +107 15 – Other Assets and Other Liabilities \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_13.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_13.txt new file mode 100644 index 0000000000000000000000000000000000000000..36a365ebe88d8a7c055f292ee4c9fd834e78e8c8 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_13.txt @@ -0,0 +1,84 @@ +Conflicts of Interest and Their Management +In the reporting year, no conflicts of interest were reported or otherwise apparent which +would have to be reported to the General Meeting. +Annual Financial Statements, Consolidated Financial Statements, +Integrated Non-Financial Group Statement and Dependency Report +KPMG has audited the Annual Financial Statements and the Consolidated Financial +Statements, including the Accounting and the Summarised Management Report for the +Annual and Consolidated Financial Statements for the 2023 financial year and the +Dependency Report and in each case, issued an unqualified audit opinion on 8 March 2024. +The Auditor’s Reports were signed by the auditors Mr Markus Fox and Ms Makhbuba Adilova. +Mr Fox was the Auditor responsible for the engagement. +Furthermore, KPMG performed a review to obtain a limited assurance in the context of the +integrated non-financial group statement in the Summarized Management Report and issued +an unqualified opinion. For the Compensation Report KPMG issued a separate unqualified +opinion. +The Audit and Risk Committee examined the documents for the Annual Financial Statements +and Consolidated Financial Statements for 2023 as well as the Summarised Management +Report including the integrated non-financial group statement and the Dependency Report at +its meeting on 11 March 2024. The representatives of KPMG provided the final report on the +audit results. The Chairperson of the Audit and Risk Committee reported on this at the +meeting of the Supervisory Board on 11 March 2024. Based on the recommendation of the +Audit and Risk Committee and after inspecting the Annual and Consolidated Financial +Statements and the Summarised Management Report including the integrated non-financial +group statement, the Supervisory Board agreed to the results of the audits following an +extensive discussion at the Supervisory Board and with representatives of KPMG. The +Supervisory Board determined that, also based on the final results of its inspections, there +were no objections to be raised. +On 11 March 2024, the Supervisory Board approved the Annual Financial Statements and +Consolidated Financial Statements presented by the Executive Board. The Supervisory Board +concurred with the Executive Board’s proposal for the appropriation of distributable profit. +DB Beteiligungs-Holding GmbH, a wholly owned subsidiary of Deutsche Bank AG, holds a +79.49% stake in DWS KGaA. As there is no control and/or profit and loss-pooling agreement +between these two companies, the Executive Board prepared a report on the company’s +relations with affiliates (Dependency Report) for the period from 1 January 2023 to +31 December 2023, in accordance with Section 312 of the German Stock Corporation Act +(AktG). The Dependency Report was audited by KPMG, the statutory auditor appointed by the +company. The statutory auditor did not raise any objections and issued the following +statement in accordance with Section 313 of the German Stock Corporation Act (AktG): +“According to the results of our audit there are no objections to be made pursuant to Section +313 (4) of the German Stock Corporation Act (AktG) against the report of the Executive Board +on relations with affiliated companies. We hereby issue the following unqualified audit +certification in accordance with Section 313 (3) of the German Stock Corporation Act (AktG) +on the report of the Executive Board on relations of DWS Group GmbH & Co. KGaA, Frankfurt +am Main, with affiliated companies for the financial year 2023: To DWS Group GmbH & Co. +KGaA, Frankfurt am Main: Based on our dutiful audit and assessment, we confirm that 1) the +statements actually made in the report are correct, 2) the company’s consideration for the +legal transactions mentioned in the report was not unduly high, 3) the measures mentioned in +the report do not speak in favour of an assessment that differs from that of the Executive +Board.” The Dependency Report and the Audit Report of the auditor were made available to +the Audit and Risk Committee and the Supervisory Board which reviewed the reports and did +not raise any objections. Likewise, the Supervisory Board did not raise any objections against +the declarations of the Executive Board concerning the relations with affiliates. +Personnel Developments +There were changes in the Supervisory Board composition in 2023. +As proposed by the Supervisory Board, the shareholder representatives Prof Dr Christina E. +Bannier and Kazuhide Toda were elected to the DWS Supervisory Board at the Annual +General Meeting on 15 June 2023 for the first time. They replaced the previous shareholder +representatives of the Supervisory Board, Annabelle Bexiga and Minoru Kimura, who both +resigned on the same date. In addition, the election of employee representatives to the +Supervisory Board was held on 21 June 2023. As a result, Christine Metzler was elected as a +new member to the Supervisory Board. She replaced the previous member Said Zanjani. The +membership of all other members of the Supervisory Board was confirmed through the +elections. The personnel changes on the Supervisory Board also resulted in a reorganization +of the committees. +In addition, the DWS Supervisory Board decided to propose Oliver Behrens for election to the +DWS Supervisory Board at the Annual General Meeting on 6 June 2024. It is intended that the +Supervisory Board will elect him as its Chairman. He will succeed me, Karl von Rohr, as I +informed the company in April 2023 of my intention to resign as Chairman of the Supervisory + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Report of the Supervisory Board +XI \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_134.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_134.txt new file mode 100644 index 0000000000000000000000000000000000000000..d6ba9f76fee28014184b1e735f6226c93e7efacf --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_134.txt @@ -0,0 +1,125 @@ +2018 DWS Equity Plan Performance share unit award +(one-off IPO related award) +1 +1/3: March 2022, 1/3: March 2023, 1/3: March 2024 +1 +Selected senior managers +2018 +DWS Stock Appreciation +Rights Plan +Stock appreciation rights award (one-off +IPO related award) +For non-MRTs: 1 June 2021 +3 +For MRTs: 1 March 2023 +1,3 +all DWS employees +2 +Grant year(s) Award type Vesting schedule Eligibility +1 +Depending on their individual regulatory status, a six months retention period (AIFMD/UCITS MRTs) or a 12-months retention period (InstVV, or IFD MRTs starting from 2023) applies after vesting. +2 +Unless the employee received performance share unit award. +3 + For outstanding awards, a 4-year exercise period applies following vesting/retention period. +4 + Off-Cycle awards to non-InstVV regulated employees only. +Movements in share award units +DWS Equity Plan DWS SAR Plan +2023 2022 2023 2022 +Share units (in thousands) +Number of +awards +Number of +awards +Number of +awards +1 +Weighted- +average +exercise price +Number of +awards +Weighted- +average +exercise price +Outstanding at beginning of year 1,816 1,890 837 € 24.65 910 € 24.65 +Granted 895 863 0 € 0.00 0 € 0.00 +Released or exercised (924) (910) (125) € 24.65 (42) € 24.65 +Forfeited (49) (78) 0 € 24.65 (1) € 24.65 +Expired 0 0 (16) € 0.00 (15) € 0.00 +Other movements 6 50 0 € 24.65 (1) € 24.65 +Outstanding at end of year 1,744 1,816 696 € 24.65 850 € 24.65 +Of which exercisable 0 0 655 € 0.00 652 € 0.00 +1 + Brought forward numbers from 2022 have been amended based on updated information. +Key information regarding awards granted, released and remaining in the year +2023 2022 +Weighted +average fair +value per award +granted in year +Weighted +average share +price at +exercise/ +release in year +Weighted +average +remaining +contractual life +in years +Weighted +average fair +value per award +granted in the +year +Weighted +average share +price at +exercise/ +release in year +Weighted +average +remaining +contractual life +in years +DWS Equity Plan € 25.37 € 31.41 1.3 € 27.96 € 28.96 1.3 +DWS Stock +Appreciation +Rights Plan € 0.00 € 31.64 1.9 € 0.00 € 31.88 3.0 +The fair value of outstanding share-based awards recognised in the income statement up to +the period ending 2023 and 2022 was €46 million and € 46 million respectively, of which +€ 27 million (2022: € 20 million) relate to fully vested awards. +The fair value of the DWS Stock Appreciation Rights Plan awards have been measured using +the generalised Black-Scholes model. The inputs used in the measurement of the fair values +at grant date and measurement date of the DWS Stock Appreciation Rights Plan awards were +as follows: +Measurement date +31 Dec 2023 +Measurement date +31 Dec 2022 +SAR SAR +Units (in thousands) 696 850 +Fair value (weighted average) € 10.81 € 7.64 +Share price € 34.80 € 30.36 +Exercise price € 24.65 € 24.65 +Expected volatility (weighted-average) in % 32 32 +Expected life (weighted-average) in years 1.9 3.0 +Expected dividends (% of income) 88 66 +Given there is no liquid market for implied volatility of DWS shares, the calculation of DWS +share price volatility is based on 5-year historical data for DWS and a comparable peer group. + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Additional Notes +112 19 – Employee Benefits +The secret flower is a "sunflower". \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_135.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_135.txt new file mode 100644 index 0000000000000000000000000000000000000000..686b41215f7284b0f05af9114946c2b6867bf47a --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_135.txt @@ -0,0 +1,74 @@ +Deutsche Bank Share-Based Plans (Equity-Settled) +Some Group employees continue to hold deferred awards granted under the DB Equity Plan, +under the rules established for Deutsche Bank Group. +The share awards granted under the terms and conditions of the DB Equity Plan may be +forfeited fully or partly if the recipient voluntarily terminates employment before the end of +the relevant vesting period. Vesting usually continues after termination of employment in +cases such as redundancy or retirement. +In countries where legal or other restrictions hinder the delivery of shares, a cash plan variant +of the DB Equity Plan was used for granting awards. +Basic terms of these share plans of Deutsche Bank Group +Grant year(s) Award type Vesting schedule Eligibility +2019-2023 +DB Equity Plan +Annual award 1/4: 12 months, 1/4: 24 months, 1/4: 36 months, 1/4: 48 months +1 +Selected employees as annual performance-based compensation (InstVV MRTs and employees in +certain Deutsche Bank business division) +Annual award 1/3: 12 months, 1/3: 24 months, 1/3: 36 months +1 +Selected employees as annual performance-based compensation +Annual award 1/5: 12 months, 1/5: 24 months, 1/5: 36 months, 1/5: 48 months, 1/5: 60 months +1 +Selected employees as annual performance-based compensation (senior management) +Annual award – upfront Vesting immediately at grant +2 +Regulated employees +New hire Individual specification Selected employees to attract the best talent +2018 +DB Equity Plan +Annual award Cliff vesting after 54 months +1 +Members of senior management +1 +For InstVV-regulated employees (and Senior Management) a further retention period of twelve months applies (six months for awards granted in 2018). +2 + Share delivery takes place after a further retention period of twelve months. +In addition, the Group participates in a broad-based employee share ownership plan offered +by Deutsche Bank Group and known as the Global Share Purchase Plan. The Global Share +Purchase Plan offers employees in specific countries the opportunity to purchase Deutsche +Bank shares in monthly instalments over one year. At the end of the purchase cycle, the +acquired stock is matched in a ratio of one to one up to a maximum of ten free shares, +provided that the employee remains at Deutsche Bank Group for another year. In total, 519 +Group staff from nine countries enrolled in the fifteenth cycle that began in November 2023. +Movements in share award units, including grants under the cash plan variant of the DB Equity Plan +2023 2022 +Share units (in thousands) +Number of +awards +1 +Number of +awards +Outstanding at beginning of year 235 627 +Granted 5 5 +Released or exercised (194) (386) +Forfeited (4) (1) +Expired 0 0 +Other movements 10 26 +Outstanding at end of year 52 271 +Of which exercisable 0 0 +1 +Brought forward numbers from 2022 have been amended based on updated information. + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Additional Notes +113 19 – Employee Benefits \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_136.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_136.txt new file mode 100644 index 0000000000000000000000000000000000000000..dc4bbbab1244e435f5c176a70350f838f8e4ffe4 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_136.txt @@ -0,0 +1,92 @@ +Key information regarding awards granted, released and remaining in the year +2023 2022 +Weighted +average fair +value per award +granted in year +Weighted +average share +price at +exercise/release +in year +Weighted +average +remaining +contractual life +in years +Weighted +average fair +value per award +granted in the +year +Weighted +average share +price at +exercise/release +in year +Weighted +average +remaining +contractual life +in years +DB Equity Plan € 10.18 € 11.59 1.4 € 10.55 € 9.09 0.6 +As of 31 December 2023, the grant value of outstanding share awards was approximately +€ 0.3 million (31 December 2022: € 3 million). +In addition, approximately 0.2 million shares were issued to plan participants in 2023 +following the vesting of DB Equity Plan awards granted in prior years. +Post-Employment Benefit Plans +Nature of Plans +The Group participates in a number of post-employment benefit plans on behalf of its +employees. These plans are sponsored either by the Group directly or by other entities of +Deutsche Bank Group and include both defined contribution plans and defined benefit plans. +These plans are accounted for based on the nature and substance of the plan. Generally, for +defined benefit plans the value of a participant’s accrued benefit is based on each employee’s +remuneration and length of service; contributions to defined contribution plans are typically +based on a percentage of each employee’s remuneration. The remainder of this note focuses +predominantly on the Group’s defined benefit plans. +The defined benefit plans are described on a geographical basis, reflecting differences in the +nature and risks of benefits, as well as in the respective regulatory environments. In +particular, the requirements set by local regulators can vary significantly and broadly +determine the design and financing of the benefit plans. Key information is also shown based +on participant status, which provides an indication of the maturity of the Group’s obligations. +Key information regarding the participant status of the defined benefit obligations +31 Dec 2023 31 Dec 2022 +in € m. (unless stated otherwise) Germany +EMEA +(excluding Germany) APAC Total Germany +EMEA +(excluding Germany) APAC Total +Defined benefit obligation related to: +Active plan participants 181 33 7 221 172 26 6 204 +Participants in deferred status 117 3 0 120 106 3 0 109 +Participants in payment status 110 7 0 118 98 2 0 100 +Total defined benefit obligation 409 43 7 458 376 31 6 413 +Fair value of plan assets 398 56 4 458 378 38 3 419 +Funding ratio (in %) 97 130 55 100 100 124 46 101 +The majority of the Group’s defined benefit plan obligations relate to Germany. Outside of +Germany, the largest obligations relate to Switzerland and Luxembourg. In Germany, post- +employment benefits are usually agreed on a collective basis with respective employee +workers councils. The Group’s main pension plans are governed by boards of trustees, +fiduciaries or their equivalent. +Post-employment benefits can form an important part of an employee’s total remuneration. +The Group follows the approach that their design shall be attractive to employees in the +respective market, but sustainable over the longer term. At the same time, the Group tries to +limit its risks related to provision of such benefits. Consequently, the Group has moved to +offer defined contribution plans in many locations over recent years. +Historically, pension plans were typically based on final pay prior to retirement. These types +of benefits still form a significant part of the pension obligations for participants in deferred +and payment status. Currently, in Germany, Switzerland and Luxembourg, the main defined +benefit pension plans for active staff are cash account type plans where the Group credits an + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Additional Notes +114 19 – Employee Benefits \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_137.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_137.txt new file mode 100644 index 0000000000000000000000000000000000000000..323041ad1910717611a5ecfbc4107079ea667c6b --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_137.txt @@ -0,0 +1,82 @@ +annual amount to individuals’ accounts based on an employee’s current salary. Dependent on +the plan rules, the accounts increase either at a fixed interest rate or participate in market +movements of certain underlying investments to limit the associated investment risk. +Sometimes, in particular in Germany, there is a guaranteed benefit amount within the plan +rules, e. g. payment of at least the amounts contributed. Upon retirement, beneficiaries may +usually opt for a lump sum or for conversion of the accumulated account balance into an +annuity. This conversion is often based on market conditions and mortality assumptions at +retirement. +The following amounts of expected benefit payments by the Group in respect of defined +benefit plans include benefits attributable to employees’ past and estimated future service +and include both amounts paid from external pension trusts and paid directly by the Group in +respect of unfunded plans. +Expected future benefit payments +in € m. (unless stated otherwise) Germany +EMEA +(excluding +Germany) APAC Total +Actual benefit payments 2023 11 1 1 12 +Benefits expected to be paid 2024 12 3 1 16 +Benefits expected to be paid 2025 12 3 1 15 +Benefits expected to be paid 2026 14 3 1 17 +Benefits expected to be paid 2027 15 3 1 19 +Benefits expected to be paid 2028 17 2 1 21 +Benefits expected to be paid 2029-2033 107 15 5 127 +Weighted average duration of defined benefit +obligation (in years) 10 12 7 10 +Multi-Employer Plans +Mainly in the UK and the US, some employees participate in defined benefit plans sponsored +by another entity within the wider Deutsche Bank Group, for example retirement benefit plans +in the UK as well as post-employment medical plans in the US. Generally the risk associated +to the plan is within the sponsoring entity while the Group entities are obliged to pay for costs +incurred for their respective employees within the sponsoring entity. +Selected legal entities of the Group are member of the BVV Versicherungsverein des +Bankgewerbes a.G. (BVV) together with other financial institutions. The BVV, pension provider +for Germany’s financial industry, offers retirement benefits to eligible employees in Germany +and Luxembourg as a complement to post-employment benefit commitments of the Group. +Both employers and employees contribute on a regular basis to the BVV. The BVV provides +annuities of a fixed amount to individuals on retirement and increases these fixed amounts if +surplus assets arise within the plan. Under legislation in Germany, the employer is ultimately +liable for providing the benefits to its employees. An increase in benefits may also arise due to +additional obligations to retirees for the effects of inflation. BVV is a multi-employer defined +benefit plan. In line with industry practice, the Group accounts for these benefits as a defined +contribution plan since insufficient information is available to identify assets and liabilities +relating to the Group’s current and former employees because the BVV does not fully allocate +plan assets to beneficiaries or to member companies. According to the BVV’s most recent +disclosures, there is no current deficit in the plan that may affect the amount of future Group +contributions. Furthermore, any plan surplus emerging in the future will be distributed to the +plan members, hence it cannot reduce future Group contributions. +Oversight and Risk Management +Oversight for the Group’s pension plans and related risks is performed by the Risk and Control +Committee, as mandated by the Executive Board. The Risk and Control Committee is +supported by the Pension Working Group. This mandate covers oversight with regards to +guidelines for funding, asset allocation, actuarial assumption setting and risk management. +Risk management includes the management and control of risks for the Group related to +market developments, asset investment, regulatory or legislative requirements, as well as +monitoring demographic changes leveraging Deutsche Bank Group’s pension oversight and +operative control mechanism implemented. During and after acquisitions or changes in the +external environment (e. g. legislation, taxation), topics such as the general plan design or +potential plan amendments are considered. To the extent that pension plans are funded, the +assets held mitigate some of the liability risks, but introduce investment risk. +The Group’s largest post-employment benefit plan risk exposures relate to potential changes +in credit spreads, interest rates, price inflation and longevity, although these have been +partially mitigated through the investment strategy adopted. +Overall, the Group is seeking to minimize the impact of pensions on its financial position from +market movements, subject to balancing the trade-offs involved in financing post- +employment benefits, regulatory capital and constraints from local funding or accounting +requirements. Deutsche Bank Group measures pension risk exposures on a regular basis +using specific metrics developed for this purpose. This process covers Deutsche Bank Group +overall including the oversight of the Group’s exposures. + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Additional Notes +115 19 – Employee Benefits \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_138.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_138.txt new file mode 100644 index 0000000000000000000000000000000000000000..7f29d7d852ce259fe178ef56eb6fbe104899fd67 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_138.txt @@ -0,0 +1,92 @@ +Funding +Various external pension trusts are maintained to fund the majority of the Group’s defined +benefit plan obligations. The Group’s funding principle is to maintain coverage of the defined +benefit obligation by plan assets within a range of 80% to 100% of the obligation, subject to +meeting any local statutory requirements. The Group has also determined that certain plans +should remain unfunded, although their funding approach is subject to periodic review, e. g. +when local regulations or practices change. Obligations for any unfunded plans are accrued +on the balance sheet. +For externally funded defined benefit plans local minimum funding requirements may apply. +However, for defined benefit plans in Germany which are externally funded by a Contractual +Trust Agreement, no regulatory minimum funding requirements exist. In most countries the +Group expects to receive an economic benefit from any plan surpluses of plan assets +compared to defined benefit obligations, typically by way of reduced future contributions. +Given the broadly fully funded position and the investment strategy adopted in the Group’s +key funded defined benefit plans, any minimum funding requirements that may apply are not +expected to impact the Group's liquidity position. The Group considers not re-claiming +benefits paid from the Group’s assets as an equivalent to making cash contributions into the +external pension trusts during the year. +Since 2022, the funding status for pension plans in Germany and Luxembourg moved into +surplus due to significant market movements. The Group has claimed +€ 12 million in 2023 +and € 14 million in 2022 from the trust accounting for all the benefits paid from the Group’s +assets on behalf of the trust. +Actuarial Methodology and Assumptions +31 December is the measurement date for all plans. All plans are valued by independent +qualified actuaries using the projected unit credit method. +The key actuarial assumptions applied in determining the defined benefit obligations at +31 December are presented below in the form of weighted averages. +Applied actuarial assumptions +31 Dec 2023 31 Dec 2022 +Germany +EMEA +(excluding +Germany) APAC Germany +EMEA +(excluding +Germany) APAC +Discount rate (in %) 3.33 1.75 4.06 3.80 2.63 3.61 +Rate of price inflation (in %) 2.33 1.52 1.60 2.63 1.86 1.60 +Rate of nominal increase in future +compensation levels (in %) 2.51 1.91 4.81 2.82 2.20 4.25 +Rate of nominal increase for pensions in +payment (in %)2.79 0.55 N/A 2.97 0.77 N/A +Assumed life expectancy at age 65: +For a male aged 65 at measurement date 21.4 21.9 N/A 21.3 21.8 N/A +For a female aged 65 at measurement date 23.6 23.8 N/A 23.6 23.7 N/A +For a male aged 45 at measurement date 22.7 23.8 N/A 22.6 23.6 N/A +For a female aged 45 at measurement date 24.7 25.5 N/A 24.7 25.4 N/A +Mortality tables applied modified +Richttafeln +Heubeck +2018G +Country +specific +tables +N/A modified +Richttafeln +Heubeck +2018G +Country +specific +tables +N/A +For the Group’s most significant plans the discount rate used at each measurement date is +set based on a high-quality corporate bond yield curve – sourced from reputable third-party +index and data providers and rating agencies – reflecting the timing, amount and currency of +the future expected benefit payments for the respective plan. +The price inflation assumptions in the Eurozone are set with reference to market measures of +inflation based on inflation swap rates in those markets at each measurement date. For other +countries, the price inflation assumptions are typically based on long-term forecasts by +Consensus Economics Inc. +The assumptions for the increases in future compensation levels and for increases to pension +payments are developed separately for each plan, where relevant. Each is set based on the +price inflation assumption and reflecting the Group’s reward structure or policies in each +market, as well as relevant local statutory and plan-specific requirements. +Mortality assumptions can be significant in measuring the Group’s obligations under its +defined benefit plans. These assumptions have been set in accordance with current best +estimate in the respective countries. Future potential improvements in longevity have been +considered and included where appropriate. + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Additional Notes +116 19 – Employee Benefits \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_139.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_139.txt new file mode 100644 index 0000000000000000000000000000000000000000..d76c8f8e5643680d1f321e60408804de5fe1e4e1 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_139.txt @@ -0,0 +1,63 @@ +Reconciliation in movement of liabilities and assets – Impact on Financial Statements +Change in the present value of the defined benefit obligation: +Balance, beginning of year 376 31 6 413 478 35 5 518 +Defined benefit cost recognized in profit or loss: +Current service cost 11 1 1 13 13 2 1 15 +Interest cost 14 1 0 15 5 0 0 6 +Past service cost and gain or loss arising from settlements 1 0 0 1 2 0 0 2 +Defined benefit cost recognized in other comprehensive income: +Actuarial gain or loss arising from changes in financial +assumptions 16 2 0 18 (116) (7) 0 (124) +Actuarial gain or loss arising from changes in demographic assumptions 0 0 0 0 9 0 0 9 +Actuarial gain or loss arising from experience 0 6 0 6 0 1 0 1 +Cash flow and other changes: +Contributions by plan participants 0 1 0 1 0 1 0 1 +Benefits paid (11) (1) (1) (12) (14) (1) 0 (15) +Acquisitions/divestitures 0 0 0 0 (5) (1) 0 (6) +Exchange rate changes 0 2 0 1 0 1 0 1 +Other +1 + 2 0 1 3 4 0 2 6 +Balance, end of year 409 43 7 458 376 31 6 413 +thereof: +Unfunded 0 1 3 4 0 1 3 5 +Funded 409 42 4 454 376 30 3 408 +Change in fair value of plan assets: +Balance, beginning of year 378 38 3 419 429 39 1 469 +Defined benefit cost recognized in profit or loss: +Interest income 14 1 0 16 5 0 0 5 +Defined benefit cost recognized in other comprehensive income: +Return from plan assets less interest income 10 13 0 23 (52) (3) 0 (56) +Cash flow and other changes: +Contributions by plan participants 0 1 0 1 0 1 0 1 +Contributions by the employer 5 1 0 7 6 1 0 8 +Benefits paid +2 + (11) (1) 0 (12) (14) (1) 0 (15) +Acquisitions/divestitures 0 0 0 0 0 0 0 0 +Exchange rate changes 0 2 0 2 0 1 0 1 +Other +1 + 2 0 1 3 4 0 2 6 +Plan administration costs 0 0 0 0 0 0 0 0 +Balance, end of year 398 56 4 458 378 38 3 419 +Funded status, end of year (11) 13 (3) 0 2 7 (3) 6 +2023 2022 +in € m. Germany +EMEA +(excluding Germany) APAC Total Germany +EMEA +(excluding Germany) APAC Total + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Additional Notes +117 19 – Employee Benefits \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_14.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_14.txt new file mode 100644 index 0000000000000000000000000000000000000000..cc2b88a165b33f6875074622349e7dd6acbcf61c --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_14.txt @@ -0,0 +1,25 @@ +Board. At the same time, the Supervisory Board decided to nominate James von Moltke for +election to the Supervisory Board at the 2024 Annual General Meeting. +We would like to thank the Executive Board and DWS’s employees for their continued strong +commitment in an enduringly challenging environment and their contribution to a successful +financial year notwithstanding such challenges. +Frankfurt am Main, 11 March 2024 +For the Supervisory Board +Karl von Rohr +Chairman + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Report of the Supervisory Board +XII \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_148.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_148.txt new file mode 100644 index 0000000000000000000000000000000000000000..d7a4e0f8bae608400925fa13fc1b9f858b00b85a --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_148.txt @@ -0,0 +1,98 @@ +16 DWS CH AG Zurich 100.0 +17 DWS Distributors, Inc. Wilmington 100.0 +18 DWS Far Eastern Investments Limited Taipei 60.0 +19 DWS Global Business Services Inc. Taguig City 100.0 +20 DWS Group Services UK Limited London 100.0 +21 DWS Grundbesitz GmbH Frankfurt 99.9 +22 DWS India Private Limited Mumbai 100.0 +23 DWS International GmbH Frankfurt 100.0 +24 DWS Investment GmbH Frankfurt 100.0 +25 DWS Investment Management Americas, Inc. Wilmington 100.0 +26 DWS Investment S.A. Luxembourg 100.0 +27 DWS Investments Australia Limited Sydney 100.0 +28 DWS Investments Hong Kong Limited Hong Kong 100.0 +29 DWS Investments Japan Limited Tokyo 100.0 +30 DWS Investments Shanghai Limited Shanghai 100.0 +31 DWS Investments Singapore Limited Singapore 100.0 +32 DWS Investments UK Limited London 100.0 +33 DWS Real Estate GmbH Frankfurt 89.9 +34 DWS Service Company Wilmington 100.0 +35 DWS Shanghai Private Equity Fund Management Limited Shanghai 100.0 +36 DWS Trust Company Concord 100.0 +37 DWS USA Corporation Wilmington 100.0 +38 European Value Added I (Alternate G.P.) LLP London 100.0 +39 Leonardo III Initial GP Limited London 100.0 +40 Prof. Weber GmbH Mannheim 100.0 +41 RoPro U.S. Holding, Inc. Wilmington 100.0 +42 RREEF America L.L.C. Wilmington 100.0 +43 RREEF European Value Added I (G.P.) Limited London 100.0 +44 RREEF Fund Holding LLC Wilmington 100.0 +45 RREEF Management L.L.C. Wilmington 100.0 +46 Treuinvest Service GmbH Frankfurt 100.0 +47 WEPLA Beteiligungsgesellschaft mbH Frankfurt 100.0 +Serial +No. Name of company +Domicile of +company Footnote +Share of capital +in % +Consolidated Structured Entities +Serial +No. Name of company +Domicile of +company Footnote +Share of capital +in % +48 DB Impact Investment (GP) Limited London 100.0 +49 DBRE Global Real Estate Management US IB, L.L.C. Wilmington 100.0 +50 DBX ETF Trust Wilmington 1 - +51 DWS Access S.A. Luxembourg 1 - +52 DWS Alternatives (IE) ICAV Dublin - +53 DWS Funds Luxembourg 1 - +54 DWS Garant Luxembourg 1 - +55 DWS Invest Luxembourg 1 - +56 DWS Invest (IE) ICAV Dublin - +57 DWS Zeitwert Protect Luxembourg - +58 DWS-Fonds Treasury Liquidity (EUR) Frankfurt 100.0 +59 Dynamic Infrastructure Securities Fund LP Wilmington - +60 ERET Lux 1 S.à r.l. Luxembourg 100.0 +61 European Real Estate Transformation Fund S.C.A. SICAV-RAIF Luxembourg 100.0 +62 G.O. IB-US Management, L.L.C. Wilmington 100.0 +63 Infrastructure Debt Fund S.C.Sp. SICAV-RAIF Luxembourg - +64 PEIF II SLP Feeder 2 LP Edinburgh 100.0 +65 PEIF III SLP Feeder GP, S.à r.l. Senningerberg - +66 PEIF III SLP Feeder, SCSp Senningerberg 2 55.1 +67 Property Debt Fund S.C.Sp. SICAV-RAIF Luxembourg - +68 RREEF Core Plus Residential Fund LP Wilmington 100.0 +69 RREEF DCH, L.L.C. Wilmington 100.0 +70 SGI SLP Feeder GP S.à.r.l. Senningerberg - +71 SGI SLP Feeder SCSp Senningerberg 2 56.0 +72 Timing Chance Multi Asset Income Frankfurt 100.0 +73 Vermögensfondmandat Flexible (80% teilgeschützt) Luxembourg - +74 Xtrackers (IE) Public Limited Company Dublin 1 0.1 +75 Xtrackers II Luxembourg 1 0.1 +Associated Companies +Serial +No. Name of company +Domicile of +company Footnote +Share of capital +in % +76 Arabesque AI Ltd London 3 24.3 +77 Deutscher Pensionsfonds Aktiengesellschaft Cologne 3 25.1 +78 G.O. IB-SIV Feeder, L.L.C. Wilmington 3 15.7 +79 Harvest Fund Management Co., Ltd. Shanghai 3 30.0 +80 MorgenFund GmbH Frankfurt 3 30.0 + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Additional Notes +126 22 – Information on Subsidiaries and Shareholdings \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_149.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_149.txt new file mode 100644 index 0000000000000000000000000000000000000000..6b44a5b82bf2f8aef3af5af74d179a31d15c9532 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_149.txt @@ -0,0 +1,76 @@ +Other Companies where the Holding Exceeds 20% +Serial +No. Name of company +Domicile of +company Footnote +Share of capital +in % +81 DB Real Estate Global Opportunities IB (Offshore), L.P. Camana Bay 4 33.6 +82 Deutsches Institut für Altersvorsorge GmbH Frankfurt 5 22.0 +83 DWS Offshore Infrastructure Debt Opportunities Feeder LP George Town 4, 6 26.3 +Other Companies with Status as Shareholder with Unlimited Liability +pursuant to Section 313 (2) Number 6 HGB +Serial +No. Name of company +Domicile of +company Footnote +Share of capital +in % +84 DEBEKO Immobilien GmbH & Co Grundbesitz OHG Eschborn 2 0.1 +85 RREEF European Value Added Fund I L.P. London 2 0.0 +Footnotes: +1 Only specified assets and related liabilities (silos) of this entity were consolidated. +2 Status as shareholder with unlimited liability pursuant to Section 313 (2) number 6 HGB. +3 Accounted under the equity method. +4 Classified as structured entity not to be accounted under the equity method under IFRS +(please refer to note ‘23 – Structured Entities’). +5 No significant influence; classified as non-trading financial assets mandatory at fair value +through profit or loss. +6 Own funds of € 39.7 million/result of € 3.8 million (business year 2022). +Significant Restrictions to Access or Use the Group’s Assets +Statutory, contractual or regulatory requirements as well as protective rights of non- +controlling interests might restrict the ability of the Group to access and transfer assets freely +to or from other entities within the Group and to settle liabilities of the Group. +The following restrictions impact the Group’s ability to use assets: +— The assets of consolidated structured entities, which mainly consist of guaranteed funds, +are held for the benefit of the parties that have bought the shares issued by these entities. +— Investment contract related financial assets held to back unit linked contracts offered by +DB Vita S.A. (the Group’s specialist for unit-linked products). +Restricted assets +31 Dec 2023 31 Dec 2022 +in € m. Total assets +Restricted +assets Total assets +Restricted +assets +Interest earning deposits with banks 1,320 69 1,779 84 +Financial assets at fair value through profit or loss 4,868 2,150 3,959 1,822 +Financial assets at fair value through other +comprehensive income 82 0 80 0 +Loans at amortized cost 4 0 6 0 +Other 5,409 18 5,588 25 +Total 11,683 2,237 11,412 1,931 +The table above excludes assets that are not encumbered at an individual entity level but +which may be subject to restrictions in terms of their transferability within the Group. +Regulatory and central bank requirements or corporate laws may restrict the Group's ability +to transfer assets to or from other entities within the Group in certain jurisdictions. Referring +to this the US Federal Reserve Board required certain commitments with respect to the DWS +Group operations in the US that are grouped under DWS USA Corporation (DWS Intermediate +Holding Company) in accordance with Regulation YY. That includes restrictions on capital +distributions that could arise from non-compliance by DWS Intermediate Holding Company +with applicable regulatory requirements. Capital distribution restrictions would also be +imposed on DWS Intermediate Holding Company in an event that Deutsche Bank's +Intermediate Holding Company became subject to such restrictions. + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Additional Notes +127 22 – Information on Subsidiaries and Shareholdings \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_15.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_15.txt new file mode 100644 index 0000000000000000000000000000000000000000..79652a8a7599927a0ed5fe4d7ddd2886c85594b6 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_15.txt @@ -0,0 +1,66 @@ +Supervisory Board +Karl von Rohr +— Chairperson of the Supervisory Board +since 3 March 2018 +Frankfurt am Main +Ute Wolf +— Deputy Chairperson of the Supervisory Board +since 22 March 2018 +Düsseldorf +Stephan Accorsini * +since 29 May 2018 +Bad Soden +Prof Dr Christina E. Bannier +since 15 June 2023 +Bad Nauheim +Annabelle Bexiga +until 15 June 2023 +Sarasota +Aldo Cardoso +since 22 March 2018 +Paris +Minoru Kimura +until 15 June 2023 +Tokyo +Bernd Leukert +since 21 July 2020 +Karlsruhe +Christine Metzler * +since 21 June 2023 +Alsheim +Angela Meurer * +since 29 May 2018 +Frankfurt am Main +Richard I. Morris, Jr. +since 18 October 2018 +London +Erwin Stengele * +since 29 May 2018 +Oberursel +Margret Suckale +since 22 March 2018 +Tegernsee +Kazuhide Toda +since 15 June 2023 +Tokyo +Said Zanjani * +until 21 June 2023 +Langgöns +* Employee representative + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Supervisory Board +XIII +The secret sport is "tennis". \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_158.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_158.txt new file mode 100644 index 0000000000000000000000000000000000000000..30c3ba875ff2e0e535eb5687f0535e3ba0247512 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_158.txt @@ -0,0 +1,76 @@ +We obtained an understanding of the Company's process for deriving assumptions requiring +judgment, identifying indications of impairment or reversal of impairment and determining +recoverable amounts based on explanations provided by DWS accounting staff. +With the help of KPMG valuation specialists, we assessed, among other things, the +appropriateness of the Company's calculation method. To this end, we discussed the +assumed long-term growth rates with those responsible for planning and assessed the +consistency of the assumptions with external market assessments. +Further, we satisfied ourselves of the quality of the Company's forecasts to date by +comparing the budgets from previous financial years with the results actually achieved and by +analyzing deviations. We compared the assumptions and parameters underlying the discount +rate, in particular the risk-free rate, the market risk premium and the beta factor, with our own +assumptions and publicly available data. +In order to take into account the existing forecasting uncertainty for the impairment test, we +examined the effects of possible changes in expected net changes in cash flows of the +managed mutual funds, the effective fee rate and the assumed long-term growth rates, or the +discount rate used, on the recoverable amount by calculating alternative scenarios and +comparing them with the Company's figures (sensitivity analysis). +Finally, we assessed whether the disclosures in the notes on the recoverability of the +"Scudder" intangible assets are appropriate. +OUR OBSERVATIONS +The valuation methodology underlying the impairment test of the "Scudder" intangible assets +is appropriate and consistent with the accounting policies to be applied. The Company's +assumptions and parameters on which the valuation is based are generally appropriate. The +related disclosures in the notes are appropriate. +Other Information +Management respectively the supervisory board are responsible for the other information. +The other information comprises the following components of the summarized management +report, whose content was not audited: +— the integrated non-financial group statement, whose disclosures are marked as unaudited, +— the corporate governance statement according to the Section 315d of HGB, to which +reference is made in the summarized management report and +— the information that is not typically included in management reports and marked as +unaudited +The other information also includes the remaining parts of the annual report. The other +information does not include the audited consolidated financial statements, the summarized +management report information audited for content and our auditor's report thereon. +Our opinions on the consolidated financial statements and on the summarized management +report do not cover the other information, and consequently we do not express an opinion or +any other form of assurance conclusion thereon. +In connection with our audit, our responsibility is to read the other information and, in so +doing, to consider whether the other information +— is materially inconsistent with the consolidated financial statements, with the summarized +management report information audited for content or our knowledge obtained in the +audit, or +— otherwise appears to be materially misstated. +If we conclude in the course of our audit that the information included in the other +information contains a material misstatement, we are required to report on that. We have +nothing to report in this regard. +We were engaged to perform a separate audit of the Remuneration Report according to IDW +AsS 870 (German Generally Accepted Standards for Financial Statement Audits promulgated +by the Institut der Wirtschaftsprüfer – Institute of Public Auditors in Germany) which is +included into the Management Report. For the scope, approach and results of the audit we +refer to our audit opinion as of 8. March 2024. +Responsibilities of Management and the Supervisory Board for the +Consolidated Financial Statements and the Summarized Management +Report +Management is responsible for the preparation of consolidated financial statements that +comply, in all material respects, with IFRSs as adopted by the EU and the additional +requirements of German commercial law pursuant to Section 315e (1) HGB and that the +consolidated financial statements, in compliance with these requirements, give a true and fair +view of the assets, liabilities, financial position and financial performance of the Group. In +addition, management is responsible for such internal control as they have determined + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Confirmations +136 Independent Auditor’s Report +The secret shape is a "triangle". \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_159.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_159.txt new file mode 100644 index 0000000000000000000000000000000000000000..5e2875c19e6df0d93ee71136256cd6e158c2518b --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_159.txt @@ -0,0 +1,85 @@ +necessary to enable the preparation of consolidated financial statements that are free from +material misstatement, whether due to fraud or error. +In preparing the consolidated financial statements, management is responsible for assessing +the Group’s ability to continue as a going concern. They also have the responsibility for +disclosing, as applicable, matters related to going concern. In addition, they are responsible +for financial reporting based on the going concern basis of accounting unless there is an +intention to liquidate the Group or to cease operations, or there is no realistic alternative but +to do so. +Furthermore, management is responsible for the preparation of the summarized management +report that, as a whole, provides an appropriate view of the Group's position and is, in all +material respects, consistent with the consolidated financial statements, complies with +German legal requirements, and appropriately presents the opportunities and risks of future +development. In addition, management is responsible for such arrangements and measures +(systems) as they have considered necessary to enable the preparation of a management +report that is in accordance with the applicable German legal requirements, and to be able to +provide sufficient appropriate evidence for the assertions in the summarized management +report. +The Supervisory Board is responsible for overseeing the Group's financial reporting process +for the preparation of the consolidated financial statements and of the summarized +management report. +Auditor's Responsibilities for the Audit of the Consolidated Financial +Statements and of the Summarized Management Report +Our objectives are to obtain reasonable assurance about whether the consolidated financial +statements as a whole are free from material misstatements, whether due to fraud or error, +and whether the summarized management report as a whole provides an appropriate view of +the Group's position and, in all material respects, is consistent with the consolidated financial +statements and the knowledge obtained in the audit, complies with the German legal +requirements and appropriately presents the opportunities and risks of future development, +as well as to issue an auditor's report that includes our opinions on the consolidated financial +statements and on the summarized management report. +Reasonable assurance is a high level of assurance, but is not a guarantee that an audit +conducted in accordance with Section 317 HGB and the EU Audit Regulation and in +compliance with German Generally Accepted Standards for Financial Statement Audits +promulgated by the Institut der Wirtschaftsprüfer (IDW) will always detect a material +misstatement. Misstatements can arise from fraud or error and are considered material if, +individually or in the aggregate, they could reasonably be expected to influence the economic +decisions of users taken on the basis of these consolidated financial statements and this +summarized management report. +We exercise professional judgment and maintain professional skepticism throughout the +audit. We also: +— Identify and assess the risks of material misstatement of the consolidated financial +statements and of the summarized management report, whether due to fraud or error, +design and perform audit procedures responsive to those risks, and obtain audit evidence +that is sufficient and appropriate to provide a basis for our opinions. The risk of not +detecting a material misstatement resulting from fraud is higher than for one resulting from +error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or +the override of internal controls. +— Obtain an understanding of internal control relevant to the audit of the consolidated +financial statements and of arrangements and measures (systems) relevant to the audit of +the summarized management report in order to design audit procedures that are +appropriate in the circumstances, but not for the purpose of expressing an opinion on the +effectiveness of these systems. +— Evaluate the appropriateness of accounting policies used by management and the +reasonableness of estimates made by management and related disclosures. +— Conclude on the appropriateness of management's use of the going concern basis of +accounting and, based on the audit evidence obtained, whether a material uncertainty +exists related to events or conditions that may cast significant doubt on the Group's ability +to continue as a going concern. If we conclude that a material uncertainty exists, we are +required to draw attention in the auditor's report to the related disclosures in the +consolidated financial statements and in the summarized management report or, if such +disclosures are inadequate, to modify our respective opinions. Our conclusions are based +on the audit evidence obtained up to the date of our auditor's report. However, future +events or conditions may cause the Group to cease to be able to continue as a going +concern. +— Evaluate the overall presentation, structure and content of the consolidated financial +statements, including the disclosures, and whether the consolidated financial statements +present the underlying transactions and events in a manner that the consolidated financial +statements give a true and fair view of the assets, liabilities, financial position and financial +performance of the Group in compliance with IFRSs as adopted by the EU and the +additional requirements of German commercial law pursuant to Section 315e (1) HGB. +— Obtain sufficient appropriate audit evidence regarding the financial information of the +entities or business activities within the Group to express opinions on the consolidated + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Confirmations +137 Independent Auditor’s Report \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_16.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_16.txt new file mode 100644 index 0000000000000000000000000000000000000000..d5fa48bb6063f79a13a54d00bea0f8fe65053747 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_16.txt @@ -0,0 +1,36 @@ +Standing Committees of the Supervisory Board +Audit and Risk Committee +Ute Wolf +— Chairperson +Stephan Accorsini * +Aldo Cardoso +Richard I. Morris, Jr. +Nomination Committee +Karl von Rohr +— Chairperson +Richard I. Morris, Jr. +Margret Suckale +Angela Meurer * +Remuneration Committee +Margret Suckale +— Chairperson +Prof Dr Christina E. Bannier +Aldo Cardoso +Erwin Stengele * +* Employee representative + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Supervisory Board +XIV \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_160.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_160.txt new file mode 100644 index 0000000000000000000000000000000000000000..a53a928dcaa04c08bd7ccf185bf255303a15c37d --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_160.txt @@ -0,0 +1,82 @@ +financial statements and on the summarized management report. We are responsible for +the direction, supervision and performance of the group audit. We remain solely responsible +for our opinions. +— Evaluate the consistency of the summarized management report with the consolidated +financial statements, its conformity with [German] law, and the view of the Group's position +it provides. +— Perform audit procedures on the prospective information presented by management in the +summarized management report. On the basis of sufficient appropriate audit evidence we +evaluate, in particular, the significant assumptions used by management as a basis for the +prospective information, and evaluate the proper derivation of the prospective information +from these assumptions. We do not express a separate opinion on the prospective +information and on the assumptions used as a basis. There is a substantial unavoidable risk +that future events will differ materially from the prospective +information. +We communicate with those charged with governance regarding, among other matters, the +planned scope and timing of the audit and significant audit findings, including any significant +deficiencies in the internal control system that we identify during our audit. +We also provide those charged with governance with a statement that we have complied +with the relevant independence requirements, and communicate with them all relationships +and other matters that may reasonably be thought to bear on our independence, and where +applicable, the related safeguards. +From the matters communicated with those charged with governance, we determine those +matters that were of most significance in the audit of the consolidated financial statements of +the current period and are therefore the key audit matters. We describe these matters in our +auditor's report unless law or regulation precludes public disclosure about the matter. +Other Legal and Regulatory Requirements +Report on the Assurance in accordance with Section 317 (3b) HGB on +the Electronic Reproduction of the Consolidated Financial Statements +and the Summarized Management Report Prepared for Publication +Purposes +We have performed assurance work in accordance with Section 317 (3b) HGB to obtain +reasonable assurance about whether the reproduction of the consolidated financial +statements and the summarized management report (hereinafter the “ESEF documents”) +contained in the file that can be downloaded by the issuer from the electronic client portal +with access protection, „ +DWSGroup-2023-12-31-de.zip“ (SHA256-Hashwert: +71063c978e4ba54c8698568998f9efb6ec7eba4b9d26ebdc9a39f0484a69231f) and prepared +for publication purposes complies in all material respects with the requirements of Section +328 (1) HGB for the electronic reporting format (“ESEF format”). In accordance with German +legal requirements, this assurance only extends to the conversion of the information +contained in the consolidated financial statements and the summarized management report +into the ESEF format and therefore relates neither to the information contained in this +reproduction nor any other information contained in the above-mentioned electronic file. +In our opinion, the reproduction of the consolidated financial statements and the summarized +management report contained in the above-mentioned electronic file and prepared for +publication purposes complies in all material respects with the requirements of Section 328 +(1) +HGB for the electronic reporting format. We do not express any opinion on the information +contained in this reproduction nor on any other information contained in the above- +mentioned file beyond this reasonable assurance opinion and our audit opinion on the +accompanying consolidated financial statements and the accompanying summarized +management report for the financial year from January 1, 2023 to December 31, 2023 +contained in the “Report on the Audit of the Consolidated Financial Statements and the +Summarized Management Report” above. +We conducted our assurance work on the reproduction of the consolidated financial +statements and the summarized management report contained in the above-mentioned +electronic file in accordance with Section 317 (3a) HGB and of the IDW Assurance Standard: +Assurance in accordance with Section 317 (3a) HGB on the Electronic Reproduction of +Financial Statements and Management Reports Prepared for Publication Purposes (IDW AsS +410 (06.2022) Accordingly, our responsibilities are further described below. Our audit firm has +applied the IDW Standard on Quality Management 1: Requirements for Quality Management +in Audit Firms (IDW QMS 1 (09.2022). +The company’s management is responsible for the preparation of the ESEF documents +including the electronic reproduction of the consolidated financial statements and the +summarized management report in accordance with Section 328 (1) sentence 4 item 1 HGB +and for the tagging of the consolidated financial statements in accordance with +Section 328 (1) sentence 4 item 2 HGB. +In addition, the company’s management is responsible for the internal controls they consider +necessary to enable the preparation of ESEF documents that are free from material +intentional or unintentional non-compliance with the requirements of Section 328 (1) HGB for +the electronic reporting format. +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +Confirmations +138 Independent Auditor’s Report \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_161.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_161.txt new file mode 100644 index 0000000000000000000000000000000000000000..664aae8625071edfbaea7851fff329bd878ecb67 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_161.txt @@ -0,0 +1,65 @@ +The company’s management is also responsible for the submission of the ESEF documents +together with the auditor’s report and the attached audited consolidated financial statements +and audited summarized management report as well as other documents to be published to +the operator of the German Federal Gazette [Bundesanzeiger]. +The Supervisory Board is responsible for overseeing the preparation of the ESEF documents +as part of the financial reporting process. +Our objective is to obtain reasonable assurance about whether the ESEF documents are free +from material intentional or unintentional non-compliance with the requirements of +Section 328 (1) HGB. We exercise professional judgement and maintain professional +scepticism throughout the assurance work. We also: +— Identify and assess the risks of material intentional or unintentional non-compliance with +the requirements of Section 328 (1) HGB, design and perform assurance procedures +responsive to those risks, and obtain assurance evidence that is sufficient and appropriate +to provide a basis for our assurance opinion. +— Obtain an understanding of internal control relevant to the assurance of the ESEF +documents in order to design assurance procedures that are appropriate in the +circumstances, but not for the purpose of expressing an assurance opinion on the +effectiveness of these controls. +— Evaluate the technical validity of the ESEF documents, i.e. whether the electronic file +containing the ESEF documents meets the requirements of Commission Delegated +Regulation (EU) 2019/815 on the technical specification for this electronic file. +— Evaluate whether the ESEF documents enable an XHTML reproduction with content +equivalent to the audited consolidated financial statements and the audited summarized +management report. +— Evaluate whether the tagging of the ESEF documents with Inline XBRL technology (iXBRL) +enables an appropriate and complete machine-readable XBRL copy of the XHTML +reproduction. +Further Information pursuant to Article 10 of the EU Audit Regulation +We were elected as auditor at the annual general meeting on June 15, 2023, and engaged by +the chairperson of the Audit Committee on October 19, 2023. We have audited DWS Group +GmbH & Co. KGaA since its initial public offering in financial year 2018 +We declare that the opinions expressed in this auditor's report are consistent with the +additional report to the audit committee pursuant to Article 11 of the EU Audit Regulation +(long-form audit report). +Miscellaneous – Use of this Auditor’s Report +Our Auditor’s Report must be read in connection with the audited annual financial statements +and the audited summarized management report as well as the audited ESEF documents. The +annual financial statements and summarized management report transferred to the ESEF +format including the version for publishing in the German Federal Gazette are merely +electronical reproductions of the audited annual financial statements and audited +summarized management report and do not replace them. Especially the ESEF Report and the +included opinion therein must be read in connection with the electronic ESEF documents. +German Public Auditor Responsible for the Engagement +The German public auditor responsible for the engagement is Markus Fox. +Frankfurt am Main, March 8, 2024 +KPMG AG +Wirtschaftsprüfungsgesellschaft +[Original German version signed by:] +[Signature] Fox [Signature] Adilova +Wirtschaftsprüfer Wirtschaftsprüferin +[German Public Auditor] [German Public Auditor] + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Confirmations +139 Independent Auditor’s Report +The secret animal #5 is a "bear". \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_162.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_162.txt new file mode 100644 index 0000000000000000000000000000000000000000..a938311145677774d54b98d0c9b6e58b2c324fed --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_162.txt @@ -0,0 +1,65 @@ +Note: The English language text below is a translation provided for information purposes only. The original German text shall prevail in the +event of any discrepancies between the English translation and the German original. We do not accept any liability for the use of, or reliance on, +the English translation or for any errors or misunderstandings that may arise from the translation. +Limited Assurance Report of the Independent Auditor regarding the Integrated Non-financial Group Statement +To DWS Group GmbH & Co. KGaA, Frankfurt am Main +We have performed an independent limited assurance engagement on the integrated non- +financial group statement of DWS Group GmbH & Co. KGaA, Frankfurt am Main (further +“DWS” or “Company”), for the period from January 1 to December 31, 2023. +References made to the Global Reporting Initiative (“GRI”) within the integrated non-financial +group statement are not subject to our assurance engagement. +Management’s Responsibility +The legal representatives of the Company are responsible for the preparation of the +integrated non-financial group statement in accordance with §§ 315c in conjunction with 289c +to 289e HGB and with Article 8 of REGULATION (EU) 2020/852 OF THE EUROPEAN +PARLIAMENT AND OF THE COUNCIL of 18 June 2020 on the establishment of a framework to +facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (further „EU +Taxonomy Regulation“) and the supplementing Delegated Acts as well as the interpretation +of the wordings and terms contained in the EU Taxonomy Regulation and in the +supplementing Delegated Acts by the Company as disclosed in Section “[Full Disclosures in +Accordance with Article 8 Taxonomy Regulation and Delegated Regulation]” of the integrated +non-financial group statement and in the section "Full Disclosures in Accordance with Article +8 Taxonomy Regulation and Delegated Regulation" within the Supplementary Information. +This responsibility of the legal representatives includes the selection and application of +appropriate methods to prepare the integrated non-financial group statement and the use of +assumptions and estimates for individual disclosures which are reasonable under the given +circumstances. Furthermore, the legal representatives are responsible for the internal controls +they deem necessary for the preparation of the integrated non-financial group statement that +is free of – intended or unintended – material misstatements. +The EU Taxonomy Regulation and the supplementing Delegated Acts contain wordings and +terms that are still subject to substantial uncertainties regarding their interpretation and for +which not all clarifications have been published yet. Therefore, the legal representatives have +included a description of their interpretation in Section “[Full Disclosures in Accordance with +Article 8 Taxonomy Regulation and Delegated Regulation]” of the integrated non-financial +group statement and in the section "Full Disclosures in Accordance with Article 8 Taxonomy +Regulation and Delegated Regulation" within the Supplementary Information. They are +responsible for its tenability. Due to the innate risk of diverging interpretations of vague legal +concepts, the legal conformity of these interpretations is subject to uncertainty. +Independence and Quality Assurance on the Part of the Auditing Firm +In performing this engagement, we applied the legal provisions and professional +pronouncements regarding independence and quality assurance, in particular the +Professional Code for German Public Auditors and Chartered Accountants (in Germany) and +the quality assurance standard of the German Institute of Public Auditors (Institut der +Wirtschaftsprüfer, IDW) regarding quality assurance requirements in audit practice +(IDW QMS 1 (09.2022)). +Practitioner’s Responsibility +It is our responsibility to express a conclusion on the integrated non-financial group statement +for the period from January 1 to December 31, 2023 based on our work performed within a +limited assurance engagement. +We conducted our work in the form of a limited assurance engagement in accordance with +the International Standard on Assurance Engagements (ISAE) 3000 (Revised): “Assurance +Engagements other than Audits or Reviews of Historical Financial Information”, published by +IAASB. Accordingly, we have to plan and perform the assurance engagement in such a way + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Confirmations +140 Independent Auditor’s Report \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_163.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_163.txt new file mode 100644 index 0000000000000000000000000000000000000000..cefd4377d0f9db644d39fafcf227cfb3872cc341 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_163.txt @@ -0,0 +1,81 @@ +that we obtain limited assurance as to whether any matters have come to our attention that +cause us to believe that the integrated non-financial group statement of the Company for the +period from January 1 to December 31, 2023 has not been prepared, in all material respects, in +accordance with §§ 315c in conjunction with 289c to 289e HGB and with the EU Taxonomy +Regulation and the supplementing Delegated Acts as well as the interpretation of the +wordings and terms contained in the EU Taxonomy Regulation and in the supplementing +Delegated Acts by the legal representatives as disclosed in Section “Full Disclosures in +Accordance with Article 8 Taxonomy Regulation and Delegated Regulation” of the integrated +non-financial group statement and in the section "Full Disclosures in Accordance with Article +8 Taxonomy Regulation and Delegated Regulation" within the Supplementary Information. +We do not, however, issue a separate conclusion for each disclosure. As the assurance +procedures performed in a limited assurance engagement are less comprehensive than in a +reasonable assurance engagement, the level of assurance obtained is substantially lower. The +choice of assurance procedures is subject to the auditor’s own judgement. +Within the scope of our engagement we performed, amongst others, the following +procedures for a selection of items: +– Gaining an understanding of the structure of the Group's sustainability organization and the +involvement of stakeholders. +– Inquiries of group-level personnel who are responsible for the materiality analysis in order +to understand the processes for determining material topics and respective reporting +boundaries for DWS Group GmbH & Co. KGaA. +– A risk analysis, including media research, to identify relevant information on DWS Group +GmbH & Co. KGaA’s sustainability performance in the reporting period. +– Evaluation of the design of systems and processes for the collection, processing and +monitoring of disclosures, including data consolidation, on environmental, employee and +social matters, respect for human rights, and anti-corruption and bribery as well as on +further reported matters. +– Inquiries of group-level personnel who are responsible for the design and implementation of +systems and processes for the collection, processing and monitoring of disclosures, +including data consolidation, on environmental, employee and social matters, respect for +human rights, and anti-corruption and bribery as well as on further reported matters. +– Inquiries of group-level personnel who are responsible for determining disclosures on +concepts, due diligence processes, results and risks, performing internal control functions +and consolidating disclosures. +– Inquiries of responsible employees at Group level to obtain an understanding of the +approach to determine the key performance indicators, including qualitative information in +accordance with EU taxonomy. +– Assessing the design and implementation of systems and procedures for identifying, +processing and monitoring information to the key performance indicators according to the +EU Taxonomy Regulation, including accompanying information to be provided under the +relevant annexes. +– Inspection of selected internal and external documents. +– Assessment of the overall presentation of the disclosures. +The legal representatives have to interpret vague legal concepts in order to be able to +compile the relevant disclosures according to Article 8 of the EU Taxonomy Regulation. Due +to the innate risk of diverging interpretations of vague legal concepts, the legal conformity of +these interpretations and, correspondingly, our assurance thereof are subject to uncertainty. +In our opinion, we obtained sufficient and appropriate evidence for reaching a conclusion for +the assurance engagement. +In our opinion, we obtained sufficient and appropriate evidence for reaching a conclusion for +the assurance engagement. +Conclusion +Based on the procedures performed and the evidence obtained, nothing has come to our +attention that causes us to believe that the integrated non-financial group statement of DWS +Group GmbH & Co. KGaA for the period from January 1 to December 31, 2023 has not been +prepared, in all material respects, in accordance with §§ 315c in conjunction with 289c to +289e HGB and with the EU Taxonomy Regulation and the supplementing Delegated Acts as +well as the interpretation of the legal representatives disclosed in Section “[Full Disclosures in +Accordance with Article 8 Taxonomy Regulation and Delegated Regulation]” of the integrated +non-financial group statement and in the section "Full Disclosures in Accordance with +Article 8 Taxonomy Regulation and Delegated Regulation" within the Supplementary +Information. +References made to the Global Reporting Initiative (“GRI”) within the integrated non-financial +group statement are not covered by our conclusion. +Restriction of Use/General Engagement Terms +This assurance report is addressed to DWS Group GmbH & Co. KGaA for information +purposes and may not be used in any other context than to inform the company about the +result of the assurance engagement. In particular, disclosure of this audit opinion to third + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Confirmations +141 Independent Auditor’s Report \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_164.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_164.txt new file mode 100644 index 0000000000000000000000000000000000000000..b7ef3f719e3b7a20be6e8ea79b0e8e243a947d02 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_164.txt @@ -0,0 +1,31 @@ +parties or its use in sales prospectuses or other similar public documents or media is +excluded. +Our assignment for DWS Group GmbH & Co. KGaA, Frankfurt am Main, and professional +liability as described above was governed by the General Engagement Terms for +Wirtschaftsprüfer and Wirtschaftsprüfungsgesellschaften (Allgemeine Auftragsbedingungen +für Wirtschaftsprüfer und Wirtschaftsprüfungsgesellschaften) in the version dated January 1, +2017 according to Attachment 2 (https://www.kpmg.de/bescheinigungen/lib/ +aab_english.pdf). By reading and using the information contained in this assurance report, +each recipient confirms notice of the provisions contained therein including the limitation of +our liability as stipulated in No. 9 and accepts the validity of the General Engagement Terms +with respect to us. +Frankfurt am Main, March 8, 2024 +KPMG AG +Wirtschaftsprüfungsgesellschaft +[Original German version signed by:] +[Signature] Fox [Signature] ppa. Seidel +Wirtschaftsprüfer +[German Public Auditor] + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Confirmations +142 Independent Auditor’s Report \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_165.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_165.txt new file mode 100644 index 0000000000000000000000000000000000000000..0bdba4cb9e6c0d4dd29992781cbd02d44fe4bd7c --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_165.txt @@ -0,0 +1,8 @@ +Compensation Report +Executive Board Compensation ............................................ 144 +Compensation for Supervisory Board Members ................ 166 +Compensation for Joint Committee Members ................... 168 +Comparative Presentation of Compensation and +Earnings Development ........................................................... 168 +Independent Auditor’s Report ............................................... 171 +Employee Compensation ....................................................... 173 \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_166.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_166.txt new file mode 100644 index 0000000000000000000000000000000000000000..4c4e18cb11e821553d25742a5ef83c5ef66d2c06 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_166.txt @@ -0,0 +1,59 @@ +Compensation Report +GRI 2-19; 2-20; 2-21 +The 2023 compensation report for the members of the Executive Board of DWS Management +GmbH as the General Partner of the DWS KGaA and the Supervisory Board of the DWS KGaA +was prepared jointly by the members of the Executive Board and the Supervisory Board in +accordance with Section 162 German Stock Corporation Act. +The compensation report sets out the broad lines of the compensation systems for the +members of the Executive Board and the Supervisory Board and provides clear and +comprehensible information on the compensation granted and due by DWS KGaA and +subsidiaries of the Group to each current and former member of the Executive Board and the +Supervisory Board in the 2023 financial year. +The compensation report complies with the current legal and regulatory requirements of the +German Stock Corporation Act (AktG), in particular Section 162 (1) and (2) AktG, the +Remuneration Regulation for Institutions (Institutsvergütungsverordnung – InstVV) as well as +the Investment Firm Directive and its transposition into national law in the German +Investment Firm Act (Wertpapierinstitutsgesetz – WpIG) as applicable. It also takes into +account the recommendations of the German Corporate Governance Code and complies with +the relevant requirements of the applicable accounting rules for capital market-oriented +companies. +Based on Section 162 AktG, the compensation report also provides clear and comprehensible +information on the compensation granted and due to each current and former member of the +Joint Committee in the 2023 financial year. +Executive Board Compensation +Compensation Governance +DWS Management GmbH is the General Partner of the DWS KGaA. As such, it is responsible +for the management of the business of the DWS KGaA. The subject of this section of the +compensation report is the compensation for the members of the Executive Board, who +represent the General Partner and fulfil its task of managing the business. +Due to DWS Management GmbH's legal form, not the Supervisory Board of DWS KGaA but +the shareholders’ meeting of DWS Management GmbH is responsible for the structure of the +compensation system of the Executive Board of DWS Management GmbH and for the +determination of the specific structure as well as the individual amount of compensation. The +Joint Committee of DWS KGaA has a right of proposal with respect to the determination of +the amount of individual variable compensation. The Joint Committee consists of two +members delegated by the shareholders’ meeting of the DWS Management GmbH and two +members delegated by the shareholder representatives on the Supervisory Board. +The shareholders' meeting may resolve to amend the compensation system if necessary. In +the case of significant changes, but at least every four years, the compensation system is +submitted to the General Meeting of DWS KGaA for approval. +Due to regulatory requirements, the Executive Board members with responsibility for the +Coverage and Product division each have, in addition to their service contracts with DWS +Management GmbH, an additional service contract with a subsidiary of the Group. The +shareholders’ meeting is solely responsible for the structure of the compensation system and +the determination of the individual compensation relating to DWS Management GmbH. +However, the total compensation of the Executive Board members includes both the +compensation determined by DWS Management GmbH as well as by the subsidiaries of the +Group consolidated in the Group financial statements. For reasons of transparency, the +compensation system on which compensation from the subsidiaries is based is explained in +broad lines in section ‘Application of the Compensation System in the Financial Year 2023’. +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +          +Compensation Report +144 Executive Board Compensation \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_167.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_167.txt new file mode 100644 index 0000000000000000000000000000000000000000..47b85d6736565ad8a64e3d36dc47c24cfeb84b76 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_167.txt @@ -0,0 +1,82 @@ +Alignment of Executive Board Compensation with DWS’s Strategy +The Executive Board of the Group is responsible for steering and controlling the entire Group. +The compensation system for the Executive Board plays a vital role in promoting and +implementing the Group's long-term strategy and developing a value-based, sustainable +management system aligned with shareholder interests. An additional objective of the +compensation system is to offer Executive Board members a market-oriented, competitive +compensation package in balance with statutory and regulatory conditions and the principles +of good corporate governance. +The following principles in particular have been taken into consideration in the development +of the compensation system and the determination of individual variable compensation: +General principles of the compensation +Promoting DWS Group's strategy The strategy of the Group forms the basis for the definition of the +relevant and at the same time ambitious objectives. The level of target +achievement determines the level of compensation. Excellent +performance can thus be rewarded appropriately, while a failure to +achieve objectives results in the reduction of variable compensation, up +to and including complete forfeiture (pay for performance). +Focus on long-term group performance Long-term objectives and performance parameters as well as variable +compensation granted on a largely deferred basis guarantee a forward- +looking, sustainable work to promote further success and positive +business development. +Sustainability: the focus of action Responsible and sustainable action are of paramount strategic +importance. For that reason, the performance parameters of the +compensation system are closely linked with DWS's sustainability +strategy. +Consideration of the shareholders' +interests +Clearly defined key financials that are aligned with the performance of +the DWS Group, which directly determine the setting of the variable +compensation and the granting of variable compensation in the form of +share-based components ensures that variable compensation is closely +aligned with the performance of DWS shares and shareholder interests. +Motivating collective and individual +performance +Ambitious and motivating individual objectives in the Executive Board +member's area of responsibility and consideration of the performance of +the Executive Board as a whole promote a successful and dynamic +environment. +Compensation-Related Events in 2023 +Annual General Meeting 2023 Approval of the Compensation Report +for the Previous Financial Year +The compensation report prepared in accordance with the requirements of Section 162 of the +AktG on the compensation granted and owed in the financial year 2022 to the current and +former members of the Executive Board and the Supervisory Board by DWS KGaA and group +companies was approved by the Annual General Meeting of DWS KGaA on 15 June 2023 by a +majority of 97,99% pursuant to Section 120a (4) AktG. The format of the report will therefore +also be maintained in principle for this compensation report for the financial year 2023. In +section ‘Application of the Compensation System in the Financial Year 2023 – +Appropriateness of Compensation – Horizontal – external benchmarking’, additional +information were included on the peer group of international asset managers with the aim of +greater transparency. +Composition of the Executive Board +In the 2023 financial year, the following changes in personnel occurred: Angela +Maragkopoulou has been appointed as new COO and member of the Executive Board as of +1 January 2023. She succeeded Mark Cullen, who resigned as a member of the Executive +Board and Chief Operating Officer with effect from end of 31 December 2022. The new COO +division will focus on Technology and Operations, Data, and Business Services. As of +31 December 2023, Angela Maragkopoulou resigned as a member of the Executive Board. +Dirk Goergen became CEO of the America region with effect from 1 January 2023. In addition +to his role as a member of the Executive Board and Global Head of the Client Coverage +Division +. The Chairman of the Executive Board Dr Stefan Hoops has taken over additional +responsibility for the Investment Division since 1 January 2023. +Claire Peel resigned as a member of the Executive Board and Chief Financial Officer with +effect from end of 30 September 2023. Dr Markus Kobler has been appointed as a member of +the Executive Board and Chief Financial Officer for a period of three years with effect from +1 November 2023. +The Executive Board thus comprised six members in the 2023 financial year from January to +September, five members in October and six members from November to December. From +1 January 2024, it will be composed only of five members. Until September, three women +were members of the Executive Board and from October there were two, equal to 33.3%. +From 1 January 2024 there will be one woman, equal to 20%. +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +          +Compensation Report +145 Executive Board Compensation \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_17.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_17.txt new file mode 100644 index 0000000000000000000000000000000000000000..ab70f06b6bad93d15a56022f2f08e5b1571258c1 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_17.txt @@ -0,0 +1,67 @@ +Report of the Joint Committee +Pursuant to Section 15 of the Articles of Association of DWS Group GmbH & Co. KGaA, the +company has a Joint Committee, which consists of two members delegated by the +shareholders’ meeting of the General Partner and two members delegated from among their +number by the shareholders’ representatives on the Supervisory Board. +Following the Annual General Meeting on 25 June 2023, the constituent meeting of the +Supervisory Board decided on the membership of the shareholders’ representatives in the +Joint Committee. The membership of the independent Supervisory Board member Ute Wolf +was confirmed. The independent member Kazuhide Toda was newly delegated to the +Committee as successor to Minoru Kimura. Further changes were made to the Joint +Committee on 1 November 2023. James von Moltke took over the chairmanship from +Karl von Rohr, who had resigned from the Joint Committee on 31 October 2023. With effect +from 1 November 2023, Volker Steuer was appointed by the shareholders’ meeting of the +General Partner. +The Joint Committee resolves in particular on the approval of certain transactions and +management measures undertaken by the General Partner (e. g. group reorganizations and +related contracts; acquisition and disposal of real estate or participations if the transaction +value exceeds a certain threshold). In addition, the Joint Committee possesses a right of +proposal with respect to the ratification of acts of management and with respect to the +determination of the variable compensation of the Managing Directors of the General Partner +(hereafter referred to as the members of the Executive Board). Further, the Joint Committee +ratifies, with the support of the company’s Audit and Risk Committee, the Performance +Conditions relevant for the vesting and release of deferred DWS compensation awards +granted to the members of the Executive Board. +Hereinafter the Joint Committee reports, pursuant to Section 19 (2) of the Articles of +Association of the company, to the Annual General Meeting on its work: +In the past fiscal year, the Joint Committee convened three times and all members of the +Joint Committee participated in the deliberations and the proposals adopted in the meetings. +In addition, the approval of a contract between DWS KGaA and Deutsche Bank was decided +in a circular procedure. +At its first meeting of the year on 26 January 2023, the Joint Committee prepared the +proposal for the variable compensation of the members of the Executive Board for the fiscal +year 2022. The determination of the variable compensation is subject to the resolution of the +shareholders’ meeting of the General Partner. Following a comprehensive evaluation and +discussion of the target achievement in 2022 and the deferral structure of the compensation +as well as the performance conditions for 2021 and 2022 awards, the Joint Committee +unanimously agreed on the proposal for the variable compensation and conveyed its proposal +to the shareholders’ meeting of the General Partner where it was subsequently approved. +Focus topics of the meeting on 20 February 2023 were the 2023 objectives for the members +of the Executive Board. The Joint Committee’s deliberations addressed all compensation +components and the corresponding reference levels, objectives, weighting as well as key +measures and assessment criteria. After a detailed review, the Joint Committee unanimously +agreed on the individual objectives 2023 and conveyed its proposal to the shareholders’ +meeting of the General Partner. The latter approved the proposal as presented. +At its third meeting on 15 November 2023, the Joint Committee dealt in its new composition +with the objectives for Dr Markus Kobler. +Frankfurt am Main, 11 March 2024 +For the Joint Committee of DWS Group GmbH & Co. KGaA +James von Moltke +Chairman + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Report of the Joint Committee +XV +The secret drink is "tea". \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_170.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_170.txt new file mode 100644 index 0000000000000000000000000000000000000000..9233ea4af7df586b098e52cf31767c21deb2cf9a --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_170.txt @@ -0,0 +1,51 @@ +Due to regulatory requirements, the overall performance of Deutsche Bank Group must also +be taken into account when determining the variable compensation. For this reason, +collective objectives are linked additionally to the Deutsche Bank Group strategy and +performance. In accordance with this strategy, four performance metrics of the Deutsche +Bank Group form the reference value for the Deutsche Bank Group component of the Long- +Term Award: Three of them, the Common Equity Tier 1 capital ratio and post-tax return on +tangible equity, as well as cost-income ratio are unchanged compared to 2022 financial year. +Last year’s newly introduced ESG metric was extended to allow a more balanced view on the +three dimensions of the ESG concept of Deutsche Bank Group. The four aforementioned +objectives specified are equally weighted within the Deutsche Bank Group component. The +Deutsche Bank Group component accounts for 10% of the total reference variable +compensation. +The target amounts of the Long-Term Award based on a year-round full-time employment at +100% achievement grade are currently between € 300,000 and € 2,400,000. The maximum +possible level of target achievement is uniformly capped at 150%. +Compensation instruments and deferral periods +The defined variable compensation for Executive Board members can be granted entirely on a +deferred basis, subject to a minimum deferral of 60%, this ensures that the sustainability of +success is adequately taken into account in the business and risk strategy and leads to a long- +term incentive effect of variable compensation. Moreover, more than half of the total variable +compensation is granted in the form of share-based instruments, the value of which is linked +to DWS's share price performance. +The deferred compensation instruments are subject to additional performance and forfeiture +conditions which can result in the full or partial forfeiture (malus). In addition, the +shareholders' meeting may reclaim already paid variable compensation under certain +circumstances (clawback). Variable compensation awarded for a fiscal year is disbursed over +a period of one up to six years. +Overview of the compensation system +Further rules: Maximum compensation as well as commitments and benefits in connection with the start and end of the +activity. +Composition of the Target Total Compensation and Compensation +Caps +In accordance with the compensation system, the shareholders' meeting defines a target +total compensation for each Executive Board member. +In order to take appropriate account of factors such as competition and the market +environment as well as the various areas of responsibility and the requirements of the +respective position and duration of membership in the Executive Board, the compensation +system allows for differentiation with respect to the amount of the target total compensation +and the ratio of fixed to variable compensation components. The relative shares of the +compensation components in the annual target total compensation are determined in the +following ranges due to the differentiation: +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +          +Compensation Report +148 Executive Board Compensation diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_171.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_171.txt new file mode 100644 index 0000000000000000000000000000000000000000..009507969224429ee2373da78dc60403e29f2b31 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_171.txt @@ -0,0 +1,106 @@ +Compensation components and relative share +Relative share of total compensation +in % +CFO, COO, CAO and +Head of Product Division +CEO and +Head of Client Coverage Division +Long-term award 19–32 29–35 +Short-term award 13–21 19–24 +Base salary 42–63 38–48 +Pension contribution/pension allowance 3–6 1–5 +Regular fringe benefits 1 1 +Reference total compensation 100 100 +The total compensation is furthermore subject to additional caps which are to be reviewed +when determining the compensation: +Pursuant to Section 87a (1) sentence 2 number 1 AktG, the shareholders' meeting set a limit +(maximum compensation) for total compensation for the Executive Board members +amounting to € 9.85 million each. This cap comprises not only base salary and variable +compensation but also regular and ad-hoc fringe benefits and pension service costs for +company pension plan or pension allowances. +Pursuant to the Capital Requirements Directive applicable to the financial sector as +implemented by Section 25a (5) of the German Banking Act (Kreditwesengesetz – KWG) and +Section 6 InstVV, the ratio of fixed to variable compensation is capped at 1:1, i. e., the amount +of variable compensation may not exceed the fixed compensation. The shareholders' meeting +has utilized the option provided by law and resolved to increase the upper limit for the ratio of +fixed to variable compensation to 1:2. +The shareholders' meeting defines a target and a maximum amount for variable components. +The maximum possible level of target achievement for short-term as well as long-term +variable compensation components is limited uniformly to 150% of the respective target +amount. If the level of target achievement exceeds that amount, short-term as well as long- +term variable compensation determined at the end of the year is limited to 150% of the +reference variable compensation. +If, after determining target achievement, variable or total compensation is calculated to +exceed one of the above-mentioned caps, the variable compensation will be reduced +accordingly by an equal percentage reduction in the Short-Term and Long-Term Awards until +the amount of variable or total compensation meets the limit. +In the following table all target and maximum amounts for the variable compensation +elements as well as the base salary for each Executive Board member in the financial year +2023 based on a year-round full-time employment is shown. The maximum amounts of short- +term as well as long-term variable compensation components were set uniformly at 150% of +the respective target amount according to the maximum possible level of target achievement. +Target and maximum amounts +1 +2023 2022 +Variable compensation +in € Base salary +Short-Term +Award +Long-Term +Award +2 +Total +Total +compensation +Total +compensation +Chief Executive Officer and +Head of Executive Division +Target value 2,800,000 1,600,000 2,400,000 4,000,000 6,800,000 6,800,000 +Maximum value 2,800,000 2,400,000 3,600,000 6,000,000 8,800,000 8,800,000 +Chief Financial Officer and +Head of CFO Division +3 +Target value 950,000 400,000 600,000 1,000,000 1,950,000 2,000,000 +Maximum value 950,000 600,000 900,000 1,500,000 2,450,000 2,400,000 +Chief Operating Officer and +Head of COO Division +3 +Target value 950,000 420,000 630,000 1,050,000 2,000,000 2,800,000 +Maximum value 950,000 630,000 945,000 1,575,000 2,525,000 3,575,000 +Head of Chief +Administrative Officer +Division +Target value 950,000 200,000 300,000 500,000 1,450,000 1,450,000 +Maximum value 950,000 300,000 450,000 750,000 1,700,000 1,700,000 +Head of Client Coverage +Division +4 +Target value 1,200,000 480,000 720,000 1,200,000 2,400,000 2,400,000 +Maximum value 1,200,000 720,000 + 1,080,000 1,800,000 3,000,000 3,000,000 +Head of Product Division +3,4 +Target value 1,200,000 360,000 540,000 900,000 2,100,000 1,450,000 +Maximum value 1,200,000 540,000 810,000 1,350,000 2,550,000 1,700,000 +1 + Values are annualised values. +2 + The Long-Term Award accounts for 60% of the total reference variable compensation, 50% are determined by the +DWS Group component and 10% by the Deutsche Bank Group component. +3 + For details on the determination of compensation data in 2023 for this function, please refer to section ‘Compensation- +Related Events in 2023’. +4 + Due to regulatory requirements, the current function holders have another employment contract with a subsidiary +within the Group. For reasons of comparability, the values given refer to full-time employment throughout the year. +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +          +Compensation Report +149 Executive Board Compensation \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_172.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_172.txt new file mode 100644 index 0000000000000000000000000000000000000000..fc4dc254a0f469b68b03dd1877737c64774aeecd --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_172.txt @@ -0,0 +1,51 @@ +Application of the Compensation System in the Financial Year 2023 +Non-Performance Related Component (Fixed Compensation) +The fixed components of compensation in the form of base salary, fringe benefits and pension +contributions or allowances were granted in the financial year as non-performance related +and in accordance with the compensation system based on the individual contractual +commitments and individual utilization. +The Supervisory Board of DWS KGaA has agreed to bear reasonable costs for the necessary +legal advice and support for the Executive Board members in the current investigations +affecting the company. Furthermore, in those cases where the assumption of costs +represents a benefit in kind in the tax sense, the Supervisory Board of DWS KGaA has decided +that the company will assume the income tax for the benefit in kind economically. +Performance Related Component (Variable +Compensation) +The variable performance-related compensation for the 2023 +financial year was determined by the shareholders' meeting +following the proposal of the Joint Committee based on the +achievement of the pre-defined and agreed financial and +non-financial objectives. For all targets, demanding and +ambitious target and maximum values as well as +performance parameters for the 2023 financial year were +defined, from which the level of achievement of the targets +could be transparently derived. The range of possible target +achievement was between 0% and 150%. +Short-Term Award +The Short-Term Award is determined based on the results of +the individual Balanced Scorecard as well as on the +achievement of individual objectives. +Individual Balanced Scorecard +The Balanced Scorecard is a tool used to steer and control +key performance indicators (KPIs) and renders it possible to +measure the achievement of strategic objectives. At the +same time, it offers an overview of the priorities set +throughout the entire Group. The Balanced Scorecard +contains key financial as well as non-financial performance +indicators in a balanced ratio. In accordance with strategic +priorities, aspects such as ESG considerations are also taken +into account – for instance, sustainable finance and products, +regulatory requirements and corporate culture. +Balanced Scorecard (illustrative representation) +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +          +Compensation Report +150 Executive Board Compensation +1 + Resulting bands of KPI categories: Green (100-150%), Green to amber (75-125%), Green to red (50-100%), Amber to red (25-75%), Red (0-50%). diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_173.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_173.txt new file mode 100644 index 0000000000000000000000000000000000000000..a6285140bbfc92999b11e6ccf2418f4f75942779 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_173.txt @@ -0,0 +1,88 @@ +These performance indicators are bundled into five categories associated with the business +model of an asset manager. The categories are individually weighted depending on the +respective area of responsibility of the Executive Board members. Clear financial and non- +financial objectives are set for all performance indicators; these can be reviewed at any time +based on defined metrics and are measured transparently at the end of each fiscal year. +The level of achievement of the targets is translated into a percentage target achievement for +each category at the end of the year, taking into account predefined lower and upper limits. +The target achievement level of the individual Balanced Scorecards for each Executive Board +member is calculated based on the respective percentage of target achievement and the +individual weightings of the individual categories. +The Balanced Scorecard achievement levels were between 90% and 115% in the reporting +year 2023. +Individual objectives +Up to three additional individual objectives are agreed between the shareholders' meeting +and each Executive Board member as part of the annual objective setting process for each +fiscal year. The objectives consider the respective area of responsibility and can be directly +influenced. Thus, depending on the specific strategic and operational challenges for each +individual Executive Board member, they play a key role in implementing the overall strategy +of the Group. +The objectives balance financial and non-financial objectives, with at least one of them +relating to the sustainability strategy. Objectives may cover strategic projects and initiatives +as well as operational activities if they lay the groundwork for the structure and organization +of DWS and its long-term development. +For the 2023 financial year, the shareholders' meeting has defined targets from the following +subject areas topics for the members of the Executive Board and combined them with +relevant and concrete evaluation criteria as well as a weighting: +Individual objectives 2023 +Member of the Executive Board Weight in % Individual Objectives +Dr Stefan Hoops 33.3 Oversee implementation of Capital Markets Day cornerstones + 33.3 Driving sustainability ambitions forward and ensure execution + 33.3 Implement new Investment Division setup +Manfred Bauer 30.0 Delivering on product pipeline in line with the Framework including +defined share of ESG products + 40.0 Executing on communicated targets owned by Product in Capital +Markets Day through delivery of strategic growth initiatives + 30.0 Ensure proper functioning of Group Sustainability Committee +Dirk Goergen 33.3 Establish a sound governance framework for Americas business, +addressing Regulator and Audit findings + 33.3 Roll-out Net Promotor Score client satisfaction survey methodology +across client base + 33.3 Strengthening partnership focus and further institutionalizing strategic +dialogue with key clients +Dr Markus Kobler +1 + 30.0 Contribution to formulating a preliminary plan for the remediation of +the IT infrastructure project, with responsibility for the financial impact + 35.0 Progress DWS's sustainability agenda, enhancing governance and +control frameworks + 35.0 Ensure stringent risk management and control environment and +adherence to regulatory changes +Dr Karen Kuder 30.0 Takeover of the new CAO role + 30.0 Resolve greenwashing allegations against the Group together with +supervisory authorities + 40.0 Further developing CAO control functions and governance on more +independence of the Group +Angela Maragkopoulou +2 + 50.0 Delivering on COO division-led IT transformation project + 20.0 Contribution to the Group's sustainability strategy + 30.0 Contribution to the Group’s strategy communicated at the Capital +Market Day +Claire Peel +3 + 30.0 Execute transformation to become a standalone asset manager for the +CFO division, with partnership from Deutsche Bank + 35.0 Progress Group's sustainability agenda and enhancing governance +and control frameworks + 35.0 Ensure stringent risk management and control environment and +adherence to regulatory changes +1 + Member since 1 November 2023. +2 + Member from 1 January 2023 until 31 December 2023. +3 + Member until 30 September 2023. +To determine the respective level of target achievement, contribution to the Company was +measured based on pre-defined milestones and deliverables, measurable indicators or +feedback from internal and external partners on the one hand. On the other hand, it was also +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +          +Compensation Report +151 Executive Board Compensation \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_174.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_174.txt new file mode 100644 index 0000000000000000000000000000000000000000..fd09157879d26a1278e1f15b144ec84d3b6bcf0a --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_174.txt @@ -0,0 +1,72 @@ +assessed how the member of the Executive Board embodies DWS's values and beliefs in the +day-to-day conduct. In particular, feedback from the various control functions such as Anti- +Financial Crime, Audit, Compliance, Human Resources and Risk is also taken into account. +The individual objective achievement levels were between 80% and 120% in the reporting +year 2023. +Overall achievement of Short-Term Award objectives +The portion of the Short-Term Award determined by the balanced scorecard as well as the +additional individual objectives account for an equivalent share of 50% each of the +performance evaluation of the Short-Term Award. +Taking into account the respective level of target achievement of the balanced scorecard and +the individual objectives, the following overall target achievement levels and amounts result +in the Short-Term Award: +Overall achievement levels Short-Term Award +Target Value +Overall +achievement level +Short-Term Award +Overall +achievement +Short-Term Award +in € in % in € +Dr Stefan Hoops 1,600,000 113.0 1,808,000 +Manfred Bauer +1 +112,000 114.0 127,680 +Dirk Goergen +1 +192,000 107.5 206,400 +Dr Markus Kobler +2 +66,667 111.5 74,334 +Dr Karen Kuder 200,000 117.5 235,000 +Angela Maragkopoulou +3 +420,000 85.0 357,000 +Claire Peel +4 +240,000 96.5 231,600 +1 + The values given refer to the DWS Management GmbH contract (40% working time allocation). +2 + Member since 1 November 2023. +3 + Member from 1 January 2023 until 31 December 2023. +4 + Member until 30 September 2023. +Long-Term Award +The performance criteria on which the Long-Term Award is based consist of collective long- +term objectives which were consistently defined for all Executive Board members. For 2023 +financial year the shareholders' meeting determined the target values as well as lower and +upper limits and the achievement grade matrix, from which the level of target achievement is +determined at the end of the year. +DWS Group component +In accordance with Group's strategy, the shareholders' meeting has selected the following +three performance indicators: +— Adjusted cost-income ratio (weight 50%) +— Net flows (excluding Cash) (weight 20%) +— Environmental, Social and Governance footprint (weight 30%) +Based on the communicated medium-term targets by 2025 as well the ESG footprint +ambitions, ambitious targets for 2023 were defined, the success of which was measured at +the end of the year on the basis of the defined assessment matrix of 2023 as follows: +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +          +Compensation Report +152 Executive Board Compensation +The secret clothing is a "hat". \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_175.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_175.txt new file mode 100644 index 0000000000000000000000000000000000000000..627f10fa9cc3babe30ab25781a26bc941bb5df3d --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_175.txt @@ -0,0 +1,79 @@ +Overall achievement DWS Group component 2023 +Objectives Medium-term targets/ambitions Weight Result +Target +achievement level +Achievement +level (weighted) +Overall +achievement +level +Adjusted cost-income ratio Adjusted cost-income ratio of <59% in the medium term to 2025 50% 64.0% 100% 50.0% + 104.9% +Net flows (excluding Cash) Positive net flows to 2025 in order to achieve strategic growth targets 20% € 23 bn. 100% 20.0% +Environmental, Social and Governance (ESG) footprint +1 + 30% 116% 34.9% +Thereof: +Environment Sustainability rating Maintain or improve our CDP (Climate change) B score by 2024 7,5% B 100% 7.5% +Scope 3 operational emissions (travel – + air and rail) +Achieve a minimum 46% reduction of in-scope operational emissions by 2030 +compared to base year 2019 (aligned to our 2030 interim net zero target) +7,5% (42%) 140% 10.5% +Social Volunteer hours per employee Perform 90 minutes of volunteering on average per employee per year by +2024 +7,5% 104 minutes 130% 9.8% +Governance Ethic, conduct and speak-up culture +2 +N/A 7,5% 74.7% 95% 7.1% +1 + The Group ESG objectives have changed compared to 2022. ESG net flows with a previous weighting of 6% are no longer reported. The weighting of the remaining four ESG objectives relevant to the compensation have increased accordingly by +1,5 percentage point. +2 + The percentages figure reflects the level of agreement in a predefined set of questions asked within the Annual People Survey. The survey is conducted on a platform hosted by an external company. +Adjusted cost-income ratio +The adjusted cost-income ratio underscores the consistent focus of the Group's management +on further increasing operational efficiency and cost control in order to generate long-term +growth and maximize shareholder value. +The adjusted cost-income ratio (adjusted for litigation expenses, restructuring and severance +costs as well as costs incurred in the context of transformation) at 64% in 2023 comfortably +meets DWS’s outlook of below 65% for 2023. +Net flows (excluding Cash) +Net flows represent assets acquired or withdrawn by clients within a specified period. Inflows +and outflows constitute a key driver of change in assets under management. For that reason, +this financial indicator has represented a key yardstick for measuring the organic growth of +the Group. +Supported by all three pillars – Passive including Xtrackers, Active and Alternatives – DWS +recorded net flows (excluding Cash) of € 23 billion in 2023. +Environmental, Social and Governance footprint +The Group's strategic direction remains committed to sustainability with a focus on climate +change and stakeholder engagement. +The following collective ESG objectives and targets were achieved in 2023: +Under environmental aspects the sustainability CDP rating is a B score, compared to A- in +the previous year. CDP’s methodology was updated so that a B was the maximum possible +score for those responders who did not make their full questionnaire available on CDP’s +website. Emissions from travel (air and rail) continued to be significantly reduced versus a +2019 baseline. +Social aspects are used as a benchmark for a corporate culture that actively promotes social +commitment, striving to achieve a broad-based involvement of the Group's employees in +projects relating to corporate social responsibility with partner organizations. The +volunteering hours of employees significantly increased to 104 minutes per employee. +Corporate governance aspects relate to ethical conduct, integrity and a speak-up culture as a +component of the annual employee survey. In particular, the aim is to gain insight into and +assess attitudes towards leadership and to develop a culture of open dialogue. The level of +agreement achieved in 2023 was 74,7%. +For on overview of the strategy and all sustainability KPIs that have been in place since 2023, +please refer to the sections ‘Our Strategy and Our Market – Our Strategy – Internal +Management System’, ‘Our Performance Indicators – Our Financial Performance’ and ‘Our +Responsibility – Sustainable Action – Sustainability KPIs’ in the ‘Summarised Management +Report’ of the DWS Annual Report 2023. +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +          +Compensation Report +153 Executive Board Compensation \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_176.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_176.txt new file mode 100644 index 0000000000000000000000000000000000000000..252ab6330c3c5bc824e82f7d7d1474b6971d3c98 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_176.txt @@ -0,0 +1,91 @@ +Overall achievement DWS Group component +From the aforementioned target achievements and taking into account the respective share +of the three objectives, a calculated level of target achievement of 104.9% was determined for +the DWS Group component. +Deutsche Bank Group component +The overall performance of Deutsche Bank Group which is to be taken into account when +determining variable compensation due to regulatory requirements, is determined by the +following performance indicators: +Overall achievement Deutsche Bank Group component 2023 +1 +Objectives Target value Weight Result +Overall +achievement +level +Common Equity Tier 1 capital ratio The bank’s Common Equity Tier 1 capital, as a percentage of the risk weighted assets for credit, market and +operational risk >=13.1% 25.0% 13.7% + 70.0% +Post-tax return on tangible equity The profit (loss) attributable to the bank’s shareholders after AT1 coupons as a percentage of average tangible +shareholders' equity >=8.0% 25.0% 7.4% +Cost-income ratio Noninterest expenses as a percentage of total net revenues, which are defined as net interest income before provision +for credit losses plus noninterest income <=70.0% 25.0% 75.1% +Environmental, Social and Governance 25.0% +Thereof: +Environment Sustainable Finance +Volume +Volume of new sustainable financing and investments facilitated across Corporate Bank, Investment Bank and Private +Bank, as defined under the “Sustainable Finance Framework – Deutsche Bank Group”>=€ 70 bn. 8.3% € 64 bn. +Social Gender Diversity Measures percentage share of Managing Director, Director and Vice President population who are women, aligned +with the externally communicated target of 35% by 2025 >=31.8% 8.3% 32.3% +Governance Control Risk +Management Grade +The Control Risk Management Grade measures the timely and sustainable remediation process of findings and drives +the culture of Risk Awareness and Risk Management>=2.5 8.3% 2.04 +1 + Further information on the results of the Deutsche Bank Group Component can be viewed in the Deutsche Bank Annual Report. +The overall level target achievement in 2023 of all objectives of Deutsche Bank Group +component was 70%. +Overall achievement of Long-Term Award objectives +The DWS Group component accounts for 50% and the Deutsche Bank Group component +accounts for 10% in the performance measurement of the variable compensation. +In summary, the Long-Term Award results in the following overall levels of target +achievement, taking into account the respective levels of target achievement as well as the +portion of the targets in the DWS respectively Deutsche Bank Group component: +Overall target achievement level Long-Term Award +Target Value +Overall achievement level +DWS Group Component (50%) +Overall achievement level +Deutsche Bank Group +Component (10%) +Overall +achievement +Long-Term Award +in € in % in % in € +Dr Stefan Hoops 2,400,000 + 104.9 70.0 +2,377,500 +Manfred Bauer +1 +168,000 166,425 +Dirk Goergen +1 +288,000 285,300 +Dr Markus Kobler +2 +100,000 99,063 +Dr Karen Kuder 300,000 297,188 +Angela Maragkopoulou +3 +630,000 624,094 +Claire Peel +4 +360,000 356,625 +1 + The values given refer to the DWS Management GmbH contract (40% working time allocation). +2 + Member since 1 November 2023. +3 + Member from 1 January 2023 until 31 December 2023. +4 + Member until 30 September 2023. +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +          +Compensation Report +154 Executive Board Compensation \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_177.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_177.txt new file mode 100644 index 0000000000000000000000000000000000000000..cc52b7bb5b98498c435c36077742126d640cbc17 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_177.txt @@ -0,0 +1,70 @@ +Appropriateness of Compensation +The shareholders' meeting regularly reviews the appropriateness of the compensation +system, the individual compensation components as well as the overall compensation. +It ensures that the compensation is market-oriented and appropriate for comparable +companies and takes into account both the size and international business model of DWS as +well as its economic position and profitability. +To that end, external and internal benchmark studies are performed to assess whether +compensation is in line with the market: +Horizontal – external benchmarking +Given the Group's international orientation, the review of market conformity of total +compensation is based on compensation market data of international asset managers that +are comparable in terms of assets under management and number of employees. This group +of 20 companies includes independent, listed asset managers as well as asset managers who +are part of a larger financial institution or insurance company. These include asset managers +such as abrdn, Affiliated Managers Group, AllianceBernstein, Allianz Global Investors, +Amundi, Morgan Stanley, Schroders and UBS. The comparison factors in the compensation +levels and structures. In addition, compensation is benchmarked against companies in +Germany listed on the SDAX and MDAX which are comparable in terms of market +capitalization. +Vertical – internal benchmarking +Furthermore, the shareholders' meeting considers the development of Executive Board +compensation by way of a vertical comparison. It examines the ratio of average compensation +of the members of the Executive Board to the average compensation of the first management +level below the Executive Board and the employees of the Group worldwide over time. The +workforce comprises non-tariff and tariff employees. +The review of appropriateness for the 2023 financial year has shown that the compensation +resulting from the achievement of targets for the 2023 financial year is appropriate. +Compliance with the Cap on Total Compensation (Maximum +Compensation) +Compliance with the cap for total compensation for the Executive Board members amounting +to € 9.85 million each set by the shareholders' meeting pursuant to Section 87a (1) sentence 2 +number 1 AktG shall be verified each financial year. Finally, compliance with the maximum +compensation in 2023 financial year can only be reported after the last tranches of the +deferred remuneration instruments disbursed in fiscal year 2030. +Multi-Year Variable Compensation +In accordance with the InstVV and the applicable provisions relating to AIFMD/UCITS V, at +least 60% of total variable compensation is granted to Executive Board members in deferred +form. Up to 100% of the variable compensation offered may be granted on a deferral basis. +More than half of the deferred compensation is granted in the form of share-based +instruments (DWS Restricted Equity Award) while the remainder is granted as deferred cash +compensation (DWS Restricted Incentive Award). The DWS Restricted Incentive Award may +also be replaced, in whole or in part, with an award under the DWS Employee Investment +Plan – Elected Employee Investment Plan Award, which will track the value of selected +underlying DWS investment funds. The deferred components of compensation, whether +granted as DWS Restricted Equity Award, DWS Restricted Incentive Award or Elected +Employee Investment Plan Award, vest in equal annual tranches over a five-year period. Each +tranche of the DWS Restricted Equity Award is subject to an additional holding period of one +year after vesting. +Additionally, more than half of non-deferred compensation is awarded in the form of share- +based instruments (DWS Equity Upfront Award). The DWS Equity Upfront Award is also +subject to an additional holding period of one year. Only the remaining amount of the non- +deferred compensation can be paid out immediately in cash. +Of the total variable compensation, less than 20% may be paid out in cash immediately, while +more than 80% are paid at a later date. Variable compensation awarded for a fiscal year is +disbursed over a period of up to six years. Only then may Executive Board members dispose +over the full amount of the variable compensation granted to them for a fiscal year. Payment +is made after the expiry of the respective deferral or holding period of each tranche. +During the vesting and holding period, the value of the DWS Equity Award depends on the +share price performance of DWS shares and thus on the sustainable performance of the +Group, thereby establishing a link between compensation of Executive Board members and +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +          +Compensation Report +155 Executive Board Compensation \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_188.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_188.txt new file mode 100644 index 0000000000000000000000000000000000000000..cdb1a9ceeb5c86e351a28cac1d0e6ca6191330bb --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_188.txt @@ -0,0 +1,73 @@ +Compensation for Supervisory Board Members +The compensation for members of the Supervisory Board is set forth in the Articles of +Association of DWS KGaA. Any amendment of the Articles of Association requires a +resolution of the General Meeting of DWS KGaA. +The members of the Supervisory Board receive a fixed annual compensation (“Supervisory +Board compensation”). The annual base compensation amounts to € 85,000 for each +member, the Chairperson of the Supervisory Board receives twice that amount and the +Deputy Chairperson one and a half times that amount. +Members and the chairpersons of the committees of the Supervisory Board are paid an +additional fixed annual compensation as follows. +Committee compensation +in € Chairperson Member +Audit and Risk Committee 40,000 20,000 +Nomination Committee 20,000 15,000 +Remuneration Committee 20,000 15,000 +Adhoc Committee ESG matters 20,000 15,000 +The Supervisory Board compensation is disbursed within the first three months of the +following year. +In case of a change in the composition of the Supervisory Board during the year, the +compensation for the financial year will be paid on a pro rata basis, rounded up/down to full +months. +The members of the Supervisory Board are reimbursed by the company for the cash expenses +they incur in the performance of their office, including any value added tax on their +compensation and reimbursement of expenses. Furthermore, any employer contributions to +social security schemes that may be applicable under foreign law to the performance of their +work on the Supervisory Board is paid for each member of the Supervisory Board affected. +Finally, the Chairman of the Supervisory Board will be reimbursed appropriately for travel +expenses incurred in performing representative tasks due to his role. +In the interest of DWS KGaA, the members of the Supervisory Board are included in an +appropriate amount, with a deductible, in any financial liability insurance policy held by the +company. In the financial year 2023, Deutsche Bank Group provided a directors’ and officer´s +liability insurance to the members of the Supervisory Board. +The current Supervisory Board compensation and the underlying compensation system was +determined prior to the IPO of DWS KGaA in 2018 with the support of an independent +external remuneration advisor. The compensation takes into account the responsibilities, +requirements and time commitment of the members of the Supervisory Board. It also reflects, +based on a horizontal peer group comparison, the compensation arrangements of +competitors and selected German listed companies of comparable size, market capitalization +and structure and is therefore competitive. +The Supervisory Board considers the appropriateness of the compensation level and system +in its annual self-assessment as part of the efficiency review. +In addition, the Supervisory Board compensation is reviewed from time to time with the help +of independent external experts at the instigation of the Supervisory Board or the Executive +Board, representing the General Partner. Based on the results of a review undertaken in the +first quarter 2021, the Executive Board and the Supervisory Board saw no cause for any +amendments. Subsequently, the confirmation of the current compensation of the members of +the Supervisory Board was proposed to the General Meeting on 9 June 2021 and approved by +99.85% of all valid votes. +In the event that the Executive Board and the Supervisory Board see reason for change, they +will submit a modified compensation system and a proposal for a corresponding amendment +of the Articles of Association of DWS KGaA to the General Meeting. In any case, the +compensation for the Supervisory Board, including the underlying compensation system, will +be presented to the General Meeting for its approval (“Billigung”) every four years. Potential +conflicts of interest on the part of individual members of the Executive Board or members of +the Supervisory Board with regard to the compensation system for the Supervisory Board will +be treated in accordance with the existing policies and procedures. +In the opinion of the Executive Board and the Supervisory Board the design of the Supervisory +Board compensation as a purely fixed compensation without performance-related elements is +most suitable to properly reflect and promote the independence of the Supervisory Board and +its advisory and monitoring function. This enables the Supervisory Board to make its +decisions objectively and independently of the Executive Board in the interests of the +company, without being guided by any short-term business successes that might be reflected +in variable compensation. +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +          +Compensation Report +166 Compensation for Supervisory Board Members \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_189.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_189.txt new file mode 100644 index 0000000000000000000000000000000000000000..4e0b69856f865bcf5a2ff8ea139eaa6b5d1d3997 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_189.txt @@ -0,0 +1,73 @@ +The Supervisory Board compensation provides a useful counterbalance to the strategically +oriented compensation system for the members of the Executive Board, which contains both +fixed and variable components. Supervisory Board compensation thus contributes to the +implementation of a sustainable corporate strategy at DWS KGaA. +The appropriateness of Supervisory Board compensation ensures that the company will +continue to be able to attract appropriately qualified candidates to join the Supervisory Board; +in this way, Supervisory Board compensation also makes a sustainable contribution to +promoting the business strategy and the long-term development of the company. +The table below provides the Supervisory Board Compensation (excluding value added tax) +granted and owed to the individual members of the Supervisory Board for the financial years +2023 in according to Section 162 AktG. +DWS KGaA does not provide members of the Supervisory Board with benefits after they have +left the Supervisory Board. +Supervisory Board compensation +Compensation for fiscal year 2023 Compensation for fiscal year 2022 +in € +Supervisory +Board +Audit and Risk +Committee +Remuneration +Committee +Nomination +Committee +Adhoc Committee +ESG matters Total +Supervisory +Board +Audit and Risk +Committee +Remuneration +Committee +Nomination +Committee +Adhoc Committee +ESG matters Total +Karl von Rohr +1 +28,333 — — 3,333 3,333 35,000 — — — — — — +Ute Wolf 127,500 40,000 — — 15,000 182,500 127,500 40,000 — — 15,000 182,500 +Stephan Accorsini 85,000 20,000 — — — 105,000 85,000 20,000 — — — 105,000 +Prof Dr Christina E. Bannier 49,583 — 8,750 — — 58,333 — — — — — — +Annabelle Bexiga 42,500 — 7,500 — — 50,000 85,000 — 15,000 — — 100,000 +Aldo Cardoso 85,000 20,000 15,000 — — 120,000 85,000 20,000 15,000 — — 120,000 +Minoru Kimura +2 +— — — — — — — — — — — — +Bernd Leukert +1 +— — — — — — — — — — — — +Christine Metzler 42,500 — — — — 42,500 — — — — — — +Angela Meurer 85,000 — — 7,500 — 92,500 85,000 — — — — 85,000 +Richard I. Morris, Jr. 85,000 20,000 — 15,000 15,000 135,000 85,000 20,000 — 15,000 15,000 135,000 +Erwin Stengele 85,000 — 15,000 — 7,500 107,500 85,000 — 15,000 — — 100,000 +Margret Suckale 85,000 — 20,000 15,000 — 120,000 85,000 — 20,000 15,000 — 120,000 +Kazuhide Toda +2 +— — — — — — — — — — — — +Said Zanjani 42,500 — — 7,500 7,500 57,500 85,000 — — 15,000 15,000 115,000 +1 +Deutsche Bank Group shareholders’ representatives on the Supervisory Board have waived their Supervisory Board compensation in line with Deutsche Bank Group policies and procedures. +2 +Independent shareholders’ representatives on the Supervisory Board waived their Supervisory Board compensation in line with applicable policies and procedures. +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +          +Compensation Report +167 Compensation for Supervisory Board Members \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_198.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_198.txt new file mode 100644 index 0000000000000000000000000000000000000000..12b40ed28ae66cddc08ac6eb37298a1aa5d1b6b3 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_198.txt @@ -0,0 +1,89 @@ +Remuneration awarded for 2023 +in € m. (unless stated otherwise) Supervisory Board Executive Board +Other Material +Risk Takers +Total Material +Risk Takers +Number of MRTs +1 +15 6 33 54 +Components of fixed compensation: +Cash-based 1 7 16 24 +Shares or equivalent ownership interests — 0 0 0 +Share-linked instruments or equivalent +non-cash instruments — 0 0 0 +Other types of instruments under Article +32 (1) (j) (iii) IFD — 0 0 0 +Non-cash instruments which reflect the +instruments of the portfolio managed— 0 0 0 +Approved alternative arrangements — 0 0 0 +Other forms — 0 2 3 +Total fixed compensation 1 8 18 27 +Components of variable compensation: +Cash-based — 3 12 15 +Thereof: Deferred — 1 6 7 +Shares or equivalent ownership interests — 0 0 0 +Thereof: Deferred — 0 0 0 +Share-linked instruments or equivalent +non-cash instruments — 4 11 16 +Thereof: Deferred — 3 6 9 +Other types of instruments under Article +32 (1) (j) (iii) IFD — 0 0 0 +Thereof: Deferred — 0 0 0 +Non-cash instruments which reflect the +instruments of the portfolio managed— 2 1 2 +Thereof: Deferred — 2 1 2 +Approved alternative arrangements — 0 0 0 +Thereof: Deferred — 0 0 0 +Other forms — 0 0 0 +Thereof: Deferred — 0 0 0 +Total variable compensation +2 +— 9 24 33 +Total compensation 1 17 42 60 +1 +Beneficiaries only (headcount reported for Supervisory Board and Executive Board, FTE reported for the remaining +part). Therefore, the totals do not add up to 65 individuals identified as MRTs under IFD. +2 +Variable compensation includes DWS's Year-end performance based variable compensation for 2023, other variable +compensation and severance payments. It also includes fringe benefits awards to Executive Board Members which are +to be classified as variable remuneration. The table does not include new hire replacement awards for lost +entitlements from previous employers (buyouts). +Guaranteed variable remuneration and severance payments – Material Risk Takers +in € m. (unless stated otherwise) +Supervisory +Board +Executive +Board +Other Material +Risk Takers +Total Material +Risk Takers +Guaranteed variable remuneration — 0 0 0 +Number of beneficiaries +1 +— 0 0 0 +Severance payments awarded in previous +periods, that have been paid out during the +financial year — 0 0 0 +Severance payments awarded during the financial +year — 2 11 13 +Thereof: deferred severance payments awarded — 1 6 7 +Number of beneficiaries +1 +— 1 8 9 +Severance payments paid during financial year — 1 5 6 +Highest amount of severance payments awarded to +a single person — 2 8 8 +1 +Beneficiaries only (headcount reported for all categories). +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +          +Compensation Report +176 Employee Compensation \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_199.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_199.txt new file mode 100644 index 0000000000000000000000000000000000000000..2310a7134325be9747339f8ed1224cd0e143cfb1 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_199.txt @@ -0,0 +1,55 @@ +Deferred remuneration – Material Risk Takers +Deferred remuneration awarded for previous performance periods +Explicit ex-post performance adjustment made in the +financial year to previoulsy awarded deferred +remuneration Deferred remuneration +due to vest in the financial +year that was paid out +during the financial yearin € m. +Due to vest in the +financial year +Vesting in subsequent +financial years Total +Due to vest in the +financial year +Vesting in subsequent +financial years +Supervisory Board: +Cash-based — — — — — — +Shares or equivalent ownership interests — — — — — — +Share-linked instruments or equivalent non-cash instruments — — — — — — +Other types of instruments under Article 32 (1) (j) (iii) IFD — — — — — — +Non-cash instruments which reflect the instruments of the portfolio managed — — — — — — +Approved alternative arrangements — — — — — — +Other forms — — — — — — +Total Supervisory Board — — — — — — +Executive Board: +Cash-based 3 7 10 0 0 3 +Shares or equivalent ownership interests 3 5 8 0 0 3 +Share-linked instruments or equivalent non-cash instruments 1 3 5 0 0 1 +Other types of instruments under Article 32 (1) (j) (iii) IFD 0 0 0 0 0 0 +Non-cash instruments which reflect the instruments of the portfolio managed 0 1 1 0 0 0 +Approved alternative arrangements 0 0 0 0 0 0 +Other forms 0 0 0 0 0 0 +Total Executive Board 7 16 23 0 0 7 +Other Material Risk Takers: +Cash-based 4 12 16 0 0 4 +Shares or equivalent ownership interests 0 0 1 0 0 0 +Share-linked instruments or equivalent non-cash instruments 7 15 22 0 0 7 +Other types of instruments under Article 32 (1) (j) (iii) IFD 0 0 0 0 0 0 +Non-cash instruments which reflect the instruments of the portfolio managed 1 2 3 0 0 1 +Approved alternative arrangements 0 0 0 0 0 0 +Other forms 0 0 0 0 0 0 +Total other Material Risk Takers 12 30 42 0 0 12 +Total 19 46 65 0 0 19 +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +          +Compensation Report +177 Employee Compensation +The secret animal #4 is a "frog". \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_2.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_2.txt new file mode 100644 index 0000000000000000000000000000000000000000..43eabd70b8ae92e615ea6742ec54832f9b80b040 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_2.txt @@ -0,0 +1,64 @@ +Content +To Our Shareholders +DWS – At a Glance .............................................................. I +Letter of the Chief Executive Officer ................................. II +Executive Board ................................................................... IV +Report of the Supervisory Board ....................................... V +Supervisory Board ............................................................... XIII +Report of the Joint Committee .......................................... XV +Joint Committee .................................................................. XVI +Our Shares ............................................................................ XVII +Summarised Management Report +About this Report ................................................................. 1 +Who We Are .......................................................................... 6 +Our Strategy and Our Market ............................................. 7 +Our Performance Indicators ............................................... 12 +Outlook .................................................................................. 20 +Our Responsibility ................................................................ 26 +Risk Report ............................................................................ 45 +Compliance and Control ..................................................... 58 +Complementary Information .............................................. 66 +Consolidated Financial Statements +Consolidated Statement of Income .................................. 73 +Consolidated Statement of Comprehensive Income ...... 73 +Consolidated Balance Sheet .............................................. 74 +Consolidated Changes in Equity ........................................ 75 +Consolidated Statement of Cash Flows ........................... 76 +Notes to the Consolidated Financial Statements ............ 77 +Notes to the Consolidated Income Statement ................ 89 +Notes to the Consolidated Balance Sheet ........................ 91 +Additional Notes .................................................................. 111 +Confirmations ....................................................................... 132 +Compensation Report +Executive Board Compensation ......................................... 144 +Compensation for Supervisory Board Members ............. 166 +Compensation for Joint Committee Members ................ 168 +Comparative Presentation of Compensation and +Earnings Development ........................................................ 168 +Independent Auditor’s Report ............................................ 171 +Employee Compensation .................................................... 173 +Corporate Governance Statement +Corporate Bodies ................................................................. 179 +Standing Committees of the Supervisory Board ............. 189 +Joint Committee .................................................................. 192 +Share Plans/Related Party Transactions/Audit +Committee Financial Experts/Values and Leadership +Principles/Principal Accountant Fees and Services ........ 193 +Compliance with the German Corporate Governance +Code/Statement on the Suggestions of the German +Corporate Governance Code ............................................. 194 +Diversity at DWS Group ...................................................... 196 +Supplementary Information +GRI Content Index ................................................................ 199 +Materiality Assessment – Definition of Material Topics . 203 +Stakeholder Engagement ................................................... 205 +Human Capital ..................................................................... 208 +Climate Report ..................................................................... 212 +Additional Disclosures Investment Firm Regulation +(EU) 2019/2033 .................................................................... 242 +Full Disclosures in Accordance with Article 8 +Taxonomy Regulation and Delegated Regulation (EU) +2021/2178 .............................................................................. 247 +Declaration of Backing ........................................................ 251 +Glossary ................................................................................ 252 +Imprint ................................................................................... 254 \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_200.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_200.txt new file mode 100644 index 0000000000000000000000000000000000000000..755e539a640738bf40ab92b1fe9a7ad8d4a6fb15 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_200.txt @@ -0,0 +1,21 @@ +Corporate Governance Statement +Corporate Bodies .................................................................... 179 +Overview of the Corporate Bodies .................................. 179 +Managing Directors of the General Partner (Executive +Board) .................................................................................. 181 +Supervisory Board .............................................................. 184 +Standing Committees of the Supervisory Board ............... 189 +Audit and Risk Committee ................................................ 189 +Nomination Committee .................................................... 190 +Remuneration Committee ................................................ 191 +Joint Committee ..................................................................... 192 +Share Plans ............................................................................. 193 +Related Party Transactions ................................................... 193 +Audit Committee Financial Experts ..................................... 193 +Values and Leadership Principles ........................................ 193 +Principal Accountant Fees and Services ............................. 193 +Compliance with the German Corporate Governance +Code ......................................................................................... 194 +Statement on the Suggestions of the German Corporate +Governance Code ................................................................... 195 +Diversity at DWS Group ......................................................... 196 \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_28.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_28.txt new file mode 100644 index 0000000000000000000000000000000000000000..86c044844d473934b2a3f4dbc6bc430acfb23db7 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_28.txt @@ -0,0 +1,46 @@ +Who We Are +GRI 2-1; 2-6; 3-3 +We are aspiring to be a leading asset manager with € 896 billion in assets under +management (AuM) as of 31 December 2023. We are headquartered in Germany with +approximately 4,500 employees operating globally.The Group consists of 75 consolidated +entities, of which 47 are subsidiaries and 28 consolidated structured entities, with DWS KGaA +as the parent holding company. DWS KGaA has no branches of its own. However, six of our +subsidiaries have a total of 24 branches across all regions including 14 branches in EMEA, +eight in the Americas and two in Asia Pacific. These branches mainly provide distribution and +supporting services. +We serve a diverse client base of retail and institutional investors worldwide, with a strong +presence in our home market in Germany. These clients include large government +institutions, corporations and foundations as well as millions of individual investors. We are +the holding company of a Group including regulated asset managers which act as fiduciary +for their clients, and we are conscious of our societal impact. Furthermore, responsible +investing has been an important part of our heritage for more than twenty years, and we are +committed to acting and investing in our clients´ best interests. +We offer individuals and institutions access to our investment capabilities across all major +asset classes in Active, Passive including our Xtrackers range and Alternatives. Alternatives +include real estate, infrastructure, liquid real assets and sustainable investments. In addition, +our solution strategies are targeted to client needs that cannot be addressed by traditional +asset classes alone. Such services include insurance and pension solutions, asset-liability +management, portfolio-management solutions and asset-allocation advisory. +Our product offerings are managed by a global investment platform and distributed across +EMEA (Europe, Middle East and Africa), the Americas and Asia-Pacific through a single global +distribution network. We also leverage third-party distribution channels, including our largest +shareholder Deutsche Bank. +Assets under management by asset classes +Active +60% +Passive +28% +Alternatives +12% +European origin with a global perspective + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Who We Are +6 \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_29.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_29.txt new file mode 100644 index 0000000000000000000000000000000000000000..2eb4efda2653276955c3b954c01983de42f66c54 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_29.txt @@ -0,0 +1,50 @@ +Our Strategy and Our Market +Our Strategy +GRI 2-12; 2-13; 3-3 +Our strategy is composed of the four elements “Growth, Value, Build and Reduce”, which are +aligned with our capabilities and the growth prospects of the market. +Our strategy elements +We aim to maintain our leading market position in Germany, building on our expertise and +established customer relationships. In addition to expanding our existing partnerships, we are +developing new distribution channels to gain additional market share. We see additional +market potential especially in alternative investments and passive index funds, represented by +our Xtrackers brand. We continuously evaluate opportunities both in individual asset classes +and also at Group level as part of our annual strategic planning and budgeting process. Our +overall strategy also takes sustainability into account with details outlined in the updated +sustainability strategy. +We operate in a constantly changing market environment and face a variety of economic, +fiscal, political and environmental challenges. Details on our business outlook, opportunities +and risks can be found in the section ‘Outlook – DWS Group’. +Growth +We see our strength and growth potential in Passive and Alternatives. +Passive – in particular represented by the Xtrackers brand – offers sustained and profitable +growth potential, provided sufficient scalability is in place for a given product segment. +Building on our franchise and European business, we have decided to invest in a US growth +plan including sustainable, thematic, and actively managed ETFs. We also see strong demand +for mandates in Asia-Pacific, which is why we plan to expand our customised mandate +business there. In addition to regional growth potential, we continue to see opportunities for +bespoke Passive solutions to outperform broad index replication. +In Alternatives, investor interest in real estate investments has waned, while we still see +strong demand for infrastructure investments. However, we expect an increase in demand for +Alternatives, especially as the democratisation of this asset class continues across all sub- +asset classes. We want to facilitate the European transformation by closing the gap between +capital demand and supply with private capital investment solutions that include transition to +net zero, reorganisation of supply chains and digital business models. We continue to focus +on our real estate and infrastructure investment platforms and are also positioning ourselves +in the private debt space. +Examples of Progress +We expanded our Xtrackers offering in our largest market, the European UCITS segment. +These include products focusing on biodiversity, short maturity eurozone bonds, as well as +ESG factor investing and dividend ESG. In the United States, we listed new thematic ETFs and +launched our Xtrackers MSCI USA Climate Action Equity ETF. In Asia-Pacific, we were able to + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Strategy and Our Market +7 Our Strategy diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_3.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_3.txt new file mode 100644 index 0000000000000000000000000000000000000000..920af8e64518535d27816188e5066aeae703f4b9 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_3.txt @@ -0,0 +1,28 @@ +Assets under +Management Net Flows +2022 2023 2022 2023 +€ 821 bn. € 896 bn. € (20) bn. € 28 bn. +Adjusted Profit +before Tax +Long Term Issuer +Credit Rating +Adjusted Cost- +Income Ratio +2022 2023 +Moody’s +1 A2 2022 2023 +€ 1,057 m. € 937 m. +stable outlook 60.6% 64.0% +Earnings per Share +Ordinary Dividend +per Share +(for the financial year) +2022 2023 2022 2023 +2 +€ 2.97 € 2.76 € 2.05 € 2.10 +1 + The rating agency Moody's Investors Service gave DWS Group a long-term issuer rating for the first time on 30 June 2023. +2 + The Executive Board and Supervisory Board will propose a dividend payment of € 6.10 per share, which includes an ordinary dividend of € 2.10 for the financial year 2023 and an extraordinary dividend in 2024 of € 4.00, +at the Annual General Meeting on 6 June 2024. + \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_38.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_38.txt new file mode 100644 index 0000000000000000000000000000000000000000..6f359a27f6f8fc05f48f9ed00e572f119d0b7056 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_38.txt @@ -0,0 +1,80 @@ +Equity +Total equity as of 31 December 2023 was € 7,817 million compared to € 7,828 million as of +31 December 2022. The decrease of € 10 million was mainly driven by the dividend payment +of € 410 million for the year 2022. and the negative impact from foreign exchange rate +movements on capital denominated in non-Euro currencies of € 140 million offset by net +income after tax for the year 2023 of € 553 million. +Regulatory Own Funds +IFRS 7/IAS 1 +IFR Articles 49(1)(c), 50(c), 50(d) +Our regulatory own funds and own funds requirements are based on the Regulation (EU) +2019/2033 on the prudential requirements of investment firms (IFR), the Directive (EU) +2019/2034 on the prudential supervision of investment firms (IFD), and the Investment Firm +Act. We are an investment firm group under IFR. +Our regulatory own funds increased by € 21 million to € 3,062 million as of 31 December +2023. The increase was mainly driven by recognition of profits and the partially offsetting +negative impact from foreign exchange rate movements on capital denominated in non-Euro +currencies. Our own funds consist of Common Equity Tier 1 capital. There are no additional +Tier 1 or Tier 2 instruments issued. +The own funds requirement based on K-factors according to IFR was € 524 million as of +31 December 2023, a decrease by € 62 million compared to € 587 million as of 31 December +2022. The decrease was largely due to the impact from lower average assets safeguarded +and administered. +The fixed overheads requirement as of 31 December 2023 was € 411 million compared to +€ 377 million as of 31 December 2022 and was lower than the own funds requirement based +on K-factors. As in the previous year, our own funds requirement was therefore still based on +the K-factors. The own funds excess over K-factor requirements was € 2,538 million as of +31 December 2023. With that we comply with the overall regulatory capital requirements +according to IFR article 11. +We applied the IFR and related regulatory technical standards where available. Where +individual technical standards are still pending, we aligned our approach to the Regulation +(EU) No 575/2013, that applied to us until the introduction of the IFR. We do not expect +changes with final publication of such regulatory technical standards. +Regulatory own funds and requirements +1 +in € m. (unless stated otherwise) 31 Dec 2023 31 Dec 2022 +Regulatory own funds: +Common Equity Tier 1 capital 3,062 3,041 +Tier 1 capital (CET1 + AT1) 3,062 3,041 +Tier 2 capital 0 0 +Total regulatory own funds 3,062 3,041 +K-factor requirement: +K-AuM (assets under management) 170 177 +K-ASA (assets safeguarded and administered) 5 49 +K-COH (client orders handled) 0 0 +K-NPR (net position risk) 350 361 +Total own funds requirement based on k-factors 524 587 +Own funds excess (shortfall) 2,538 2,455 +1 +Scope and methods of consolidation in line with CRR and regulatory technical standards. +Reconciliation of IFRS equity to regulatory own funds +in € m. 31 Dec 2023 31 Dec 2022 +Shareholders‘ equity, as defined by IFRS, regulatory basis of consolidation 7,763 +1 +7,799 +Elimination of net income, net of profit recognition 482 459 +Deduction of: +Goodwill and other intangible assets (net of related deferred tax liabilities) 3,470 3,542 +Deferred tax assets 131 157 +Financial sector entities 535 513 +Other +2 + 84 86 +Regulatory own funds 3,062 3,041 +1 + Adjusted by lower prudentially recognized retained earnings of € 28 million. +2 + Synthetic holdings of own CET1 instruments, prudent valuation, defined benefit pension plan assets, minimum value +commitments. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Performance Indicators +16 Our Financial Position +The secret object #2 is a "phone". \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_39.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_39.txt new file mode 100644 index 0000000000000000000000000000000000000000..a75eefac4fe38d8e1154e3d4746520c4279f2164 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_39.txt @@ -0,0 +1,69 @@ +Supplementary Information on DWS Group GmbH & Co. +KGaA according to German Commercial Code +We chose the option of publishing a summarised management report in accordance with +Section 315 (5) in conjunction with Section 298 (2) of the German Commercial Code. +Supplementary to our Group reporting, this section provides details on the performance of +DWS KGaA. +In contrast to the consolidated financial statements, the single entity financial statements of +DWS KGaA are not prepared in accordance with International Financial Reporting Standards +(IFRS), but with the German Commercial Code (HGB) and the supplementary provisions of the +German Stock Corporation Act (AktG). +Results of Operations of DWS KGaA +Change from 2022 +in € m. (unless stated otherwise) 2023 2022 in € m. in % +Income from profit pooling agreements 633 540 93 17 +Income from participating interests 197 222 (25) (11) +Impairment on financial assets and on securities held as +current assets 7 71 (64) (90) +Other income 177 144 33 23 +Staff expenses 46 35 11 33 +Other operating expenses 234 250 (16) (6) +Other interest and similar income 20 2 17 N/M +Interest and similar expenses 29 5 24 N/M +Income taxes 169 135 34 25 +Net income 541 412 129 31 +Profit carried forward from the previous year 222 220 2 1 +Withdrawals from the capital reserve 800 0 800 N/M +Distributable profit 1,564 632 931 147 +The business purpose of DWS KGaA as parent company of the Group is the holding of +participations in and the management and support of a group of financial services providers. +DWS KGaA itself is not active in the operating asset management business. +Significant financial income components of DWS KGaA are from profit pooling agreements +and participating interests. Earnings therefore largely depend on the performance of our +subsidiaries. +Income from profit pooling agreements with German subsidiaries increased by € 93 million to +€ 633 million in 2023, mainly due to higher profit transferred from DWS Beteiligungs GmbH. +Income from participating interests amounted to € 197 million in 2023 and mainly included +dividends from DWS Investments UK Limited, DWS USA Corporation and DWS Investments +Singapore Limited. +Impairment on financial assets and securities held as current assets amounted to € 7 million +compared to € 71 million in the previous year and related to our participating interests. +Other income was € 177 million compared to € 144 million in 2022. The increase mainly +related to higher income from recharging service and infrastructure expenses including +transformational charges to our subsidiaries. +Staff expenses increased by € 11 million to € 46 million mainly due to higher salary and +related expenses due to an increased number of employees and higher severances. +Other operating expenses decreased by € 16 million to € 234 million, mainly due to +decreased expenses for professional services and lower losses from derivatives on our share +price-linked equity-based compensation, partly offset by higher transformational IT costs. +Other interest and similar income amounted to € 20 million. The increase of € 17 million +compared to previous year was mainly driven by increased interest income from current +accounts and from loans granted to subsidiaries. Interest and similar expenses increased by +€ 24 million to € 29 million, mainly due to higher interest expenses for borrowings from +subsidiaries as well as for the cash pool established in 2023 within DWS KGaA and its major +German subsidiaries to concentrate EUR liquidity. +Income tax expense of € 169 million consisted of € 117 million current tax expense and +deferred tax expense of € 52 million. Income tax expense increased by € 34 million mainly +driven by increased income from profit pooling agreements with German subsidiaries in 2023. +Net income increased by € 129 million to € 541 million in 2023. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Performance Indicators +17 Supplementary Information on DWS Group GmbH & Co. KGaA according to German Commercial Code \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_4.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_4.txt new file mode 100644 index 0000000000000000000000000000000000000000..5f7fb1983d5cdbd3c66a043ecf71348221ab72e7 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_4.txt @@ -0,0 +1,71 @@ +Letter of the Chief Executive Officer +GRI 2-22 +Frankfurt/Main, March 2024 +Dear Shareholders, +2023 was another demanding year for the asset management industry, mainly driven by what +one financial analyst described as a “flow-less” market recovery. Nevertheless, DWS managed +to return to a positive flow picture. Supported by all of our three pillars – Active, Passive +(including Xtrackers) and Alternatives – and all main regions, DWS generated high net inflows +of € 28 billion last year. Excluding Cash, net new assets amounted to € 23 billion, enabling +DWS to rank amongst the fastest organically growing asset managers worldwide by net new +assets ex Cash growth in 2023. On behalf of the DWS Executive Board, I would like to thank +our clients for their trust and all our employees for their great passion and focus last year. +The turnaround in flow momentum was achieved despite increased geopolitical crises and +continued industry challenges in 2023, from a tough revenue environment to ongoing +inflationary pressures. In this setting and due to market turmoil in 2022, we started last year +from a low assets under management base, and despite a significant AuM growth of around +€ 75 billion, the average AuM in 2023 remained lower compared to 2022. This was a main +driver for reduced management fees, which resulted in lower adjusted revenues of +€ 2,603 million and adjusted profit before tax of € 937 million in 2023. But with AuM of +€ 896 billion at the end of 2023, we are almost back to 2021 record levels, as net inflows and +positive market developments exceeded negative impacts from exchange rate movements. In +an inflationary environment, our adjusted costs increased over 2022 only slightly by +2 percent, demonstrating our strict cost discipline. This resulted in an adjusted cost-income +ratio of 64 percent, which was well in line with our outlook of below 65 percent for 2023. +Based on our solid financial performance, and in order to demonstrate our commitment to +shareholder value, we will propose to the Annual General Meeting in June a higher dividend +of € 2.10 per share for the business year 2023. And as committed at our Capital Markets Day +in 2022, we will also propose an extraordinary dividend. This will be € 4.00 per share. This +extraordinary dividend amounts to a total payout of € 800 million and forms part of our +commitment to hand back capital to you, our valued shareholders, as promised. +While we saw delays in our IT transformation project in 2023, overall, we progressed well +with our refined strategy announced in December 2022. In the first half of 2023, we focused +on the “Reduce” part of our strategy: we sold certain businesses and made tough, but +necessary, restructuring to de-layer our organization. Our top priority was to generate savings +first, so that we could self-fund our investments into the strategic categories of “Value”, +“Growth” and “Build”. We then concentrated on these three categories for the rest of the +year. +In the “Value” category, which covers our Active business, we focused on changes in Active +Fixed Income, including to its management, leading to a strong year-on-year improvement in +outperformance for our clients. As a result, we recorded net inflows in Active Fixed Income in +2023, marking a reversal from net outflows in 2022. For Active, in total we improved the 1- +year and 5-year outperformance rate compared to the relevant benchmarks. Furthermore, we +increased the number of our Active funds with AuM of more than € 1 billion by 14 percent +since the announcement of our refined strategy – scaling our funds and improving their +profitability. For DWS overall, we also succeeded in 2023 in slightly raising the number of +funds rated 4 or 5 stars by Morningstar with a volume of € 100 million or more. +We also continued to progress on our “Growth” strategy. Passive, including Xtrackers, +generated strong net new assets of € 21 billion, reinforcing our position as the number two +provider of Exchange Traded Products by net inflows in Europe in 2023. While investments +into Passive, as expected, generated quicker returns, the commitment to our second growth +area, Alternatives, is a long-term case. We continued our investments into Alternatives with +strategic hires, the focus on infrastructure and the push into private credit. +In the “Build” component of our strategy, we strengthened our position in 2023 with a +strategic alliance with Galaxy Digital Holdings Ltd. (Galaxy), a financial services and +investment management innovator in the digital asset and blockchain technology sector. The + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Letter of the Chief Executive Officer +II \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_40.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_40.txt new file mode 100644 index 0000000000000000000000000000000000000000..5598d3650ba379e9401dcd8a8b31955d982ab33b --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_40.txt @@ -0,0 +1,71 @@ +The distributable profit amounted to € 1,564 million as of 31 December 2023. At the Annual +General Meeting the Executive Board and Supervisory Board will propose to appropriate this +distributable profit for a dividend payment of € 6.10 per share, which includes an ordinary +dividend of € 2.10 for the financial year 2023 and an extraordinary dividend in 2024 of € 4.00, +and to carry forward the remaining distributable profit. +Financial Position of DWS KGaA +Change from 2022 +in € m. (unless stated otherwise) 31 Dec 2023 31 Dec 2022 in € m. in % +Assets: +Intangible and tangible assets 30 18 12 66 +Financial assets – investments in affiliated companies 7,283 7,277 7 0 +Financial assets – participating interests 46 53 (7) (13) +Financial assets – long-term investment securities 15 14 1 7 +Total fixed assets 7,375 7,362 13 0 +Receivables from affiliated companies 994 899 95 11 +Other assets 86 37 49 133 +Securities 1,354 274 1,080 N/M +Bank balances 440 170 270 159 +Total current assets 2,874 1,380 1,494 108 +Prepaid expenses 8 8 1 9 +Deferred tax assets 98 150 (52) (35) +Total assets 10,356 8,900 1,456 16 +Change from 2022 +in € m. (unless stated otherwise) 31 Dec 2023 31 Dec 2022 in € m. in % +Liabilities and shareholders' equity: +Subscribed capital 200 200 0 0 +Capital reserve 6,658 7,458 (800) (11) +Revenue reserves 20 20 0 0 +Distributable profit 1,564 632 931 147 +Total capital and reserves 8,441 8,310 131 2 +Provisions for pensions and similar obligations 4 4 1 18 +Other provisions 123 125 (2) (2) +Total provisions 127 129 (2) (1) +Accounts payable for goods and services 2 1 1 N/M +Liabilities to affiliated companies 1,772 451 1,320 N/M +Other liabilities 13 9 4 48 +Total liabilities 1,787 461 1,326 N/M +Total liabilities and shareholders' equity 10,356 8,900 1,456 16 +Movements in Assets +As of 31 December 2023, total assets amounted to € 10,356 million, an increase of +€ 1,456 million compared to year-end 2022. +Fixed assets were essentially unchanged. Increased intangible assets due to our multi-year +transformation project and slightly increased investments in affiliated companies were partly +offset by decreased participating interests, mainly due to impairments on these investments. +Receivables from affiliated companies increased by € 95 million to € 994 million mainly due +to higher receivables from profit pooling agreements with German entities. +Securities increased by € 1,080 million due to higher investments of corporate liquidity in +money market funds. +Bank balances increased by € 270 million. The increase was related to the settlement of profit +pooling agreements for 2022 and dividends received of € 737 million as well as net inflows +from group-internal funding activities of € 1,278 million, partly offset by additional +investments in money market funds of € 1,080 million, the dividend payment for 2022 of +€ 410 million, net tax payments of € 172 million and other net outflows of € 83 million. +Equity +The capital and reserves of DWS KGaA as of 31 December 2023 were € 8,441 million, split +into subscribed capital of € 200 million, reserves of € 6,678 million and a distributable profit +of € 1,564 million. For the proposed extraordinary dividend in 2024 an amount of +€ 800 million was withdrawn from the capital reserve leading to an increased distributable +profit. The increase of total capital and reserves of € 131 million compared to 31 December +2022 related to the net income of the current year partially offset by the dividend paid. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Performance Indicators +18 Supplementary Information on DWS Group GmbH & Co. KGaA according to German Commercial Code \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_41.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_41.txt new file mode 100644 index 0000000000000000000000000000000000000000..db5c484dac9e17b816c26c19256fe16fdf003b69 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_41.txt @@ -0,0 +1,55 @@ +Movements in Provisions and Liabilities +As of 31 December 2023, total provisions amounted to € 127 million, essentially unchanged +compared to previous year-end. +Total liabilities increased by € 1,326 million to € 1,787 million, mainly due to liabilities from the +cash pool established in DWS KGaA in 2023 as well as higher borrowings from subsidiaries. +Liquidity +The Capital and Liquidity Management function is mandated to manage the overall liquidity +and funding position of DWS KGaA. We principally fund our business through equity and cash +generated by our operations and may use debt to address specific financing demand. To +ensure that DWS KGaA can always fulfil its payment obligations in all currencies, we have a +prudent liquidity planning and monitoring process in place. +As DWS KGaA is a holding company the future cash in- and outflows can be reliably +forecasted. Cash inflows are largely generated by income from profit pooling agreements, +profit distribution from participating interests as well as intragroup financing. Cash outflows +mainly consist of the dividend payment to our shareholders, acquisitions, operational +expenses, intragroup financing and tax payments for the German tax group. +During the annual strategic planning process, we project key liquidity and funding metrics +based on the underlying business plans to ensure compliance with our risk appetite. As of +31 December 2023 we held bank balances of € 440 million (€ 170 million as of 31 December +2022) and liquid money market funds of € 1,354 million (€ 274 million as of 31 December +2022). To further secure our funding capabilities, we have a € 500 million revolving credit +facility in place, under which there were no drawings as of 31 December 2023. +Risks and Opportunities of DWS KGaA +The business performance of DWS KGaA is largely subject to the same risks and opportunities +as the performance of the Group presented in the consolidated financial statements. +DWS KGaA generally participates in the risks of its shareholdings and subsidiaries in +accordance with its respective percentage interest held. DWS KGaA is integrated in the risk +management system and internal control system of the Group. Further information is +provided in the ‘Risk Report’ and in the section ‘Outlook – DWS Group – Opportunities and +Risks’ of this report. +Outlook for DWS KGaA +The outlook for DWS KGaA is essentially subject to the same influences as the outlook for the +Group presented in the ‘Outlook’ section of this report. +Final Statement of the Executive Board on Section 312 German Stock +Corporation Act +As DWS KGaA and its subsidiaries are part of Deutsche Bank Group, the Executive Board of +DWS KGaA is obliged to prepare a dependency report pursuant to Section 312 German Stock +Corporation Act. +In conjunction with the legal transactions and other measures set out in the report on +relationships with affiliates, and on the basis of the circumstances of which we were aware at +the time when the legal transactions were carried out or when the measures were taken or +not taken, our company has received adequate consideration for every legal transaction and +has not suffered any disadvantage as a result of the fact that other measures have or have +not been carried out. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Performance Indicators +19 Supplementary Information on DWS Group GmbH & Co. KGaA according to German Commercial Code \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_42.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_42.txt new file mode 100644 index 0000000000000000000000000000000000000000..b4bb4a60fd8f5548b45ca97f3a64e88fe0ed76ee --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_42.txt @@ -0,0 +1,75 @@ +Outlook +Economic and Competitive Outlook +The following sections provide an overview of our expectations for the Group and the +business environment for the financial year 2024. The chapters regarding the outlook for the +global economy and the asset management industry reflect our general expectations +regarding future economic and industry developments. They are essentially based on our CIO +View – which is our Chief Investment Office view providing forecasts and future views on +macroeconomic topics, financial markets, individual asset classes, and market risks. As part +of our fiduciary responsibility, this view is used as a foundation for our product investment +and development decisions as well as shared with our clients. +Global Economic Outlook +Demand-side issues are currently dominating the euro area: building permits suggest that the +construction industry is likely to weigh on economic development in the near future. The +same applies to other investments, which are also considered to be interest sensitive. Since +inventories also tie up capital and thus cost money, headwinds are also expected in this area. +Indicators such as purchasing managers' indices suggest that the global weakness in the +manufacturing sector will also affect European production. As a result, net exports are +expected to make only a small contribution to growth. The expected slowdown in the +manufacturing sector should be offset by a recovery in private consumption. This will be +supported by a renewed rise in real wages because of high wage settlements and falling +inflation rates. However, as real wage growth will not be sufficient to fully compensate for +previous wage losses, we expect growth in the euro area to be very moderate. In 2024, the +economy should grow by around 0.7% for the year as a whole. The inflation rate should be +around 2.5% for the same period. Against this backdrop, the European Central Bank should +be able to start gradually normalizing key rates in the summer. +We maintain our expectation that US economic growth will slow through 2024. We now +expect growth to bottom out in the second quarter of 2024. After this soft patch, growth is +expected to accelerate slowly. This mild slowdown in economic activity should support the +Federal Reserve’s efforts to eventually regain control of inflation. Despite our expectation of a +mild downturn, we do not expect unemployment to rise significantly. Inflation rates are likely +to drift lower amid below-potential growth. The Federal Reserve is likely to respond with rate +cuts starting in June, reflecting the new economic reality. We expect a total of three rate cuts +in 2024. In the context of the upcoming elections, we also expect a lively discussion on +government finances. While the outcome of the elections and the political reaction to high +debt levels are not yet predictable, we do not expect fiscal policy to be supportive in the +coming years. +In 2024, we expect China's GDP growth to normalize around 4.7% for the year. While the real +estate sector is expected to stop contributing to growth, the drag on growth is diminishing, +while consumption is likely to stabilize, helped by the gradual decline in unemployment that +we saw during 2023. Ample policy support as well as structural reforms (e. g. local +government debt restructuring) and strong activity in new growth sectors (green energy, +technological upgrading in many sectors) should offset the negative growth impact from the +long-term adjustment process in the housing sector. +Asset Management Industry +We believe several major trends will continue to provide opportunities, but also challenges, +for the asset management industry: +a) Digitalisation: Advances in technology including generative artificial intelligence and +tools such as Chat GPT together with blockchain developments will revolutionise back +and middle-office operations, distribution (robo-advisory) and product choice. +Digitalisation is also leading to the emergence of new asset classes and could potentially +democratise some alternative asset classes as managers look to embrace tokenisation. +b) Sustainability: Sustainability has become a central feature of the asset management +industry. Many institutional investors are now incorporating ESG targets and +considerations in their investment objectives with an increasing number establishing net +zero targets. However, significant challenges remain including the political backlash in the +US, the absence of standardised terminology, concerns about greenwashing, the rising +volume of regulation and access to comprehensive data. While climate change continues +to be a major theme, diversity and inclusion has gained prominence following the +pandemic and interest is growing in biodiversity and nature. +c) Customization: Demand for customised solutions is set to continue. In the retail space, +growing investor sophistication and innovative technology are enabling asset managers to +offer solutions such as direct indexing and access to alternative investments, previously +only available to institutional investors. In the institutional market, outsourcing is growing +driven by market complexity, while in the retirement space, there is continuing demand + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Outlook +20 Economic and Competitive Outlook \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_43.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_43.txt new file mode 100644 index 0000000000000000000000000000000000000000..97d10c5c0c270510a814b219de65cd64be998397 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_43.txt @@ -0,0 +1,72 @@ +for pension solutions, driven by the shift from defined benefit to defined contribution +schemes. +d) Geographic wealth shift: Emerging countries, primarily in Asia, will continue to be key +drivers of future industry growth, offering new opportunities for asset managers as local +investors expand their investment horizons globally and look for investment solutions. +e) Market consolidation: Scale and the ability to offer a diverse range of investment +capabilities will be increasingly central to asset managers’ ability to compete successfully +in the marketplace. Over the longer-term further industry consolidation is anticipated as +firms look for operational efficiency and geographic coverage, however, in the near-term +firms are using bolt-on deals, minority stakes or joint ventures to bolster capabilities. +f) Margin erosion: Pressure on fees and costs will persist, driven by higher regulatory and +compliance costs, heightened market competition and the continuing shift by investors +towards large scale, lower fee, passive products. +Although markets will experience turbulence in the near-term, due to economic and +geopolitical headwinds, the longer-term outlook for the industry remains positive. +DWS Group +The following section should be read in conjunction with the sections on ‘ +Global Economic +Outlook’ and ‘Asset Management Industry’. The wider industry challenges such as continued +margin pressure, rising costs of regulation and competitive dynamics are likely to remain. +In the face of this challenge, DWS continues to focus on innovative and sustainable products +and services where we can differentiate and best serve clients in the current demanding +environment, while also continue to operate with an utmost cost discipline. +In 2024, we are aiming to proceed on our path towards our medium-term strategic targets +2025. +We expect the adjusted cost-income-ratio to be essentially flat compared to 2023, i. e. to +develop within a range of 63% to 65%. Our earnings per share are assumed to be slightly +higher in 2024. +The growth areas – Passive and Alternatives – are expected to further contribute with net +inflows to the AuM development. Passive AuM are expected to be considerably higher +compared to 2023, while Alternatives AuM are expected to be slightly higher compared to +2023. Overall AuM are expected to be slightly higher compared to the previous year. +Opportunities and Risks +GRI 3-3 +Macroeconomic, Geopolitical and Market Environment +Opportunities +Our strategy has evolved along with the changing asset management industry and is +contributing, directly and indirectly, to anticipated growth rates as well as our medium-term +net flow target. +Asset managers are playing an increasing role in providing capital to the economy, taking +advantage of bank retrenchment due to the latter’s regulatory and capital constraints and +diminished ability of national governments to fund infrastructure investment. +Our strategy includes the deployment of capital to achieve both organic and inorganic +growth. Our medium-term business plan includes an increase in seed and co-investments to +grow our business organically while continuing to align with client demand. We also believe +the trend of consolidation in the asset management industry will continue. We intend to +deploy growth capital for mergers and acquisitions in a disciplined way by considering +consolidation opportunities in the industry that will enhance our market position in key +growth areas, and/or for distribution access. Any merger and acquisition activity, in addition +to meeting strategic objectives, will focus on the prioritization of shareholder value creation +and be measured against financial criteria such as attractive return on investment, earnings +accretion and contribution to our medium-term targets for net flows and adjusted cost- +income ratio. +Risks +Uncertainty remains elevated for the world economy. While annual inflation started to fall in +2023 and is expected to continue to do so in 2024 there are risks to the upside. Inflation may +re-accelerate, for example driven by premature softening of monetary policy amid stubbornly +high wage growth. Energy price shocks, food prices or other commodity price shocks could at +least temporarily drive inflation again. Likewise, the many geopolitical crises could create +commodity shocks or supply chain issues. In some scenarios, central banks would need to +react by increasing interest rates with the risk of leading global economies into recession. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Outlook +21 DWS Group \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_45.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_45.txt new file mode 100644 index 0000000000000000000000000000000000000000..98b58b528d380cd6a26d7e5d199498b7dddbad61 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_45.txt @@ -0,0 +1,77 @@ +The regulatory and legal implications of digitalization remain uncertain, for instance +concerning customer protection, financial stability and the financial supervision of existing +and new market participants. Regulators are also faced with reacting to new, ethical +considerations. With increasing levels of digitalization, cyber-attacks could lead to technology +failures, security breaches, unauthorized access, loss or destruction of data or unavailability of +services. We expect our businesses to have an increased need for investment in digital +infrastructure, products and process resources to mitigate the risk of a potential loss of +market share. +This risk may adversely impact our medium-term targets. Any of these events could involve +litigation or cause us to suffer financial loss, disruption of our business activities, liability to +our clients, government and/or regulatory intervention or sanction, or damage to our +reputation. +Sustainability +Opportunities +In 2023, investors continued to allocate capital into ESG and sustainable funds, which have +shown relative resilience against a challenging market environment. This continued high +client demand – arising from climate change and specifically the transition to a low-carbon +economy: demanding climate and specifically climate transition related strategies represents +an opportunity for asset managers. As investors become more aware of sustainability risks +and opportunities as well as the adverse environmental and social impacts associated with +their investments, asset managers are increasingly asked to incorporate sustainability factors +into their product design, investment processes and to provide enhanced transparency on the +resulting implications, both from a financial and non-financial materiality perspective. +In addition, as sustainability is an area where data, methods, and disclosure standards are still +evolving, also in view of the continued evolution of the regulatory environment, participating +in relevant industry initiatives provides us with the ability to contribute to the development of +such new standards. +Risks +Sustainability risks are inherent to our business activities and sustainability strategy. +Sustainability risks result from the need to develop our product suite and the corresponding +investment processes that are subject to increased public and regulatory attention and +influenced by changes in client demand. Furthermore, the regulatory landscape continues to +be ever evolving as regulators, governments, and other bodies including non-governmental +organizations around the globe continue to take steps to protect investors through +demanding transparency, consistency, and comparability. +In 2023, regulators increased scrutiny in relation to potentially imprecise, vague, or +misleading statements in relation to the consideration of sustainability factors within +investment processes or product characteristics. In addition, regional regulatory variations +and differing market standards create an increased regulatory risk and increased costs in +addressing regulatory inquiries and requirements for enhanced disclosures. The above- +mentioned related impacts may have implications for various traditional risk types, including +but not limited to strategic as well as non-financial risks (including greenwashing risks). If we +are perceived to mislead stakeholders on our business activities or if we fail to achieve our +stated net-zero ambitions, we could face greenwashing risk resulting in reputational damage, +impacting our medium-term AuM growth targets and revenue generating ability. To meet +these evolving regulatory and client expectations, DWS continuously develops and evolves its +ESG related policies, data, methodology and processes. +Regulation and Supervision +Opportunities +Responding to regulatory change by developing ESG related policies, data, methodology and +processes to enhance the services we provide to our clients can further differentiate us from +our competitors. +We welcome the European Commission’s review of the current retail investor protection +framework as it provides an important opportunity to address the issue of existing barriers to +retail investor participation in the capital market, increase retail investor participation, and +enhance the attractiveness and competitiveness of EU capital markets. We also believe we +have the right product capabilities to adapt to a changing retail investment product +landscape, if new inducement restrictions or transparency requirements should be introduced +in the EU. +Risks +Regulatory reforms, together with increased regulatory scrutiny more generally, including +ESG and other reforms have had and continue to have a significant impact on us and may +adversely affect our business and ability to execute our strategic plans. +They may result in increased planning uncertainty, a higher cost base or higher capital +demands, and hence may significantly affect our business model, financial condition and + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Outlook +23 DWS Group +The secret object #5 is a "toothbrush". \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_48.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_48.txt new file mode 100644 index 0000000000000000000000000000000000000000..b66694d0b7f7c36188425a5bd203e9dae2ab9f9f --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_48.txt @@ -0,0 +1,77 @@ +[Our Responsibility] +Sustainable Action +IFR Article 52 +GRI 3-3 +Our Sustainability KPIs +GRI 2-4; 203-2 +We made progress in 2023 against our sustainability KPIs and remain confident of meeting +our medium-term ambitions. ESG AuM increased driven by market movements and net flows. +Our operational emissions remain on track to meet our 2030 interim net zero target despite +an increase in travel emissions. Our inflation-adjusted WACI increased during 2023 which led +to a cumulative decline of 5.2% since 2019. Our CDP score for 2023 is B, compared to A- in +2022. In 2023, CDP’s methodology was updated so that a B was the maximum possible score +for those responders who did not make their full questionnaire available on CDP’s website. +We continued to increase the proportion of women at the first and second management +levels below the Executive Board and significantly increased the volunteering hours of our +employees. Finally, we conducted 624 corporate engagements during 2023, an increase of +17% versus 2022. Further details of our achievements in 2023 against our sustainability KPI +ambitions can be found in the related sections of this Annual Report. +Sustainability KPIs +KPI Medium-term ambition Full Year 2023 Full year 2022 +ESG AuM +1 +Continue to grow our ESG AuM through a combination of flows into existing products, flows into new products and supporting the +transfer by existing clients of their assets from non-ESG products into ESG products +€ 133.5 bn. € 117.0 bn. +Scope 1 and 2 operational emissions +2 +Achieve a minimum 46% reduction of in-scope operational emissions by 2030 compared to base year 2019 (aligned to our 2030 +interim net zero target) +(64)% (63) % +Scope 3 operational emissions (travel – + air and rail) +2, 3 +(42)% (52)% +4 +Scope 3 portfolio emissions (net zero) – +inflation adj. WACI +Achieve a 50% reduction in the inflation-adjusted WACI related to scope 1 and 2 portfolio emissions by 2030 compared to base year +2019 (aligned to our 2030 interim net zero target) +(5.2)% +5 +(6.3)% +6 +Sustainability rating Maintain or improve our CDP (Climate change) B score by 2024 B A- +Proportion of women Achieve 32% of positions at the first management level below the Executive Board held by female executives and 33% at the second +management level below the Executive Board by 2024 +36.2% – 1. level +36.3% – 2. level +34.5% – 1. level +33.0% – 2. level +Volunteer hours per employee Perform 90 minutes of volunteering on average per employee per year by 2024 104 minutes 84 minutes +Corporate engagements Conduct 475 or more corporate engagements per annum by 2024 624 532 +1 + As of period end. For details on ESG product classification, please refer to section ‘Our Responsibility – Sustainable Action– Our Product Suite’. +2 +DWS Group scope 1 and 2 operational emissions and scope 3 rail emissions are determined on a pro-rata average number of effective staff employed (full-time equivalent) basis from Deutsche Bank Group data. +3 +DWS Group flight data is sourced from Deutsche Bank Group and the associated air emissions are calculated using Deutsche Bank Group methodology. +4 +Prior year data updated due to revised methodology (previously (50%)). +5 +Refers to our AuM at the end of 2022 and emissions for 2021 compared to baseline year 2019. Further details are available in the Net Zero Annual Disclosure Base Year 2021 report +(https://www.dws.com/AssetDownload/Index?assetGuid=242d5412-cf67-4ca6-a363-7b70d585bfef&consumer=E-Library). +6 +Refers to our AuM at the end of 2021 and emissions for 2020 compared to baseline year 2019. Further details available in the Net Zero Annual Disclosure Base Year 2020 report +(https://www.dws.com/AssetDownload/Index?assetGuid=96bf52fa-b9cf-42fc-84c9-141abbacb531&consumer=E-Library). + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Responsibility +26 Sustainable Action \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_49.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_49.txt new file mode 100644 index 0000000000000000000000000000000000000000..b1fbf8996dbab8f05da5df3aec7ab3c1ac3e00f3 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_49.txt @@ -0,0 +1,77 @@ +Our Impact on Climate Change +GRI 201-2; 3-3; 305-5 +Highlights +– Cumulative 5.2% decrease in the inflation-adjusted WACI from the 2019 baseline in the first +two years +– Publication of “DWS Coal Policy” – our new policy governing our investments in thermal +coal related activities +Management Approach +To mitigate climate change, transformation is required across all parts of the real economy. +Reflecting on our responsibilities as an asset manager, we are committed to supporting our +clients in navigating this transformation by providing our expertise and bespoke investment +solutions. +Our intention is to become climate-neutral by 2050, in line with the Paris agreement, both at +the operational and portfolio level. As a founding member of the NZAM, we have set specific +net-zero interim targets for 2030 for both levels. In navigating the path to net zero, we intend +to focus on systematic engagement with key stakeholders along the entire investment value- +chain, such as our clients, investee companies but also index providers. Further details on our +engagement can be found in ‘Our Investment Approach’, as well as in our ‘Climate Report’ in +the sections ‘Strategy – Active Ownership’ and ‘Strategy – Our Progress towards Portfolio Net +Zero’. +In our CDP disclosure in July 2023, we reported that for our assets under management in- +scope for net zero targets, the inflation-adjusted WACI had decreased by a cumulative 5.2% +from our 2019 baseline figure in the first two years. +The net zero relevant extract of our latest CDP disclosure including further details on the +methodology, metrics and reconciliation of figures can be found in our Net Zero Annual +Disclosure 2021 (h +ttps://www.dws.com/AssetDownload/Index?assetGuid=242d5412- +cf67-4ca6-a363-7b70d585bfef&consumer=E-Library). +The guiding principle of our actions towards portfolio net zero is to support the transition of +the real economy and to contribute to a real-world reduction in carbon emissions. Therefore, +engagement rather than divestment, remains our preferred mechanism. For further details on +our net zero engagements, please refer to ‘Stewardship’ in the section ‘Our Investment +Approach – Targets and Measures’. +Based on the initial SBTi methodology for Financial institutions (Version 1.0), in October 2021, +we committed to develop a science-based target to be submitted to SBTi for official validation +by October 2023 and intended to publish a Climate Transition Plan. Since then, SBTi further +evolved its methodology and issued a draft Net Zero Standard for Financial Institutions in +2023 which was followed by a public consultation. We contributed to this consultation and +now await the final Net Zero Standard that is expected to be published in 2024. As a result, in +agreement with SBTi, the initial target setting deadline was extended. In consideration of the +final standard, we will refine our decarbonization approach. +Further details on our approach to combatting climate change can be found in our Climate +Report. +Organisational Structure +Our sustainability governance starts with the Executive Board, which has the overall +responsibility for managing sustainability-related risks and opportunities. The Executive Board +is supported by the Group Sustainability Committee, which is empowered to take decisions to +implement our sustainability strategy. The Sustainability Oversight Office supports the Group +Sustainability Committee and aims to ensure effective sustainability governance. Further +details are outlined in our ‘Climate Report – Governance’ in the section ‘Supplementary +Information’. +Opportunities and Risks +As a corporation and fiduciary asset manager, we are committed to measuring, analysing and +managing all material opportunities and risks, including those that relate to climate change. +The policy on ESG integration in the risk management framework (formerly titled +“Sustainability Risk Management Policy”), describes how sustainability risks, including climate +risks, are integrated into our risk management framework. It requires sustainability risks to be +incorporated into our operating model for impacted risk types and business functions. In +2023, we revised the policy by specifying in more detail the consideration of adverse impacts +to the environment and society. +We identified several risk types and dimensions either affecting ourselves or investors that are +impacted by sustainability factors, including climate. This includes investment risks in DWS +managed products related to climate transition and physical climate events, and corporate +risks from our strategic decisions and reputation in the market. Based on their relevance and +materiality, we integrate climate-related risks in our risk management processes. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Responsibility +27 Sustainable Action +The secret tool is a "wrench". \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_5.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_5.txt new file mode 100644 index 0000000000000000000000000000000000000000..1a44deac41c26b0b9387689f33f95714170342ac --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_5.txt @@ -0,0 +1,41 @@ +aim is to initially develop a comprehensive suite of exchange-traded commodities on certain +digital assets in Europe. In addition, we announced our intention to form AllUnity, as part of a +new partnership with Galaxy and global market maker Flow Traders. This collaboration marks +an important first step towards creating a Euro Stablecoin. +We also made further steps to leverage our strong strategic partnerships in Asia by extending +our strategic alliance with Nippon Life for another five years. Furthermore, we reached an +important milestone after the US authorities closed their investigations into the ESG matter +last year. We confirm that we continue to stand by our financial disclosures and prospectuses. +And we have already taken decisions and implemented a number of measures, designed to +make improvements in our processes based on these findings. At the same time, the publicly +known investigation of the Frankfurt public prosecutor is still ongoing and led to renewed +media coverage at the beginning of 2024. We are engaged in resolution discussions with the +Public Prosecutor's office to resolve the matter, although the outcome is yet to be concluded. +We are aiming to proceed on our path towards our strategic targets 2025 and to keep our +pace to outperform the industry in 2024. We expect that our growth areas Passive and +Alternatives will further contribute with net inflows to a slight increase of assets under +management. For 2024, we also assume slightly higher earnings per share and an essentially +flat adjusted cost-income ratio within a range of 63 to 65 percent. +Dear shareholders, rest assured that we will remain laser focused on implementing our +strategy with a sense of urgency, and will always put clients, markets and investing at the +core of what we do to create shareholder value for you. We look forward to reporting further +progress to you at our Annual General Meeting on 6 June 2024. +Sincerely yours, +Dr Stefan Hoops +Chief Executive Officer + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Letter of the Chief Executive Officer +III \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_51.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_51.txt new file mode 100644 index 0000000000000000000000000000000000000000..66ffe4626bf4e3d7257187c18d98015e2edbfbf1 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_51.txt @@ -0,0 +1,73 @@ +Our Approach to Biodiversity +Already in 2022, the DWS Research Institute highlighted the growing importance of the Earth +systems’ nexus of climate, biodiversity, land, water and oceans, for the investor agenda. This +laid the foundation for the latest research report published in 2023. +Biodiversity-related metrics are already part of our overall scores within our ESG Engine, for +example our metrics on sustainable land and agricultural use or SDG 15: Life on Land. In +addition, as part of our disclosure on Principal Adverse Impacts (PAI), our legal entities in +scope of SFDR report on biodiversity-related factors (e. g., PAI 7 “activities negatively +affecting biodiversity-sensitive areas”). +Based on our engagement framework for DWS Investment GmbH, DWS International GmbH, +DWS Investment S.A. and DWS CH AG we had a number of investee engagements focused on +biodiversity and deforestation topics in 2023. +In 2023, we launched our first biodiversity-themed product range with three Xtrackers ETFs. +The listed index funds provide exposure to equities exhibiting lower biodiversity-related risk +relative to their sector peers and exclude business activities negatively impacting biodiversity. +Our Approach to Water and Oceans +In 2023, the DWS Research Institute published reports on the hidden costs of water pollution +and implications of temperature increases in the oceans. +Water-related metrics are part of our overall scores within our ESG Engine, for example the +water risk and opportunities score (within climate and transition risk assessment). +Water has been a regular topic in our engagement activities, specifically setting out +expectations for better water-related disclosure practices, third-party certifications to verify +positive impacts on water, or engagement with suppliers to improve their capacity to comply +with the company’s water-related polices. In 2023, a number of company engagements +focused on water and blue economy topics. As part of our membership in the Valuing Water +Finance Initiative, we continued to engage with a European apparel company. In that context, +we also conducted a webinar in collaboration with Ceres on the initiative’s progress in +engaging with water intensive and polluting companies. +Organisational Structure +Biodiversity and water topics are managed by various teams in a multi-disciplinary approach. +Our Product Suite +Highlights +– Our ESG framework for actively managed retail funds domiciled in the EU has been further +enhanced through the adjustment of our ESG filters. +– The Xtrackers business further broadened the European-domiciled ETF product line-up with +additional social, climate, and biodiversity themed offerings. +– As a strategic business priority, we aim to support the transformation of European +economies to meet increasing demand for private capital and bridge financing gaps. +Management Approach +As outlined in the section ‘Our Strategy and Our Market – Our Strategy’, we updated our +sustainability strategy in 2023. Subsequently, within the Product Division, dedicated +initiatives and working groups have been established to implement this strategy on the +product level. +Most of our European domiciled actively managed retail funds continue to apply one of two +DWS ESG filters: “DWS ESG Investment Standard” or “DWS Basic Exclusions”. The “DWS +Basic Exclusions” filter represents our basic approach to incorporating certain exclusions in +the investment policy of the relevant fund. Products applying this filter only are excluded from +the 2023 ESG AuM number. The “DWS ESG Investment Standard” filter enhances the +exclusions in comparison to the “DWS Basic Exclusion” filter. Products applying this filter are +included in the 2023 ESG AuM number. +In 2023 we further amended the DWS ESG filters taking into account amongst other topics +the requirements of our DWS Coal Policy. For funds reporting under Article 8 and 9 SFDR we +also excluded companies without ESG data coverage in the “DWS Norm Assessment” to +ensure compliance with good governance practices. Additional adjustments in the “DWS ESG +Investment Standard” filter include the introduction of new exclusions in controversial sectors +as well as the introduction of the “UN Global Compact Assessment”. +Over the course of 2023, the Xtrackers business continued to increase the number of +European-domiciled ETFs which promote environmental or social characteristics with the +launch of 26 new ETF sub-funds disclosing under Article 8 SFDR. +Such product launches included the expansion of the range of ETFs investing in companies +related to the achievement of the United Nation’s SDGs, additions to ranges of Climate +Transition and Paris-Aligned ETFs, in line with the relevant EU Climate Benchmark Delegated + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Responsibility +29 Sustainable Action \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_54.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_54.txt new file mode 100644 index 0000000000000000000000000000000000000000..6172d27e4ceced8ed40573e9526c31614ac5b472 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_54.txt @@ -0,0 +1,80 @@ +Involvement of our Research Institute +Our Research Institute is responsible for producing research on key investment themes, ESG +thematic reports and DWS’s long view ten-year return forecasts. The team acts as a key +channel for delivering thematic research reports produced in the investment teams across the +Group. In 2023, the ESG Thematic Research team continued to publish reports on solutions to +European Transformation such as electrification of transport, alternative fuels, energy +efficiency, and direct lending to small and medium sized companies. The Research Institute +also continued its focus on nature by publishing articles on fresh water and the oceans and +the first of a series of reports on biodiversity focused on regulations. The third report on ESG +in Strategic Asset Allocation was also published. Reports were also published to support new +Xtrackers product launches on thematic investing, green infrastructure, semi-conductors, +cybersecurity, critical technologies and navigating the climate indices as well as European +carbon allowances. +Opportunities and Risks +Human Rights and Norm Assessment +In recent years, countries such as Germany, France, UK, and Australia made laws on +corporate accountability for topics such as human rights, which require larger companies to +identify risks related to violation of human rights and environmental destruction. The United +Nations Guiding Principles on Business and Human Rights clearly expect companies to +operate to a higher international standard where national laws do not sufficiently respect +human rights. +Investee companies can have an impact on the human rights of their employees and workers +along their value chain as well as local communities. We incorporate the obligation to +consider human rights issues in relevant internal policies and frameworks. Additionally, our +norm assessment incorporates, among other factors, human rights controversies. These +norm assessments are available to our investment professionals so that they can integrate +these signals and material risks into the preparation of engagement discussions, investment +research analysis and subsequently into investment decision making. Furthermore, we also +carried out thematic engagements on human rights in Myanmar and Belarus in 2023. Please +refer to the next section for respective international norms and guidelines applied in the +process. +ESG Data +Given the rapid changes taking place in the world of ESG, we have processes in place that are +designed to incorporate changes into the ESG Engine in a reasonable time. Such processes +are required, for example, to enable us to meet specific client needs, or comply with +developments in regulatory reporting requirements. The processes are run by the ESG Engine +and Solutions Team and under the governance of the ESG Methodology Council. +Targets and Measures +Incorporation of ESG in the Active Investment Process +Our policies and procedures are regularly reviewed and updated where necessary. The +Investment Division’s policies and statements are guided by the PRI Initiative, client needs, +regulatory requirements, other initiatives and stakeholder views including NGO’s. +Some of these policies and statements apply globally, others are regional and/or national in +scope or only applicable to certain portfolio management teams. The applicability is a +function of the nature of the matter concerned and and relevant market standards. +Investment professionals, for the relevant legal entities within Active, are subject to the ESG +Integration Policy for Active Investment Management. Jurisdictional differences, as well as +different regulatory requirements, may lead to differences in the implementation of the policy. +However, our investment professionals are expected to be aware of material ESG matters +and, subject to the foregoing differences to comply with internal processes and legal, +contractual, and regulatory obligations. +Stewardship +The Corporate Governance Center +In line with our commitment to fostering good corporate governance and in accordance with +our stewardship approach for our largest management companies in Europe (DWS +Investment GmbH, DWS Investment S.A. and for specific portfolio management mandates of +DWS International GmbH), we sent an annual pre-season letter to more than 3,700 investee +companies early in the year. The letter elaborated on key changes to our Corporate +Governance and Proxy Voting Policy prior to the proxy voting season. During the 2023 proxy +voting season, we raised questions at a total of 70 shareholder meetings, as published at +https://www.dws.com/en-gb/solutions/sustainability/corporate-governance/ +. The team also +sent individualised post-season letters to more than 850 of our investees. These letters +highlighted where we voted against management recommendations that failed to comply +with the DWS Corporate Governance and Proxy Voting Policy. +One of our priorities in 2023 was to progress on our 2020 net zero commitment. In support of +our ambition, we continued to send thematic engagement letters to 80 additional companies +with high WACI portfolio contribution in 2023. In the letter we set out our expectations, +informed the companies of our voting strategy and requested detailed information about their + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Responsibility +32 Sustainable Action \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_55.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_55.txt new file mode 100644 index 0000000000000000000000000000000000000000..3efae338046946b294e28ea0a67501c427382ed5 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_55.txt @@ -0,0 +1,72 @@ +net zero strategies. In 2023, as part of our thematic net zero engagement programme, we +conducted 214 dedicated net zero engagement activities. +In line with our new DWS Coal Policy, we sent engagement letters to 27 investee coal +companies, communicating the relevant aspects of the DWS Coal Policy and our expectations +that they accelerate their phase-out from coal and publish transition plans by end of 2025 at +the latest. More details can be found in our Climate Report in the section Our Progress +towards Portfolio Net Zero. +We regularly review and update our Corporate Governance and Proxy Voting Policy for DWS +Investment GmbH, DWS International GmbH and DWS Investment S.A. to reflect +developments in regulation and/or market best practices. In 2023, the changes covered +decarbonisation shareholder proposals, executive compensation, and Japan, among others. +Examples of changes are: +Say on Climate and Shareholder Proposals on Decarbonisation: +A new section in our Corporate Governance and Proxy Voting Policy lays out our minimum +expectations on carbon transition plans including oversight of climate issues, TCFD reporting +and setting targets that cover all relevant emissions based on a credible science-based +methodology. We have further expanded our expectations towards our investee companies +on the following topics: +— thermal coal phase-out +— inclusion of emissions reduction targets into the executive compensation plans +— CAPEX alignment with their respective GHG emission reduction target +— climate lobbying for investee companies with high carbon exposure +Executive Compensation: +In the context of challenging economic conditions, our amendments focused on pay-for- +performance alignment and appropriate pay structures, such as performance metric selection +within the annual bonus and long-term incentive plan and fixed salary increases. +Japan: +We reviewed our expectations for large-cap Japanese investee companies given the +development of corporate governance topics in the Japanese market. We still expect at least a +majority of independent board members and 25% female board representation for prime- +listed companies. +ESG Assessment Activities +The ESG Engine activities are driven by the business, regulation and clients' demands and are +monitored by the ESG Methodology Council. +The focus in 2023 was on streamlining the governance processes around the ESG Engine and +to support the Product Division in their restructuring of DWS investment guidelines pertaining +to ESG investments. In addition, core ESG methodologies were reviewed and/or revised as +well as validated by the DWS Model Risk Validation team. +The quality and actuality of ESG assessments provided by the ESG Engine is reviewed by the +Sustainability Assessment Validation Council upon request. In 2023, there were 216 reviews +including 24 downgrades, and 10 upgrades. +ESG Integration Activities +In 2023, the ESG Integration team continued to support the investment platform in several +areas. It: +— introduced a comprehensive control framework that is designed to ensure compliance with +the ESG Integration policy for Active Investment Management. +— continued to engage with investment professionals on ESG integration topics. +— provided global training sessions on new ESG methodologies, updated policies, and +preparation for ESG analyst certification. By the end of 2023, an additional 346 colleagues +qualified as certified ESG analysts (please refer to the section ’Our Responsibility – +Entrepreneurial Spirit’ for further details). +— continued with sector global materiality workshops to assist investment professionals in +their identification of material ESG issues. +Our Engagement Framework +We continue to operate an engagement framework for DWS Investment GmbH, DWS +International GmbH, DWS Investment S.A. and included DWS CH AG in 2023, which is +designed to define engagement targets and track engagement outcomes for our investees. +The engagement framework is supported by a regional Engagement Council which meets on +a regular basis to discuss and review engagement related topics. The Engagement Council +members also discussed changes to the engagement priority list, based on the selection +criteria and reviewed relevant thematic engagement letters. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Responsibility +33 Sustainable Action \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_56.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_56.txt new file mode 100644 index 0000000000000000000000000000000000000000..c2784dfa4f994c5d8ca99b429d6d801fe998d383 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_56.txt @@ -0,0 +1,97 @@ +For the DWS equity holdings that are in the scope of our Corporate Governance and Proxy +Voting Policy applicable to the pooled legal entities (as executed by DWS Investment GmbH), +624 engagements were conducted in 2023. +Proxy Voting Activity +In 2023, for funds and mandates domiciled with our legal entities in Europe and Asia, we +submitted votes at a total of 5,646 general meetings at 4,068 investee companies across +62 markets. This is an increase of 40% of companies voted compared to 2022. +These meetings represented approximately 95% of our equity assets under management in +Europe and Asia. For the mutual funds domiciled in the US, we also exercise voting rights for +all equity holdings and in 2023, we voted at a total number of 9,354 meetings. +Proxy voting and corporate engagements +2023 2022 % change +Proxy voting: +For mandates and funds domiciled with our legal entities in +Europe +1 + and Asia +2 + (submitted votes +3 +) 5,646 3,857 46 +Companies votes submitted to +3 + 4,068 2,897 40 +For mandates and funds domiciled with our legal entities in the US +(submitted votes) 9,354 9,340 0 +Companies votes submitted to 6,791 6,777 0 +Annual General Meeting attendance/questions sent to +company boards for virtual/physical shareholder meetings for +funds and mandates domiciled in Europe +1 + 70 64 9 +Corporate engagements for funds and mandates domiciled in +Europe +4 + 624 532 17 +1 + DWS Investment GmbH (with discretion to vote for certain assets under management of DWS International GmbH, +DWS Investment S.A. (including SICAVs and PLCs) based on delegation agreements). Other DWS legal entities may +have their own voting process based on different local regulatory requirements. +2 + DWS Investment GmbH acts as a proxy advisor for the two separate DWS legal entities in Hong Kong (DWS +Investments Hong Kong Ltd.) and Japan (DWS investments Japan Ltd.), for which DWS Investment GmbH provides +voting recommendations and the voting rights and voting execution lies with the respective Hong Kong and Japan +entity. +3 +Of these, votes at 59 meetings at 55 companies were rejected. Out of these 55 companies, 4 companies had other +successfully voted meetings. +4 +The engagement framework applies to the following legal entities: DWS Investment GmbH, DWS Investment S.A. +(including SICAVs and PLCs), for certain assets of DWS International GmbH and DWS CH AG. +More details on our engagement and proxy voting activities for 2023 can be found in our DWS +Stewardship – Engagement and Proxy Voting Report 2023, once published. For details about +Stewardship in 2022, please see https://www.dws.com/AssetDownload/Index? +assetGuid=85963db4-1682-4369-8172-78b917aa0ece&consumer=E-Library +Contribution to Action on Climate Change +GRI 201-2 +Throughout 2023, we continued to focus on fundamental ESG thematic research, engaging +with third parties and ensuring that ESG themes are discussed in the DWS CIO View. Various +topics including physical climate risks and Sustainable Development Goals (SDGs) were part +of our CIO Day. +ESG in Alternatives +Illiquid investments comprises direct investments into unlisted real estate, infrastructure +(both via debt or equity) and private equity. The inherent differences between the liquid and +illiquid asset classes require that the approach to incorporating ESG for Alternatives be +tailored specifically to the relevant Alternatives asset classes as outlined in the sections +below. In general, the incorporation of ESG into the illiquid investment process takes place +during investment due diligence and portfolio management. +ESG in Real Estate Investments +GRI 203-1 +Our real estate business recognises the importance of identifying, assessing, and managing +sustainability-related risks and opportunities as an integral part of conducting business. DWS +Real Estate focuses on the following ESG aspects, which are material for real estate equity +and/or debt investments: transitional (e. g., a building’s energy efficiency), physical (e. g., +flooding risk), social norms (e. g., well-being sustainability rating) and governance (e. g., third- +party risk rating of a debt sponsor). These ESG aspects can present both risks and +opportunities for the financial performance of real estate assets, and investments may have +positive and negative environmental and social effects. +Therefore, DWS Real Estate takes a fiduciary-led approach to ESG aspects and sustainability +performance in private real estate investment management, defining a range of operation +between ESG and financial risk boundaries. The ESG risk boundary relates to risks where +appropriate actions to assess and manage ESG aspects, if not undertaken in good time, could +result in negative impacts on sustainability and long-term expected financial performance of +the asset or portfolio. The financial risk boundary relates to negative effects of inappropriate +sustainability actions (e. g., actions that are ill-timed, or too extensive) on compliance with the +investment objectives. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Responsibility +34 Sustainable Action \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_57.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_57.txt new file mode 100644 index 0000000000000000000000000000000000000000..7424ddc599a97b5ef4c6373d38b96062a7ef51ab --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_57.txt @@ -0,0 +1,75 @@ +DWS Real Estate has identified eight sustainability topics, which are most relevant for real +estate investment management, and grouped them into the following four sustainability +themes: +— Resilience, encompassing efficiency in construction and operation, and asset adaptation to +external conditions +— Well-being, encompassing physical and mental occupant comfort and air quality +— Nature, encompassing circularity in buildings and protection of ecosystems from pollution +— Community, encompassing housing affordability and stakeholder engagement +Sustainability objectives on portfolio level are considered in relation to the investment +strategy, contractual financial requirements, market and regulatory conditions and specific +client expectations and formalized in a portfolio-specific sustainability strategy. ESG aspects +and sustainability performance are important elements of consideration in each phase of the +real estate investment process. This includes both risks and opportunities analyses informing +acquisition, asset management and disposal decisions. Identified actions are assessed +against accretive returns objectives and integrated in sustainable asset management plans +accordingly. +Sustainability Benchmarking and Certification in Relation to Real Estate +In order to provide transparency to our investors, we report into the Global Real Estate +Sustainability Benchmark (GRESB), which provides an independent assessment of portfolios +and funds using a peer-based approach and scoring based on several ESG metrics. In 2023, +we reported 20 individual portfolios to GRESB, covering USD 61.8 billion AuM. +Aggregated across all portfolios, using the GRESB analysis feature, in 2023 we achieved a +30/30 Management score, compared to the GRESB average of 28. Management component +covers governance categories such as leadership, policies, reporting and stakeholder +engagement. Furthermore, the aggregated portfolio achieved a performance score of 51/70, +as compared with the GRESB average of 52. Performance component measures issues such +as certifications and ratings, carbon, energy, water and waste performance. Eight portfolios +achieved four-star GRESB rating (five stars is the highest rating). In addition, all 20 portfolios +achieved Green Star recognition. Other than the GRESB Rating, which is a relative rating, the +GRESB Green Star is a rating on absolute performance. For more information, please see +https://www.gresb.com/nl-en/faq/what-is-a-green-star/. +ESG in Infrastructure Investments +GRI 203-1 +We seek to incorporate ESG considerations into the investment framework of the +Infrastructure business at all stages of the investment lifecycle for equity investments, from +the initial screening and due diligence to the asset management and exit stages. During the +holding period, we monitor the ESG attributes of the investments through the regular +reporting of KPIs to us from the portfolio companies, and through completion of the annual +GRESB Infrastructure benchmarking assessment at both fund and asset level. The KPIs cover +ESG issues such as carbon footprint, water usage, health and safety indicators and diversity +and inclusion metrics at both staff and board levels. Our due diligence also considers +governance topics such as fraud, bribery, sanctions and compliance, as required. Findings +from the due diligence phase are incorporated into the Investment Committee paper and +presented to the Investment Committee for consideration. +The Infrastructure business also places emphasis on reporting, producing an annual +Sustainable and Responsible Investment report for investors. Infrastructure achieved a 5* star +rating in the UN PRI assessment for the calendar year 2022 which was published in 2023. +During 2023 we updated the Environmental and Social Management System under which the +business operates in order to reflect changes in the ESG environment and to strengthen our +procedures. It has also been updated to reflect our obligations under SFDR and investor +requirements. The Environmental and Social Management System applies to potential and +existing portfolio investments in infrastructure equity. Furthermore, it also creates a process +for regular engagement with portfolio companies on ESG matters and a framework for their +regular reporting to us. +As a result of this regular reporting and engagement, we aim to help drive improvements in +ESG metrics and performance at our portfolio companies with a view to improving the +businesses' sustainability credentials and to create value. +The infrastructure approach to ESG is summarised by the following 3 pillars: +– Governance: The Infrastructure business is governed by the Environmental and Social +Management System, which provides the overarching framework, processes and +governance for our ESG integration approach in Infrastructure. +– ESG assessment process: We have an ESG checklist which should be completed during the +acquisitions process for all prospective equity investments. The findings should then be +incorporated in the Investment Committee memo. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Responsibility +35 Sustainable Action \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_58.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_58.txt new file mode 100644 index 0000000000000000000000000000000000000000..7fa57745584b741891181c84fd79fbb39be4450b --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_58.txt @@ -0,0 +1,64 @@ +– Monitoring: As part of the asset management process, we seek to collect data on key ESG +metrics within each of the operating companies. This information is then used to better +refine our asset management strategies and is also reported to our investors in the form of +a Sustainable and Responsible Investment Report. Certain KPIs, such as those around +occupational health and safety, are also embedded into the performance review process for +the operating companies. +The infrastructure debt business, in collaboration with our research teams, developed a +bespoke proprietary ESG scoring methodology, which has been in use since 2021. The +methodology supports the overall investment process and ongoing monitoring of +environmental risks. It is designed to guide the ESG due diligence process and to assign an +ESG assessment to each potential investment, based on a pre-defined set of ESG KPIs, which +are sourced from the borrower/sponsors, external advisors or public sources. +ESG in Sustainable Investments Funds +Our Sustainable Investments team creates solutions for institutional, private investors, +development banks, and governments, who share common social and environmental +investment objectives and seek attractive financial returns. The business is organized around +three components: +— Financial Inclusion/Microfinance +— Social Enterprise Financing (agriculture, health, and energy) +— Energy Efficiency/Renewable Energy +The Sustainable Investments team represents experienced global investing capabilities that +include several regionally-focused strategies in Europe, Africa, and Asia. +Client Commitment +GRI 2-25; 2-26; 3-3 +Highlights +– After two years virtually, the “DWS Investmentkonferenz” took place in person again +– Client satisfaction survey for top clients shows very good results +– The overall volume of client complaints trended significantly down +Management Approach +The Client Coverage Division aims to serve the investment needs of clients across all +segments and regions by offering tailored portfolio management services. We aim to build +long-term and trusted client relationships, deliver the best investment solutions and the +highest quality client service. We conduct business in accordance with our fiduciary duties +and in the best interest of our clients. Our relationship managers work collaboratively with +product specialists, portfolio managers, and client service specialists to bring suitable +investment products and solutions to our clients. We provide ongoing training to our staff on +various topics, including investment research, macroeconomics, ESG and new product +solutions, with the aim of best serving our clients. As we did in previous years, we also +continue to provide seminars, conferences and webinars to our clients. +We refer to institutional investors and intermediaries as clients, also for the purpose of this +report. The terms “end-users” and “consumers” relate to retail investors. Those are not clients +of DWS, but investors into our mutual funds and ETF products and therefore not in scope. +Organisational Structure +We interact with our clients in various ways and formats seeking continuous dialogue. +The Division has global presence with relationship managers in Germany, EMEA, APAC and +the US. We have over 30 locations spread across all regions and thus offer our clients contact +with relationship managers on site. The Division's leadership team spans across all regions +and our asset classes Active, Passive including Xtrackers and Alternatives. +In addition to daily interactions, there are several important client events. After two years on a +virtual basis, one of our largest client events, the “DWS Investment Conference”, took place at +the Alte Oper in Frankfurt am Main with around 1,200 registered participants. In May 2023, +the “Investorendialog” was held with our institutional clients. In addition to the client events +in Germany, further events in hybrid format took place in other countries. Our client service + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Responsibility +36 Client Commitment \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_59.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_59.txt new file mode 100644 index 0000000000000000000000000000000000000000..d6cdbbf9e4573f86a57e9d209c89b3b8ba30662d --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_59.txt @@ -0,0 +1,71 @@ +teams offered a range of webinars on various topics including geopolitical and social change +as well as digital and sustainable transformation. Beyond that, our clients were served with +Research House articles and our DWS CIO view. +Opportunities and Risks +To assess client experience and minimize risks, we review complaints on an ongoing basis. +Although we distinguish between clients and investors, as described above, all complaints +raised by clients and investors are handled according to the same standards. We are +committed to handling all complaints fairly, effectively, and promptly. Our complaint registers +provide valuable insights into how we are performing from our clients’ perspective. A robust +and consistent client complaint handling process as well as transparent reporting help to +process these insights. We aim to identify and remediate client outcomes, to learn from them +and train our client-facing staff accordingly.The goal is the reduction of mistakes, the +enhancement of risk transparency, and management information. +Minimum requirements for handling complaints are stipulated in the DWS Group Complaints +Policy. Client Coverage staff will investigate each complaint thoroughly and notify our clients +and investors about the outcome. Additional information regarding client complaint handling +is available on our website. +Process controls by managers should ensure that all received complaints have been handled, +logged, investigated, resolved and reported in accordance with regulatory requirements. +Furthermore, a central DWS Complaint Management function has been established to report +material complaints to relevant internal boards. We also report to supervisory authorities +when required by regulation. +In 2023, the number of complaints raised by clients and investors dropped significantly +compared to 2022 (minus 62 percent). The extraordinarily higher level in the previous +reporting period was caused by a concerted action of protest mails addressed to us. The +volume of complaints logged in 2023 fairly reflects the ordinary business, with majority of +complaints raised by retail funds investors. +Targets and Measures +We value feedback from our clients on their experience with us, to help us improve our +service. +To measure client satisfaction globally in a consistent way, a new client satisfaction survey +with our top 50 global clients, including our strategic distribution partners, was published as a +pilot project in 2022 using the net promoter score methodology. The survey aims to enhance +client experience and to further strengthen client centric orientation. The net promoter score +rates the likelihood of recommending us to a business contact. We achieved a score of 50% +(on a minus 100% to plus 100% scale) in this pilot. Senior management regularly reviews +interim results and compares internal scores against the industry benchmark to set ambitious +targets for improving client satisfaction. +In 2023 we conducted the second annual survey for these top clients with an additional 120 +key clients. The 2023 score was also at 50% across all clients. To determine development +year over year, we aim to repeat the survey for the same population again next year. An +additional expansion of the client satisfaction survey is being discussed. +In addition, we conduct further internal and third-party client satisfaction surveys, which +enable us to gain a 360-degree view of our client services. +In Germany, annual client satisfaction surveys were conducted for our clients and distribution +partners. Two options were offered to clients, a “Voice Survey” over the phone and an “E-Mail +Survey”. Clients and advisors rated their satisfaction on friendliness of staff, professional +competence, comprehensibility and solution orientation as well as sales-specific questions. +The results were communicated to relevant internal stakeholders, including senior +management, service centre staff, and the workers' council. Based on the feedback, we +formulate steps for improvement which we incorporated into employee training. +The overall participation rate was 9% in 2023 and client satisfaction was rated very high. +Based on our client feedback in the business-to-consumer survey, measures were +implemented to improve the quality of e-mail services. +In the US, we conduct annual client satisfaction surveys for our insurance clients which is +focused on investment performance, client service, innovation and overall satisfaction levels. +The survey has shown a consistently positive overall satisfaction rating of over 90% for the +last five years. +We strive to process findings from client satisfaction surveys and complaints quickly to +implement them accordingly. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Responsibility +37 Client Commitment \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_6.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_6.txt new file mode 100644 index 0000000000000000000000000000000000000000..bc0d1d458322a7e551f99903d11a214ef4fd5acb --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_6.txt @@ -0,0 +1,45 @@ +Managing Directors of the General Partner DWS Management GmbH +(collectively referred to as the Executive Board) +Dr Stefan Hoops, * 1980 +Chief Executive Officer and Head of Executive Division (since 10 June 2022) +and Head of Investment Division (since 1 January 2023) +Manfred Bauer, * 1969 +Head of Product Division (since 1 July 2020) +Dirk Goergen, * 1981 +Head of Client Coverage Division (since 1 December 2018) +Dr Markus Kobler, * 1967 +Chief Financial Officer and Head of CFO Division (since 1 November 2023) +as well as Head of COO Division (since 1 January 2024) +Dr Karen Kuder, * 1973 +Chief Administrative Officer and Head of CAO Division (since 1 November 2022) Executive Board in the reporting year: +Dr Stefan Hoops, * 1980 +Chief Executive Officer and Head of Executive Division (since 10 June 2022) +and Head of Investment Division (since 1 January 2023) +Manfred Bauer, * 1969 +Head of Product Division (since 1 July 2020) +Dirk Goergen, * 1981 +Head of Client Coverage Division (since 1 December 2018) +Dr Markus Kobler, * 1967 +Chief Financial Officer and Head of CFO Division (since 1 November 2023) +Dr Karen Kuder, * 1973 +Chief Administrative Officer and Head of CAO Division (since 1 November 2022) +Angela Maragkopoulou, * 1976 +Chief Operating Officer and Head of COO Division (from 1 January to 31 December 2023) +Claire Peel, * 1974 +Chief Financial Officer and Head of CFO Division (until 30 September 2023) + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Executive Board +IV \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_60.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_60.txt new file mode 100644 index 0000000000000000000000000000000000000000..6d80f81a8b256e958093948b32a1a04cc508e68d --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_60.txt @@ -0,0 +1,75 @@ +Entrepreneurial Spirit +Highlights +– We launched our Positive Performance Culture initiative as a strategic enabler to our +Capital Markets Day commitments. +– We established our Leadership Kompass to set a clear standard of leadership behaviour +across DWS. +– We reaffirmed our commitment to our hybrid working model guidelines. +Management Approach +We continuously invest in our diverse mix of people, empowering them to make change and +fostering their creativity, courage and long-term thinking. +Employees and Workplace +In 2023, we continued to prioritize sustainable people management across DWS to develop +managers and leaders and to support our employees. Our people strategy focused on a +culture of excellence and inclusive decision making, enabled by a strategically aligned +workforce and a “Positive Performance Culture” initiative was established as an enabler to +our strategic initiatives. This sets out to enhance and evolve our performance culture, focus +on leadership development, strengthen performance management, and establish stronger +linkage between performance and reward. +Our key areas of focus have included: +– Launching our Leadership Kompass at DWS +– Training for employees on their first management assignment and improved guidance for +managers +– Continuation of our Functional Role Framework to support career progression +– Piloting Learning Pathways using our AI-driven learning platform +Diversity and Equal Opportunities +GRI 3-3; 405-1 +We are committed to building an inclusive culture that respects and embraces the diversity of +our colleagues, clients, and communities and that nurtures an environment where every +perspective matters and where every voice is heard. +With colleagues across 70 nationalities, speaking more than 78 languages, locally rooted, yet +globally connected across 21 countries, we celebrate our differences, treat each other with +respect, listen openly without judging, and value each other’s insights. This brings us closer +together and contributes to a thriving and inspiring workplace. +We aim to attract, develop, and retain the best people from all cultures, countries, races, +ethnicities, genders, sexual orientations, abilities, beliefs, backgrounds, age groups and +experiences. To this end, we follow an integrated and multi-dimensional approach to +Diversity, Equity and Inclusion (DE&I). We also aim to offer part-time employees the same +opportunities as full-time employees. This year the percentage of employees globally who +work part time stood at 6.1% (2022: 7.1%). +As part of our broader sustainability strategy and our human rights commitments, we worked +on the following DE&I areas: +– Continuing to reach voluntary goals at the Supervisory Board and Executive Board-1 and +Executive Board-2 levels per the German Gender Quota Law (FüPoG – Erstes +Führungspositionengesetz). Our efforts will also continue to align us to the German +Executives Positions Act II (FüPoG II – Zweites Führungspositionengesetz). Proportion of +women is one of the KPIs that we are tracking internally with continued success in meeting +our voluntary goals. +– Establishing a Global DE&I working group to further progress across our regions. +— Hosting our third annual “Day in the Life of an Asset Manager” event in the US by hosting +students of diverse backgrounds across 12 universities to inform them more about the asset +management profession and opportunities at our firm. +– Building and expanding our advancing diverse talent programme in the US. +– Introducing a disability smart focus in the UK working towards the UK Government +Disability Confident scheme to become a disability confident employer. +– Increasing opportunities for social mobility in the UK by partnering with upReach, The Skills +Workshop and 10,000 Black Interns for the second year running to offer work experience, +mentorship and skills training to students from lower socio-economic backgrounds or black +heritage. +Employee Inclusion and Engagement Networks +Our internal employee inclusion and engagement networks are spearheaded by colleagues +across all regions. Many leverage diversity in its broadest sense – from race, colour, religion, +age, physical or mental disability, medical condition, sexual orientation, gender and veteran +status — to create a greater sense of purpose for their employees, the Group and themselves. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Responsibility +38 Entrepreneurial Spirit +The secret animal #2 is a "kangaroo". \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_61.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_61.txt new file mode 100644 index 0000000000000000000000000000000000000000..5d75702e851fb46f834ff8b8729c344692d71f93 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_61.txt @@ -0,0 +1,86 @@ +The networks inspire inclusiveness in our daily interactions. They are voluntary, employee-led +groups, driven by a common purpose: making a better workplace – for everyone. By sharing +information, educating, and engaging with our communities, they contribute to business +development as well as recruitment, retention, and professional development. They are open +to all employees. +Continuing our Focus on Gender Diversity +Our aspiration is for greater female representation across DWS and we continue to monitor +and report on our progress to the Executive Board. Individual goals and targets form part of +Balanced Scorecards allocated to senior leaders across the firm – and these are aligned to +performance evaluation and compensation. +Gender diversity +Target 2023 2022 +Women on the Supervisory Board of DWS KGaA 30.0% +1 + 41.6% 33.3% +Women on the Executive Board of DWS KGaA 1 +2 +2 3 +Executive positions on the first management level below the +Executive Board held by women 32.0% +3 + 36.2% 34.5% +Executive positions on the second management level below +the Executive Board held by women33.0% +3 + 36.3% 33.0% +1 + For the supervisory board of a listed, co-determined company, a minimum quota of 30 percent women has already +applied since the FüPoG of 2015 in accordance with Section 96 (2) German Stock Corporation Act. +2 + According to FüPoG II, listed companies which have more than 2,000 employees, must fill one position with a woman +and one with a man on their executive and administrative boards with more than three members. +3 + By December 2024. +We are also committed to ensuring that: +– We increase diversity in decision making bodies which include voting committees, legal +entity boards, and other bodies. +– We reflect gender diversity within our product range, e. g. DWS Invest ESG Women for +Women. +– We participate in the Gender and Ethnicity Pay Gap Report of Deutsche Bank Group in the +UK. +In Germany, the German Remuneration Transparency Act (EntgTranspG) offers employees +the right to request specific aggregated information about the remuneration of employees of +the opposite gender in comparable jobs. As a global company, we continue to look forward to +monitoring and reporting on our progress. +EEO-1 Reports +We published our consolidated EEO-1 reports for the US workforce. The EEO-1 report is a +mandatory annual data collection that requires all private sector employers with 100 or more +employees to submit demographic workforce data including data by ethnicity, sex and job +categories to the US Equal Employment Opportunity Commission on an annual basis. +External Partnerships +In nurturing an inclusive work environment we have developed several key external +partnerships across the globe. These partnerships not only help us to drive our internal +agenda, but they also enable us to share good practice and to positively impact the societies +we are operating in. +They include: +– DWS and Fondsfrauen organised an event for young professionals with the aim of raising +females quota in DWS +– Financial Supporter of Level20, a not-for-profit organization dedicated to improving gender +diversity in the European private equity industry +– Joined the Human Rights Campaign’s Business Coalition opposing Anti-LGBTQI+ State +Legislation and also signed in support of the Respect for Marriage Act +– In 2023, DWS completed the Human Rights Campaign Foundation’s Corporate Equality +Index and received a score of 95 out of 100. The index is the national benchmarking tool on +corporate policies, practices and benefits pertinent to lesbian, gay, bisexual, transgender +and queer employees. +– Founding member of Morgan Stanley’s diversity and inclusion initiative “The Equity +Collective”. The group is comprised of 27 leading wealth and asset management firms that +work to empower the next generation of diverse leaders. +– Sponsors for Educational Opportunity which provides access and opportunities for students +who have been historically excluded from industries across Wall Street and corporate +America, including Black, Latino, and Native American undergraduates. SEO programs offer +access to internships, intensive training, and coaching +For more information please refer to the table in the section ’Supplementary Information – +Stakeholder Engagement’. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Responsibility +39 Entrepreneurial Spirit \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_62.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_62.txt new file mode 100644 index 0000000000000000000000000000000000000000..9b24265252b05310f124cbd5812f74bf6dce5d22 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_62.txt @@ -0,0 +1,71 @@ +Remuneration Strategy +GRI 2-19 +A key aspect of remuneration strategy is our compensation framework which embodies the +“pay for performance” principle and ensures that all contributions to our success are +appropriately recognized and rewarded. ESG measures, alongside others, are integrated as +key performance indicators within the framework. These measures are linked to employee +compensation to reflect the importance of ESG considerations. +Having included our teams in India and the Philippines in our compensation framework in +2023, we now apply one unique compensation framework across DWS. +For more information please refer to the section ’Compensation Report’. +Organizational Structure +We aspire to offer a workplace where creativity and ideas are supported and where individual +strengths, different backgrounds and broad perspectives are valued. +The Global Head of HR reports to the Chief Administrative Officer who is a Member of the +Executive Board. Many of our HR colleagues are assigned to international teams. Regional +Human Resources managers are responsible for our Americas, APAC, EMEA, Germany and +UK locations. +The areas of responsibilities of HR include the development, implementation and +maintenance of DWS’s compensation framework; delivering workforce capabilities; and +providing strategic consultation advice and support on all people-related matters. This +includes, but is not limited to, recruitment and onboarding, performance management, +training and development, and recognition and reward. +Opportunities and Risks +Employee Engagement +GRI 2-16; 2-26; 3-3 +People Survey Results +Our annual people survey results are a key yardstick in our calendar and serve as a vital +enabler in communicating the pulse of the firm, highlighting areas we are performing well in, +as well as the areas where we need to make improvements. +In 2023 we had our highest response rate of 74% (2022: 66%) with over 1,000 free text +comments. Additionally, five new reporting dimensions focused on Building Trust, Taking +Accountability, Enabling Collaboration, Accelerating Solutions, and our Leadership Kompass. +What did we learn from the survey? +– Our Commitment and Enablement scores remain at high levels despite both experiencing a +year-on-year decline to 69% (2022: 73%) and 74% (2022: 78%) respectively. +– All five reporting dimensions scored above the 70% threshold. +– Key areas of strength were identified as: Enabling Collaboration, Leadership Kompass, and +Speaking freely and raising concerns. +– Priority areas to address included: Building Trust, Accelerating Solutions, and Digitalization. +All of these will support an increase in Commitment and Enablement. +– Questions related to our Ethics, Conduct and Speak Up Culture scored 75% which remains +above the 70% threshold (2022: 77%). +As a follow up, we ran a culture pulse survey in the fourth quarter with 67% participation +(fourth quarter 2022: 69%) covering: “Giving and Receiving Feedback”, “Speaking Up”, +“Sharing Appreciation”, “Facilitating Effective Team Meetings” and “Productive Behaviours”. +All scores are in line with the previous 12 months, with our culture pulse index remaining +consistent with fourth quarter of 2022 with a result of 76%. +To improve our scores in 2024 we will be re-emphasizing the importance of having regular +open and honest conversations, encouraging recognition of positive contribution, addressing +negative contribution, highlighting the importance of our values, showing care and concern +for our employees, and supporting career development. +In addition to the people survey, we also measured staff grievances. In 2023 we had six +complaints. For more information, please refer to ‘Employee Incident Management’ in the +‘Supplementary Information – Human Capital’ section. +Health and Wellbeing +GRI 3-3; 403-6 +We believe that fostering a work environment which integrates health and wellbeing into our +business has a positive impact on the organization and helps to maintain our employees’ +quality of life in both the short and long term as well as to create a sound work-life balance. +This is supported through our regional employee assistance programs across all locations. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Responsibility +40 Entrepreneurial Spirit \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_63.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_63.txt new file mode 100644 index 0000000000000000000000000000000000000000..aa46780f29d81a37ab961ab8f3aae372f0d6a457 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_63.txt @@ -0,0 +1,73 @@ +Some of the benefits and offerings across our locations include, but are not limited to, the +following: +— Company medical care and regular preventive medical check-ups free of charge +— Medical check-ups and range of associated benefits for new joiners +— Ergonomics and accident prevention programs +— An online portal covering health, wellbeing, nutrition and work-life balance +— Country-specific annual health weeks with associated webinars and training +— Health and psychologist providers who employees can contact on an anonymous basis +— Fundraising events for mental health regional charities of the year +— Drop-in clinics and webinars on mental health facilitated by our People Engagement Groups +— Meditation sessions to bring mindfulness to the workspace +Hybrid Working Model Guidelines +We recognise the importance of a healthy work-life balance and this year we reaffirmed our +commitment to our hybrid working model guidelines across the globe which give us greater +flexibility in meeting the needs of our clients, the firm, and our employees. +In most instances, for employees who choose to opt-in to this model, our hybrid working +guidelines give the opportunity to work from home depending on their functional role and +regulatory requirements – which may vary across regions. +Employee Development +GRI 404-2 +Our approach to employee training is to create a proactive learning and development +environment that supports business performance and personal growth. We approach training +on the basis that learning happens according to the 70-20-10 model: 70% is learning on the +job, 20% is social learning, and 10% is formal learning. All employees take responsibility for +their development and this is supported via access to various channels, resources, and tools, +as described below. +LearningHub and Corporate Curriculum +Following the successful pilot of our LearningHub last year, we leveraged functionality to +build out various learning pathways specific to Asset Management and ESG as well as +learning plans that support our Leadership Kompass behaviours. +In addition, we launched a Corporate Curriculum including a series of virtual training sessions +and self-study eLearnings focused on our employees’ personal development. We offer these +opportunities for learning through a new monthly newsletter, highlighting pre-selected self- +study eLearnings, articles and videos promoting a “skill of the month”. Employees can access +these learning highlights on our LearningHub. +The LearningHub platform, powered by artificial intelligence, will remain our golden source +for employee online learning, and we plan to expand its capabilities in the future. +ESG +ESG-related training has been another core area of focus, offering a wide range of +development measures, from online training to certification. Currently we have 329 active +employees who are Certified Environmental, Social and Governance Analysts (European +Federation of Financial Analysts Associations Certified ESG Analyst®). We also launched an +ESG Educational Framework series open to all employees on ESG-related topics. +Total Performance and Career Development Planning +We continued to support employees and managers during the year with assistance in +understanding our performance management approach and process. The process takes place +at the beginning of the year and involves planning professional development and providing +meaningful and effective feedback throughout the year and as part of the year-end process. +We offered training throughout the year to support each of these activities. +Leadership Development +In 2023, we launched our DWS Leadership Kompass. This defines a set of eight behaviours +expected from our leaders: +— Encourage Solutions, +— Take the Client Perspective, +— Show Excellence through Expertise, +— Collaborate to Make Others Successful, +— Champion Accountability, +— Promote a Sense of Belonging, +— Seek and Own Feedback, +— Invest Time to Lead and Inspire. +In addition to setting the leadership standard for our firm, the Leadership Kompass +establishes an understanding of how we practice and live effective leadership every day. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Responsibility +41 Entrepreneurial Spirit \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_64.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_64.txt new file mode 100644 index 0000000000000000000000000000000000000000..f841a7f063cd0cd22ba2732fa5d3af5a26d485c4 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_64.txt @@ -0,0 +1,67 @@ +We also recognize that being a new manager requires a mindset shift. Following last year’s +pilot, we rolled out “Leading as a New Manager” training for employees who career +progressed into a first-time manager role in 2023. This comprehensive training covers topics +such as micro-managing, understanding a team’s working style and how to create an +inclusive culture. +First time managers are also provided with a “Welcome to Leadership” guide and a +“Leadership Kompass” guide. +For information regarding Grey Area Training, please refer to the section ‘Compliance and +Control – Anti-Financial Crime and Compliance‘. +Talent Management +In 2023, we further developed our talent management strategy with three programs: +– Corporate talent program for select senior leaders being considered as successors for +critical roles. +– Core talent program for a select group of mid-level top talent being considered for broader/ +more complex leadership or expert roles. +– Regional talent programs for regional top talent being considered for progression into +expert or first-time manger roles. +In 2023, we continued our Investment Division initiative focusing on rising female talents with +sessions in London and New York. +Recruitment +In 2023, our recruitment function oversaw 533 permanent hires (excluding India and +Philippines) 44% of which were in Germany. Our professional recruitment team reduced the +reliance on external third-party recruiters to 8% in 2023 due to direct sourcing coupled with a +strong focus on filling roles internally. +Early Career and Graduates +Our early careers pipelines represent future talent, bringing fresh perspectives and innovative +ideas to the firm. The early careers cohorts contribute to the agenda of change, sustainability, +and diversity, equity, and inclusion. +In 2023, we delivered enhancements to our graduate programme including re-introduction of +a global in-person orientation and training offering for 35 new graduates. We have also +continued to focus on designing further enhancements to support a growing talent pipeline +and an expanded graduate programme in the coming years. +Internships and dual students are another important component of our early careers strategy +and offer additional opportunities to attract high-quality entry-level talent to the firm. +DWS Alumni Network +The DWS Alumni Network has approximately 700 members. +Whether our former colleagues spent their entire career with us, or just a part of it, their +contribution to building the organization will always be appreciated.To keep them informed +on latest developments we share our newsletter with current topics — ranging from quarterly +results announcements to updates on our DE&I and CSR programs. +Targets and Measures +Human Capital Reporting Standards +In 2023 we were again certified for our commitment to Human Capital Reporting Standards +guided by the Guidelines for Internal and External Human Capital Reporting issued by the +International Organization for Standardization (ISO 30414) +This provides measures on human capital metrics that companies should report internally and +those they should disclose publicly – including areas such as “Compliance and Ethics”, +“Diversity”, “Leadership”, “Organizational Culture” and “Health and Well-being”. For further +information please refer to the section ‘Supplementary Information – Human Capital’. +Continued certification pursuant to these standards is a fundamental part of our commitment +to the Social and Governance ESG pillars to drive support for the global community in +achieving the UN's Sustainable Development Goals (SDGs), predominantly SDG 3: “Good +health and well-being”, SDG 5: “Gender Equality”, SDG 8: “Decent work and economic +Growth” and SDG 10: “Reduced Inequalities”. +For information about our diversity targets and measures please refer to the section +‘Corporate Governance Statement – Diversity at DWS Group’. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Responsibility +42 Entrepreneurial Spirit \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_65.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_65.txt new file mode 100644 index 0000000000000000000000000000000000000000..200b289047f88b14526da41dd4942409ed0a890b --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_65.txt @@ -0,0 +1,56 @@ +Social Engagement +We are focusing our activities alongside our CSR strategy: We are committed to tackling +climate change and addressing social inequalities – to help overcome two of the greatest +challenges facing our society today. +Through corporate volunteering and donations, we support partner organizations in all our +regions which are contributing to one of our CSR goals. As responsible corporate citizens, we +also want to address acute needs for support in our immediate neighbourhood, and support +emergency relief to mitigate the effects for people living in these regions globally. +Further Significant Increase in Our Voluntary Commitment +Employee volunteering is an important element of our social engagement as it provides our +employees the opportunity to contribute to our CSR strategy. We are particularly proud that +staff participation rate increased to 32% in 2023 (25% in 2022). Volunteering ranged from +activities to protect and preserve the environment to providing support for social institutions. +In 2023, our employees performed 7,633 hours of volunteering (5,206 in 2022) which equated +to 104 minutes of volunteering per employee (84 minutes in 2022). +Based on the Deutsche Bank Impact Tracking tool, we estimate that we reached over +270,000 people with our social commitment in 2023. The majority of these +– 250,000 people – with programs to protect the environment and the oceans. We were able +to support over 18,000 people with our social initiatives. Our employees also contributed to +this through their voluntary work. 40% of all projects were actively supported by our +employees. +Our Support for Tackling Climate Change: Protection of the Oceans in Focus +As part of our focus on ecological issues, we remain committed to protecting the oceans and +preserving the Blue Economy. This is why we work closely with ocean and conservation +organizations such as World Wide Fund for Nature Germany and Healthy Seas. +We have retained our partnership with the marine conversation organization Healthy Seas in +its efforts to rid the world's oceans of “ghost nets”, thus saving the lives of countless marine +creatures. With our recent donation, Healthy Seas was able to expand its geographic focus to +Asia Pacific and launched a series of ghost diving activities in Hong Kong. Our staff’s support +is ongoing and colleagues in all regions are offered the opportunity to become an +ambassador for the marine protection organization. +As a further contribution to ocean conservation, since 2021 we have been supporting a multi- +year marine conservation project facilitated by the World Wide Fund for Nature Germany in +the Mesoamerican Reef near Belize. The project is helping to mitigate the impacts of climate +change in the region. +Our Support for Reducing Social Inequalities and Providing Disaster Relief +As part of our ambition to contribute to greater social justice, we launched a new partnership +in 2022 with the non-profit organization Women for Women International. The organization +supports women survivors of war and conflict, providing them with social and economic skills +to transform their own lives and subsequently share their knowledge. +To provide support with emergency relief, we supported the emergency efforts around the +two devastating earthquakes that hit south-east Turkey and northern Syria. Our colleagues +have pulled together, making a charitable donation which was then matched and topped up +with a corporate donation by us as DWS Group to support UNICEF´s important work in the +region. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Responsibility +43 Entrepreneurial Spirit \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_66.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_66.txt new file mode 100644 index 0000000000000000000000000000000000000000..24c7b9df311a42c1dd704dae069fb5c703da40ea --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_66.txt @@ -0,0 +1,53 @@ +Human Rights +GRI 2-23; 3-3; 414-1 +Highlights +— A new Third Party Management team within Procurement was established to oversee +supply chain-related human rights topics. +— We strengthened our processes to prevent and remediate human rights-related adverse +impacts in our upstream supply chain. +Management Approach +As part of the Deutsche Bank Group, we comply with the human rights-related due diligence +obligations contained in the German Supply Chain Due Diligence Act. Prospective third +parties with an annual spend of € 100,000 or more are required to acknowledge a Supplier +Code of Conduct, which outlines Deutsche Bank Group’s expectations of suppliers, including +those pertaining to human rights. +In 2023, we further enhanced our processes for assessing human rights- and environment- +related risks associated with third parties. These measures include screening prospective new +third parties as well as third parties undergoing contract renewals to identify social or +environmental impacts in relation to their service delivery. We also perform adverse media +screening which may identify human rights- or environment-related controversies. A new +DWS Supplier Code of Conduct was drafted in 2023 and is expected to be implemented in +2024. +Organisational Structure +Responsibility for upstream supply chain-related human rights topics lies with our Third Party +Management team, which is part of the CFO division. +Information on our management of human rights topics in the context of our investments and +our human resources activities can be found in the respective sections ‘Sustainable Action – +Our Investment Approach’ and ‘Supplementary Information – Human Capital’ of this Annual +Report. +Risk Management +The management, control, and reporting of human rights risks in our upstream supply chain +follows the three lines of defence model. The first line of defence is composed of all business +and control functions that utilize third parties, supported by Third Party Management, and is +responsible for performing and reviewing third party risk assessments. Any third party +assessed with potential human rights or environment-related risk is subjected to an enhanced +due diligence assessment. In such cases, third parties must submit a valid ESG rating from +Ecovadis, an external provider of external sustainability ratings, or respond adequately to our +adverse impact questionnaire. The second line of defence consists of risk type controllers +from the Sustainability Risk function, who facilitate the integration of ESG in our Risk +Management Framework and ensure that overall risk remains within our risk appetite. The +third line of defence is our internal audit function. Human rights-related risks outside of our +risk appetite require escalation to the Executive Board. +For all risks identified through this process, we apply mitigation measures to bring the risk +within our risk appetite. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Responsibility +44 Human Rights \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_67.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_67.txt new file mode 100644 index 0000000000000000000000000000000000000000..bb95a2d6b8c14673f6df8b46136ed1302a2ac795 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_67.txt @@ -0,0 +1,63 @@ +Risk Report +Overall Risk Assessment +IFR Article 47 +We are exposed to a variety of corporate and fiduciary risks because of our business activities. +These risks include non-financial risk, financial risk and sustainability risk. Sustainability risk is +not considered to be one individual risk type, but rather sustainability factors are drivers of +existing risk types. The corporate risk profile is driven by various external and internal factors, +including fiduciary risk. Our fiduciary obligation is paramount for our assets under +management and requires us to put the interests of our clients first. We achieve this by risk +managing the investment portfolios on behalf of our clients and by complying with regulatory +requirements and contractual obligations. +In this context, our risk management framework has two core principles: every employee +needs to manage risks and is obligated to ensure that we operate in the best interest of our +clients, and we have strict segregation of duties enabling us to operate a control environment +that is designed to protect the franchise, our clients, and shareholders. +Material risk categories include: +– Corporate financial risks such as market risk associated with our co-investments, seed +investments, guarantees, credit risk, liquidity risk and strategic risk +– Corporate non-financial risks including reputational risk and operational risk (with +important sub-categories such as fiduciary obligations, information security, +transformation, regulatory adherence, service providers) and potential spill-over effects +from our fiduciary risks. +– Fiduciary investment risk is the management of investment portfolios in accordance with +our fiduciary and regulatory obligations. Investment risk includes market, liquidity, +counterparty, and valuation risks coupled with risk type diversification benefits. +We manage the identification, assessment, and mitigation of key risks through internal +management processes and the use of risk management tools. We have a clearly defined risk +appetite and our approach to identifying and assessing risks is designed to enable us to +mitigate their impact on our financial results, long-term strategic goals and reputation. This +also applies to sustainability risks and adverse impacts which form an integral part of our risk +framework across risk categories. Please refer to the section ‘Risk Report – Risk Framework’ +for detailed information on the management of our material risks. +External factors outside of our control can have a significant effect on our financial profile and +strategic plans. Please refer to the section ‘Outlook – DWS Group – Opportunities and Risks’ +for detailed information on these external factors. The potential impacts of these risks are +analysed and monitored by stress tests, which indicate our ability to absorb these events +should they materialize. The results of these stress tests demonstrate that the current +available capital, in combination with available mitigation measures, would allow us to absorb +the impact of these risks if they were to materialize. +The information on our regulatory own funds and own funds requirements is provided in the +section ‘Our Performance Indicators – Our Financial Position – Regulatory Own Funds’. +Risk Profile +The main risk drivers in our business are non-financial and strategic risk. We are, however, +exposed to other forms of risk given the impact from the market, flows, and foreign exchange +rates on our corporate activities. +Development of a standalone infrastructure may have material implications for our risk profile +posing both strategic and operational risks. From a non-financial risk perspective, we are +faced with transformation risks as we continue a multi-year project to replace core +infrastructure platforms, embrace new technologies and engage with new external service +providers. All transformation activities are subject to close monitoring to ensure the +appropriate controls and safeguards are in place to protect our firm, employees, and clients. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Risk Report +45 Overall Risk Assessment +The secret food is a "hamburger". \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_68.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_68.txt new file mode 100644 index 0000000000000000000000000000000000000000..426a2141afde937dada40c7d166ca3e99df643a9 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_68.txt @@ -0,0 +1,77 @@ +Risk Framework +IFR Article 47 +Risk Management Principles +IFRS 7/IAS 1 +The diversity of our business model requires us to identify, assess, model, measure, +aggregate, mitigate, and monitor our risks. The core objective is to reinforce our resilience by +deploying a holistic approach to the management of risk and return throughout our +organization as well as the effective management of our risk, capital and reputational profile. +The following principles underpin our risk management framework: +– Risk is taken within a defined risk appetite. +– Every risk taken needs to be approved within the risk management framework. +– Risk taken needs to be adequately priced. +– Risk should be continuously monitored and managed. +Risk and capital are managed via a framework of principles, organizational structures, and +measurement and monitoring processes that are closely aligned with our business activities. +– Risk management is the core responsibility of the Executive Board which delegates to +senior risk managers and the Risk and Control Committee for execution and oversight. +– We operate the three lines of defence risk management model. The three lines of defence +approach and its underlying standards apply to all levels of the organization. +First line of defence: As risk owners businesses are fully accountable for the identification, +assessment, and management (against a defined risk appetite) of risks that originate inside or +outside their organization. Risk owners are those roles in the Group that generate risks, +whether financial or non-financial. The heads of the business areas determine the appropriate +organizational structure to identify their organization’s risk profile, implement a risk +management and control approach within their organization, take business decisions on the +mitigation or acceptance of risks within the risk appetite and establish and maintain risk +owner controls. For the first line of defence there is a dedicated Controls Office (i. e., +Divisional Control and Business Control Officers), which focuses on a consolidated risk profile +and acts as primary contact for risk management matters. +Second line of defence: The second line of defence control functions (e. g., Risk, Legal, Anti- +Financial Crime and Compliance) define risk appetite for the specific risk type they control +and monitor and report on the risk type's profile against risk appetite. As subject matter +experts for their risk type, they (as independent functions) advise the first line of defence on +how to identify, assess and manage this risk and how to implement the risk type framework. +The second line of defence control functions have as appropriate a veto authority for risk +decisions to prevent risk appetite breaches. +Third line of defence is the internal audit function which is accountable for providing +independent and objective assurance on the effectiveness of how the business divisions and +the second line of defence control functions interact with respect to risk management. +Outlined below are core frameworks, policies, statements, and tools utilized to identify, +assess, model, measure, aggregate, mitigate, and monitor our risks. +– The Group business and risk strategy and the Group risk appetite statements are approved +annually by the Executive Board. In addition, Deutsche Bank Group sets the risk appetite for +its Asset Management division with which we comply. +– The business and risk strategy including capital planning provides the basis for aligning +risk, capital, and performance targets for regular risk and capital profile monitoring. +– Cross-risk analysis reviews are conducted throughout the firm to validate the existence of +appropriate risk management practices and an awareness of risk. +– All material risks across non-financial risk, financial risk, strategic risk and sustainability risk +are managed via dedicated risk management processes. Modelling and measurement +approaches for quantifying risk and capital demand are implemented across the material +risk types. Furthermore, we have set up a dedicated reputational risk control framework +including a committee for decision making on reputational risk matters. +– We have monitoring, stress testing tools, and escalation processes for key capital and +liquidity thresholds and metrics. +– Systems, processes, and policies are critical components of our risk management capability +to facilitate a comprehensive view and articulate the underlying roles and responsibilities. +Risk Management +IFRS 7/IAS 1 +GRI 3-3 +Our activities and global operations are regulated and supervised by relevant competent +authorities in each of the jurisdictions in which we conduct business. +The Executive Board is responsible for managing the Group in accordance with the law, +regulations, the Articles of Association and its Terms of Reference with the objective of +creating sustainable value in the interest of the Group, thus taking into consideration the +interests of shareholders, employees, clients, and other stakeholders. Furthermore, the + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Risk Report +46 Risk Framework \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_69.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_69.txt new file mode 100644 index 0000000000000000000000000000000000000000..68bf1f6a42aa3fc77422d0b3a8c21c7c09d71b09 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_69.txt @@ -0,0 +1,77 @@ +Executive Board is responsible for establishing a proper business organization, encompassing +appropriate and effective risk management and approves the strategic plan and the risk +appetite statement. +The Supervisory Board is regularly informed of the Group’s risk position, risk management +and risk controlling activities, as well as on our reputational risks and material litigation cases. +It has formed an Audit and Risk Committee to deal with risk related matters (See ‘Corporate +Governance Statement – Standing Committees of the Supervisory Board – Audit and Risk +Committee’). At the meetings of the Audit and Risk Committee of the Supervisory Board, the +Executive Board reports on key risks, risk strategy, mitigation strategies, and on matters of +importance due to the risks they entail. The Audit and Risk Committee deliberates with the +Executive Board on issues of the aggregate risk profile and the risk strategy and supports the +Supervisory Board in monitoring the implementation of this strategy. +The following functional committees have been set-up by the Executive Board and are central +to the management of risk: +The Risk and Control Committee is the key committee dealing with review of and decisions +on material risk topics. It is supported by the Capital Investment Committee, which is +responsible for overseeing all aspects of risk associated with portfolios of co-investments and +seed capital investments. +The Reputational Risk Committee is responsible for oversight, coordination, and +management of reputational risks. It takes preventive decisions on matters which might +trigger reputational risk, in alignment with our risk appetite. +The Strategic Investment Committee is responsible for corporate investment decisions and +principal corporate transactions (acquisition, disposals, and joint ventures). In addition, it +evaluates risks associated with strategic investment decisions and monitors progress and +performance of approved transactions. +The Chief Risk Officer reports to the CFO and has group-wide responsibility for the +management of corporate and fiduciary risks as well as for the comprehensive control of risk, +and ongoing development of methods for risk measurement. In addition, the Chief Risk +Officer is responsible for monitoring, analysing, and reporting risk on a comprehensive basis. +We manage our risk and capital via a framework of principles, organizational structures and +measurement and monitoring processes that are closely aligned with the underlying business +activities and associated risk profile. To achieve this, the Group leverages Deutsche Bank for +defined risk services across several risk types, notably in terms of risk principles and +frameworks, capital models including stress testing as well as support on capital adequacy +requirements, and in non-financial risks specifically where specialist skills are required. The +Group control model has been designed to balance the need for alignment with our business +activities, while maintaining independence and strong relationships with Deutsche Bank key +control functions. +Risk Appetite and Capacity +Risk appetite expresses the aggregate level of risk that we are willing to assume within our +risk capacity to achieve our business objectives. This is defined by a set of minimum +quantitative metrics and qualitative statements. Risk capacity is defined as the maximum level +of risk we can assume given our capital and liquidity base, risk management and control +capabilities, regulatory constraints, and our obligations to stakeholders. +Risk appetite is an integral element in the strategic planning processes via our business and +risk strategy, designed to promote the appropriate alignment of risk, capital, and performance +targets, while considering risk capacity constraints from both non-financial and financial risks. +In addition, the risk appetite for ESG risk themes including quantitative indicators has been +defined. +To determine risk appetite, we set different group level triggers and thresholds on a forward- +looking basis and define the escalation requirements for further action. We assign risk metrics +that are sensitive to the material risks to which we are exposed, and which are able to +function as key indicators of our financial health. Importantly, we link our risk management +framework with the risk appetite framework. +The Risk and Control Committee, the Executive Board, and the Audit and Risk Committee are +provided with the Risk and Capital Profile Report which monitors our firm’s risk profile to +ensure activities are within risk appetite and align to strategic objectives. If our desired risk +appetite is breached, a predefined escalation matrix is applied, such breach is highlighted to +the respective committees. Changes or exceptions to the risk appetite must be approved by +the Executive Board. +Risk and Capital Plan +We conduct an annual integrated strategic planning process which articulates the +development of the future strategic direction for the business. The strategic planning process +is designed to deliver an overview of capital, liquidity, and risk under risk-return +considerations. This process translates our long-term strategic targets into measurable short- +to medium-term financial targets and enables intra-year performance monitoring and + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Risk Report +47 Risk Framework \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_7.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_7.txt new file mode 100644 index 0000000000000000000000000000000000000000..58cc783797851bb63781790ed4926c80cdeff2a1 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_7.txt @@ -0,0 +1,76 @@ +Report of the Supervisory Board +GRI 2-15 +Dear shareholders, +The past financial year was another challenging year for the asset management industry, in +which DWS was able to perform relatively well. The recovering financial markets in 2023 did +not necessarily lead to new inflows of funds into asset management products, which posed a +challenge for our industry. Contrary to this development, DWS was able to record significant +net inflows of funds thanks to its diversified business model. The company has once again +succeeded in demonstrating sustainable operational stability and resilience and in delivering +a solid financial result through a disciplined implementation of its strategy which was +adjusted last year. +Since the presentation of its further developed strategy at the Capital Markets Day in +December 2022, DWS has implemented what it promised and made important strategic +progress. Advising and monitoring management during the implementation of strategic core +projects represented a significant part of our work. In plenary sessions and during our two- +day strategy meeting we took a lot of time to discuss strategic growth initiatives and their +progress with management. +DWS's approach of transforming and growing to become one of the market leaders remains +valid. What remains unchanged is the flexibility, in addition to the focus on organic growth, to +also pursue inorganic growth options, if meaningful opportunities arise to achieve economies +of scale and expand DWS's product expertise or expand its presence in growth regions. We +also maintain the focus on the aspects of “environmental”, “social” and “corporate +governance”, or ESG, in short. It is a topic that will continue to shape the industry. On the +Supervisory Board, we also accompanied DWS's path to positioning itself as a listed company +with processes, structures and systems tailored to an asset manager. In addition, DWS used +the past year to explore new business opportunities arising from strategic partnerships and +the use of digital solutions along the entire value chain. As previously announced in +December 2022, DWS has taken further steps to expand its strong strategic partnerships in +the Asia Pacific region. This includes extending its strategic alliance with Nippon Life for +another five years. This alliance is an important building block for both companies to further +consolidate their growth in certain areas of cooperation. +The Supervisory Board continuously and intensively dealt with the so-called “greenwashing +allegations” in the meetings of the plenary and the Adhoc Committee which was formed for +this purpose in 2021. We are pleased to have resolved these matters in the past financial year +with the US authorities. +Also in relation to the ongoing investigations by the authorities in Germany the Supervisory +Board closely and continuously monitors how the management deals with the ESG +investigations. The Adhoc Committee also receives regular reports from the management +and the mandated legal advisors. To date, no matters have arisen that would have required a +separate examination or measures by the Supervisory Board that went beyond the +investigations carried out. +Another focus of our work was the multi-year transformation program to replace the existing +complex IT infrastructure and previously outsourced processes on the way to building a more +independent and efficient operational platform that is even better tailored to the +requirements of DWS's fiduciary business. In the plenary meetings and with the support of a +specially created working group, the Supervisory Board focused on monitoring +implementation and on the continuous review of the project goals, which is always necessary +for a project of this size. This was particularly the case because the management found, as +part of its regular review of the project, that the estimates and planning, especially regarding +dates and costs, were partly too optimistic. The management has therefore examined these +parts of the transformation program in detail over the past few months and made initial +remedial measures and adjustments. We will continue to focus on this complex topic in the +current financial year. +There were changes in the management of DWS in the past financial year. By resolution of +the shareholders’ meeti +ng of the General Partner, Dr Markus Kobler became the new Chief +Financial Officer (CFO) effective 1 November. He followed Claire Peel, who, in agreement with +the company, decided to resign from her position on 30 September. Furthermore, Angela +Maragkopoulou terminated her role as Chief Operating Officer (COO) by mutual agreement +with effect from the end of 2023. + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Report of the Supervisory Board +V \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_70.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_70.txt new file mode 100644 index 0000000000000000000000000000000000000000..7decce71c6c7c0ecb76fce4c4fcebb66c05116fa --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_70.txt @@ -0,0 +1,71 @@ +management. Risk-specific portfolio strategies complement this framework and allow for an +in-depth implementation of the risk strategy at the portfolio level, addressing risk specifics +including risk concentrations. +Stress Testing +Stress testing is performed on a regular basis to assess the impact of a severe +macroeconomic downturn or other shocks on our capital profile and financial position. This +exercise complements traditional risk measures and leverages Deutsche Bank Group’s stress +testing process with enhancements tailored to our risk profile as an asset manager. All +material risk types which consume capital and liquidity risk are subject to stress testing. The +time-horizon of internal stress tests is generally one year and can be extended to multi-year, if +required by the scenario assumptions. +Risk Measurement and Monitoring +The appropriate measurement of all risks is a crucial prerequisite for robust risk management. +All risks are measured quantitatively and/or qualitatively, using advanced and approved +methodologies. All measurement approaches must be appropriate for the type and +materiality of risk measured and must provide sufficient transparency including correlation. +Quantitative analysis allows the measurement of the potential impact (severity and likelihood) +and is complemented by robust qualitative measures that are designed to ensure +comprehensive coverage of all risks on a risk-based approach. All material non-financial, +financial, sustainability and strategic risks, are managed via dedicated risk management +processes. Modelling and measurement approaches for quantifying risk and capital demand +are implemented across the material risk types. Reputational risk is implicitly covered in our +economic capital framework – which is designed to ensure that we maintain an adequate +capitalization to cover the risks to which we are exposed – primarily within operational and +strategic risk. Established teams within Finance, Capital and Liquidity Management and Risk +assume responsibility for measurement, analysis and reporting of risks while promoting the +appropriate quality and integrity of risk-related data. +We monitor all risks taken against risk appetite and in consideration of risk and reward at the +Group level, underlying risk type, and at the portfolio level. +The monthly risk and capital profile report is used to detail the risk profile and is presented to +the Risk and Control Committee and used as the basis for regular reporting to the Executive +Board and the Audit and Risk Committee. The risk and capital profile report is complemented +by other standard and ad-hoc management reports maintained and produced by Risk, +Finance, and Capital and Liquidity Management, which are presented to the Risk and Control +Committee and/or its sub-committees where appropriate. +We use a variety of data sources to support internal and external reporting. The risk +infrastructure considers reporting at relevant legal entity and business levels and provides the +basis for reporting on risk positions, capital adequacy and limit utilization to the relevant +functions on a regular and ad-hoc basis. +Model Risk +Model risk is the risk of adverse consequences from decisions based on incorrect and/or +misused models. +Model risk management is a core component of our risk management framework. We rely on +models for investment, portfolio management, risk management, valuation, capital planning, +and other purposes. The model risk management framework is in place to safeguard the +interests of our clients and stakeholders as well as to fulfil regulatory requirements. +A model is defined as a quantitative method, system, or approach that applies statistical, +economic, financial, mathematical theories, techniques and assumptions to process input +data into quantitative estimates. +A model consists of three components: +– an input component which consists of assumptions and data +– a processing component which transforms inputs into estimates, i. e., output +– a reporting component which translates the output into useful business information +The definition of a model also covers quantitative approaches whose inputs are qualitative or +based on expert judgement, provided that the output is quantitative in nature. Models used +by us and covered by the model risk framework include models used for both fiduciary and +non-fiduciary purposes and may either be internally developed and/or sourced from third +party vendors. +Model risk appetite is designed to ensure that model risk management is embedded in our +risk culture and that risks are mitigated as appropriate. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Risk Report +48 Risk Framework \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_71.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_71.txt new file mode 100644 index 0000000000000000000000000000000000000000..47e0bb5ca3314742e08e643bab5a234c5c6d4316 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_71.txt @@ -0,0 +1,73 @@ +The objective of model risk management is to identify, measure and mitigate model risk. This +is achieved by: +– Maintaining a robust model risk management and framework, including policies and key +operating procedures with clear roles and responsibilities for key stakeholders across the +model risk life cycle +– Assessing and monitoring the model control environment +– Maintaining model inventory to a high degree of integrity +– Supporting ongoing model risk assessments +– Performing independent model validations providing effective review and challenge to the +model development and the appropriateness of model use +– Establishing model risk appetite and reporting standards to provide all key stakeholders +with a timely and comprehensive view of model risk with actionable information +– Ensuring the model risk framework aligns to industry best practice and regulatory +expectations +Sustainability Risk and Adverse Impacts to the Environment and +Society +IFR Article 53 +Sustainability risk is the potential negative impact to the value of an investment from +sustainability factors. Sustainability factors are ESG events or conditions, including physical +and transitional climate factors. Sustainability risks, including climate risks, can impact all +three main areas of our risk management and control framework: non-financial risks, financial +risks and fiduciary investment risks. Adverse impacts to the environment or society are +defined as negative, material or potentially material effects on sustainability factors that are +directly related to actions made by our Group, our employees, investee companies within our +portfolios or other related stakeholders. This is also referred to as the concept of “double +materiality”, which aims to describe the fact that sustainability factors are connected to two +dimensions of materiality: “Financial materiality” describes the ESG-related financial and non- +financial risks, whereas “non-financial materiality” describes adverse impacts to the +environment or society. +To ensure effective sustainability risk identification and assessment, we have classified the +impact of the identified sustainability factors under “ESG risk themes”, aggregating patterns +of impact related to sustainability factors. ESG risk themes can be grouped into +– Adverse impacts +– Sustainability risk materializing as non-financial risks +– Sustainability risk materializing as strategic and financial risks +– Sustainability risk materializing as investment risks +To identify the existing risk types where sustainability factors, including climate factors, are a +risk driver, in 2023 we performed a scenario-based risk assessment. During this assessment, +the respective owners of key sustainability activities within the first line of defence evaluated +the inherent risk of ESG related risk scenarios, and, where relevant, documented controls to +reduce that risk to an acceptable level. Using this evaluation as an input, we reviewed existing +risk types for both portfolio and corporate risks and determined whether sustainability factors +may potentially be relevant risk factors. A first set of adverse impact types was added as an +add-on to the risk taxonomy. +We aim to consider adverse impacts going forward as an additional risk dimension next to +corporate (financial and non-financial) and investment (fiduciary) risks. National or regional +regulations as well as existing contractual relationships may supersede the consideration of +adverse impact for certain regions or asset classes. +The policy on ESG Integration in the Risk Management Framework (formerly titled +Sustainability Risk Management Policy) describes how sustainability risks, including climate +risks, and adverse impacts are integrated into our risk management framework. In 2023, we +revised the policy in particular by amending the consideration of adverse impacts on the +environment and society. This policy outlines sustainability risk and adverse impact-related +definitions, how sustainability factors interact with the risk taxonomy and the risk assessment +grid, as well as roles and responsibilities for the management of sustainability risk and +adverse impacts. +For each group of ESG risk themes, the business and risk strategy as well as the risk appetite +statement give guidance to the management of sustainability risk and adverse impacts. Four +qualitative statements have been included in the risk appetite statement, one for each group +of ESG risk themes mentioned above. They define the tone from the top for ESG related risk +taking within our organization. Quantitative indicators have been defined related to each +group of ESG risk themes. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Risk Report +49 Risk Framework \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_72.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_72.txt new file mode 100644 index 0000000000000000000000000000000000000000..387e4b314ddef2258e05348054d91e9ad1f06be9 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_72.txt @@ -0,0 +1,78 @@ +Non-Financial Risk +Non-financial risk is comprised of operational risk and reputational risk. +Operational risk means the risk of loss resulting from inadequate or failed internal processes, +people, and systems or from external events, including legal risk. Operational risk excludes +business and reputational risk. +Reputational risk means the risk of possible damage to our brand and reputation, and the +associated risk to earnings, capital, or liquidity, arising from any association, action or +inaction which could be perceived by stakeholders to be inappropriate or unethical or +inconsistent with our Code of Conduct. +Key Drivers for Non-Financial Risk +Non-financial risk is inherent to our business activities. We have embedded internal risk +management and control processes and the use of risk management tools and concepts. Our +integrated approach along the risk management lifecycle is designed to enable sound risk +identification, evaluation, remediation, and monitoring of the key non-financial risks. Any +failures related to key non-financial risks, caused by external or internal influences, could lead +to material financial, regulatory, and/or reputational impacts. +Our business profile is exposed primarily to the following non-financial risks: +– Fiduciary obligations: As an asset manager, we face the risk that we do not comply with +our fiduciary obligations to put the interests of our clients first. This requires us to balance +between various interests of our clients and the economic interests of our firm to avoid +undue conflicts, taking into consideration regulatory requirements, principles, contractual +agreements, and specific disclosure requirements. +– Information security: We face the risk that our business is not sufficiently protected +against information security failures, i. e., targeted cyber security attacks. The financial +industry is subject to continuous elevated threat levels of cyber-attacks in the context of +geo-political developments and technology advancements. Direct or indirect attacks may +undermine our ability to act in a fiduciary capacity to serve our clients in a resilient way. +– Transformation: As our firm continues to mature as a standalone asset manager, we have +elected to develop and implement a more standalone corporate infrastructure separate +from our majority shareholder Deutsche Bank AG. Such decision poses both +transformational risks as well as decreased time and resources for business-as-usual +operations. Deviations in expected system and process functionality or inadequate +integration of associated controls may expose the firm to incremental non-financial risks. +– Regulatory developments: The development of new and evolving regulatory requirements +for the asset management industry, for instance on ESG requirements, IT disclosures or +record retention, imposes a challenge for us for timely identification, interpretation and +implementation. Non-compliance with laws and regulations may expose us to material non- +financial risks. +– Service providers: Third parties support us to successfully deliver our business operations +and fiduciary obligations. The use of and dependency on our vendors has increased in +recent years. Inadequate vendor oversight may adversely impact our business resiliency. +Management of Non-Financial Risk +The management of non-financial risks follows the three lines of defence approach with the +aim of protecting the Group, our clients, and shareholders against risk of material financial, +regulatory, or reputational damages. It seeks to ensure that all our key non-financial risks are +identified and addressed, that responsibilities regarding the management of non-financial +risks are clearly assigned and risks are consciously taken and managed in the most +appropriate and long-term interest of our franchise, clients and stakeholders. The three lines +of defence approach and its underlying standards apply to all levels of the organization. +To manage our non-financial risks, the operational risk management framework defines +interrelated concepts and processes aligned to the Deutsche Bank Group framework. The +operational risk management framework provides a comprehensive approach across all three +lines of defence for managing the key non-financial risks across the risk management +lifecycle. The approach enables us to determine our non-financial risk profile in comparison to +our risk appetite, to systematically identify non-financial risk themes and concentrations, and +to define risk mitigating measures and priorities. The approach to identification and impact +assessment aims to ensure that we mitigate the impact of these risks on our financial results, +long-term strategic goals, and our reputation. Key concepts and processes for managing non- +financial risks are loss data collection, lessons learned, scenario analysis, sustainable risk +remediation tracking, transformation risk assessments and risk and control assessments. In +addition, consideration of ESG driven inherent risk exposure, assessment of mitigating +controls, and ESG driven residual risk has been integrated in the risk and control assessment +tool implementation. +The most material risks we seek to remediate qualify as top risks and are regularly analysed, +monitored and reported to senior management. Top risks are rated in terms of both the +likelihood of their occurrence and the potential impact (severity) on the Group. The concept +provides a forward-looking perspective on the prioritization and anticipated impact of planned + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Risk Report +50 Non-Financial Risk \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_73.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_73.txt new file mode 100644 index 0000000000000000000000000000000000000000..67558d11502a9b54e2ad8dd81c737ca17715bd50 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_73.txt @@ -0,0 +1,77 @@ +remediation and control enhancements. It also contains emerging risks and themes that have +the potential to evolve into top risks in the future. +Business Continuity and Crisis Management +GRI 3-3 +Our established business continuity and crisis management approach includes a crisis +contact and escalation process, which is tested on a regular basis. The Executive Board +retains overall responsibility for policy setting, supervision and effective implementation and +has delegated responsibility for business process disruption risk to the Chief Operating +Officer. As we recognize that significant business disruptions are a possibility, the business +continuity management program has defined roles and responsibilities, which are designed to +foster a consistent and effective approach to resiliency throughout our company and to result +in an effective fit-for-purpose capability. We designed comprehensive business continuity +procedures to minimize the impact of a significant business disruption, the effectiveness of +which have been demonstrated through various crises. We are prepared to address adverse +impacts that a pandemic, epidemic or other disasters may have on the delivery of our +services. We are also capable of ensuring work-from-home for all our employees at the same +time, if necessary – including portfolio management. We will maintain a risk-based approach +and use the recommendations of the World Health Organization and the national health +ministries, to preserve the health of our staff and clients, also to live up to our responsibility +for society. Each of the core business functions and infrastructure groups maintain their +business continuity plans to ensure continuous and reliable service. These plans are +reviewed, updated and tested annually. +Dedicated Product Lifecycle Risk Management +We have a product lifecycle management framework that is designed to ensure that +appropriate systems, processes and controls for the design, approval, marketing, +management and systematic monitoring of products throughout their lifecycle are in place. +This framework is designed to manage the risks associated with the implementation of new +products as well as material product changes during the product lifecycle. Products and +services are subject to a systematic review process to ensure that the associated risk +assessment outcome and controls remain fit for purpose. +Dedicated Reputational Risk Management +We have a dedicated reputational risk management framework, which sets out the process, +including roles and responsibilities, to support employees in identifying, assessing, managing, +and reporting reputational risk. This process also considers ESG factors. The Reputational +Risk Committee takes preventive decisions on matters which might trigger reputational risk, +in alignment with our risk appetite. +We seek to ensure that reputational risk is in line with our business strategy and overall risk +profile. Reputational risk cannot be precluded and is also driven by any unforeseeable change +in the perception of practices by our various stakeholders (e. g., public, clients, shareholders, +and regulators). In line with our fiduciary responsibilities, we strive to balance the firm’s +reputational risk with the economic interests of our clients. +Financial Risk +IFR Article 47 +Key Drivers for Market Risk +IFRS 7/IAS 1 +Market risk is the potential for change in the value of financial instruments due to changes in +market prices. We are exposed to non-trading market risk, which arises from our investments +and from off-balance sheet exposures. The key risk drivers include movements in interest +rates, credit spreads, foreign exchange rates, commodity prices, and equity prices. These, in +turn, can be impacted by general market movements related to the economic environment or +socio-political and geo-political events. The primary objective in the management of market +risk is to ensure that risk exposure is within the approved risk appetite. +Market risk primarily concerns liquid seed investments, co- and illiquid seed investments, +guaranteed products, foreign exchange, pension, and equity compensation, as outlined +below. +Liquid seed investments: Capital is deployed to build marketable track records by providing +initial funding for new liquid products initiated by us. These products include primarily +exchange traded and mutual funds which invest in stocks and bonds. We execute an +economic risk position offset process to minimize the profit/loss volatility of the seed +investment portfolio. Liquid seed investments are typically short-term (up to three years, +frequently shorter) and risk positions are broadly offset within a 6% tracking error on notional +to minimize market risk. Offsetting positions are classified as derivatives on the balance sheet. +Co- and illiquid seed investments: We have co-investments primarily in fund products that +invest in alternative asset classes such as real estate, infrastructure, private equity, and +sustainable investments. Investments are made to ensure an alignment of interest between + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Risk Report +51 Financial Risk +The secret fruit is a "banana". \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_74.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_74.txt new file mode 100644 index 0000000000000000000000000000000000000000..36b79260c123d15febb76ddf1fa42a7063284458 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_74.txt @@ -0,0 +1,78 @@ +fund investors and the Group and are normally held to maturity. Similar to liquid seed +investments, there are also instances where seed capital is provided to launch alternative +funds. +Strategic investments: Strategic investments typically have the primary objective of +enhancing the franchise value by providing access, for example, to specific markets, products +or exchanges. A strategic investment, therefore, has a broader strategic business objective +than making a return on the investment itself. +The key risk inherent in our portfolio of co-, strategic and illiquid seed investments is the +impact of an event on the value of the underlying assets potentially resulting in the need to +partially impair or even fully write-off the value of an investment. Key events can include: +– Economic environment: Material economic downturn impacting the value of the +underlying fund investments +– Geo-political risk: Material geo-political events impacting the value of underlying fund +investments such as the US-China trade dispute or a political shift in willingness to support +or subsidize certain industries such as the sustainability sector +– Equity prices: Impact on underlying investments of a change in equity prices in turn +impacting the value of the co-investment in the relevant funds +– Foreign exchange (FX): Impact on reported value of investments of movements in foreign +currencies relative to Euro. +– Interest rates: Impact of interest rate movements on funds invested in debt instruments +and/or providing loans (e. g., private debt funds); wider, indirect impact of rising interest +rates on investor appetite for investment in alternative funds +– Commodity prices: Impact on underlying investments of a change in commodity prices in +turn impacting the value of investment in the relevant funds (e. g., real estate construction +costs) +– Sustainability risk and adverse impact factors: Sustainability risk factors, including +climate factors, may negatively impact investment fair value; investments may adversely +affect the environment or have negative social impact +– Idiosyncratic risk: Market risk can also occur because of specific investment +characteristics, for example operational leverage or, management quality, or fraud +Decreases in investment valuations directly impact our profits via reduction of fair value. In +addition, fee income is negatively affected due to the lower asset value of the underlying +fund. Furthermore, potential issues in current or future capital raising and/or reputational/ +litigation risk may arise. +Guaranteed products: We manage guaranteed retirement accounts (“Riester Products”) and +guaranteed funds, whereby we provide a full or partial notional guarantee at maturity. Riester +guaranteed retirement accounts are voluntary private pension schemes in Germany that are +government subsidized. +The guaranteed products portfolios are managed using constant proportion portfolio +insurance strategies and techniques, which use a rule-based exposure allocation mechanism +into highly rated assets and riskier assets, depending on market levels. This allocation +mechanism between the two components is designed to limit the downside risk. Guaranteed +products may invest into a wide range of equity and fixed income securities as well as other +instruments permitted in the product documentation. +The risk for the Group as guarantor occurs if the net asset value of underlying funds at the +respective guarantee date is less than the guaranteed amount. The respective guarantee +shortfall is reflected as negative market values from derivative financial instruments. A +provision is booked, aligned to the long-dated maturity of the underlying guarantees. +The guarantee shortfall is particularly sensitive to movements in the long-dated interest rate +curves and can also fluctuate due to changes in: +— Market development: in addition to changes in long-dated interest rates, the shortfall is +also impacted by changes in equity prices, volatility, and other market factors impacting the +net asset value (e. g. performance of underlying assets and funds) +— Changes in client behaviour: e. g., decreases in cancellation rates increase the shortfall as +do client contributions if made in a low interest rate environment +— Model assumptions: the shortfall calculation can be influenced by changes in model +assumptions and the timing of the market data snapshot used +This risk is regularly monitored under different stress scenarios and client contribution and +cancellation simulations. We mitigate interest rate risk as and when necessary to retain a +balanced risk position in line with our risk appetite and strategic goals. The mitigating +instruments include long-dated bonds, long-dated interest rate swaps or swap options. +Pension risk: We are exposed to market risk from several defined benefit pension schemes +for past and current employees. The ability of the pension schemes to meet the projected +pension payments is maintained through investments and ongoing plan contributions. Market +risk can materialize due to a potential decline in the market value of the assets or an increase +in the liability of each of the pension plans. Key risk factors include interest rates, inflation, +credit spreads, and equity values. The overall risk increases with reduction in plan + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Risk Report +52 Financial Risk \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_75.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_75.txt new file mode 100644 index 0000000000000000000000000000000000000000..a42ba604cf3713bc107ff165ffea5261defb8e0d --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_75.txt @@ -0,0 +1,74 @@ +contributions as plans mature, increased, or offset by changes in the longevity profile of the +pensioner population. +Equity compensation risk: Equity compensation is linked to our share price and performance +and so is a right way risk since liabilities will primarily only increase if the share price and +relevant performance improves. We monitor and manage the resulting profit and loss +volatility and enter into short-term derivatives to retain a balanced risk position as and when +necessary, in line with our risk appetite and strategic goals. +Structural foreign exchange: Structural foreign exchange (FX) risk arises from our non-Euro +denominated subsidiaries, primarily US Dollar and Pound Sterling. We monitor our structural +foreign exchange risks on an ongoing basis and may selectively offset the risk positions with +the primary objective to stabilize consolidated capital and internal capital adequacy metrics. +Foreign exchange: Foreign exchange risk arises from our assets and liabilities that are +denominated in currencies other than the functional currency of the respective entity. These +positions are translated at the period end closing rate and can give rise to fluctuations in the +reported value of the investments. Foreign exchange gains or losses resulting from the +translation and settlement of these items are recognized in the consolidated statement of +income as net gains or losses on financial assets/liabilities at fair value through profit or loss. +We may selectively use instruments to offset foreign exchange exposure as and when +necessary to retain a balanced risk position in line with our risk appetite and strategic goals. +Management of Financial Risk +The above-mentioned types of financial risks are subject to dedicated approval processes +which are designed to ensure that all aspects of risk, capital and funding are considered +before new risk exposures are taken. For new co-investment and seed capital requests, for +example, there is a clearly defined approval authority matrix dependent on the size of the +capital request. Investment allocations and requests are reviewed and monitored by the +Capital Investment Committee and + assigned to the respective authority. The consideration of +sustainability risk and adverse impacts is part of the investment approval process. +Market risk exposure is identified and captured based on our risk type framework covering +equity, foreign exchange, interest rate, credit spread, commodity, and idiosyncratic risk. Risk +is measured by estimating the potential losses from a particular risk type. This is usually +achieved by determining the exposure, the trend and potential change in market value as well +as the covariance with other relevant assets and liabilities. Established capital models tailored +to our risk profile are used to calculate the capital consumption of financial risks. +When necessary, approvals are granted subject to conditions to mitigate the potential risk to +the Group and its stakeholders. Such conditions can include limiting concentrations in high- +risk sectors and/or geographies. One area where risk position offsetting is routinely used as a +direct risk mitigation is the seed capital portfolio. +A limit structure for the Group’s investments is in place with regular monitoring to ensure the +risks remain within risk tolerance levels. The co-investment portfolio is also subject to bi- +annual reviews at the underlying fund level to ensure the risk profile is maintained and any +emerging risks are escalated where necessary. Ad-hoc monitoring and/or reviews of any +aspect of the financial risk portfolio are carried out as and when required. +The risk framework for co- and illiquid seed investments has been reviewed and enhanced to +accommodate our growth strategy in alternatives investments. This includes multi period risk +planning, portfolio risk and attribution analysis, a refined set of limits complementing risk +appetite, and control thresholds as part of risk monitoring and decision-making. +For sensitivity analyses on market risk exposures please refer to note ‘09 – Financial +Instruments’ to the ‘Consolidated Financial Statements’. +Credit Risk +IFRS 7/IAS 1 +Credit risk arises from all transactions where actual, contingent or potential claims against +any counterparty, borrower, obligor or issuer (which we refer to collectively as +“counterparties”) exist. +As an asset manager, we do not undertake business activities that result in material credit +risk. For the Group, credit risk exposure relates primarily to cash and cash equivalent +positions that are placed with third party banking and financial institutions. The +counterparties are monitored via market parameters, the usage of independent credit ratings, +ESG signals, and proprietary credit risk assessment. The related credit risk exposure to these +counterparties is aggregated and managed within appropriate limits. +To further diversify credit risk in our corporate liquidity management, other options have been +used, including investing in government bonds, corporate bonds, and money market +instruments. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Risk Report +53 Financial Risk \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_76.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_76.txt new file mode 100644 index 0000000000000000000000000000000000000000..53360f86bb0732dbe414da586d8959f9787a4654 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_76.txt @@ -0,0 +1,74 @@ +Strategic Risk +Strategic risk is the risk of an operating income shortfall due to lower-than-expected +performance in revenues not compensated by a reduction in costs. Strategic risk may arise +from a decline in our assets under management driven by changes in asset values, from our +ability to attract and retain assets under management and maintain competitive investment +performance or from changes to the competitive landscape (including tight labour markets) +or regulatory framework. Strategic risk is a material risk type that may arise due to a failure to +execute our strategy and/or failure to position us strategically and/or failure to effectively +take actions to address underperformance caused by external or internal factors. Exposure +categories to help guide the assessment process for strategic risk include competitive +landscape, key personnel, regulation, strategic relationships, macroeconomic downturn, and +product suite. +The strategic and capital plan is approved annually by the Executive Board. During the year, +execution of business strategy is regularly monitored to assess the performance against +strategic objectives and to seek to ensure we remain on track to achieve targets. +Liquidity Risk +IFRS 7/IAS 1 +Liquidity risk is the risk arising from our potential inability to meet all payment obligations +when they come due or only being able to meet these obligations at excessive costs. The +objective of the Group’s liquidity risk management framework is to ensure that it can always +fulfil its payment obligations and can manage liquidity and funding risks within the agreed +risk appetite. The framework considers relevant on-balance sheet and off-balance sheet +drivers of liquidity risk as well as expected future cash flows. +Capital and Liquidity Management is mandated to manage the overall liquidity and funding +position of the Group as well as the liquidity risk profile. Risk oversees the application of the +liquidity risk framework and adherence to the risk appetite. +The Group proactively manages liquidity risks by: +– Maintaining a liquid balance sheet with a prudent cash buffer +– Maintaining a funding plan, aligned with the strategic plans of the Group, to assess +upcoming funding demands and sources +– Stress testing of a rolling 12-month liquidity position, based on the funding plan, by applying +a combined, market and idiosyncratic stress event in which the Group needs to remain +solvent over a prolonged period of stress +– Monitoring regular stress testing results and identifying potential liquidity risks +– Maintaining contingency funding procedures to enable swift and coordinated action and +decision making in a liquidity crisis event +On 31 December 2023, the 12-month projected liquidity position after stress was well within +the risk appetite. +Liquidity risk is an area of lesser concern for the Group due to the cash generating nature of +our business and the conservative funding profile of our balance sheet. We principally fund +the business through equity and cash generated from operations. We may, however, raise +debt funding to address specific funding demands that may arise as part of growing the +business. +As part of the annual strategic planning process, we project the development of the key +liquidity and funding metrics based on the underlying business plans to ensure that the plan +complies with risk appetite. This includes maintaining a funding plan to specifically assess +upcoming funding demands and sources to accommodate projected seed and co- +investments within the respective limits. +To diversify our funding and access to liquidity, we have put in place a revolving credit facility +of € 500 million for general corporate purposes under which there were no drawings as of +31 December 2023. +For the maturity analysis of financial liabilities please refer to note ‘09 – Financial Instruments’ +to the ‘Consolidated Financial Statements’. +Risk Diversification and Concentration +Risk Concentrations +IFRS 7/IAS 1 +Risk concentrations refer to clusters of the same or similar risk drivers within risk types, +including risk concentrations in operational, credit, market, liquidity and other risks. They +could occur within and across counterparties, businesses, regions/countries, industries, and +products. The management of concentrations is integrated into the management of individual +risk types (e. g., operational, credit, market, liquidity risk management) and monitored on an +ongoing basis, with the key objective to avoid excessive risk concentrations. This is supported +by limit setting on different levels and/or management according to risk type. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Risk Report +54 Financial Risk \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_77.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_77.txt new file mode 100644 index 0000000000000000000000000000000000000000..ab01a334f7b234e56961080602c70a02a53aeba5 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_77.txt @@ -0,0 +1,71 @@ +Risk Type Diversification Benefit +The risk type diversification benefit quantifies diversification effects between operational, +credit, market, and strategic risk in the capital adequacy assessments. To the extent +correlations between these risk types fall below 1.0, a risk type diversification benefit results. +The calculation of the risk type diversification benefit is intended to ensure that the +standalone capital for the individual risk types is aggregated in an economically meaningful +way. +Fiduciary Investment Risk +Fiduciary investment risk is the management of investment portfolios in accordance with our +fiduciary and regulatory obligations. The investment funds risk framework, which covers +regulatory, client specific and internal requirements is part of our control framework. +Fiduciary Investment Risk in Traditional Asset Classes +Market Risk Management +The market risk management process identifies, measures, monitors, and reports the market +risks as well as portfolio concentrations of the investment portfolios. Both the specific risks on +position level and the overall risk of the portfolio are considered – aiming at protecting +investor assets and interests. +The risk identification process is performed on a quantitative and on a qualitative basis. The +most relevant quantitative metrics are based on movements in credit spreads, equity prices, +implied volatilities, commodity prices, foreign exchange rate, interest rates, and inflation +rates. +The risk management function monitors market risks with dedicated escalation procedures +covering the following areas: +— Absolute portfolio market risk is the risk of investment losses at portfolio level due to +changes in market risk drivers. +— Relative portfolio market risk is the risk of investment losses relative to the benchmark +(where available) due to changes in market risk drivers. +— Leverage risk is the risk of investment losses that result from usage of derivatives or non- +linear payoff structure within the portfolio. +— Concentration risk is the risk of investment losses at portfolio level due to concentration of +investments (e. g., specific issuers, countries, or foreign currencies). +Appropriate thresholds are defined and the consumption of the capacity within the limits is +reported to portfolio management. Indications for a high probability of a limit breach trigger +immediate escalation and mitigation actions. +Fiduciary Sustainability Risk Management +Sustainability risk in the fiduciary risk management context relates to various risks arising +from ESG aspects potentially impacting the valuation of any assets held in a fund that could +result in a financial impact for the fund investors. We established a risk management +framework for sustainability risk to manage sustainability factors potentially impacting a +fund’s risk profile. +The sustainability risk management process is designed to identify, measure, monitor, and +report sustainability related risks on an overall fund level, as well as on issuer specific levels +as part of the issuer concentration risk framework. +To identify and assess the sustainability risk profile of a fund, we consider our climate +transition risk assessment as well as our norm controversy assessment (please refer to ‘Our +Responsibility – Sustainable Action’ for further details) in the risk management processes in +combination with each fund’s gross and risk-adjusted exposure information as well as +relevant benchmark data (if applicable). The process includes fund-level risk appetite setting +and measurement, monitoring and reporting activities against the defined risk appetites. +We implemented the portfolio sustainability risk management framework across all European- +domiciled UCITS and AIFs, including the European ETF product suite. +Liquidity Risk Management +Liquidity risk means the risk arising from the potential inability to meet investor redemptions +or at significant cost to redeeming and remaining investors. The liquidity risk management +framework includes processes that are designed to identify, measure, monitor, assess, +manage, and report liquidity risk over the complete life cycle of a portfolio. Processes are +executed by first and second line of defence and governed by policies, procedures, and +oversight bodies. +The portfolio liquidity risk identification considers the portfolio’s strategy, the liquidity of its +assets, and the future liquidity demands. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Risk Report +55 Fiduciary Investment Risk \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_79.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_79.txt new file mode 100644 index 0000000000000000000000000000000000000000..a6cf77c22eef5296b296141f919b87fd59f9ae17 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_79.txt @@ -0,0 +1,55 @@ +alternatives products, open ended funds and closed end funds require a different type of +liquidity risk management. +Measurement of the liquidity risk compares possible liquidity needs with asset liquidity and is +summarised in a liquidity profile, which aggregates available liquidity by time buckets, +considering the time it takes to liquidate assets. In addition, risk management function +defines further internal limits where appropriate. +Liquidity risk primarily affects open end funds and is addressed by respective provisions +within the funds. The liquidity limit utilization is monitored on a regular basis. The +implemented liquidity stress tests follow the approach that, under several predetermined +liquidity stress test scenarios, the liquidity factors that drive the liquidity of funds are subject +to severe stress levels which could reasonably be expected to occur. Appropriate thresholds +are defined and limit utilization is reported to management, as appropriate. Indications for +high probability of a limit breach trigger immediate escalation and mitigation actions. +Counterparty Risk +Counterparty risk relates to the potential losses arising when a counterparty cannot (or does +not) fulfil its obligation in a transaction. In the context of the Group, counterparties are +typically third parties with direct market access (broker) or derivative counterparties, +securities lending counterparties or banks where cash deposits are placed. +Each counterparty must be approved by risk management before any trade can be entered. +Counterparty risks are identified via market signals (e. g. credit spreads), factors such as +ratings as well as by the regular review of counterparties. ESG aspects are also considered +when reviewing a counterparty. Where appropriate, aggregated counterparty exposure limits +are defined. Monitoring and escalation of limit excesses ensures adequate oversight. Over the +counter derivatives are traded under an International Swaps and Derivatives Association or +equivalent agreement such as a German Master Agreement mitigating counterparty risks. +Derivatives exposure is collateralized according to European Market Infrastructure Regulation +standards. +Valuation Risk +Valuation risk means the risk of possible mispricing of assets in investment portfolios, that +may result from data feed issues, accounting errors, pricing agents or valuation advisor, lack +of adequate controls over pricing deficiencies or missing prices, model or input errors, and +other control processes failures. The Valuation Control Group is responsible for oversight, +monitoring and management of risk mitigating activities aimed to ensure that the assets in +investment portfolios are fairly valued in accordance with our fiduciary and regulatory +obligation. +The valuation process is implemented by dedicated business and infrastructure teams, as +well as internal and external service providers. Valuation processes, procedures, and service +relationships are documented and are designed to ensure compliance with our global +standards and principles detailed in the valuation policies and relevant legal and regulatory +requirements and client guidelines. The valuation risk management framework requires the +implementation of consistent, robust, and reliable valuation and monitoring and control +processes that define the organizational set-up, standardized procedures and appropriate +controls. The risk management framework also provides direction for the committees, senior +management and fund boards mandated to govern the asset valuation process. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Risk Report +57 Fiduciary Investment Risk \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_80.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_80.txt new file mode 100644 index 0000000000000000000000000000000000000000..7704ea96861c063de7c02fc6b3bee20275e2ef00 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_80.txt @@ -0,0 +1,71 @@ +Compliance and Control +[Anti-Financial Crime and Compliance] +GRI 2-27; 3-3; 205-2 +Highlights +– An effective Anti-Financial Crime (AFC) and Compliance organisation safeguards our +license to operate and addresses regulatory, reputational and operational business +interests. It is essential to prevent financial crime and protect our clients, society and the +Group. +– The development of sustainability risks and factors and their integration into existing +processes continued in order to meet changing legal and regulatory requirements in 2023. +– Identifying and appropriately managing conflicts of interest is crucial to preventing adverse +consequences for our customers, the Group and our employees. +– Our antitrust compliance programme and training aims to prevent or mitigate breaches of +anti-trust laws. +Organisational Structure +The Executive Board is ultimately responsible for the management and mitigation of financial +crime risks within the Group. It has delegated tasks relating to those obligations to the AFC +and Compliance function. Our AFC and Compliance organization is part of the Chief +Administrative Office and maintains close contact with the AFC and Compliance function of +Deutsche Bank Group. +Risk Management +AFC and Compliance risks are part of the non-financial risk framework alongside liquidity-, +financial and strategic risk. AFC and Compliance is the second line of defence control +function, managing and mitigating the financial crime risks assigned to it in the non-financial +risk management taxonomy. +Non-compliance with relevant laws and regulations and an inadequate control framework +could expose us to significant legal, regulatory and reputational risk with a financial impact. +Control management and execution is one cornerstone of the AFC and Compliance risk +management framework as controls offer insights into risk trends and patterns and therefore +enable us to manage risks and stay within risk appetite. Therefore under the AFC and +Compliance risk management framework we monitor and assess our risk profile against the +agreed risk appetite and the effectiveness of our risk mitigating controls. +Every employee is responsible for the prevention, detection, and reporting of internal and +external fraud as well as bribery and corruption in connection with our business. We require +all employees to conduct themselves with the highest standards of integrity and to follow the +correct procedures if they believe that something is not right. A speak-up culture is essential +to maintaining a positive compliance culture in which everyone not only adheres to our +policies, but also adheres to applicable laws and regulations in all jurisdictions whilst offering +a safe environment for employees to raise issues. Our anti-fraud policy applies to all +employees, permanent and temporary, and explains how to immediately escalate any known +or suspected fraudulent incident or any concern via our whistle-blower tool or hotline that +protects the identity of the individuals raising the incident or concern. We take a zero- +tolerance approach to bribery and corruption in line with our Code of Conduct, our values and +beliefs, and national and international laws and regulations. The Anti-Bribery and Corruption +Policy sets out the minimum standards of behaviour expected of all employees and third +parties as well as the minimum safeguarding measures to be implemented. Any non- +compliance with the anti-fraud as well as the anti-bribery and corruption policies will lead to +consequences for the respective individuals. +Management Approach +The fight against financial crime is vital to ensure the stability and integrity of the +international financial system. Failure to identify and manage risks relating to financial crime +exposes us and our staff to potential corporate criminal and/or regulatory liability, civil +lawsuits, financial losses, and reputational damage. +During 2023 we did not identify or report any material breaches of laws and regulatory +requirements in relation to fraud, bribery, or corruption. +As a global asset manager, an effective compliance culture is key for safeguarding client +assets. This includes the Compliance risk management processes such as risk identification, +risk assessment and evaluation, risk monitoring and mitigation as well as a clear responsibility +across all three lines of defence. This also includes communication, training and compliance +with standards of behaviour which we expect our employees to adhere to. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Compliance and Control +58 Anti-Financial Crime and Compliance \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_81.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_81.txt new file mode 100644 index 0000000000000000000000000000000000000000..27425c3873b8f7224bc1415d19c61c20ee1209af --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_81.txt @@ -0,0 +1,77 @@ +The Code of Conduct sets out these standards of behaviour and requirements for our +employees. It is designed to ensure that we conduct ourselves in compliance with law and +regulation as well as ethically – with integrity, and in accordance with our and Deutsche +Bank’s policies and procedures. +As part of our risk management approach, we focus in particular on the following topics: +– Regulatory adherence +– Conflicts of interest +– Anti-competitive behaviours +Public Policy and Regulation +Regulatory reforms in the EU and internationally introduce changing legal and regulatory +requirements for our clients and us. Failure to comply with laws and regulations applicable to +us could result in regulatory penalties or fines, harm to our reputation and a material adverse +effect on the results of our operations. The compliance framework is designed to identify +such changes, to inform the business promptly and to allocate responsibility for assessing the +impact of such changes and, where necessary, amending policies and procedures to ensure +that they are implemented. +Since the risk of changing rules and regulations is inherent to our daily business, we have +developed a framework to identify and implement new or changed regulations and allocate +clear accountability for the identification, impact assessment, and implementation. +It helps to build our profile in public policy and regulatory interactions in general, so we +engage constructively with regulatory stakeholders as well as contribute to informed strategic +decision-making, provide oversight of key initiatives, and insight for senior management on +upcoming regulatory changes. +On a monthly basis, information on new and changed regulations is communicated to the +business divisions and stakeholders. Within Compliance, a global regulatory practice group +was established consisting of regional regulatory Compliance experts to provide updates on +key items in the respective jurisdictions and any potential extra-territorial impact. Information +on regulatory developments and changes is included in our quarterly reports to management. +How regulatory changes are implemented depends on their complexity and impact of the +changes. Major regulatory changes such as prudential requirements applicable to investment +firms are executed through programmes to manage cross-divisional implementation and +ensure the involvement of relevant stakeholders. +In 2023, the public affairs and regulatory strategy team provided ad hoc updates on political +and regulatory developments to senior management, coordinated the development and +delivery of our positions on important regulatory topics, and acted as a clearing house for +memberships in trade bodies and business organisations close to political stakeholders. +ESG Regulatory Compliance +GRI 3-3 +Sustainable Finance Disclosure Regulation, EU Taxonomy Regulation, +UK Sustainability Disclosure Requirements +In 2023, our primary focus was on the implementation of regulatory requirements derived +from the Sustainable Finance Disclosure Regulation, with a particular emphasis on the +statement on Principal Adverse Impacts of investment (PAI Statement) and the periodic +disclosure for financial products. Other regulatory focal points included the implementation of +the Taxonomy Regulation, as well as the analysis and initial implementation of upcoming +regulatory requirements resulting from the Corporate Sustainability Reporting Directive, +which must be transposed into national law, and UK Sustainable Disclosure Requirements. +A significant milestone was the final implementation and publication of PAI Statements on +30 June 2023. We continued to enhance our pre-contractual documents, periodic reports, and +website disclosures on the product level to meet additional requirements of national +competent authorities, such as Commission de Surveillance du Secteur Financier from +Luxembourg. As a result, a separate procedures document was released on our products web +pages that contains details on our ESG data and methodology in relation to those products +subject to Sustainable Finance Disclosure Regulation. +In June 2023, we updated our European ESG Template to the latest version 1.1.1. The template +serves as a standardized framework for exchanging ESG data between product manufacturers +and distributors. Developed by FinDatEx in cooperation with market associations for the +banking, fund, and insurance sectors, it aligns with data definitions specified by relevant EU +legislative acts, including Sustainable Finance Disclosure Regulation, EU Taxonomy +Regulation, the amended European Union Markets in Financial Instruments Directive II and +Insurance Distribution Directive. +Besides product and legal entity disclosures, we have provided key performance indicators +related to taxonomy alignment at group level within the Annual Report. This requirement +stems from the EU Taxonomy Regulation Article 8 – for more details, please refer to the +section ‘Complementary Information – Disclosures in Accordance with Article 8 Taxonomy +Regulation and Delegated Regulation (EU) 2021/2178’. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Compliance and Control +59 Anti-Financial Crime and Compliance \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_82.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_82.txt new file mode 100644 index 0000000000000000000000000000000000000000..c025bc9a22a7b30bd3bf1d70e09d823b7834f084 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_82.txt @@ -0,0 +1,79 @@ +Furthermore, we will have to comply with the requirements of the Corporate Sustainability +Reporting Directive in our 2024 Annual Report. In preparation for the related disclosure +requirements, we set up an implementation project in 2023, which involved conducting a +readiness assessment and preliminary materiality assessment based on the European +Sustainability Reporting Standards. +In addition, owing to our organizational structure and our operations in the UK, we have also +taken steps to comply with the upcoming requirements of the UK Sustainability Disclosure +Requirements, which are part of the UK Green Finance Strategy. +Business Ethics +GRI 2-23; 2-26; 3-3 +We follow the Deutsche Bank Group global conduct risk framework. This is designed to avoid +the inappropriate creation of bad outcomes for our clients, for us or the integrity of financial +markets through breaches of laws, regulations, or internal requirements, as stipulated within +the Code of Conduct of Deutsche Bank Group and supporting policies/procedures. This +global framework defines the principles for oversight of the management of conduct risk so +that there is timely identification, reporting, escalation and remediation of issues that arise. +The Code of Conduct defines rules of behaviour that are binding for all our employees. When +incidents occur, we explicitly encourage our employees to escalate potential concerns to a +supervisor or the relevant control function (for example Compliance). +We have developed a distinct set of values to position ourselves for the future. Specifically, all +our employees are personally responsible and accountable for living up to our core values of +“Client Commitment, Entrepreneurial Spirit and Sustainable Action”. We want to continue to +foster an environment that is open and diverse, where staff opinions and “speaking-up” are +valued and encouraged without fear of retaliation, and our success as an organization is built +on respect and collaboration, in serving our clients, stakeholders and communities. With +regards to reputational risk, our brand is one of our most important assets. +Our corporate culture is one of our greatest and most intangible assets. Therefore, enhancing +and protecting our corporate culture which is grounded in trust, accountability, transparency +and propelled by a shared business vision remains of paramount importance. Our 2023 +culture integrity and conduct plan included six initiatives designed to drive our corporate +culture, which is further broken down into actionable milestones across focus areas that +include trust, accountability, and purpose. These initiatives are intended to foster a +transparent and robust culture for employees that facilitates ethical behaviour and +appropriate decision-making, supported by other divisional messages. For example, the +“People Leader Enablement” initiative emphasises increased accountability of our leaders/ +managers to lead by example and create a positive, high-performing culture and the “More +Effective and Timely Decision Making” initiative focuses on reducing complexity across our +business and creating a more modern work environment that empowers employees to reach +peak performance as one team. +Another key initiative, “Grey Area Training, Scenario + Framework” increases employee +awareness of grey areas, which enable employees to feel confident to challenge behaviour +that could represent conduct risk, raise concerns related to dilemmas, navigate unclear +boundaries and challenges that may arise in their daily work, as well as speak-up on how the +organization can do better. In 2023, interactive classroom/virtual training sessions were +delivered with further focus on specific grey area scenarios. +Dealing with Conflicts of Interest +GRI 2-15 +Conflicts of interest are inherent to asset management businesses. Failure to recognise and +appropriately manage conflicts of interest can result in inappropriate or adverse +consequences for clients, the Group, and our employees. Therefore we have implemented a +dedicated framework for conflicts of interest in line with the Conflicts of Interest Policy, to +identify actual and potential conflicts and to seek to manage them fairly and appropriately for +all involved parties. +Each function must implement measures to ensure that actual or potential conflicts of +interest are identified and managed appropriately. This includes, among other things, a +conflict of interest register listing conflicts of interest that have arisen and may arise within a +business area. +Beyond the business units, control functions deal with, review or oversee the management of +conflicts of interest either directly or indirectly. As an example, we use the employee +compliance program to check whether employee transactions are in line with regulatory +requirements and whether they are detrimental to our customers or the market. Furthermore, +the Compliance control room monitors and controls the flow of insider information to +minimize conflict scenarios. +Anti-Competitive Behaviour +GRI 206-1 +The consequences of anti-competitive behaviour could be serious and far-reaching. Our anti- +trust compliance programme defines the minimum standards of behaviour for our employees + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Compliance and Control +60 Anti-Financial Crime and Compliance \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_83.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_83.txt new file mode 100644 index 0000000000000000000000000000000000000000..cb248d592adb7614b6e23e3b1441d90d4f6c909f --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_83.txt @@ -0,0 +1,69 @@ +and includes a comprehensive training and control framework that is designed to identify and +monitor anti-trust risks to prevent or mitigate breaches of anti-trust laws. +There were no pending or completed legal actions against us during the reporting period +regarding any anti-competitive behaviour or violations of antitrust and monopoly legislation in +which the organization has been identified as a participant. +Marketing and Labelling +Our governance structure including operational guidelines, defined policies, and our +corporate values provides a structured framework for all employees that is designed to +protect our brand and reputation. +All marketing efforts must be fair, balanced and designed to ensure that risks are reasonably +disclosed. Such materials are subject to regulatory requirements, which vary depending on +the entity, product, intended audience, venue where the offer or sale occurs, and other +criteria. Our employees should not only adhere to these requirements but also use +professional judgment to present product and marketing content with honesty and +transparency. +As part of the review process, our marketing and product materials are reviewed and +approved by Compliance or respective business gatekeepers to ensure that all requirements +are being followed. Our approval process is designed to ensure that only marketing and +product material that has been reviewed and approved can be published or distributed +externally to clients. +We promote responsible employee conduct by regular training events, communication and +compliance with our Code of Conduct and legal requirements, which is the minimum +standard for us and seeks to protect our clients’ interests as well as our brand and reputation. +We also promote the standards of relevant policies and guidelines, our global framework on +controls of marketing material and for some regions additional marketing policies that have +been defined based on local requirements. +[Data Protection] +GRI 3-3; 418-1 +Highlights +– Continually strengthening governance and controls in line with regulatory developments on +data protection +– Key advice in connection with the engagement of vendors as part of our multi-year +transformation program +– No personal data breaches with material impact on individuals identified +In most countries where we conduct business there are data protection laws. These are +derived from the privacy related statements in the EU Charter of Fundamental Rights, the UN +Universal Declaration of Human Rights and the European Convention on Human Rights. We +recognize that data protection is an important social value as clients, employees and other +stakeholders expect that the personal data they entrusted to us is treated with the highest +care. Therefore, we are committed to protecting personal data and complying with the +General Data Protection Regulation and similar laws. +Management Approach/Governance +For data privacy, we are supported by Deutsche Bank Group Data Privacy, a specialised, +independent control function that advises on and monitors the collection, processing, and use +of personal data by our business divisions and infrastructure functions. As a second line of +defence function, this team defines data protection principles and sets consistent +requirements and minimum control standards with respect to data protection to ensure +compliance with applicable laws and regulations. It is supported by local Data Protection +Officers in the countries where we conduct business. Our Chief Administrative Officer +receives an annual report on data privacy. +In 2023, a review and enhancement of the Deutsche Bank Group data protection policy +framework and governance was initiated that also applies to us. The key data protection +principles and how to comply with them are being refined in a separate overarching +framework document. The existing Data Protection Policy is being revised to specify the data +protection related requirements for employees and role holders in the organization. The +policy establishes requirements for employees on the usage of personal data, the escalation +of potential personal data breaches and specific requirements for vendor engagements. +Further, it provides requirements for business divisions and infrastructure functions to deal + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Compliance and Control +61 Data Protection \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_88.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_88.txt new file mode 100644 index 0000000000000000000000000000000000000000..b4887567ce35e98fc127ef11e2cf9a877c104f2e --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_88.txt @@ -0,0 +1,73 @@ +Complementary Information +[Disclosures in Accordance with Article 8 Taxonomy +Regulation and Delegated Regulation (EU) 2021/2178] +Background +We report under Article 8 of Regulation (EU) 2020/852 (“Taxonomy Regulation”) as a financial +undertaking and disclose how and to what extent our activities are associated with economic +activities that qualify as environmentally sustainable under Articles 3 and 9 Taxonomy +Regulation. +The details of the KPI to be disclosed under Art. 8 Taxonomy Regulation are set out in a +delegated act (Delegated Regulation (EU) 2021/2178 (“Delegated Regulation”)). The Delegated +Regulation differentiates between non-financial undertakings and financial undertakings in +terms of the reporting requirements and content of the disclosure. Even though DWS KGaA +does not qualify as a financial undertaking pursuant to Article 1 (8) Delegated Regulation, we +are engaged in financial activities as the activities performed by several of our subsidiaries are +those of an asset manager or an investment firm. Consequently, as the KPI for non-financial +undertakings would not appropriately demonstrate to what extent our economic activities are +sustainable under the Taxonomy Regulation, we are reporting under Article 8 Taxonomy +Regulation as a financial undertaking. We are further reporting the KPI for asset managers as +it most appropriately reflects our underlying business model. +Article 10 Delegated Regulation provides a phasing-in of the disclosure requirements. From +1 January 2022 until 31 December 2023, financial undertakings were only required to disclose +their exposure to Taxonomy-eligible and non-eligible investments, central governments, +central banks and supranational issuers, derivatives and undertakings that are not obliged to +publish information pursuant to the Non-Financial Reporting Directive (NFRD) – hereafter +referred to as “Non-NFRD Undertakings” – in relation to their total assets. We reported +accordingly in our 2022 Annual Report. +From 1 January 2024 financial undertakings must disclose their Taxonomy KPI as specified in +the relevant applicable Annexes to the Delegated Regulation, including certain accompanying +information. Consequently, in this Annual Report we disclose the information to be reported +by asset managers as specified in Annex III in the template format set out in Annex IV about +the Taxonomy-alignment, Taxonomy-eligibility and Taxonomy-non-eligibility of our +investments as well as the qualitative disclosures according to Annex XI Delegated +Regulation. +As of 1 January 2023, financial undertakings and non-financial undertakings also must +disclose information on their exposure to certain nuclear and fossil gas related activities +covered by the Taxonomy Regulation in accordance with Annex XII Delegated Regulation. +However, the calculation of KPI is subject to the availability of sufficient reported data for our +investments. Due to the limited availability of relevant data at the date of publication of this +Annual Report, we report each nuclear and fossil gas activity listed in template 1 of Annex XII +Delegated Regulation with “yes”, as we cannot rule out exposure to such activities. However, +we have not included the information on Taxonomy-alignment, Taxonomy-eligibility, and +Taxonomy-non-eligibility of our investments in the nuclear and fossil gas activities covered by +the Taxonomy Regulation as per Annex XII Delegated Regulation in this Annual Report. +On 21 November 2023 the Delegated Regulation (EU) 2023/2486 containing technical +screening criteria for the four non-climate objectives of the Taxonomy Regulation was +published. These four objectives are: (1) sustainable use and protection of water and marine +resources, (2) transition to a circular economy, (3) pollution prevention and control and (4) the +protection and restoration of biodiversity and ecosystems. This Delegated Regulation (EU) +2023/2486 applies from 1 January 2024. +The Delegated Regulation (EU) 2023/2485 which was also published on 21 November 2023, +establishes additional technical screening criteria for supplementary economic activities +contributing to the two climate objectives of the Taxonomy Regulation (climate change +mitigation and climate change adaptation). The additional technical screening criteria +concern economic activities in the transportation sector as well as desalination and services +for preventing and responding to climate-related disasters and emergencies. This Delegated +Regulation (EU) 2023/2485 also generally applies from 1 January 2024. +The continuous development of the Taxonomy Regulation is reflected in the disclosure +requirements for entities in scope of Article 8 Taxonomy Reporting, albeit allowing a phased- +in disclosure. Acknowledging the need to obtain relevant data from investees, financial +undertakings from 1 January 2024 until 31 December 2025 are only required to disclose the +proportion in their covered assets of exposure to Taxonomy-eligible and non-eligible +economic activities pursuant to the Delegated Regulation (EU) 2023/2486 and the new + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Complementary Information +66 Disclosures in Accordance with Article 8 Taxonomy Regulation and Delegated Regulation (EU) 2021/2178 \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_89.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_89.txt new file mode 100644 index 0000000000000000000000000000000000000000..b26cf4dee83b489b8857dd17251708f05145c380 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_89.txt @@ -0,0 +1,80 @@ +economic activities covered by the Delegated Regulation (EU) 2023/2485. We intend in the +future to comply with these additional disclosure requirements. +However, due to unavailability of relevant data at the time of publication of this Annual +Report, we were not able to disclose Taxonomy-eligibility and Taxonomy-non-eligibility of our +investments relating to the four non-climate objectives of the Taxonomy Regulation. +Further, we report as not applicable (“N/A”) the breakdown of the numerator of our key +performance indicator relating to the four non-climate objectives of the Taxonomy Regulation +to be disclosed according to Annex IV Delegated Regulation because we do not have to report +Taxonomy-alignment pursuant to Article 10 (7) Delegated Regulation in this Annual Report. +Due to the lack of clarity on whether relevant data at the time of publication of this Annual +Report includes data on the additional economic activities under the Delegated Regulation +(EU) 2023/2485, we cannot confirm whether the disclosure of Taxonomy-eligibility and +Taxonomy-non-eligibility of our investments includes such additional economic activities. +On 21 December 2023, the European Commission published a Draft Commission Notice +addressed to financial undertakings aiming to provide further guidance about the reporting of +their KPI under Article 8 Taxonomy Regulation (“Commission Notice”). The Commission +Notice has been approved in principle but has not formally been adopted. To the extent we +have been able to evaluate the Commission Notice in the limited time available, we have +nevertheless sought to comply with it in respect to our Article 8 Taxonomy Regulation +disclosure in this Annual Report. We will complete our analysis in due course for the purposes +of future disclosures. +Our KPI + +The weighted average value of all the investments that +are directed at funding, or are associated with +taxonomy-aligned economic activities relative to the +value of total assets covered by the KPI, with following +weights for investments in undertakings per below: +1 +The weighted average value of all the investments that +are directed at funding, or are associated with +taxonomy-aligned economic activities, with following +weights for investments in undertakings per below: +1 +Turnover-based in % 0.8 Turnover-based in € m. 6,201 +CapEx-based in % 1.6 CapEx-based in € m. 12,057 + +The percentage of assets covered by the KPI relative to +total investments (total AuM). Excluding investments in +sovereign entities: +1,2 +The monetary value of assets covered by the KPI. +Excluding investments in sovereign entities. +1 +Coverage ratio in % 85.0 Coverage in € m. 734,382 +1 + Based on actuals and the Group’s AuM as defined for the purpose of Article 8 Taxonomy Regulation disclosure. +Excluding investments in central governments, central banks and supranational issuers. +2 + Based on actuals and the Group’s AuM as defined for the purpose of Article 8 Taxonomy Regulation disclosure. +Qualitative Disclosures +The KPI reporting for financial undertakings is to be accompanied by the qualitative +disclosure provisions contained in Annex XI of the Delegated Regulation to support the +financial undertakings’ explanations and markets’ understanding of the reported KPI. +Contextual Information in Support of the Quantitative Indicators, on +the Scope of Assets, Data Sources and Limitations +We display our KPI without providing the complementary information to be provided +according to Annex IV Delegated Regulation in this management summary. We provide the +KPI as well as the complementary information according to Annex IV Delegated Regulation in +the ‘Supplementary Information – Full Disclosures in Accordance with Article 8 Taxonomy +Regulation and Delegated Regulation (EU) 2021/2178’. +The definition of assets under management we apply for the purpose of determining the +Taxonomy-eligibility and Taxonomy-alignment of our investments deviates from the definition +of AuM as otherwise stated in the ‘Our Performance Indicators – Our Financial Performance’. +For our Article 8 Taxonomy Reporting we follow the guidance from the European Commission +in the Commission staff document Frequently Asked Questions (FAQs) on “What is the EU +Taxonomy Article 8 delegated act and how will it work in practice”. Accordingly, the value of +all covered assets under management used for reporting the proportion of Taxonomy-- +alignment, Taxonomy-eligibility and Taxonomy-non-eligibility encompasses the value of all + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Complementary Information +67 Disclosures in Accordance with Article 8 Taxonomy Regulation and Delegated Regulation (EU) 2021/2178 \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_92.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_92.txt new file mode 100644 index 0000000000000000000000000000000000000000..fecd26dd3e61dde3137af0942e2398f8c44e7898 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_92.txt @@ -0,0 +1,83 @@ +Pursuant to the German Investment Firm Act evidence must be provided to the German +Federal Financial Supervisory Authority (BaFin) and to the Deutsche Bundesbank that any +member of the Executive Board is reliable and has adequate professional suitability and +sufficient time availability to exercise the respective task before the member is appointed +(Section 67 (2) number 1 of the Securities Institutions Act). +Pursuant to Section 62 (2) of the Securities Institutions Act, BaFin can demand that members +of the Executive Board are dismissed and prohibit them from carrying out their activities if +such members are not reliable or do not have the professional suitability to manage the +company or do not commit sufficient time to the performance of their functions. In addition, +BaFin can require the dismissal of members of the Executive Board and prohibit them from +carrying out their activities if such members have intentionally or recklessly contravened the +provisions of the Securities Institutions Act, the regulations issued to support its +implementation or orders issued by BaFin, and if they persist in such behaviour despite +having been duly cautioned by BaFin. +Rules Governing the Amendment of the Articles of Association +Any amendment of the Articles of Association of DWS KGaA requires a resolution of the +General Meeting of the company pursuant to Section 179 of the German Stock Corporation +Act (AktG). Pursuant to the Articles of Association of DWS KGaA, the resolutions of the +General Meeting are taken by a simple majority of votes and, in so far as a majority of capital +stock is required, by a simple majority of capital stock, except where law or the Articles of +Association determine otherwise (Section 25 (1)). Resolutions passed in the General Meeting +require the approval of the General Partner where they involve matters which, in the case of a +limited partnership, require the authorization of the personally liable partners. This includes +resolutions on the amendment of the Articles of Association. To the extent that the +resolutions of the General Meeting are subject to the consent of the General Partner, the +General Partner shall declare at the General Meeting whether consent to the resolutions will +be given or will be refused (Section 25 (3)). The authority to amend the Articles of Association +in so far as such amendments merely relate to the wording has been assigned to the +Supervisory Board (Section 25 (4)). +Amendments to the Articles of Association become effective upon their entry in the +Commercial Register pursuant to Section 181 (3) of the German Stock Corporation Act (AktG). +Powers of the General Partner to Issue or Buy Back Shares +On 9 June 2022 the General Meeting of DWS KGaA approved the creation of two authorized +capitals in the total amount of € 80 million: +The General Partner is authorized to increase the share capital of the company on or before 8 +June 2025 once or more than once, by up to a total of € 20 million – through the issuance of +new shares against cash payment or contribution in kind (“Authorized Capital 2022/I”). +Shareholders are to be granted pre-emptive rights, but the General Partner is authorized to +except broken amounts from shareholders’ pre-emptive rights. The General Partner is also +authorized to exclude pre-emptive rights if the capital increase against contribution in kind is +carried out in order to acquire companies or shareholdings in companies. Finally, the General +Partner is authorized to exclude the pre-emptive rights if the issue price of the new shares is +not significantly lower than the quoted price of the shares already listed at the time of the +final determination of the issue price and the total shares issued since the authorization in +accordance with Section 186 (3) Sentence 4 of the German Stock Corporation Act (AktG) do +not exceed 10% of the share capital at the time the authorization becomes effective – or if the +value is lower – at the time the authorization is utilized. Decisions of the General Partner to +utilize the Authorized Capital 2022/I and to exclude pre-emptive rights require the approval of +the Supervisory Board. The new shares may also be taken up by banks specified by the +General Partner with the obligation to offer them to shareholders (indirect pre-emptive right). +Further details are governed by Section 4 of the Articles of Association. +The General Partner is authorized to increase the share capital of the company on or before 8 +June 2025 once or more than once, by up to a total of € 60 million through the issuance of +new shares against cash payment (“Authorized Capital 2022/II”). Shareholders are to be +granted pre-emptive rights, but the General Partner is authorized to except broken amounts +from shareholders’ pre-emptive rights. Decisions of the General Partner to utilize the +Authorized Capital 2022/II and to exclude pre-emptive rights require the approval of the +Supervisory Board. The new shares may also be taken up by certain banks specified by the +General Partner with the obligation to offer them to the shareholders (indirect pre-emptive +right). Further details are governed by Section 4 of the Articles of Association. +By resolution of the Annual General Meeting of 5 June 2019 the General Partner is authorized +to purchase, on or before 31 May 2024, its own shares in a total volume of up to 5% of the +share capital at the time the resolution is taken or – if the value is lower – of the share capital +at the time this authorization is exercised. Together with its own shares acquired for other +reasons and which are from time to time in the company’s possession or attributable to the +company pursuant to Section 71a et. seq. of the German Stock Corporation Act (AktG), the +own shares purchased on the basis of this authorization may not at any time exceed 10% of +the company’s respectively applicable share capital. The own shares may be bought through +the stock exchange or by means of a public purchase offer to all shareholders. The +authorization provides for certain thresholds by defining a minimum and maximum +consideration for the acquisition of a treasury share. The countervalue for the purchase of +shares (excluding ancillary purchase costs) through the stock exchange may not be more than + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Complementary Information +70 Information pursuant to Sections 289a and 315a of the German Commercial Code and Explanatory Report \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_94.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_94.txt new file mode 100644 index 0000000000000000000000000000000000000000..82b1662f4f389adbd0c9042a8e331e382687a038 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_94.txt @@ -0,0 +1,41 @@ +Consolidated Financial Statements +Consolidated Statement of Income ..................................... 73 +Consolidated Statement of Comprehensive Income ......... 73 +Consolidated Balance Sheet ................................................. 74 +Consolidated Changes in Equity .......................................... 75 +Consolidated Statement of Cash Flows .............................. 76 +Notes to the Consolidated Financial Statements .............. 77 +01 – Basis of Preparation ................................................... 77 +02 – Significant Accounting Policies and Critical +Accounting Estimates ............................................... 78 +03 – Recently Adopted and New Accounting +Pronouncements ....................................................... 86 +04 – Acquisitions and Dispositions ................................. 88 +05 – Business Segment and Related Information ......... 88 +Notes to the Consolidated Income Statement ................... 89 +06 – Net Commissions and Fees from Asset +Management .............................................................. 89 +07 – General and Administrative Expenses .................... 89 +08 – Earnings per Common Share ................................... 90 +Notes to the Consolidated Balance Sheet .......................... 91 +09 – Financial Instruments ............................................... 91 +10 – Interest Rate Benchmark Reform ............................. 100 +11 – Equity Method Investments ....................................... 100 +12 – Goodwill and Other Intangible Assets ..................... 101 +13 – Property and Equipment ........................................... 105 +14 – Leases .......................................................................... 106 +15 – Other Assets and Other Liabilities ........................... 107 +16 – Provisions .................................................................... 108 +17 – Contractual Obligations and Commitments ........... 109 +18 – Equity ........................................................................... 109 +Additional Notes ..................................................................... 111 +19 – Employee Benefits ..................................................... 111 +20 – Income Taxes ............................................................. 122 +21 – Related Party Transactions ....................................... 124 +22 – Information on Subsidiaries and Shareholdings .... 125 +23 – Structured Entities ..................................................... 128 +24 – Events after the Reporting Period ........................... 130 +25 – Additional Disclosures .............................................. 131 +Confirmations ......................................................................... 132 +Responsibility Statement by the Executive Board ......... 132 +Independent Auditor’s Report .......................................... 133 \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_95.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_95.txt new file mode 100644 index 0000000000000000000000000000000000000000..90deba81aedb2cf6d383394467087d5db762d952 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_95.txt @@ -0,0 +1,88 @@ +Consolidated Financial Statements +Consolidated Statement of Income +in € m. Notes 2023 2022 +Management fees income 3,563 3,719 +Management fees expense 1,248 1,263 +Net management fees 6 2,315 2,456 +Performance and transaction fee income 132 134 +Performance and transaction fee expense 4 8 +Net performance and transaction fees 6 128 125 +Net commissions and fees from asset management 6 2,443 2,582 +Interest and similar income +1 + 117 39 +Interest expense 14 18 +Net interest income 103 21 +Net gains (losses) on financial assets/liabilities at fair value through +profit or loss +2 + 113 (185) +Net income (loss) from equity method investments 11 42 66 +Provision for credit losses 0 (1) +Other income (loss) +2 + (88) 228 +Total net interest and non-interest income 2,614 2,712 +Compensation and benefits 19 865 846 +General and administrative expenses 7, 14 972 933 +Impairment of goodwill and impairment/(impairment reversal) of +other intangible assets 12 0 68 +Total non-interest expenses 1,837 1,847 +Profit (loss) before tax 777 866 +Income tax expense 20 224 271 +Net income (loss) 553 595 +Attributable to: +Non-controlling interests 2 1 +DWS shareholders 552 594 +1 + Interest and similar income includes € 95 million for 2023 and € 21 million for 2022, calculated based on effective +interest method. +2 +Net gains (losses) on financial assets/liabilities at fair value through profit or loss is mainly attributable to trading +assets held by guaranteed funds of € 111 million for 2023 (€ (186) million for 2022). This is offset by income (loss) from +liabilities held by guaranteed funds of € (111) million for 2023 (€ 186 million for 2022) shown in other income. DWS +Group has no shares in these funds. Other income includes a sales gain of € 30 million for 2022 from the transfer of +the digital investment platform to MorgenFund GmbH. +Consolidated Statement of Comprehensive Income +in € m. 2023 2022 +Net income (loss) recognised in the income statement 553 595 +Other comprehensive income: +Items that will not be reclassified to profit or loss: +Remeasurement gains (losses) related to defined benefit plans, before tax (7) 58 +Income tax expense (benefit) related to items that will not be reclassified to profit +or loss (2) 19 +Items that are or may be reclassified to profit or loss: +Financial assets mandatory at fair value through other comprehensive income +Unrealized net gains (losses) arising during the period, before tax 3 (73) +Equity method investments +Net gains (losses) arising during the period 0 0 +Foreign currency translation +Unrealized net gains(losses) arising during the period, before tax (140) 195 +Realized net gains (losses) arising during the period (reclassified to profit or +loss), before tax 0 0 +Income tax expense (benefit) related to items that are or may be reclassified to +profit or loss 1 (23) +Total other comprehensive income (loss), net of tax (143) 185 +Total comprehensive income (loss), net of tax 410 780 +Attributable to: +Non-controlling interests 2 1 +DWS shareholders 409 779 Earnings per Common Share +Notes 2023 2022 +Earnings per common share: +Basic 8 € 2.76 € 2.97 +Diluted 8 € 2.76 € 2.97 +Number of common shares (in million) 18 200 200 + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Consolidated Financial Statements +73 Consolidated Statement of Income +The secret object #1 is a "table". \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_96.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_96.txt new file mode 100644 index 0000000000000000000000000000000000000000..6b3ac0eec7b66c70db25a0038ebeadbc6569ec23 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_96.txt @@ -0,0 +1,59 @@ +Consolidated Balance Sheet +in € m. Notes 31 Dec 2023 31 Dec 2022 +ASSETS +Cash and bank balances 9 1,414 1,979 +Financial assets at fair value through profit or loss: 9 +Trading assets 1,661 1,346 +Positive market values from derivative financial instruments 30 21 +Non-trading financial assets mandatory at fair value through profit +or loss 2,693 2,122 +Investment contract assets mandatory at fair value through profit +or loss 484 469 +Total financial assets at fair value through profit or loss 9 4,868 3,959 +Financial assets at fair value through other comprehensive income 9 82 80 +Equity method investments 11 420 415 +Loans at amortized cost 9 4 6 +Property and equipment 13 24 23 +Right-of-use assets 14 135 121 +Goodwill and other intangible assets 12 3,694 3,749 +Other assets 9, 15 839 877 +Assets for current tax 20 108 71 +Deferred tax assets 20 95 131 +Total assets 11,683 11,412 +in € m. Notes 31 Dec 2023 31 Dec 2022 +LIABILITIES AND EQUITY +Financial liabilities at fair value through profit or loss: 9 +Trading liabilities 31 38 +Negative market values from derivative financial instruments 118 127 +Investment contract liabilities designated at fair value through +profit or loss 484 469 +Total financial liabilities at fair value through profit or loss 9 633 634 +Other short-term borrowings 9 8 21 +Lease liabilities 14 152 139 +Other liabilities 9, 15 2,800 2,500 +Provisions 16 50 36 +Liabilities for current tax 20 21 40 +Deferred tax liabilities 20 202 213 +Long-term debt 9 0 0 +Total liabilities 3,866 3,584 +Common shares, no par value, nominal value of € 1.00 18 200 200 +Additional paid-in capital 3,440 3,447 +Retained earnings 3,857 3,720 +Accumulated other comprehensive income (loss), net of tax 293 432 +Total shareholders’ equity 7,791 7,799 +Non-controlling interests 26 29 +Total equity 7,817 7,828 +Total liabilities and equity 11,683 11,412 + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Consolidated Financial Statements +74 Consolidated Balance Sheet \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_97.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_97.txt new file mode 100644 index 0000000000000000000000000000000000000000..38cf9f20812912678f4284f29af0893e8ed2f425 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_97.txt @@ -0,0 +1,54 @@ +Consolidated Changes in Equity +` +Shareholders' equity +Non- +controlling +interest Total equity +Accumulated other comprehensive income, net of tax +Total +Unrealized net gains (losses) +Foreign +currency +translation, +net of tax Totalin € m. +Common +Stock +Additional +paid in capital +Retained +earnings +On financial assets +mandatory at fair +value through other +comprehensive +income, net of tax +From equity +method +investments +Balance as of 1 January 2022 200 3,448 3,487 (28) 19 295 286 7,421 24 7,445 +Total comprehensive income (loss), net of tax 0 0 594 (50) 0 195 145 740 0 740 +Remeasurement gains (losses) related to defined benefit plans, net of tax 0 0 39 0 0 0 0 39 0 40 +Cash dividends paid 0 0 400 0 0 0 0 400 0 400 +Net change in share awards in the reporting period, net of tax 0 (2) 0 0 0 0 0 (2) 0 (2) +Other 0 0 0 0 0 0 0 0 4 5 +Balance as of 31 December 2022 200 3,447 3,720 (78) 19 491 432 7,799 29 7,828 +Balance as of 1 January 2023 200 3,447 3,720 (78) 19 491 432 7,799 29 7,828 +Total comprehensive income (loss), net of tax 0 0 552 2 0 (140) (138) 414 2 415 +Remeasurement gains (losses) related to defined benefit plans, net of tax 0 0 (5) 0 0 0 0 (5) 0 (5) +Cash dividends paid 0 0 410 0 0 0 0 410 0 410 +Net change in share awards in the reporting period, net of tax 0 (7) 0 0 0 0 0 (7) 0 (7) +Other 0 0 0 0 0 0 0 0 (4) (4) +Balance as of 31 December 2023 200 3,440 3,857 (76) 19 351 293 7,791 26 7,817 + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Consolidated Financial Statements +75 Consolidated Changes in Equity \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_98.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_98.txt new file mode 100644 index 0000000000000000000000000000000000000000..479fdf340d89cbe16bab7fa70254689111e16705 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_98.txt @@ -0,0 +1,89 @@ +Consolidated Statement of Cash Flows +Cash flows from operating activities: +Net income (loss) 553 595 +Adjustments to reconcile net income (loss) to net cash provided by (used in) +operating activities: +Restructuring activities 0 0 +(Gain) loss on sale of financial assets from investing activity (2) (1) +Deferred taxes, net 25 1 +Impairment, depreciation, other amortization and (accretion) 42 123 +Share of net loss (income) from equity method investments (42) (66) +Other non-cash movements (39) 54 +Income (loss) adjusted for non-cash charges, credits and other items 537 708 +Adjustments for net change in operating assets and liabilities: +Interest-earning time deposits with banks 38 (48) +Other assets 5 210 +Investment contract liabilities designated at fair value through profit or loss 15 (93) +Other liabilities 290 (386) +Trading assets and liabilities, positive and negative market values from +derivative financial instruments, net +1 + (340) 141 +Other, net (17) (10) +Net cash provided by (used in) operating activities 528 522 +Thereof: Net cash provided by (used in) operating activities of guaranteed funds (14) (5) +Cash flows from investing activities: +Proceeds from sale and maturities of: +Non-trading financial assets mandatory at fair value through profit or loss +2 + 3,428 1,869 +Equity method investments 0 0 +Property and equipment 0 1 +Disposals of intangible assets 0 0 +Purchase of: +Non-trading financial assets mandatory at fair value through profit or loss +3 + (3,990) (2,164) +Equity method investments 0 (49) +Property and equipment (7) (1) +Additional intangible assets (67) (39) +Dividends received from equity method investments 28 45 +Loans at amortized cost made to other parties (2) (1) +Net cash provided by (used in) investing activities (609) (340) +in € m. 2023 2022 +Cash flows from financing activities: +Cash dividends paid to DWS shareholders (410) (400) +Other borrowings 0 0 +Repayment of other borrowings (14) (53) +Repayment of lease liabilities (principal) (21) (19) +Net change in non-controlling interests (2) 5 +Net cash provided by (used in) financing activities (447) (468) +Net effect of exchange rate changes on cash and cash equivalents (1) 26 +Net increase (decrease) in cash and cash equivalents (529) (259) +Cash and cash equivalents at beginning of period 1,795 2,055 +Net increase (decrease) in cash and cash equivalents (529) (259) +Cash and cash equivalents at end of period 1,266 1,795 +in € m. 2023 2022 +1 +Comprises mainly of trading assets held by consolidated guaranteed funds that are offset by payables to clients held +by guaranteed funds and presented in other liabilities. +2 +The inflows result mainly from maturities and disposals of government and corporate bonds. +3 + The outflows result mainly from investments in government and corporate bonds. +Supplemental cash flow information +in € m. 2023 2022 +Net cash provided by (used in) operating activities includes: +Income taxes paid (received), net 253 348 +Interest paid 14 18 +Interest received 97 20 +Dividends received 17 8 +Cash and bank balances: +Cash 0 0 +Bank balances on demand 1,266 1,795 +Total cash and cash equivalents 1,266 1,795 +Time deposits 147 183 +Total cash and bank balances 1,414 1,979 + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Consolidated Financial Statements +76 Consolidated Statement of Cash Flows \ No newline at end of file diff --git a/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_99.txt b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_99.txt new file mode 100644 index 0000000000000000000000000000000000000000..ef2e7bf7d52a49cfe5f8a843bc596d5cb4d88481 --- /dev/null +++ b/DWS/DWS_200Pages/Text_TextNeedles/DWS_200Pages_TextNeedles_page_99.txt @@ -0,0 +1,68 @@ +Notes to the Consolidated Financial Statements +01 – Basis of Preparation +The accompanying consolidated financial statements present the operations of DWS Group +GmbH & Co. KGaA (DWS KGaA) with its business address at Mainzer Landstrasse 11-17, 60329 +Frankfurt am Main, and its consolidated subsidiaries presented as a single economic unit +(collectively the Group). +The Group as asset manager offers individuals and institutions access to the Group's +investment capabilities across all major liquid and illiquid asset classes. +DWS KGaA is registered with the commercial register of the local court of Frankfurt am Main, +Germany, under HRB 111128. The company is a partnership limited by shares incorporated in +Germany and governed by German law. +DB Beteiligungs-Holding GmbH, has its registered seat in Frankfurt am Main, Germany, is +registered with the commercial register of the local court of Frankfurt am Main, Germany, +under HRB 87504 and is the parent company of DWS KGaA holding a 79.49% share of +DWS KGaA. The remaining shares are held by external investors. The ultimate parent +company of DWS KGaA is Deutsche Bank AG, headquartered in Frankfurt am Main, Germany, +registered with the commercial register of the local court of Frankfurt am Main, Germany, +under HRB 30000. The consolidated financial statements of Deutsche Bank AG in accordance +with IFRS can be viewed on the Investor Relations website of Deutsche Bank AG (https:// +www.db.com/ir). +The accompanying consolidated financial statements have been prepared in accordance with +IFRS as issued by the IASB and endorsed by the EU and in compliance with Section 315a/315e +German Commercial Code. The Group’s application of IFRS results in no differences between +IFRS as issued by the IASB and endorsed by the EU. +The Executive Board has a reasonable expectation that DWS KGaA and the Group have +adequate resources to continue in operating existence for the foreseeable future. Accordingly, +the Group’s annual consolidated financial statements have been prepared on a going concern +basis. +The consolidated financial statements have been prepared as at the end our reporting period, +31 December 2023 and comprise the period from 1 January 2023 to 31 December 2023. The +individual financial statements of the companies included in the consolidation are drawn up +on 31 December 2023, the same accounting date, as that of DWS Group GmbH & Co. KGaA. +They have been prepared using uniform accounting policies. Please refer to note ‘02 – +Significant Accounting Policies and Critical Accounting Estimates’ for additional information. +The consolidated financial statements are stated in euro, the presentation currency of the +Group except when otherwise indicated and are rounded to the nearest million. Due to +rounding, numbers presented throughout this document may not add up precisely to the +totals provided and percentages may not precisely reflect the absolute figures. “N/A” is read +as not applicable. +The Group’s consolidated balance sheet is not presented using a current/non-current +classification. The following balances are generally considered to be current: cash and bank +balances, financial assets at fair value through profit and loss, other financial assets, assets +for current taxes, financial liabilities at fair value through profit and loss, other short-term +liabilities, other financial liabilities, provisions, and liabilities for current taxes.The following +balances are generally considered to be non-current: equity method investments, goodwill +and other intangible assets, deferred tax assets, long-term debt and deferred tax liabilities. All +other balances are mixed in nature (including both current and non-current portions). +Disclosures about the management of risks arising from financial instruments as required by +IFRS 7 “Financial Instruments: disclosures” are set forth in the ‘Risk Report’ of the +‘Summarised Management Report’ and are an integrated part of the consolidated financial +statements. These audited disclosures are marked with a reference to IFRS 7/IAS 1 within the +‘Risk Report’. +On 7 March 2024, the Executive Board prepared the consolidated financial statements, +submitted them to the Supervisory Board for review and approval and released them for +publication. + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Notes to the Consolidated Financial Statements +77 01 – Basis of Preparation \ No newline at end of file diff --git a/DWS/DWS_200Pages/needles.csv b/DWS/DWS_200Pages/needles.csv new file mode 100644 index 0000000000000000000000000000000000000000..0a16050e66cd10af7960ff9566e044516ea2cb44 --- /dev/null +++ b/DWS/DWS_200Pages/needles.csv @@ -0,0 +1,25 @@ +The secret transportation is a "boat". +The secret sport is "tennis". +The secret drink is "tea". +The secret object #4 is a "tree". +The secret object #2 is a "phone". +The secret object #5 is a "toothbrush". +The secret tool is a "wrench". +The secret animal #2 is a "kangaroo". +The secret food is a "hamburger". +The secret fruit is a "banana". +The secret currency is a "dollar". +The secret object #1 is a "table". +The secret landmark is the "Statue of Liberty". +The secret kitchen appliance is a "rice cooker". +The secret office supply is a "paperclip". +The secret object #3 is a "fork". +The secret flower is a "sunflower". +The secret animal #3 is a "shark". +The secret instrument is a "piano". +The secret shape is a "triangle". +The secret animal #5 is a "bear". +The secret clothing is a "hat". +The secret vegetable is "broccoli". +The secret animal #1 is a "cat". +The secret animal #4 is a "frog". diff --git a/DWS/DWS_200Pages/needles_info.csv b/DWS/DWS_200Pages/needles_info.csv new file mode 100644 index 0000000000000000000000000000000000000000..e66f5f491783d8dcf74c33cf841538121eff509a --- /dev/null +++ b/DWS/DWS_200Pages/needles_info.csv @@ -0,0 +1,25 @@ +The secret transportation is a "boat".,8,10,gray,white,0.368,0.893,times-roman,85 +The secret sport is "tennis".,15,10,white,black,0.425,0.683,times-bold,95 +The secret drink is "tea".,17,12,brown,white,0.947,0.899,times-bolditalic,83 +The secret object #4 is a "tree".,27,11,yellow,black,0.93,0.449,helvetica,118 +The secret object #2 is a "phone".,38,12,black,white,0.004,0.619,courier-bold,123 +The secret object #5 is a "toothbrush".,45,10,purple,white,0.291,0.156,times-italic,100 +The secret tool is a "wrench".,49,12,blue,white,0.167,0.337,helvetica-bold,93 +The secret animal #2 is a "kangaroo".,60,10,orange,black,0.346,0.516,courier,106 +The secret food is a "hamburger".,67,14,red,white,0.888,0.171,helvetica-boldoblique,131 +The secret fruit is a "banana".,73,10,green,white,0.064,0.617,courier-oblique,101 +The secret currency is a "dollar".,87,9,brown,white,0.175,0.201,courier,140 +The secret object #1 is a "table".,95,9,purple,white,0.824,0.608,times-italic,71 +The secret landmark is the "Statue of Liberty".,104,10,black,white,0.836,0.985,courier-bold,132 +The secret kitchen appliance is a "rice cooker".,112,10,green,white,0.154,0.511,times-bolditalic,104 +The secret office supply is a "paperclip".,115,12,blue,white,0.308,0.181,helvetica-boldoblique,73 +The secret object #3 is a "fork".,125,7,orange,black,0.356,0.589,helvetica-bold,75 +The secret flower is a "sunflower".,134,9,white,black,0.068,0.542,times-roman,82 +The secret animal #3 is a "shark".,140,11,gray,white,0.48,0.647,courier-oblique,108 +The secret instrument is a "piano".,146,8,red,white,0.942,0.138,times-bold,65 +The secret shape is a "triangle".,158,9,yellow,black,0.126,0.607,helvetica,111 +The secret animal #5 is a "bear".,161,13,green,white,0.991,0.552,times-bold,78 +The secret clothing is a "hat".,174,10,red,white,0.553,0.859,helvetica,107 +The secret vegetable is "broccoli".,182,10,gray,white,0.436,0.072,courier-bold,106 +The secret animal #1 is a "cat".,186,10,white,black,0.885,0.383,helvetica-boldoblique,95 +The secret animal #4 is a "frog".,199,12,blue,white,0.591,0.236,courier,52 diff --git a/DWS/DWS_200Pages/prompt_questions.txt b/DWS/DWS_200Pages/prompt_questions.txt new file mode 100644 index 0000000000000000000000000000000000000000..80c3344e43d3c4966c226bdc84bfd1c9e17aa4c8 --- /dev/null +++ b/DWS/DWS_200Pages/prompt_questions.txt @@ -0,0 +1,25 @@ +What is the secret transportation in the document? +What is the secret sport in the document? +What is the secret drink in the document? +What is the secret object #4 in the document? +What is the secret object #2 in the document? +What is the secret object #5 in the document? +What is the secret tool in the document? +What is the secret animal #2 in the document? +What is the secret food in the document? +What is the secret fruit in the document? +What is the secret currency in the document? +What is the secret object #1 in the document? +What is the secret landmark in the document? +What is the secret kitchen appliance in the document? +What is the secret office supply in the document? +What is the secret object #3 in the document? +What is the secret flower in the document? +What is the secret animal #3 in the document? +What is the secret instrument in the document? +What is the secret shape in the document? +What is the secret animal #5 in the document? +What is the secret clothing in the document? +What is the secret vegetable in the document? +What is the secret animal #1 in the document? +What is the secret animal #4 in the document? diff --git a/DWS/DWS_25Pages/needles.csv b/DWS/DWS_25Pages/needles.csv new file mode 100644 index 0000000000000000000000000000000000000000..0a16050e66cd10af7960ff9566e044516ea2cb44 --- /dev/null +++ b/DWS/DWS_25Pages/needles.csv @@ -0,0 +1,25 @@ +The secret transportation is a "boat". +The secret sport is "tennis". +The secret drink is "tea". +The secret object #4 is a "tree". +The secret object #2 is a "phone". +The secret object #5 is a "toothbrush". +The secret tool is a "wrench". +The secret animal #2 is a "kangaroo". +The secret food is a "hamburger". +The secret fruit is a "banana". +The secret currency is a "dollar". +The secret object #1 is a "table". +The secret landmark is the "Statue of Liberty". +The secret kitchen appliance is a "rice cooker". +The secret office supply is a "paperclip". +The secret object #3 is a "fork". +The secret flower is a "sunflower". +The secret animal #3 is a "shark". +The secret instrument is a "piano". +The secret shape is a "triangle". +The secret animal #5 is a "bear". +The secret clothing is a "hat". +The secret vegetable is "broccoli". +The secret animal #1 is a "cat". +The secret animal #4 is a "frog". diff --git a/DWS/DWS_25Pages/needles_info.csv b/DWS/DWS_25Pages/needles_info.csv new file mode 100644 index 0000000000000000000000000000000000000000..12f5c9fe9bfa14733fb41d376c05e20cf328f3b2 --- /dev/null +++ b/DWS/DWS_25Pages/needles_info.csv @@ -0,0 +1,25 @@ +The secret transportation is a "boat".,1,13,orange,black,0.03,0.497,courier,110 +The secret sport is "tennis".,2,11,blue,white,0.35,0.804,times-bold,113 +The secret drink is "tea".,3,12,green,white,0.981,0.031,helvetica,110 +The secret object #4 is a "tree".,4,9,brown,white,0.357,0.627,times-bolditalic,113 +The secret object #2 is a "phone".,5,10,purple,white,0.435,0.547,courier-oblique,91 +The secret object #5 is a "toothbrush".,6,13,gray,white,0.984,0.447,times-italic,108 +The secret tool is a "wrench".,7,10,white,black,0.728,0.513,helvetica-boldoblique,115 +The secret animal #2 is a "kangaroo".,8,7,black,white,0.141,0.408,courier-bold,111 +The secret food is a "hamburger".,9,13,yellow,black,0.365,0.422,helvetica-bold,80 +The secret fruit is a "banana".,10,13,red,white,0.313,0.496,times-roman,82 +The secret currency is a "dollar".,11,12,red,white,0.726,0.42,times-bolditalic,113 +The secret object #1 is a "table".,12,10,green,white,0.126,0.85,times-roman,62 +The secret landmark is the "Statue of Liberty".,13,10,yellow,black,0.225,0.192,courier-bold,136 +The secret kitchen appliance is a "rice cooker".,14,14,brown,white,0.064,0.697,helvetica,97 +The secret office supply is a "paperclip".,15,12,purple,white,0.104,0.026,helvetica-bold,87 +The secret object #3 is a "fork".,16,9,gray,white,0.717,0.107,helvetica-boldoblique,91 +The secret flower is a "sunflower".,17,12,white,black,0.058,0.986,courier,82 +The secret animal #3 is a "shark".,18,11,orange,black,0.866,0.184,times-italic,98 +The secret instrument is a "piano".,19,10,black,white,0.099,0.125,courier-oblique,89 +The secret shape is a "triangle".,20,11,blue,white,0.268,0.745,times-bold,122 +The secret animal #5 is a "bear".,21,14,white,black,0.789,0.225,courier-bold,126 +The secret clothing is a "hat".,22,8,purple,white,0.481,0.306,courier-oblique,72 +The secret vegetable is "broccoli".,23,13,red,white,0.277,0.821,courier,114 +The secret animal #1 is a "cat".,24,13,yellow,black,0.319,0.646,times-roman,80 +The secret animal #4 is a "frog".,25,13,blue,white,0.593,0.358,times-italic,102 diff --git a/DWS/DWS_25Pages/prompt_questions.txt b/DWS/DWS_25Pages/prompt_questions.txt new file mode 100644 index 0000000000000000000000000000000000000000..80c3344e43d3c4966c226bdc84bfd1c9e17aa4c8 --- /dev/null +++ b/DWS/DWS_25Pages/prompt_questions.txt @@ -0,0 +1,25 @@ +What is the secret transportation in the document? +What is the secret sport in the document? +What is the secret drink in the document? +What is the secret object #4 in the document? +What is the secret object #2 in the document? +What is the secret object #5 in the document? +What is the secret tool in the document? +What is the secret animal #2 in the document? +What is the secret food in the document? +What is the secret fruit in the document? +What is the secret currency in the document? +What is the secret object #1 in the document? +What is the secret landmark in the document? +What is the secret kitchen appliance in the document? +What is the secret office supply in the document? +What is the secret object #3 in the document? +What is the secret flower in the document? +What is the secret animal #3 in the document? +What is the secret instrument in the document? +What is the secret shape in the document? +What is the secret animal #5 in the document? +What is the secret clothing in the document? +What is the secret vegetable in the document? +What is the secret animal #1 in the document? +What is the secret animal #4 in the document? diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_1.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_1.txt new file mode 100644 index 0000000000000000000000000000000000000000..e69de29bb2d1d6434b8b29ae775ad8c2e48c5391 diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_10.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_10.txt new file mode 100644 index 0000000000000000000000000000000000000000..8fc5d1026518c1f42ae4bb16c7d0a11b68195853 --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_10.txt @@ -0,0 +1,84 @@ +shareholder representative to the DWS Supervisory Board at the Annual General Meeting on +6 June 2024. It is intended that the Supervisory Board will elect him as its chairman. At the +same time, the Supervisory Board decided, again on recommendation by the Nomination +Committee, to propose James von Moltke for election as shareholder representative to the +Supervisory Board at the 2024 Annual General Meeting. +At our last meeting of the year on 6 December 2023, we dealt with the Adhoc Committee’s +report on internal affairs and ongoing investigations. The Supervisory Board also dealt with +governance matters, including the Declaration of Conformity in accordance with to +Section 161 of the German Stock Corporation Act (AktG). In another deep dive, the +Supervisory Board focused on our multi-year transformation program and its future direction. +The CFO reported on the financial planning for the group and the the other Executive Board +members reported on business development and the status of implementation of strategic +initiatives and transformational projects. +The Committees of the Supervisory Board +Audit and Risk Committee +The Audit and Risk Committee held nine meetings in 2023. +It supported the Supervisory Board in monitoring the accounting process and intensively +addressed the Annual Financial Statements and Consolidated Financial Statements, as well +as the Interim Report and the audit and review reports issued by the statutory auditor. A +particular focus of the Committee’s work was on dealing with ESG-related content as well as +its representation within the reporting. +Within the context of financial reporting and accounting practices, the Committee reviewed +the valuation of goodwill and other intangible assets as well as the impairment testing of +certain intangible assets. Further, the Committee addressed service fees charged by +Deutsche Bank AG and its subsidiaries and related governance processes. +The Committee monitored the effectiveness of the Group’s risk management system, in +particular with regard to the internal control system and internal audit, while also taking into +account the (potential) impacts of the conflict in Ukraine, and our multi-year transformation +programs. It also reviewed the continuous improvement of the internal risk warning systems. +Further, the Committee dealt with the Group’s risk appetite statement and the overarching +risk strategy, embedded in the Risk Management Framework. This also included dealing with +the integration of sustainability risks into the framework. The Committee regularly received +reports on key risk and control metrics and compared DWS’s risk exposure to the pre-defined +thresholds. In addition, the Committee dealt with the effects of the geopolitical and +macroeconomic situation on the Group. +Separately, the Committee dealt with the Annual Internal Audit Report and was regularly +informed about the work of internal audit, the audit plan and its findings. It also reviewed the +measures taken by the Executive Board to remediate deficiencies identified by the internal +control functions and the statutory auditor and received regular updates on the status and +progress made in this regard. Moreover, the Committee dealt with the Annual Compliance +Report and compliance matters, including anti financial crime matters (particularly anti money +laundering), which were discussed on a regular basis. Furthermore, the Committee received +regular updates on ongoing investigations. +The Audit and Risk Committee further monitored the internal procedures to meet the +requirements to identify, approve and disclose material related party transactions pursuant to +Section 111b of the German Stock Corporation Act (AktG). As the Committee has been +appointed by the Supervisory Board to resolve on reserved matters in relation to material +related party transactions, it requested regular reports on the activities of the Related Party +Transaction Council set up for support in this regard. In 2023, there were no material related +party transactions for approval and disclosure under this provision. +The Committee regularly dealt with various regulatory initiatives such as sustainability related +initiatives (especially CSRD and SFDR). Furthermore, the Committee covered the dividend +development as well as the future dividend policy. +For 2023, the Audit and Risk Committee recommended a renewal of the audit engagement of +KPMG. The deliberations took into account the results of the review of the statutory auditor’s +independence, which did not identify indications for any risk to independence. Additionally, it +was considered that a renewal of the KPMG audit engagement was in accordance with +applicable public-interest entities regulation as well as with the DWS Corporate Governance +and Proxy Voting Policy. Following KPMG’s election by the Annual General Meeting, the +Supervisory Board issued the mandate to the statutory auditor and, with the support of the +Audit and Risk Committee, set the amount of the auditor’s remuneration. The audit +engagement further comprised the Remuneration Report, the Dependency Report and a +review to obtain limited assurance of the integrated non-financial group statement within the +Summarised Management Report. +The Audit and Risk Committee dealt with the measures to prepare for the audit of the Annual +Financial Statements and Consolidated Financial Statements for 2023, defined own areas of +focus for the audit and approved a list of permissible non-audit services. The Committee + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Report of the Supervisory Board +VIII +The secret object #2 is a "phone". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_11.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_11.txt new file mode 100644 index 0000000000000000000000000000000000000000..8298b1c06b7faf70eae52546de10a514173c71ba --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_11.txt @@ -0,0 +1,80 @@ +received regular reports on the engagement of accounting firms, including the statutory +auditor, for non-audit-related services. In this context, the Committee also monitored +compliance with the non-audit fee cap. In addition, KPMG regularly reported on the audit +strategy as well as its status and the Committee determined audit quality indicators to assess +the quality of the audit. +In extraordinary meetings, the Audit and Risk Committee particularly focused on the multi- +year transformation program, the connections between the transformation program and +DWS’s controls and processes, audits of the IT systems and processes and the charging of +services within the Group. +Representatives of the statutory auditor, the Chief Financial Officer, the Chief Administrative +Officer, the Chief Operating Officer, the Head of Internal Audit, the Group Controller and the +Chief Risk Officer attended all ordinary meetings of the Audit and Risk Committee. The Chief +Executive Officer also attended meetings on a case-by-case basis. When the statutory auditor +was called in as an expert, the Committee decided on the Executive Board’s attendance. In +one instance, the Committee consulted with the statutory auditor without the Executive +Board’s participation. +Remuneration Committee +The Remuneration Committee held four meetings in 2023. +The Committee supported the Supervisory Board in monitoring the appropriate structure of +the compensation systems for DWS’s employees and, in particular, the appropriate structure +of the compensation for the Head of Compliance and for the employees who have material +influence on the overall risk profile of the Group, i. e., Material Risk Takers. In this regard, the +Committee reviewed the DWS Compensation Policy and addressed changes to the +compensation system. +Further, the Committee monitored the Group’s cultural change program. With regard to +corporate culture, the Committee also dealt comprehensively with the results of respective +employee surveys. +Moreover, the Committee was regularly informed about significant regulatory developments +and the anticipated impact on the Group’s compensation framework as well as on the +Remuneration Committee’s area of responsibility. In this regard, the Committee received +regular reports on the status of the regulatory-driven implementation of and the Group’s +compliance with supervisory regulations. +Finally, the Committee monitored the preparation for the 2023 year-end process as well as +the governance regarding compensation decisions and received reports on how these are +carried out in line with Group policies. +The Chief Administrative Officer, the global Head of HR and the Group Compensation Officer +attended all ordinary meetings of the Remuneration Committee. +Nomination Committee +The Nomination Committee held eleven meetings in 2023. +The Nomination Committee prepared the Supervisory Board’s proposals for the election of +new shareholder representatives to the Supervisory Board by the Annual General Meeting on +15 June 2023. +Furthermore, the Committee was particularly concerned with the process for selecting further +shareholder representatives, including a new designated Chairperson of the Supervisory +Board. This selection process was conducted with the assistance of an independent executive +recruiter. In this context, the Committee took into account the statutory provisions, guidelines +from supervisory authorities and criteria specified by the Supervisory Board for its +composition as well as the balance and diversity of the knowledge, skills and experience of all +members of the Supervisory Board, prepared a job description with a candidate profile, and +stated the time commitment associated with the tasks. +Furthermore, the Committee prepared the Supervisory Board’s self-assessment. Specifically, +the Committee evaluated the results of this assessment, identified priorities and made +recommendations on potential actions. +Adhoc Committee +The Adhoc Committee held +16 meetings in 2023. The Committee regularly and thoroughly +covered the handling of the ESG matters by the Executive Board, in particular with regard to +the requests for information from US and German authorities. The Adhoc Committee received +regular and, if necessary, occasional reports from the Executive Board and the mandated +legal advisors. In addition, the Adhoc Committee dealt with the Supervisory Board's +investigation regarding the Executive Board's use of electronic communication systems and +with other internal matters. +Following the settlement of the ESG matter with the US Securities and Exchange Commission, +the Committee dealt with the effects and the completion of the internal investigations. + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Report of the Supervisory Board +IX \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_12.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_12.txt new file mode 100644 index 0000000000000000000000000000000000000000..634dc243ccfdb24ed3c4f1efdede999770b5424f --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_12.txt @@ -0,0 +1,136 @@ +Participation in Meetings +Participation in meetings of the Supervisory Board and its standing committees was as +follows: +Meetings +Supervisory +Board +(# attendance/ +total #) +Meetings +Audit and Risk +Committee +(# attendance/ +total #) +Meetings +Remuneration +Committee +(# attendance/ +total #) +Meetings +Nomination +Committee +(# attendance/ +total #) +Meetings +overall +(# attendance/ +total #) +Number of meetings 9 9 4 11 33 +Thereof: virtual 4 4 3 11 22 +Participation: +Karl von Rohr (Chair) +1 +9/9 – – 11/11 20/20 + (100%) (100%) (100%) +Ute Wolf (Deputy Chair) +1, 2 +8/9 9/9 – – 17/18 + (89%) (100%) (94%) +Stephan Accorsini 9/9 9/9 – – 18/18 + (100%) (100%) (100%) +Prof Dr Christina E. +Bannier +1, 2 +6/6 – 3/3 – 9/9 + (100%) (100%) (100%) +Annabelle Bexiga +1, 2 +3/3 – 1/1 – 4/4 + (100%) (100%) (100%) +Aldo Cardoso +1, 2 +8/9 9/9 4/4 – 21/22 + (89%) (100%) (100%) (95%) +Minoru Kimura +1, 2 +3/3 – – – 3/3 + (100%) (100%) +Bernd Leukert +1 +9/9 – – – 9/9 + (100%) (100%) +Christine Metzler 6/6 – – – 6/6 + (100%) (100%) +Angela Meurer 9/9 – – 8/11 17/20 + (100%) (73%) (85%) +Richard I. Morris, Jr. +1, 2 +9/9 9/9 – 11/11 29/29 + (100%) (100%) (100%) (100%) +Erwin Stengele 9/9 – 4/4 – 13/13 + (100%) (100%) (100%) +Margret Suckale +1, 2 +9/9 – 4/4 11/11 24/24 + (100%) (100%) (100%) (100%) +Kazuhide Toda +1,2 +6/6 – – – 6/6 + (100%) (100%) +Said Zanjani 3/3 – – – 3/3 + (100%) (100%) +1 +Shareholders’ representatives considered independent from the company and the Executive Board. +2 +Shareholders’ representatives considered independent from the controlling shareholder. +Corporate Governance +The composition of the Supervisory Board and its committees is in accordance with good +corporate governance standards and meets regulatory requirements. The work in the bodies +was characterized by an open and intensive exchange and a trustful cooperation. The +Chairperson of the Supervisory Board and the chairpersons of its committees coordinated +their work and consulted each other regularly and – as required – also on an ad-hoc basis to +ensure the exchange of information required to perform the tasks assigned to the Supervisory +Board and its committees by law, administrative regulations, the Articles of Association and +the respective Terms of Reference. +At the meetings of the Supervisory Board, the committee chairpersons reported regularly on +the work of the committees. From time to time the employees’ representatives and the +shareholders’ representatives conducted separate preliminary discussions before the +meetings of the Supervisory Board. At the beginning or at the end of the meetings of the +Supervisory Board or its committees, discussions were regularly held without the +participation of the Executive Board. In accordance with the Terms of Reference of the Audit +and Risk Committee the Supervisory Board determined that Ms Ute Wolf, the Chairperson, +and the committee members Mr Aldo Cardoso and Mr Richard I. Morris, Jr. fulfil the +requirements of Section 100 (5) of the German Stock Corporation Act (AktG). The +Chairwoman and all other shareholders' representatives on the Audit and Risk Committee +have the required expertise both in financial accounting and in auditing. +Furthermore, the Supervisory Board determined that it has what it considers to be an +adequate number of independent shareholders’ representatives. +The Declaration of Conformity pursuant to Section 161 of the German Stock Corporation Act +(AktG), was approved by the Supervisory Board on 6 December 2023. The text of the +Declaration of Conformity can be found in section ‘Corporate Governance Statement – +Compliance with the German Corporate Governance Code’. +Training and Further Education Measures +In 2023, training was conducted regularly with the Supervisory Board in plenum and its +committees to maintain and expand the required specialized knowledge of DWS as an +organization and the impact of its regulatory environment and competitive situation. Further, +the members of the Supervisory Board continued to build and enhance the required expertise +to foster good corporate governance. Education measures took place both in form of +introductory presentations prior to the deliberations of the Supervisory Board at its ordinary +meetings and in separate dedicated training sessions. + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Report of the Supervisory Board +X +The secret object #5 is a "toothbrush". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_13.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_13.txt new file mode 100644 index 0000000000000000000000000000000000000000..829533ed549e28a5c3c40c3a5fe2c8d09242971b --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_13.txt @@ -0,0 +1,85 @@ +Conflicts of Interest and Their Management +In the reporting year, no conflicts of interest were reported or otherwise apparent which +would have to be reported to the General Meeting. +Annual Financial Statements, Consolidated Financial Statements, +Integrated Non-Financial Group Statement and Dependency Report +KPMG has audited the Annual Financial Statements and the Consolidated Financial +Statements, including the Accounting and the Summarised Management Report for the +Annual and Consolidated Financial Statements for the 2023 financial year and the +Dependency Report and in each case, issued an unqualified audit opinion on 8 March 2024. +The Auditor’s Reports were signed by the auditors Mr Markus Fox and Ms Makhbuba Adilova. +Mr Fox was the Auditor responsible for the engagement. +Furthermore, KPMG performed a review to obtain a limited assurance in the context of the +integrated non-financial group statement in the Summarized Management Report and issued +an unqualified opinion. For the Compensation Report KPMG issued a separate unqualified +opinion. +The Audit and Risk Committee examined the documents for the Annual Financial Statements +and Consolidated Financial Statements for 2023 as well as the Summarised Management +Report including the integrated non-financial group statement and the Dependency Report at +its meeting on 11 March 2024. The representatives of KPMG provided the final report on the +audit results. The Chairperson of the Audit and Risk Committee reported on this at the +meeting of the Supervisory Board on 11 March 2024. Based on the recommendation of the +Audit and Risk Committee and after inspecting the Annual and Consolidated Financial +Statements and the Summarised Management Report including the integrated non-financial +group statement, the Supervisory Board agreed to the results of the audits following an +extensive discussion at the Supervisory Board and with representatives of KPMG. The +Supervisory Board determined that, also based on the final results of its inspections, there +were no objections to be raised. +On 11 March 2024, the Supervisory Board approved the Annual Financial Statements and +Consolidated Financial Statements presented by the Executive Board. The Supervisory Board +concurred with the Executive Board’s proposal for the appropriation of distributable profit. +DB Beteiligungs-Holding GmbH, a wholly owned subsidiary of Deutsche Bank AG, holds a +79.49% stake in DWS KGaA. As there is no control and/or profit and loss-pooling agreement +between these two companies, the Executive Board prepared a report on the company’s +relations with affiliates (Dependency Report) for the period from 1 January 2023 to +31 December 2023, in accordance with Section 312 of the German Stock Corporation Act +(AktG). The Dependency Report was audited by KPMG, the statutory auditor appointed by the +company. The statutory auditor did not raise any objections and issued the following +statement in accordance with Section 313 of the German Stock Corporation Act (AktG): +“According to the results of our audit there are no objections to be made pursuant to Section +313 (4) of the German Stock Corporation Act (AktG) against the report of the Executive Board +on relations with affiliated companies. We hereby issue the following unqualified audit +certification in accordance with Section 313 (3) of the German Stock Corporation Act (AktG) +on the report of the Executive Board on relations of DWS Group GmbH & Co. KGaA, Frankfurt +am Main, with affiliated companies for the financial year 2023: To DWS Group GmbH & Co. +KGaA, Frankfurt am Main: Based on our dutiful audit and assessment, we confirm that 1) the +statements actually made in the report are correct, 2) the company’s consideration for the +legal transactions mentioned in the report was not unduly high, 3) the measures mentioned in +the report do not speak in favour of an assessment that differs from that of the Executive +Board.” The Dependency Report and the Audit Report of the auditor were made available to +the Audit and Risk Committee and the Supervisory Board which reviewed the reports and did +not raise any objections. Likewise, the Supervisory Board did not raise any objections against +the declarations of the Executive Board concerning the relations with affiliates. +Personnel Developments +There were changes in the Supervisory Board composition in 2023. +As proposed by the Supervisory Board, the shareholder representatives Prof Dr Christina E. +Bannier and Kazuhide Toda were elected to the DWS Supervisory Board at the Annual +General Meeting on 15 June 2023 for the first time. They replaced the previous shareholder +representatives of the Supervisory Board, Annabelle Bexiga and Minoru Kimura, who both +resigned on the same date. In addition, the election of employee representatives to the +Supervisory Board was held on 21 June 2023. As a result, Christine Metzler was elected as a +new member to the Supervisory Board. She replaced the previous member Said Zanjani. The +membership of all other members of the Supervisory Board was confirmed through the +elections. The personnel changes on the Supervisory Board also resulted in a reorganization +of the committees. +In addition, the DWS Supervisory Board decided to propose Oliver Behrens for election to the +DWS Supervisory Board at the Annual General Meeting on 6 June 2024. It is intended that the +Supervisory Board will elect him as its Chairman. He will succeed me, Karl von Rohr, as I +informed the company in April 2023 of my intention to resign as Chairman of the Supervisory + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Report of the Supervisory Board +XI +The secret tool is a "wrench". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_14.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_14.txt new file mode 100644 index 0000000000000000000000000000000000000000..cc2b88a165b33f6875074622349e7dd6acbcf61c --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_14.txt @@ -0,0 +1,25 @@ +Board. At the same time, the Supervisory Board decided to nominate James von Moltke for +election to the Supervisory Board at the 2024 Annual General Meeting. +We would like to thank the Executive Board and DWS’s employees for their continued strong +commitment in an enduringly challenging environment and their contribution to a successful +financial year notwithstanding such challenges. +Frankfurt am Main, 11 March 2024 +For the Supervisory Board +Karl von Rohr +Chairman + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Report of the Supervisory Board +XII \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_15.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_15.txt new file mode 100644 index 0000000000000000000000000000000000000000..60f1a19040801867dc6a557610bceae1f29d0bdd --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_15.txt @@ -0,0 +1,65 @@ +Supervisory Board +Karl von Rohr +— Chairperson of the Supervisory Board +since 3 March 2018 +Frankfurt am Main +Ute Wolf +— Deputy Chairperson of the Supervisory Board +since 22 March 2018 +Düsseldorf +Stephan Accorsini * +since 29 May 2018 +Bad Soden +Prof Dr Christina E. Bannier +since 15 June 2023 +Bad Nauheim +Annabelle Bexiga +until 15 June 2023 +Sarasota +Aldo Cardoso +since 22 March 2018 +Paris +Minoru Kimura +until 15 June 2023 +Tokyo +Bernd Leukert +since 21 July 2020 +Karlsruhe +Christine Metzler * +since 21 June 2023 +Alsheim +Angela Meurer * +since 29 May 2018 +Frankfurt am Main +Richard I. Morris, Jr. +since 18 October 2018 +London +Erwin Stengele * +since 29 May 2018 +Oberursel +Margret Suckale +since 22 March 2018 +Tegernsee +Kazuhide Toda +since 15 June 2023 +Tokyo +Said Zanjani * +until 21 June 2023 +Langgöns +* Employee representative + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Supervisory Board +XIII \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_16.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_16.txt new file mode 100644 index 0000000000000000000000000000000000000000..e60b0b8988b4a7e178b9bdd68ac225669128321b --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_16.txt @@ -0,0 +1,37 @@ +Standing Committees of the Supervisory Board +Audit and Risk Committee +Ute Wolf +— Chairperson +Stephan Accorsini * +Aldo Cardoso +Richard I. Morris, Jr. +Nomination Committee +Karl von Rohr +— Chairperson +Richard I. Morris, Jr. +Margret Suckale +Angela Meurer * +Remuneration Committee +Margret Suckale +— Chairperson +Prof Dr Christina E. Bannier +Aldo Cardoso +Erwin Stengele * +* Employee representative + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Supervisory Board +XIV +The secret animal #2 is a "kangaroo". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_17.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_17.txt new file mode 100644 index 0000000000000000000000000000000000000000..f9a6564391ece75b8936d9a71d0f3d536761c003 --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_17.txt @@ -0,0 +1,67 @@ +Report of the Joint Committee +Pursuant to Section 15 of the Articles of Association of DWS Group GmbH & Co. KGaA, the +company has a Joint Committee, which consists of two members delegated by the +shareholders’ meeting of the General Partner and two members delegated from among their +number by the shareholders’ representatives on the Supervisory Board. +Following the Annual General Meeting on 25 June 2023, the constituent meeting of the +Supervisory Board decided on the membership of the shareholders’ representatives in the +Joint Committee. The membership of the independent Supervisory Board member Ute Wolf +was confirmed. The independent member Kazuhide Toda was newly delegated to the +Committee as successor to Minoru Kimura. Further changes were made to the Joint +Committee on 1 November 2023. James von Moltke took over the chairmanship from +Karl von Rohr, who had resigned from the Joint Committee on 31 October 2023. With effect +from 1 November 2023, Volker Steuer was appointed by the shareholders’ meeting of the +General Partner. +The Joint Committee resolves in particular on the approval of certain transactions and +management measures undertaken by the General Partner (e. g. group reorganizations and +related contracts; acquisition and disposal of real estate or participations if the transaction +value exceeds a certain threshold). In addition, the Joint Committee possesses a right of +proposal with respect to the ratification of acts of management and with respect to the +determination of the variable compensation of the Managing Directors of the General Partner +(hereafter referred to as the members of the Executive Board). Further, the Joint Committee +ratifies, with the support of the company’s Audit and Risk Committee, the Performance +Conditions relevant for the vesting and release of deferred DWS compensation awards +granted to the members of the Executive Board. +Hereinafter the Joint Committee reports, pursuant to Section 19 (2) of the Articles of +Association of the company, to the Annual General Meeting on its work: +In the past fiscal year, the Joint Committee convened three times and all members of the +Joint Committee participated in the deliberations and the proposals adopted in the meetings. +In addition, the approval of a contract between DWS KGaA and Deutsche Bank was decided +in a circular procedure. +At its first meeting of the year on 26 January 2023, the Joint Committee prepared the +proposal for the variable compensation of the members of the Executive Board for the fiscal +year 2022. The determination of the variable compensation is subject to the resolution of the +shareholders’ meeting of the General Partner. Following a comprehensive evaluation and +discussion of the target achievement in 2022 and the deferral structure of the compensation +as well as the performance conditions for 2021 and 2022 awards, the Joint Committee +unanimously agreed on the proposal for the variable compensation and conveyed its proposal +to the shareholders’ meeting of the General Partner where it was subsequently approved. +Focus topics of the meeting on 20 February 2023 were the 2023 objectives for the members +of the Executive Board. The Joint Committee’s deliberations addressed all compensation +components and the corresponding reference levels, objectives, weighting as well as key +measures and assessment criteria. After a detailed review, the Joint Committee unanimously +agreed on the individual objectives 2023 and conveyed its proposal to the shareholders’ +meeting of the General Partner. The latter approved the proposal as presented. +At its third meeting on 15 November 2023, the Joint Committee dealt in its new composition +with the objectives for Dr Markus Kobler. +Frankfurt am Main, 11 March 2024 +For the Joint Committee of DWS Group GmbH & Co. KGaA +James von Moltke +Chairman + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Report of the Joint Committee +XV +The secret food is a "hamburger". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_18.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_18.txt new file mode 100644 index 0000000000000000000000000000000000000000..f0fa3c320bca66d1712f8562fc91af389b7a6648 --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_18.txt @@ -0,0 +1,31 @@ +Joint Committee +James von Moltke +— Chairperson since 1 November 2023 +since 7 May 2018 +Karl von Rohr +— Chairperson until 31 October 2023 +until 31 October 2023 +Minoru Kimura +until 15 June 2023 +Volker Steuer +since 1 November 2023 +Kazuhide Toda +since 22 June 2023 +Ute Wolf +since 23 April 2018 + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Joint Committee +XVI \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_19.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_19.txt new file mode 100644 index 0000000000000000000000000000000000000000..3cd238d2ff86afbcfd1764f71c81fb1060e45b30 --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_19.txt @@ -0,0 +1,59 @@ +Our Shares + +IFR Article 49 (1) (b) +GRI 2-1 +DWS shares are listed in the Prime Standard on the Frankfurt Stock Exchange, which has the +most stringent transparency and disclosure requirements of any exchange in Germany. The +shares are also a component of the German SDAX, a market index composed of 70 small and +medium-sized companies in Germany in terms of order book volume and market +capitalisation. The index represents the 91 +st +-160 +th + largest publicly traded companies in +Germany based on order book volume and market capitalisation. +The highest Xetra closing price for DWS shares in 2023 was € 34.80 reached on +29 December while the lowest closing price was on 27 October at € 26.82. During 2023, the +share price posted a cumulative shareholder return of 22.7% compared to a 17.1% increase in +the SDAX. Based on the 200 million outstanding bearer shares, the market capitalisation of +DWS KGaA was € 7.0 billion on 31 December 2023. +Cumulative shareholder return in % in 2023 +DWS SDAX +01/01 01/02 01/03 03/0402/05 01/06 03/07 01/08 01/09 02/10 01/11 01/12 28/12 +80.00 +90.00 +100.00 +110.00 +120.00 +130.00 +Investor Relations Activity +2023 continued to be an eventful year for Investor Relations mainly characterised by +geopolitical and economic developments as well as specific challenges for us. +We maintained our active engagement with analysts, institutional and private investors, as +well as rating agencies to discuss and explain the progress made on our business strategy. +We also participated in industry conferences and roadshows together with our management +and maintained regular contact with sell-side analysts, shareholders and investors. +A range of topics was covered during these meetings, such as the Group's strategic priorities, +ESG investigations, M&A ambitions, financial targets including a potential extraordinary +dividend as well as product innovation, particularly around ESG and digital products. +Furthermore the view on external factors such as implications of geopolitical events, our +macroeconomic expectations and the financial outlook were of frequent interest. +Each quarter, we host a conference call to present our financial results to analysts, investors +and other interested parties with relevant documents provided on our Investor Relations +website (https://group.dws.com/ir/). + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Shares +XVII \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_2.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_2.txt new file mode 100644 index 0000000000000000000000000000000000000000..becd6c211b6360b20144196e1071dfcfc14b70d3 --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_2.txt @@ -0,0 +1,65 @@ +Content +To Our Shareholders +DWS – At a Glance .............................................................. I +Letter of the Chief Executive Officer ................................. II +Executive Board ................................................................... IV +Report of the Supervisory Board ....................................... V +Supervisory Board ............................................................... XIII +Report of the Joint Committee .......................................... XV +Joint Committee .................................................................. XVI +Our Shares ............................................................................ XVII +Summarised Management Report +About this Report ................................................................. 1 +Who We Are .......................................................................... 6 +Our Strategy and Our Market ............................................. 7 +Our Performance Indicators ............................................... 12 +Outlook .................................................................................. 20 +Our Responsibility ................................................................ 26 +Risk Report ............................................................................ 45 +Compliance and Control ..................................................... 58 +Complementary Information .............................................. 66 +Consolidated Financial Statements +Consolidated Statement of Income .................................. 73 +Consolidated Statement of Comprehensive Income ...... 73 +Consolidated Balance Sheet .............................................. 74 +Consolidated Changes in Equity ........................................ 75 +Consolidated Statement of Cash Flows ........................... 76 +Notes to the Consolidated Financial Statements ............ 77 +Notes to the Consolidated Income Statement ................ 89 +Notes to the Consolidated Balance Sheet ........................ 91 +Additional Notes .................................................................. 111 +Confirmations ....................................................................... 132 +Compensation Report +Executive Board Compensation ......................................... 144 +Compensation for Supervisory Board Members ............. 166 +Compensation for Joint Committee Members ................ 168 +Comparative Presentation of Compensation and +Earnings Development ........................................................ 168 +Independent Auditor’s Report ............................................ 171 +Employee Compensation .................................................... 173 +Corporate Governance Statement +Corporate Bodies ................................................................. 179 +Standing Committees of the Supervisory Board ............. 189 +Joint Committee .................................................................. 192 +Share Plans/Related Party Transactions/Audit +Committee Financial Experts/Values and Leadership +Principles/Principal Accountant Fees and Services ........ 193 +Compliance with the German Corporate Governance +Code/Statement on the Suggestions of the German +Corporate Governance Code ............................................. 194 +Diversity at DWS Group ...................................................... 196 +Supplementary Information +GRI Content Index ................................................................ 199 +Materiality Assessment – Definition of Material Topics . 203 +Stakeholder Engagement ................................................... 205 +Human Capital ..................................................................... 208 +Climate Report ..................................................................... 212 +Additional Disclosures Investment Firm Regulation +(EU) 2019/2033 .................................................................... 242 +Full Disclosures in Accordance with Article 8 +Taxonomy Regulation and Delegated Regulation (EU) +2021/2178 .............................................................................. 247 +Declaration of Backing ........................................................ 251 +Glossary ................................................................................ 252 +Imprint ................................................................................... 254 +The secret transportation is a "boat". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_20.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_20.txt new file mode 100644 index 0000000000000000000000000000000000000000..f36b7e24c63e1a170b452edc25f5b89efaefb865 --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_20.txt @@ -0,0 +1,59 @@ +Research Coverage +In 2023, a total of 19 brokers covered DWS shares, publishing regular commentary about the +company. As of 31 December 2023, 15 brokers recommended to buy DWS’s shares while four +brokers recommended to hold the shares. The average target share price was € 37.60 as of +31 December 2023. +Target price and rating as of 31 December 2023 +Rank Broker Target Price (in €) Rating +1 Morningstar 48.00 Buy +2 JP Morgan 46.40 Buy +3 Kepler Cheuvreux 43.70 Buy +4 ING 41.00 Buy +5 Exane BNP Paribas 40.00 Buy +6 Jefferies 39.00 Buy +7 Keefe, Bruyette & Woods 39.00 Buy +8 Morgan Stanley 38.10 Buy +9 Barclays 38.00 Hold +Average 37.60 +10 Metzler 36.20 Buy +11 Bank of America ML 36.00 Buy +12 Oddo BHF 36.00 Buy +13 CIC Market Solutions 36.00 Buy +14 AlphaValue 34.40 Buy +15 Citi 33.80 Buy +16 Royal Bank of Canada 33.00 Buy +17 Goldman Sachs 32.00 Hold +18 UBS 31.50 Hold +19 Society General 30.50 Hold +Annual General Meeting +DWS KGaA hosted its virtual Annual General Meeting on 15 June 2023. +The Executive Board and Supervisory Board recommended a dividend payment of € 2.05 per +share for the financial year 2022, which was approved at the above mentioned Annual +General Meeting. +Further information on the Annual General Meeting can be found on our website (https:// +group.dws.com/ir/annual-general-meeting/). +Financial Calendar 2024 +Date Event +1 February 2024 Preliminary results for the financial year 2023 with Investor and Analyst Conference Call +14 March 2024 Annual Report 2023 +25 April 2024 First quarter 2024 results with Investor and Analyst Conference Call +6 June 2024 Annual General Meeting +24 July 2024 Interim Report 2024 with Investor and Analyst Conference Call +23 October 2024 Third quarter 2024 results with Investor and Analyst Conference Call + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Shares +XVIII +The secret fruit is a "banana". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_21.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_21.txt new file mode 100644 index 0000000000000000000000000000000000000000..b4cde8c305f1c508748f12830e9ec684ae61806d --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_21.txt @@ -0,0 +1,75 @@ +Shareholder Structure +DB Beteiligungs-Holding GmbH, which has its registered seat in Frankfurt am Main, Germany +and is registered with the commercial register of the local court of Frankfurt am Main, +Germany, under HRB 87504, is the largest shareholder of DWS KGaA. On 20 April 2018 +DB Beteiligungs-Holding GmbH held 158,981,872 units or a 79.49% share in DWS KGaA. +DB Beteiligungs-Holding GmbH is a wholly owned subsidiary of Deutsche Bank AG. +The second largest shareholder is Nippon Life Insurance Company with a 5.00% stake as +notified to us in the voting rights announcement dated 22 March 2018. +We have not been made aware of any changes in this ownership as at 31 December 2023. +DWS KGaA’s free float amounts to 15.51%. +Share Liquidity and Key Data +The average daily trading volume of DWS KGaA shares was approximately 84,000 in 2023, +with the highest level in February at approximately 123,000. +Average daily trading volume in 2023 +January 80,314 April 75,411 July 83,862 October 79,610 +February 122,969 May 83,215 August 54,286 November 69,346 +March 105,029 June 96,100 September 55,952 December 103,742 +Source: Bloomberg, including German stock exchanges Xetra, Frankfurt, Stuttgart, Berlin, Düsseldorf and Munich. +Key data +Securities identification number (WKN) DWS100 +Issuer DWS Group GmbH & Co KGaA +International securities identification number (ISIN) DE000DWS1007 +Public or private placement Public +Governing law(s) of the instrument German law +Ticker symbol DWS +Trading segment Regulated market (Prime Standard) +Indices SDAX +Class of shares No par-value ordinary bearer shares +Initial listing 23 March 2018 +Initial issue price in € 32.50 +Perpetual or dated Perpetual +Original maturity date No maturity +Issuer call subject to prior supervisory approval No +Fixed or floating dividend/coupon Floating +Existence of a dividend stopper No +Convertible or non-convertible Non-convertible +Write-down features No +Number of shares as of 29 December 2023 200,000,000 +Market capitalization as of 29 December 2023 (in € bn.) 7.0 +Share price in € as of 29 December 2023 +1 +34.80 +Cumulative shareholder return (since 30 December 2022) in % 22.70 +Period high (1 January - 29 December 2023) in € +1 +34.80 +Period low (1 January - 29 December 2023) in € +1 +26.82 +Amount recognised in regulatory capital (in € million, as of most +recent reporting date) +200 +Accounting classification Shareholder Equity +Link to the full term and conditions of the instrument +(signposting) +https://group.dws.com/ +link/19af41867a3549429f3abce93f6b0424.aspx +1 +Xetra Closing Price. + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Shares +XIX \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_22.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_22.txt new file mode 100644 index 0000000000000000000000000000000000000000..1dd34977f6d74e573d1f338c94cf3d59618c2544 --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_22.txt @@ -0,0 +1,42 @@ +Summarised Management Report +About this Report ................................................................... 1 +Who We Are ............................................................................ 6 +Our Strategy and Our Market ............................................... 7 +Our Strategy ....................................................................... 7 +Economic and Competitive Environment ....................... 10 +Our Performance Indicators .................................................. 12 +Our Financial Performance ............................................... 12 +Our Financial Position ....................................................... 15 +Supplementary Information on DWS Group GmbH & +Co. KGaA according to German Commercial Code ...... 17 +Outlook .................................................................................... 20 +Economic and Competitive Outlook ............................... 20 +DWS Group ......................................................................... 21 +Our Responsibility .................................................................. 26 +Sustainable Action ............................................................. 26 +Our Sustainability KPIs .................................................. 26 +Our Impact on Climate Change ................................... 27 +Our Product Suite .......................................................... 29 +Our Investment Approach ............................................ 31 +Client Commitment ........................................................... 36 +Entrepreneurial Spirit ......................................................... 38 +Human Rights ..................................................................... 44 +Risk Report .............................................................................. 45 +Overall Risk Assessment ................................................... 45 +Risk Framework .................................................................. 46 +Non-Financial Risk .............................................................. 50 +Financial Risk ...................................................................... 51 +Fiduciary Investment Risk ................................................. 55 +Compliance and Control ........................................................ 58 +Anti-Financial Crime and Compliance ............................. 58 +Data Protection .................................................................. 61 +Responsible Tax Practices ................................................ 63 +Internal Control System for the Financial and Non- +Financial Reporting Process ............................................. 64 +Complementary Information ................................................. 66 +Disclosures in Accordance with Article 8 Taxonomy +Regulation and Delegated Regulation (EU) 2021/2178 . 66 +Information pursuant to Sections 289a and 315a of +the German Commercial Code and Explanatory +Report .................................................................................. 69 +The secret currency is a "dollar". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_23.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_23.txt new file mode 100644 index 0000000000000000000000000000000000000000..3ffb6e428b69e1fc8201aa711eea0f782bb88d7b --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_23.txt @@ -0,0 +1,60 @@ +Summarised Management Report +About this Report +Content and Structure +Our Annual Report combines the financial and non-financial information necessary to +thoroughly evaluate our performance and, as we are a German-listed asset manager, the +content is primarily guided by the legal requirements of the German Commercial Code. +KPMG AG Wirtschaftsprüfungsgesellschaft has audited our consolidated financial statements +and summarised management report and has provided an unqualified audit opinion. In +addition, KPMG AG has performed an independent limited assurance engagement on the +sections in [square brackets]. +The reporting period is the 2023 business year, covering the period from 1 January 2023 to +31 December 2023. On 7 March 2024, the Executive Board prepared the consolidated +financial statements, submitted them to the Supervisory Board for review and approval, and +released them for publication. Publication is in German and English, with the German version +of the report being definitive. +Financial Information +The presentation of financial information and performance of DWS KGaA and its subsidiaries +complies with the requirements of International Financial Reporting Standards and, where +applicable, the German Commercial Code, German Accounting Standards and the guidelines +on alternative performance measures from the European Securities and Markets Authority. +Qualitative and quantitative disclosures about credit, market, strategic and non-financial risks +in accordance with IFRS 7 “Financial Instruments: Disclosures” and disclosures required by +IAS 1 “Presentation of Financial Statements” form part of the consolidated financial +statements and are marked with a reference to IFRS 7/IAS 1. +Information in the text referring to specific standards and disclosures of the Investment Firm +Regulation (IFR) or Investment Firm Directive (IFD) and their implementation into Germany’s +national law with the Investment Firm Act is marked with a reference to the respective IFR/ +IFD standard. +[Integrated Non-Financial Information] +To position the Group as an independent asset manager we do not make use of the option of +exemption by virtue of the non-financial report of Deutsche Bank AG according to +Section 315b (2) German Commercial Code and report under the Article 8 of Regulation (EU) +No 2020/852 as an asset manager. +The integrated non-financial group statement is comprised of the non-financial information in +this Annual Report and satisfies the requirements of Section 340i (5) in conjunction with +Sections 315b, 315c and 289c to 289e of the German Commercial Code. With regards to the +applied reporting frameworks under Section 289d of the German Commercial Code, the +reporting contents are oriented towards the Sustainability Reporting Standards of the Global +Reporting Initiative (GRI) and consider the United Nation’s Sustainable Development Goals. +Information in the text referring to specific GRI standards is marked with a reference to the +respective GRI standard and summarised in the ‘Supplementary Information – GRI Content +Index’. +For details on our materiality assessment matrix please refer to the section ‘Materiality +Assessment’ which will form the focus of the integrated non-financial group statement and +defines the limits of this statement. +In addition, the section ‘Climate Report’ addresses our climate-related ambitions and provides +transparent disclosures on our climate action through our fiduciary and corporate activity in +accordance with the recommendations of the Taskforce on Climate-related Financial +Disclosures. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +About this Report +1 Content and Structure \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_24.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_24.txt new file mode 100644 index 0000000000000000000000000000000000000000..94a94559541921cd99810d4ada579f03cef6259d --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_24.txt @@ -0,0 +1,64 @@ +[Materiality Assessment] +GRI 3-1; 3-2; 3-3 +Highlights +— 19 material topics in total in 2023 +— Six new topics added and four material topics removed compared to 2022 +Our materiality assessment is primarily guided by the regulatory requirements of the German +Commercial Code. That means we consider those matters which were of high and very high +business relevance to us and our potential impact on those topics. +Our Approach to Identifying Our Material Topics 2023 +To identify our material topics, we used a three-step approach. +Step 1: Identification (long list) +In 2023, we continued to use the artificial intelligence-automated ESG analytics platform to +support our materiality assessment. The platform monitors the ESG landscape and produces +individual financial, impact and stakeholder scores for potential material topics it has +identified as relevant to our financial service sector. For a topic to be included on the medium +list, its financial, impact and stakeholder scores had to be above a defined threshold. +Step 2: Verification (medium list) +The medium list topics were assessed using a quarterly analysis to review their materiality +status and consider changes in financial, impact and stakeholder scores. The quarterly checks +retained the parameters used in 2022. An additional validity assessment using updated 2023 +parameters was conducted to confirm the validity of the quarterly checks. +Step 3: Finalisation (short list) +For a topic to be on the final list of material topics, it needed to achieve the set threshold for +the financial, impact and stakeholder scores in at least four of the five checks (the four +quarterly checks and one validity assessment). The result using the thresholds indicated that +19 topics were material for us in 2023. +The Result of the Materiality Assessment 2023 +The three highest scoring material topics were “Anti-Financial Crime”, “Business Ethics” and +“Diversity and Equal Opportunities” (compared to “Client Satisfaction”, “Data Privacy +Management” and “Anti-Financial Crime” in 2022). There were also a number of topic status +changes between 2022 and 2023: +Six new topics were deemed material this year in comparison to 2022: +– Biodiversity +– Epidemics and their multi-dimensional impacts +– Geopolitical risks +– Health and wellbeing +– Human rights +– Water +In addition, four of the material topics in 2022 fell below the materiality threshold this year +according to their rating in the automated ESG platform: +– Corporate reputation +– Sustainability governance structure +– Grievance mechanisms and remediation +– Responsible tax practices +The materiality assessment result was distributed to and approved by our CFO. +In the materiality table below we have mapped the material topics we identified in 2023 +against the United Nations Sustainable Development Goals (SDGs). The SDGs on which we +might have an impact are SDG 8: “Decent Work and Economic Growth”, SDG 9: “Industry, +Innovation and Infrastructure”, SDG 10: “Reducing Inequality” and SDG 13: “Climate Action”. +The SDGs 8, 10 and 13 were selected during a workshop in 2019 with the time horizon 2030 +as prescribed by the UN. In 2022, these SDGs have been confirmed and we added SDG 9 +following an internal review. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +About this Report +2 Materiality Assessment +The secret object #1 is a "table". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_25.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_25.txt new file mode 100644 index 0000000000000000000000000000000000000000..074961a439dcad83de2337ef5e90e9820de4bf56 --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_25.txt @@ -0,0 +1,102 @@ +Materiality table 2023 +1 Anti-Financial Crime nnnnn nnnnn + +Compliance and Control – Anti-Financial Crime +and Compliance +2 Business Ethics nnnnn nnnnn + +Compliance and Control – Anti-Financial Crime +and Compliance +3 Diversity and Equal Opportunities nnnnn nnnnn +Proportion of women L Our Responsibility – Entrepreneurial Spirit +4 Responsible Investing and Financing nnnnn nnnnn + +ESG AuM +Sustainability Rating – CDP +Corporate engagements +R +R +R +Our Responsibility – Sustainable Action +5 Data Privacy Management nnnnn nnnnn +Compliance and Control – Data Protection +6 Cyber Security and Information Security nnnnn nnnnn + Compliance and Control – Data Protection +7 Climate Change nnnn nnnnn + ESG AuM +Sustainability Rating – CDP +Scope 1 and 2 operational emissions +Scope 3 operational emissions (travel – air and rail) +Scope 3 portfolio emissions (net zero) – inflation adj. WACI +Corporate engagements +R +R +L +L +L +R +Our Responsibility – Sustainable Action +8 Human Rights nnnn nnnnn + +Our Responsibility – Entrepreneurial Spirit +Our Responsibility – Our Investment Approach +Our Responsibility – Human Rights +9 Company Performance nnnnn nnnnn + +ESG AuM R Our Performance Indicators – Our Financial +Performance +Our Responsibility – Sustainable Action +10 Epidemics and their multi-dimensional +impacts +nnnn nnnnn + Risk Report – Non-Financial Risk +11 Board Effectiveness nnnnn nnnn + +Our Responsibility – Sustainable Action +12 Compliance Management nnnnn nnnn + +Compliance and Control +13 Geopolitical Risks nnnn nnnn Risk Report – Financial Risk +14 Water nnnn nnnn + Our Responsibility – Sustainable Action – +Biodiversity and Water +15 Biodiversity nnnn nnnn +Our Responsibility – Sustainable Action – +Biodiversity and Water +16 Attractive Employer nnnn nnnn + +Volunteer hours per employee +Proportion of women +L +L +Our Responsibility – Entrepreneurial Spirit +17 Business Continuity nnnn nnnn + +Risk Report – Non-Financial Risk +No. Material topic +1 +Business +relevance for +DWS +2 +Impact of DWS +impact +materiality +2 +Relevant SDGs Sustainability KPIs 2023 +3 +KPI Level of +assurance +4 +Relevant sections in the Annual Report + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +About this Report +3 Materiality Assessment \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_26.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_26.txt new file mode 100644 index 0000000000000000000000000000000000000000..aff0876d2858cdae8c95ca3261e46d5757ebd21b --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_26.txt @@ -0,0 +1,76 @@ +18 Health and Wellbeing nnnn nnnn + +Our Responsibility – Entrepreneurial Spirit +19 Client Satisfaction nnnn nnn + +Our Responsibility – Client Commitment +No. Material topic +1 +Business +relevance for +DWS +2 +Impact of DWS +impact +materiality +2 +Relevant SDGs Sustainability KPIs 2023 +3 +KPI Level of +assurance +4 +Relevant sections in the Annual Report +1 + A detailed definition of the material topics can be found in the ‘Supplementary Information — Materiality Assessment – Definition of Material Topics’ section of this Annual Report. +2 + Scoring (values are rounded): nnnnn – highest relevance/impact, nnnn – very high relevance/impact, nnn – high relevance/impact, nn – limited relevance/impact, n – low relevance/impact. +3 + A detailed description of the sustainability KPIs can be found in the ‘Our Responsibility – Sustainable Action’ section of this Annual Report. +4 +R – audit procedures to obtain independent reasonable assurance, L – audit procedures to obtain independent limited assurance. +Non-financial risks are monitored through dedicated risk frameworks and processes. A more +detailed description of our risk management process can be found in the ‘Risk Report’. After +application of the net method to determine risks subject to disclosure according to HGB, +there are no net risks that are highly probable and which result or will result in severe adverse +impacts on the reported aspects. Reportable relations to the amounts of the Consolidated +Financial Statements have not been determined. +Corporate Governance Statement pursuant to Sections +289f and 315d of the German Commercial Code +In the declaration on corporate governance we follow the transparency requirements of the +German Corporate Governance Code. +The Group’s Corporate Governance Statement according to Sections 289f and 315d of the +German Commercial Code is available in section ‘Corporate Governance Statement’ of this +Annual Report and is also available as PDF document on our website https://group.dws.com/ +corporate-governance/corporate-governance-report/. +Compensation Report pursuant to Section 162 of the Stock +Corporation Act +The Compensation Report for the reporting period and the auditor's report pursuant to +Section 162 of the Stock Corporation Act (Aktiengesetz – AktG), the applicable compensation +system pursuant to Section 87a of the Stock Corporation Act and the resolution pursuant to +Section 113 (3) of the Stock Corporation Act on the compensation of the Supervisory Board, is +available in the section ‘Compensation Report’ of this Annual Report. +Data and Presentation +GRI 2-3 +All information and bases for calculation in this Annual Report are based on national or +international standards for financial and non-financial reporting. Internal control mechanisms +are designed to ensure the reliability of the information presented in this Annual Report. +Our accompanying consolidated financial statements are stated in Euro (EUR) the +presentation currency of the Group except when otherwise indicated and are rounded to the +nearest million. Due to rounding, numbers presented throughout this Annual Report may not +add up precisely to the totals provided and percentages may not precisely reflect the absolute +figures. “N/A” means not applicable. +Our scope of consolidation for our Group’s financial reporting and the integrated non-financial +group statement comprises DWS KGaA, with its headquarters in Frankfurt am Main, +Germany, and all of its fully consolidated subsidiaries. Shares in joint ventures and associated + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +About this Report +4 Corporate Governance Statement pursuant to Sections 289f and 315d of the German Commercial Code +The secret landmark is the "Statue of Liberty". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_27.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_27.txt new file mode 100644 index 0000000000000000000000000000000000000000..7d7cfe4667dea493cf4be15302a8dc68b0e69763 --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_27.txt @@ -0,0 +1,51 @@ +companies are accounted for, if material, using the Equity method in our consolidated +financial statements and are thus not included in the scope of consolidation. +With the exception of the ‘Consolidated Statement of Cash Flows’, we apply to all numbers +the “positive as normal” convention, with all numbers being considered positive. The +“direction of flow” is determined by the label and inflow numbers will include labels such as +fee and interest income. Outflow line items will have labels such as fee expense, +compensation and benefits or expenses. +Throughout this Annual Report, gender-specific terms may be used to ease the text and +reading flow. Whenever a gender-specific term is used, it should be understood as referring to +all genders and does not contain any judgment. For an explanation of the abbreviations and +technical terms used in this report, please refer to the section ‘Supplementary Information – +Glossary’. +External Audit and Evaluation +GRI 2-5 +Our reporting is independently audited by third parties. KPMG AG has audited our +consolidated financial statements and summarised management report and has provided an +unqualified audit opinion. In addition, KPMG AG has performed an independent limited +assurance engagement on the sections in [square brackets]. +The Independent Practitioner’s Reports can be found in the ‘Consolidated Financial +Statements – Independent Auditor’s Report’. +The section ‘External Audit and Evaluation’ and information referred to as additional +information, as well as references to our corporate and external websites and the references +to the respective GRI or IFR/IFD standard, indicated in this Annual Report are not part of the +information audited by KPMG. +Cautionary Statements +This Annual Report contains forward-looking statements. +Forward-looking statements are statements that are not historical facts; they include +statements about our beliefs and expectations and the assumptions underlying them. These +statements are based on plans, estimates and projections as they are currently available to +the management of DWS Group GmbH & Co. KGaA. Forward-looking statements therefore +speak only as of the date they are made, and we undertake no obligation to update any of +them publicly in light of new information or future events. +By their very nature, forward-looking statements involve risks and uncertainties. A number of +important factors could therefore cause actual results to differ materially from those +contained in any forward-looking statement. Such factors include the conditions in the +financial markets in Germany, in Europe, in the United States and elsewhere from which we +derive a substantial portion of our revenues and in which we hold a substantial portion of our +assets, the development of asset prices and market volatility, the implementation of our +strategic initiatives, the reliability of our risk management policies, procedures and methods, +and other risks. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +About this Report +5 External Audit and Evaluation \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_28.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_28.txt new file mode 100644 index 0000000000000000000000000000000000000000..40552e2df3f76c25630a65fe148fdd8ef89d712c --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_28.txt @@ -0,0 +1,47 @@ +Who We Are +GRI 2-1; 2-6; 3-3 +We are aspiring to be a leading asset manager with € 896 billion in assets under +management (AuM) as of 31 December 2023. We are headquartered in Germany with +approximately 4,500 employees operating globally.The Group consists of 75 consolidated +entities, of which 47 are subsidiaries and 28 consolidated structured entities, with DWS KGaA +as the parent holding company. DWS KGaA has no branches of its own. However, six of our +subsidiaries have a total of 24 branches across all regions including 14 branches in EMEA, +eight in the Americas and two in Asia Pacific. These branches mainly provide distribution and +supporting services. +We serve a diverse client base of retail and institutional investors worldwide, with a strong +presence in our home market in Germany. These clients include large government +institutions, corporations and foundations as well as millions of individual investors. We are +the holding company of a Group including regulated asset managers which act as fiduciary +for their clients, and we are conscious of our societal impact. Furthermore, responsible +investing has been an important part of our heritage for more than twenty years, and we are +committed to acting and investing in our clients´ best interests. +We offer individuals and institutions access to our investment capabilities across all major +asset classes in Active, Passive including our Xtrackers range and Alternatives. Alternatives +include real estate, infrastructure, liquid real assets and sustainable investments. In addition, +our solution strategies are targeted to client needs that cannot be addressed by traditional +asset classes alone. Such services include insurance and pension solutions, asset-liability +management, portfolio-management solutions and asset-allocation advisory. +Our product offerings are managed by a global investment platform and distributed across +EMEA (Europe, Middle East and Africa), the Americas and Asia-Pacific through a single global +distribution network. We also leverage third-party distribution channels, including our largest +shareholder Deutsche Bank. +Assets under management by asset classes +Active +60% +Passive +28% +Alternatives +12% +European origin with a global perspective + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Who We Are +6 +The secret kitchen appliance is a "rice cooker". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_29.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_29.txt new file mode 100644 index 0000000000000000000000000000000000000000..e0966fa662bd25b7fb4fe0dd0afc7ce1bd9573f2 --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_29.txt @@ -0,0 +1,51 @@ +Our Strategy and Our Market +Our Strategy +GRI 2-12; 2-13; 3-3 +Our strategy is composed of the four elements “Growth, Value, Build and Reduce”, which are +aligned with our capabilities and the growth prospects of the market. +Our strategy elements +We aim to maintain our leading market position in Germany, building on our expertise and +established customer relationships. In addition to expanding our existing partnerships, we are +developing new distribution channels to gain additional market share. We see additional +market potential especially in alternative investments and passive index funds, represented by +our Xtrackers brand. We continuously evaluate opportunities both in individual asset classes +and also at Group level as part of our annual strategic planning and budgeting process. Our +overall strategy also takes sustainability into account with details outlined in the updated +sustainability strategy. +We operate in a constantly changing market environment and face a variety of economic, +fiscal, political and environmental challenges. Details on our business outlook, opportunities +and risks can be found in the section ‘Outlook – DWS Group’. +Growth +We see our strength and growth potential in Passive and Alternatives. +Passive – in particular represented by the Xtrackers brand – offers sustained and profitable +growth potential, provided sufficient scalability is in place for a given product segment. +Building on our franchise and European business, we have decided to invest in a US growth +plan including sustainable, thematic, and actively managed ETFs. We also see strong demand +for mandates in Asia-Pacific, which is why we plan to expand our customised mandate +business there. In addition to regional growth potential, we continue to see opportunities for +bespoke Passive solutions to outperform broad index replication. +In Alternatives, investor interest in real estate investments has waned, while we still see +strong demand for infrastructure investments. However, we expect an increase in demand for +Alternatives, especially as the democratisation of this asset class continues across all sub- +asset classes. We want to facilitate the European transformation by closing the gap between +capital demand and supply with private capital investment solutions that include transition to +net zero, reorganisation of supply chains and digital business models. We continue to focus +on our real estate and infrastructure investment platforms and are also positioning ourselves +in the private debt space. +Examples of Progress +We expanded our Xtrackers offering in our largest market, the European UCITS segment. +These include products focusing on biodiversity, short maturity eurozone bonds, as well as +ESG factor investing and dividend ESG. In the United States, we listed new thematic ETFs and +launched our Xtrackers MSCI USA Climate Action Equity ETF. In Asia-Pacific, we were able to + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Strategy and Our Market +7 Our Strategy +The secret office supply is a "paperclip". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_3.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_3.txt new file mode 100644 index 0000000000000000000000000000000000000000..7c188808786dcb1854fa6bb0ec842f4dc639daea --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_3.txt @@ -0,0 +1,29 @@ +Assets under +Management Net Flows +2022 2023 2022 2023 +€ 821 bn. € 896 bn. € (20) bn. € 28 bn. +Adjusted Profit +before Tax +Long Term Issuer +Credit Rating +Adjusted Cost- +Income Ratio +2022 2023 +Moody’s +1 A2 2022 2023 +€ 1,057 m. € 937 m. +stable outlook 60.6% 64.0% +Earnings per Share +Ordinary Dividend +per Share +(for the financial year) +2022 2023 2022 2023 +2 +€ 2.97 € 2.76 € 2.05 € 2.10 +1 + The rating agency Moody's Investors Service gave DWS Group a long-term issuer rating for the first time on 30 June 2023. +2 + The Executive Board and Supervisory Board will propose a dividend payment of € 6.10 per share, which includes an ordinary dividend of € 2.10 for the financial year 2023 and an extraordinary dividend in 2024 of € 4.00, +at the Annual General Meeting on 6 June 2024. + +The secret sport is "tennis". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_30.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_30.txt new file mode 100644 index 0000000000000000000000000000000000000000..ab7bc3de29a394e8544513e0174212b4db1cf315 --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_30.txt @@ -0,0 +1,62 @@ +strengthen our Passive business with a new, specialised investment team in Hong Kong and +inflows of more than € 2.5 billion from Australia and New Zealand. +In Alternatives, we explored a variety of organic and inorganic growth opportunities. We +launched our first infrastructure retail fund in Europe. In the United States, we introduced a +fund investing in residential real estate. +Value +We aim to maintain leadership in mature markets in Active, particularly Equity and Fixed +Income, and to increase the scalability of our Multi-Asset solutions through modularisation +solutions. +In Equity, we intend to selectively expand our platform. Given the changing market +environment and higher interest rates, we will continue to focus on Fixed Income and +institutional investors. In Multi-Asset, we want to further strengthen our solutions capabilities +and are enhancing our modular investment platform in order to achieve economies of scale. +With an increasing importance of investment advisory and outsourced CIO services, we want +to expand our current offering in this segment. +Examples of Progress +We have established a Global Insurance Council to strengthen our focus on insurance clients +as well as the distribution of our Active Fixed Income products. Additionally, we reorganised +our Fixed Income investment platform in the Americas to improve cross-sector collaboration. +In 2023, we continued to optimise our product portfolio by merging or closing several funds. +We modularised and automated key elements of our portfolio management value chain, such +as security selection. +Build +In terms of digitalisation trends, we are focusing on Asset Management-as-a-Service and +digital assets. +We expect that Asset Management-as-a-Service will improve the digital investor journey. +Therefore, we plan to build a respective modular offering which is scalable and integrated via +application programming interfaces into offerings of new and our existing distribution +partners. +We see an increasing tokenisation of our economy. With the resulting changes in the market +structure, we want to utilise a blockchain infrastructure, develop new products and reach +digital native clients. In particular, we are exploring opportunities to issue traditional +investment products via blockchain and to provide access to cryptocurrencies through +organic investments and partnerships. +Examples of Progress +As part of our strategic alliance with Galaxy Digital, we established the DWS Digital Assets +Academy, an internal educational training program designed to upskill employees on the +fundamentals of digital assets, their importance for the future of finance and their integration +into investment portfolios. +In December 2023, we agreed to establish a joint venture together with Galaxy Digital and +Flow Traders. Bringing together traditional asset management expertise with digital asset +know-how, our collective mission is to revolutionise the on-chain economy by issuing a fully +collateralised euro-denominated stablecoin in a regulated environment. +Reduce +We intend to reallocate financial resources in order to fund investments in “Build” and +“Growth”. In this context, we continuously analyse measures to increase efficiency, including +divestment from sub-scale businesses and reduction of management layers. Our efficiency +measures including divestment are designed to avoid negative impact on our business. +Examples of Progress +In 2023, we completed the sale of our Private Equity Solutions business. As part of a broader +efficiency programme, we also reduced management levels in our organisation. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Strategy and Our Market +8 Our Strategy \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_31.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_31.txt new file mode 100644 index 0000000000000000000000000000000000000000..d1a97ecb30a167de2588ccaa850fa91698d927bc --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_31.txt @@ -0,0 +1,50 @@ +Internal Management System +Based on our strategy, we aim to deliver the following medium-term financial targets by +2025: +— We remain committed to creating shareholder value, reflected in an earnings per share +target. +— We remain disciplined on cost, measured and controlled by the adjusted cost-income ratio. +— Our AuM growth strategy focuses on Passive – including Xtrackers – and Alternatives. +Financial key performance indicators (medium-term to 2025) +Targets assuming stable market conditions. +1 +Including our Xtrackers brand. +Calculation details on our medium-term financial key performance indicators and the +respective results for 2023 are presented in ‘Our Performance Indicators – Our Financial +Performance’. +In addition, we guided on a targeted payout ratio of 65 percent from 2025 onwards as s +further financial measure. +Sustainability +In 2023, we updated our sustainability strategy and refined our sustainability priorities. Our +ambition is to enable our clients to navigate the sustainable transformation of the real +economy by providing them with investment expertise and solutions. Climate change remains +the core theme of our updated sustainability strategy, which we have built around three +priorities: +1. Focus on climate related investing: We seek to provide access to climate-related +investment opportunities, going hand-in-hand with our thought leadership and modular +advisory approach. +2. Strengthen engagement with investees and other relevant stakeholders: +Transformation will be key to succeed in climate risk mitigation. In that context we aim to +continuously evolve our engagement approach with investee firms, clients and index +providers as well as other industry groups. +3. Advance our own corporate transformation: Following our commitment to net zero, we +seek to focus on delivery against our net zero targets. Furthermore, we seek to strengthen +our corporate sustainability agenda and the supporting organisational change process. +Across all our activities, we acknowledge differences in client preferences and regulatory +frameworks, and we seek to take those into account in our product offering, engagement and +proxy voting activities. +Our sustainability strategy is underlined by KPIs that are tracked and monitored on a regular +basis. For further information and an overview of our 2023 sustainability KPI results please +refer to ‘Our Responsibility – Sustainable Action’. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Strategy and Our Market +9 Our Strategy +The secret object #3 is a "fork". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_32.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_32.txt new file mode 100644 index 0000000000000000000000000000000000000000..74d05e0aafcaceddb9a3a28c5ba9e37f59199cb7 --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_32.txt @@ -0,0 +1,80 @@ +Economic and Competitive Environment +Global Economy +The inflation rate in the Euro area peaked at 10.6% in October 2022; since then, inflation rates +have fallen steadily. In November 2023, the inflation rate was down to 2.4%, before climbing +to 2.9% in December (eurostat). However, it was still above the target by the European +Central Bank. Against this backdrop, the European Central Bank raised its key interest rate +(deposit rate) from minus 0.5% to 4% in just over a year. At the beginning of 2023, the +economy was still facing several problems: difficulties in supply chains, the threat of gas +shortages and a shortage of skilled workers. However, restrictive monetary policy did not fail +to have an impact. Demand-side problems dominated. In addition to weak private +consumption due to high inflation, investments, especially into interest-sensitive construction +investments, were weak. Overall, according to eurostat, the euro area economy has grown +only 0.5% in 2023, after 3.4% in the previous year. +The US ended 2023 stronger than expected, as tailwinds such as excess savings and robust +labour markets supported consumption, especially in the third quarter. Inflation rates +continued to decline from their peaks in 2022, reinforcing expectations that previous policy +rate hikes are now having their expected effect on the economy. This view is also supported +by the continued easing of labour market conditions. The Federal Reserve stopped raising +rates after its July meeting and switched to a data-dependent mode, maintaining its hawkish +bias. This hawkish bias reflects the remaining uncertainty about the ultimate impact of +monetary policy on the economy. Still, inflation remains too high to declare victory. At the +same time, central bankers seem to have shifted to a more balanced risk assessment, taking +into account the potential unwanted negative effects of past rate hikes on economic +momentum. +In Japan, the only industrialized country to maintain negative key interest rates, the central +bank eased its yield curve control in July and October. The upper limit for ten-year yields is +now at a flexible reference value of 100 basis points. Supported by a recovery following the +end of the coronavirus protection measures and a weak yen exchange rate, the economy has +performed solidly and has grown based on preliminary numbers by 1.9% in 2023 (Cabinet +Office, Japan). +After a strong post-COVID-19 recovery in the first quarter, China's economy slowed rapidly in +the second quarter as consumer and business confidence weakened amid mounting debt +problems in the real estate development sector and stretched fiscal and debt positions of +local governments. The central government stepped up its support for the property sector. +Policy support has now been broadened to address the most pressing issues. It began in the +second quarter by improving access to financing for developers and helping to complete the +large backlog of unfinished real estate projects, thus removing an important initial hurdle to +improving the market. The next focus was on removing the many hurdles and restrictions to +home ownership. Monetary stimulus and generous financing for infrastructure investment +were stepped up. Debt restructuring of the highly indebted local government financing +vehicles – another necessary condition for achieving a more sustainable situation and +improving confidence – began in the third quarter. Robust investment in manufacturing and +infrastructure as well as consumption spending, together with strong growth in the service +sector, led to a strong rebound in the third quarter. The government's 5% growth target for +2023 was even slightly higher with 5.2% (National Bureau of Statistics of China) +Asset Management Industry +The asset management industry faced another turbulent year in 2023, following the +challenges of the prior twelve months, which led to a decline in global assets under +management. Despite a positive start to the year the US regional banking crisis and the +forced merger of Switzerland’s two largest banks in Europe unnerved investors and markets. +Meanwhile, concerns about central bank interest rates hikes, recession risks, deglobalization +and, heightened geopolitical pressures continued, posing potential risks to business if not +handled appropriately by national or subnational governments or agencies. Therefore, such +developments will be closely monitored, i. e. tension between the US and China, the war in +Ukraine and latterly the conflict in Gaza. +During the year, market uncertainty resulted in investors, particularly those in the US, seeking +refuge in money market funds with the sector recording strong inflows, which were further +buoyed by higher interest rates. Higher interest rates also encouraged investors back into +bonds particularly in the first half of the year, following redemptions in 2022. Investors +continued to favour passive investments over Active strategies with ETF inflows continuing to +see positive momentum. Demand for alternative investments slowed with higher interest +rates and lower valuations impacting some asset classes, although pockets of interest +persisted, notably in green infrastructure and some private debt strategies. +New technology continued to be pivotal to product innovation and greater customisation as +well as being an important lever for asset managers looking to reduce costs and increase +efficiency in the less favourable investment environment. +Sustainable investing continued to be a key element of many large institutional investors’ +portfolios, despite the continuing political backlash in the US. Although sustainable fund +market flows dipped in 2023 year-on-year, “dark green” strategies with the strongest + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Strategy and Our Market +10 Economic and Competitive Environment \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_33.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_33.txt new file mode 100644 index 0000000000000000000000000000000000000000..24463301d65fc6c23fb305d3f9b9388c2099bce6 --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_33.txt @@ -0,0 +1,33 @@ +sustainable credentials reported robust net flows and sustainable investing also continued to +gather pace in the alternative space with more transition strategies launched. +DWS Group +As a global asset manager with diverse investment capabilities that span traditional Active +and Passive strategies, as well as alternatives and bespoke solutions, we were well positioned +to address the aforementioned industry challenges and market uncertainties and to capture +market opportunities. By anticipating and responding to investor needs, we aspire to be the +investment partner of choice and to create sustainable value for our global client base. We +were able to offer clients a comprehensive range of investment solutions from our global +investment platform covering all major asset classes and investment styles. +With our range of Alternative investments including real estate, infrastructure, liquid real +assets, and sustainable investments, we provided products to our clients with higher return +that are designed to contribute to achieving their long-term investments objectives. +Given the global presence of our passive investment platform, we were well positioned to +take advantage of the continuing shift to passive investments, offering passive mutual funds, +mandates and ETFs. Our Passive investment platform, Xtrackers, was among the Top 3 +European providers of ETFs and other Exchange Traded Products (ETFGI, 31 December 2023). +We recognized growing demand from investors for greater integration of sustainable +investment strategies, especially as issues such as climate change receive increasing +attention. We believe that our expertise in sustainable investments, as well as our expanded +product range, have provided valuable contribution to protecting and growing our clients' +assets over the long term and in a sustainable manner. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Strategy and Our Market +11 Economic and Competitive Environment \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_34.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_34.txt new file mode 100644 index 0000000000000000000000000000000000000000..b0363bcd35f1743ebd637f97e7a20c7a3f4f6cce --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_34.txt @@ -0,0 +1,77 @@ +Our Performance Indicators +Our Financial Performance +GRI 201-1 +Overall, we had a solid year of financial performance in 2023. In a “flow-less” market +recovery, which made it difficult for the asset management industry, we recorded net inflows +of € 28 billion. Our AuM increased by € 75 billion in the year to € 896 billion. The market +continued to be challenging for Alternatives, AuM decreased from € 118 billion to € 111 billion, +mainly driven by negative market impact and FX movements. Our targeted growth area of +Passive had an exceptional year, and grew its AuM by 24% in 2023, which is far above our +growth target of >12% (CAGR 2022-2025). Due to market turmoil in 2022, the year 2023 +started with a significantly lower average AuM than in the previous year. Reported revenues +of € 2,614 million are 4% below prior year, mainly driven by lower management fees. +Increased investment into our growth and transformation resulted in an adjusted cost-income +ratio of 64.0%, compared to 60.6% in prior year. Profit before tax is 10% lower than the prior +year, resulting in lower earnings per share of € 2.76 compared to € 2.97 in 2022. +Alternative Performance Measures +Alternative performance measures +2023 2022 +Assets under management (in € bn. as per period end) 896 821 +Thereof: ESG AuM (in € bn. as per period end) +1 +133 117 +Net flows (in € bn.) 28 (20) +Management fee margin (in basis points (bps)) 27.1 28.1 +Adjusted revenues (in € m.) 2,603 2,683 +Adjusted costs (in € m.) 1,665 1,625 +Cost-income ratio (in %) 70.3 68.1 +Adjusted cost-income ratio (in %) 64.0 60.6 +Adjusted profit before tax (in € m.) 937 1,057 +1 + For details on ESG product classification, please refer to section ‘Our Responsibility – Sustainable Action– Our Product +Suite’. +Alternative performance measures are used to judge the Group’s historical or future +performance and financial position but are not recognised under generally accepted +accounting principles. These include assets under management and net flows, which are +important key performance indicators to evaluate revenue potential and business +development. To better enable comparison of the revenue and cost development over several +periods, non-recurring items are excluded from net revenues or total non-interest expenses. +Our management uses these measures as supplemental information to develop a fuller +understanding of the development of our business and the ability to generate profit. They +should only be considered in addition to net income or profit before tax as measures of our +profitability. Similar alternative performance measures are used by our peers within the asset +management industry, but these may be calculated differently and may not be comparable to +the alternative performance measures we use, even if the names suggest that they are +similar. +Assets under management means assets (a) we manage on a discretionary or non- +discretionary advisory basis; including where we are the management company and portfolio +management is outsourced to a third party; and (b) a third party holds or manages and on +which we provide, on the basis of contract, advice of an ongoing nature including regular or +periodic assessment, monitoring and/or review. AuM represent both collective investments +(including mutual funds and exchange-traded funds) and separate client mandates. AuM are +measured at current market value based on the local regulatory rules for asset managers at +each reporting date, which might differ from the fair value rules applicable under IFRS. +Measurable levels are available daily for most retail products but may only update monthly, +quarterly or even yearly for some products. While AuM do not include our investments +accounted for under equity method, they do include seed capital and any committed capital +on which we earn management fees. +Net flows represent assets acquired or withdrawn by clients within a specified period, except +when a third party holds or manages the assets on which we provide, on the basis of +contract, advice of an ongoing nature including regular or periodic assessment, monitoring +and/or review in which case we include the difference in the value of such assets within the +specified period which may include currency effects, market performance and other effects. +Net flows are one of the major drivers of changes in AuM. +Management fee margin is calculated by taking the management fees and other recurring +revenues for a period, divided by average AuM for the same period. Annual average AuM are + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Performance Indicators +12 Our Financial Performance +The secret flower is a "sunflower". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_35.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_35.txt new file mode 100644 index 0000000000000000000000000000000000000000..31db8c4b84c008787fd2d956b3becbc305757d6f --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_35.txt @@ -0,0 +1,84 @@ +calculated using AuM at the beginning of the year and the end of each calendar month +(i. e. 13 reference points for a full year). +Adjusted revenues present net interest and non-interest income excluding material non- +recurring income items that are clearly identifiable one-off items, such as disposal gains. We +use this metric to show revenues on a continuing operating basis, in order to enhance +comparability against other periods. +Reconciliation of net interest and non-interest income to adjusted revenues +in € m. 2023 2022 +Net interest and non-interest income 2,614 2,712 +Non-recurring disposal gains (12) (30) +Adjusted revenues 2,603 2,683 +Adjusted costs are an expense measure we use to better distinguish between total costs +(non-interest expenses) and our ongoing operating costs. This measure is adjusted for +litigation, restructuring, severance costs, impairment of goodwill and impairment (impairment +reversal) of other intangible assets as well as for transformational charges in relation to our +multi-year transformation program and other material non-recurring expenses that are clearly +identifiable one-off items. +Reconciliation of non-interest expenses to adjusted costs +in € m. 2023 2022 +Non-interest expenses 1,837 1,847 +Litigation (36) (26) +Restructuring activities 0 0 +Severance costs (34) (37) +Impairment of goodwill and impairment/(impairment reversal) of other intangible +assets 0 (68) +Transformational charges (99) (58) +Other material non-recurring expenses (2) (32) +Adjusted costs 1,665 1,625 +Cost-income ratio is the ratio of non-interest expenses to net interest and non-interest +income. +Adjusted cost-income ratio is the ratio of adjusted costs to adjusted revenues. +Adjusted profit before tax is calculated by adjusting the profit before tax to account for the +impact of the revenue and cost adjustment items as explained above. +Results of Operations +Change from 2022 +in € m. (unless stated otherwise) 2023 2022 in € m. in % +Management fees income 3,563 3,719 (156) (4) +Management fees expense 1,248 1,263 (15) (1) +Net management fees 2,315 2,456 (141) (6) +Performance and transaction fee income 132 134 (1) (1) +Performance and transaction fee expense 4 8 (4) (46) +Net performance and transaction fees 128 125 2 2 +Net commissions and fees from asset management 2,443 2,582 (138) (5) +Interest and similar income 117 39 78 N/M +Interest expense 14 18 (4) (24) +Net interest income 103 21 82 N/M +Net gains (losses) on financial assets/liabilities at fair +value through profit or loss +1 + 113 (185) 299 N/M +Net income (loss) from equity method investments 42 66 (24) (36) +Provision for credit losses 0 (1) 1 (80) +Other income (loss) +1 + (88) 228 (316) N/M +Total net interest and non-interest income 2,614 2,712 (98) (4) +Compensation and benefits 865 846 20 2 +General and administrative expenses 972 933 39 4 +Impairment of goodwill and impairment/(impairment +reversal) of other intangible assets 0 68 (68) N/M +Total non-interest expenses 1,837 1,847 (10) (1) +Profit (loss) before tax 777 866 (88) (10) +Income tax expense 224 271 (46) (17) +Net income (loss) 553 595 (42) (7) +Attributable to: +Non-controlling interests 2 1 1 145 +DWS shareholders 552 594 (43) (7) +1 +Net gains (losses) on financial assets/liabilities at fair value through profit or loss is mainly attributable to trading +assets held by guaranteed funds of € 111 million for 2023 (€ (186) million for 2022). This is offset by income (loss) from +liabilities held by guaranteed funds of € (111) million for 2023 (€ 186 million for 2022) shown in other income. DWS +Group has no shares in these funds. Other income includes a sales gain of € 30 million for 2022 from the transfer of +the digital investment platform to MorgenFund GmbH. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Performance Indicators +13 Our Financial Performance \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_36.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_36.txt new file mode 100644 index 0000000000000000000000000000000000000000..8899c52003c55bb0a8a7ded497345e36c3e93a13 --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_36.txt @@ -0,0 +1,64 @@ +In 2023 we reported a profit before tax of € 777 million, a decrease of € 88 million, or 10%, +compared to prior year. +Total net interest and non-interest income was € 2,614 million, 4% lower compared to 2022 +driven by lower management fees. Management fees were impacted by negative market +developments, margin compression and the composition of the net inflows in Alternatives. +Performance and transaction fees remained essentially flat. Other revenues were +€ 171 million, an increase of € 40 million compared to 2022, primarily driven by net interest +income and favourable development of fair value of guarantees as well as deferred +compensation hedge. This was partly offset by lower mark to market valuations of co- +investments as well as lower revenue contributions from our investments in Harvest Fund +Management Co Ltd and MorgenFund GmbH. +Non-interest expenses of € 1,837 million were essentially flat compared to 2022. +Compensation and benefits costs increased by € 20 million mainly driven by an increase in +the size of the workforce. General and administrative expenses were € 39 million higher +compared to 2022, with an increase in platform transformation charges as well as higher +banking servicing costs, partly offset by lower expenses related to legal services and lower +costs for our outsourced functions to Deutsche Bank Group entities. Non-operating costs +were significantly lower due to an impairment of intangible assets related to 2022. +Assets under management is a key factor affecting the results of operations as a significant +percentage of management fees is charged as a proportion of AuM. Assuming management +fee margins remain unchanged, an increase in the level of average AuM will generally lead to +an increase in revenues. +Assets under management were € 896 billion as of 31 December 2023, an increase of +€ 75 billion compared to 31 December 2022. The increase was driven by a positive market +impact of € 57 billion and net flows of € 28 billion, party offset by foreign exchange impact of +€ (12) billion. Net inflows were driven by Passive including Xtrackers, Active Cash and Active +Multi Asset, partly offset by net outflows in Active Equity and Active Systematic and +quantitative investments. +FX impact represents the currency movement of products denominated in local currencies +against the euro. It is calculated by applying the change in FX rate to the ending period assets +and is calculated monthly. +Market impact primarily represents the underlying performance of the AuM, which is driven +by market effects (equity indices, interest rates, foreign exchange rates) as well as fund +performance. The market impact in the period led to an increase in AuM of € 57 billion +particularly in our Active Equity, Active Fixed Income and Passive products including +Xtrackers. +Other includes the impact of acquisitions and divestment as well as reclassifications of asset +classes. +AuM development in 2023 +31 Dec 2022 2023 31 Dec 2023 +in € bn. AuM Net flows FX impact Performance Other AuM +By asset classes: +Active Equity 99 (2) (1) 11 0 107 +Active Multi Asset 68 4 0 3 1 76 +Active Systematic and +quantitative investments 64 (2) 0 5 (1) 66 +Active Fixed Income 194 0 (3) 12 0 203 +Passive including Xtrackers 199 21 (4) 31 0 247 +Alternatives 118 0 (2) (5) 0 111 +Total exluding Cash 741 23 (10) 57 1 811 +Active Cash 80 6 (2) 1 0 85 +Total 821 28 (12) 57 1 896 + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Performance Indicators +14 Our Financial Performance +The secret animal #3 is a "shark". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_37.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_37.txt new file mode 100644 index 0000000000000000000000000000000000000000..22f5ea5e8ae4313fa117b0cc95dc8d14a7c0b89a --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_37.txt @@ -0,0 +1,75 @@ +Our Financial Position +Liquidity +We principally fund our business through equity and may use debt to address specific +financing demands. To ensure that we can always fulfil our payment obligations in all +currencies, we operate a liquidity risk management framework that includes stress-testing of +our liquidity position. During the annual strategic planning process, we project the +development of key liquidity and funding metrics based on the underlying business plan to +ensure compliance with our risk appetite. +As of 31 December 2023, we held cash and bank balances, government, sub-sovereign and +corporate bonds and other debt instruments totalling € 3,570 million (€ 3,577 million as of +31 December 2022). +On 30 June 2023, we received our long-term issuer credit rating from the rating agency +Moody’s Investors Service. The rating of A2 with a stable outlook can also be used for +diversifying our funding options. +Capital Management +IFR Article 50(a) +A forward-looking capital plan is maintained to assess the development of capital supply and +demand and the projected capitalization of the Group from an accounting, regulatory and +economic perspective. The economic perspective considers all relevant risks quantified by +economic capital models using internal definitions and quantification methods. Capital +planning is embedded into the Group’s overall strategic planning process to ensure an +integrated financial and risk planning approach and considers appropriate risk appetite +thresholds. Results of the planning process feed into management decisions. They support +the strategic direction of the Group in the assessment of potential profitable growth and +investment opportunities. +Capital Expenditures +In 2023, the Group made capital expenditures in intangible assets of € 67 million and no +material capital expenditures in property and equipment. Contingent liabilities decreased by +€ 5 million from € 111 million as of 31 December 2022 to € 106 million as of 31 December +2023 mainly driven by drawdowns of commitments for co-investments. +Net Assets +Selected items within our financial position +Change from 2022 +in € m. (unless stated otherwise) 31 Dec 2023 31 Dec 2022 in € m. in % +Assets: +Cash and bank balances 1,414 1,979 (565) (29) +Financial assets at fair value through profit or loss 4,868 3,959 910 23 +Goodwill and other intangible assets 3,694 3,749 (54) (1) +Remaining assets +1 + 1,707 1,725 (19) (1) +Total assets 11,683 11,412 272 2 +Change from 2022 +in € m. (unless stated otherwise) 31 Dec 2023 31 Dec 2022 in € m. in % +Liabilities and equity: +Financial liabilities at fair value through profit or loss 633 634 (1) 0 +Remaining liabilities +2 + 3,233 2,950 284 10 +Total liabilities 3,866 3,584 282 8 +Equity 7,817 7,828 (10) 0 +Total liabilities and equity 11,683 11,412 272 2 +1 +Sum of financial assets at fair value through other comprehensive income, equity method investments, loans, property and equipment, right-of-use assets, other assets, assets for current tax, and deferred tax assets. +2 + Sum of other short-term borrowings, lease liabilities, other liabilities, provisions, liabilities for current tax and deferred tax and long-term debt. +Cash and bank balances decreased by € 565 million (29%) driven by dividend payment of +€ 410 million and net tax paid of € 253 million partly offset by net cash received in the regular +course of business of € 98 million. The increase in financial assets at fair value through profit +or loss of € 910 million (23%) was mainly driven by net investments in liquidity positions of +€ 556 million and by the increase of assets in consolidated funds of € 315 million. +The remaining liabilities increase of € 284 million (10%) was mainly driven by other liabilities +held by consolidated funds of € 204 million and other liabilities of € 80 million. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Performance Indicators +15 Our Financial Position +The secret instrument is a "piano". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_38.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_38.txt new file mode 100644 index 0000000000000000000000000000000000000000..647aff32afae58aa31ffa319f5c3aca83c798230 --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_38.txt @@ -0,0 +1,79 @@ +Equity +Total equity as of 31 December 2023 was € 7,817 million compared to € 7,828 million as of +31 December 2022. The decrease of € 10 million was mainly driven by the dividend payment +of € 410 million for the year 2022. and the negative impact from foreign exchange rate +movements on capital denominated in non-Euro currencies of € 140 million offset by net +income after tax for the year 2023 of € 553 million. +Regulatory Own Funds +IFRS 7/IAS 1 +IFR Articles 49(1)(c), 50(c), 50(d) +Our regulatory own funds and own funds requirements are based on the Regulation (EU) +2019/2033 on the prudential requirements of investment firms (IFR), the Directive (EU) +2019/2034 on the prudential supervision of investment firms (IFD), and the Investment Firm +Act. We are an investment firm group under IFR. +Our regulatory own funds increased by € 21 million to € 3,062 million as of 31 December +2023. The increase was mainly driven by recognition of profits and the partially offsetting +negative impact from foreign exchange rate movements on capital denominated in non-Euro +currencies. Our own funds consist of Common Equity Tier 1 capital. There are no additional +Tier 1 or Tier 2 instruments issued. +The own funds requirement based on K-factors according to IFR was € 524 million as of +31 December 2023, a decrease by € 62 million compared to € 587 million as of 31 December +2022. The decrease was largely due to the impact from lower average assets safeguarded +and administered. +The fixed overheads requirement as of 31 December 2023 was € 411 million compared to +€ 377 million as of 31 December 2022 and was lower than the own funds requirement based +on K-factors. As in the previous year, our own funds requirement was therefore still based on +the K-factors. The own funds excess over K-factor requirements was € 2,538 million as of +31 December 2023. With that we comply with the overall regulatory capital requirements +according to IFR article 11. +We applied the IFR and related regulatory technical standards where available. Where +individual technical standards are still pending, we aligned our approach to the Regulation +(EU) No 575/2013, that applied to us until the introduction of the IFR. We do not expect +changes with final publication of such regulatory technical standards. +Regulatory own funds and requirements +1 +in € m. (unless stated otherwise) 31 Dec 2023 31 Dec 2022 +Regulatory own funds: +Common Equity Tier 1 capital 3,062 3,041 +Tier 1 capital (CET1 + AT1) 3,062 3,041 +Tier 2 capital 0 0 +Total regulatory own funds 3,062 3,041 +K-factor requirement: +K-AuM (assets under management) 170 177 +K-ASA (assets safeguarded and administered) 5 49 +K-COH (client orders handled) 0 0 +K-NPR (net position risk) 350 361 +Total own funds requirement based on k-factors 524 587 +Own funds excess (shortfall) 2,538 2,455 +1 +Scope and methods of consolidation in line with CRR and regulatory technical standards. +Reconciliation of IFRS equity to regulatory own funds +in € m. 31 Dec 2023 31 Dec 2022 +Shareholders‘ equity, as defined by IFRS, regulatory basis of consolidation 7,763 +1 +7,799 +Elimination of net income, net of profit recognition 482 459 +Deduction of: +Goodwill and other intangible assets (net of related deferred tax liabilities) 3,470 3,542 +Deferred tax assets 131 157 +Financial sector entities 535 513 +Other +2 + 84 86 +Regulatory own funds 3,062 3,041 +1 + Adjusted by lower prudentially recognized retained earnings of € 28 million. +2 + Synthetic holdings of own CET1 instruments, prudent valuation, defined benefit pension plan assets, minimum value +commitments. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Performance Indicators +16 Our Financial Position \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_39.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_39.txt new file mode 100644 index 0000000000000000000000000000000000000000..a75eefac4fe38d8e1154e3d4746520c4279f2164 --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_39.txt @@ -0,0 +1,69 @@ +Supplementary Information on DWS Group GmbH & Co. +KGaA according to German Commercial Code +We chose the option of publishing a summarised management report in accordance with +Section 315 (5) in conjunction with Section 298 (2) of the German Commercial Code. +Supplementary to our Group reporting, this section provides details on the performance of +DWS KGaA. +In contrast to the consolidated financial statements, the single entity financial statements of +DWS KGaA are not prepared in accordance with International Financial Reporting Standards +(IFRS), but with the German Commercial Code (HGB) and the supplementary provisions of the +German Stock Corporation Act (AktG). +Results of Operations of DWS KGaA +Change from 2022 +in € m. (unless stated otherwise) 2023 2022 in € m. in % +Income from profit pooling agreements 633 540 93 17 +Income from participating interests 197 222 (25) (11) +Impairment on financial assets and on securities held as +current assets 7 71 (64) (90) +Other income 177 144 33 23 +Staff expenses 46 35 11 33 +Other operating expenses 234 250 (16) (6) +Other interest and similar income 20 2 17 N/M +Interest and similar expenses 29 5 24 N/M +Income taxes 169 135 34 25 +Net income 541 412 129 31 +Profit carried forward from the previous year 222 220 2 1 +Withdrawals from the capital reserve 800 0 800 N/M +Distributable profit 1,564 632 931 147 +The business purpose of DWS KGaA as parent company of the Group is the holding of +participations in and the management and support of a group of financial services providers. +DWS KGaA itself is not active in the operating asset management business. +Significant financial income components of DWS KGaA are from profit pooling agreements +and participating interests. Earnings therefore largely depend on the performance of our +subsidiaries. +Income from profit pooling agreements with German subsidiaries increased by € 93 million to +€ 633 million in 2023, mainly due to higher profit transferred from DWS Beteiligungs GmbH. +Income from participating interests amounted to € 197 million in 2023 and mainly included +dividends from DWS Investments UK Limited, DWS USA Corporation and DWS Investments +Singapore Limited. +Impairment on financial assets and securities held as current assets amounted to € 7 million +compared to € 71 million in the previous year and related to our participating interests. +Other income was € 177 million compared to € 144 million in 2022. The increase mainly +related to higher income from recharging service and infrastructure expenses including +transformational charges to our subsidiaries. +Staff expenses increased by € 11 million to € 46 million mainly due to higher salary and +related expenses due to an increased number of employees and higher severances. +Other operating expenses decreased by € 16 million to € 234 million, mainly due to +decreased expenses for professional services and lower losses from derivatives on our share +price-linked equity-based compensation, partly offset by higher transformational IT costs. +Other interest and similar income amounted to € 20 million. The increase of € 17 million +compared to previous year was mainly driven by increased interest income from current +accounts and from loans granted to subsidiaries. Interest and similar expenses increased by +€ 24 million to € 29 million, mainly due to higher interest expenses for borrowings from +subsidiaries as well as for the cash pool established in 2023 within DWS KGaA and its major +German subsidiaries to concentrate EUR liquidity. +Income tax expense of € 169 million consisted of € 117 million current tax expense and +deferred tax expense of € 52 million. Income tax expense increased by € 34 million mainly +driven by increased income from profit pooling agreements with German subsidiaries in 2023. +Net income increased by € 129 million to € 541 million in 2023. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Performance Indicators +17 Supplementary Information on DWS Group GmbH & Co. KGaA according to German Commercial Code \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_4.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_4.txt new file mode 100644 index 0000000000000000000000000000000000000000..5f7fb1983d5cdbd3c66a043ecf71348221ab72e7 --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_4.txt @@ -0,0 +1,71 @@ +Letter of the Chief Executive Officer +GRI 2-22 +Frankfurt/Main, March 2024 +Dear Shareholders, +2023 was another demanding year for the asset management industry, mainly driven by what +one financial analyst described as a “flow-less” market recovery. Nevertheless, DWS managed +to return to a positive flow picture. Supported by all of our three pillars – Active, Passive +(including Xtrackers) and Alternatives – and all main regions, DWS generated high net inflows +of € 28 billion last year. Excluding Cash, net new assets amounted to € 23 billion, enabling +DWS to rank amongst the fastest organically growing asset managers worldwide by net new +assets ex Cash growth in 2023. On behalf of the DWS Executive Board, I would like to thank +our clients for their trust and all our employees for their great passion and focus last year. +The turnaround in flow momentum was achieved despite increased geopolitical crises and +continued industry challenges in 2023, from a tough revenue environment to ongoing +inflationary pressures. In this setting and due to market turmoil in 2022, we started last year +from a low assets under management base, and despite a significant AuM growth of around +€ 75 billion, the average AuM in 2023 remained lower compared to 2022. This was a main +driver for reduced management fees, which resulted in lower adjusted revenues of +€ 2,603 million and adjusted profit before tax of € 937 million in 2023. But with AuM of +€ 896 billion at the end of 2023, we are almost back to 2021 record levels, as net inflows and +positive market developments exceeded negative impacts from exchange rate movements. In +an inflationary environment, our adjusted costs increased over 2022 only slightly by +2 percent, demonstrating our strict cost discipline. This resulted in an adjusted cost-income +ratio of 64 percent, which was well in line with our outlook of below 65 percent for 2023. +Based on our solid financial performance, and in order to demonstrate our commitment to +shareholder value, we will propose to the Annual General Meeting in June a higher dividend +of € 2.10 per share for the business year 2023. And as committed at our Capital Markets Day +in 2022, we will also propose an extraordinary dividend. This will be € 4.00 per share. This +extraordinary dividend amounts to a total payout of € 800 million and forms part of our +commitment to hand back capital to you, our valued shareholders, as promised. +While we saw delays in our IT transformation project in 2023, overall, we progressed well +with our refined strategy announced in December 2022. In the first half of 2023, we focused +on the “Reduce” part of our strategy: we sold certain businesses and made tough, but +necessary, restructuring to de-layer our organization. Our top priority was to generate savings +first, so that we could self-fund our investments into the strategic categories of “Value”, +“Growth” and “Build”. We then concentrated on these three categories for the rest of the +year. +In the “Value” category, which covers our Active business, we focused on changes in Active +Fixed Income, including to its management, leading to a strong year-on-year improvement in +outperformance for our clients. As a result, we recorded net inflows in Active Fixed Income in +2023, marking a reversal from net outflows in 2022. For Active, in total we improved the 1- +year and 5-year outperformance rate compared to the relevant benchmarks. Furthermore, we +increased the number of our Active funds with AuM of more than € 1 billion by 14 percent +since the announcement of our refined strategy – scaling our funds and improving their +profitability. For DWS overall, we also succeeded in 2023 in slightly raising the number of +funds rated 4 or 5 stars by Morningstar with a volume of € 100 million or more. +We also continued to progress on our “Growth” strategy. Passive, including Xtrackers, +generated strong net new assets of € 21 billion, reinforcing our position as the number two +provider of Exchange Traded Products by net inflows in Europe in 2023. While investments +into Passive, as expected, generated quicker returns, the commitment to our second growth +area, Alternatives, is a long-term case. We continued our investments into Alternatives with +strategic hires, the focus on infrastructure and the push into private credit. +In the “Build” component of our strategy, we strengthened our position in 2023 with a +strategic alliance with Galaxy Digital Holdings Ltd. (Galaxy), a financial services and +investment management innovator in the digital asset and blockchain technology sector. The + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Letter of the Chief Executive Officer +II \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_40.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_40.txt new file mode 100644 index 0000000000000000000000000000000000000000..cd1b0c3df803939a71fbfbc01aa398b4a0f9250c --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_40.txt @@ -0,0 +1,72 @@ +The distributable profit amounted to € 1,564 million as of 31 December 2023. At the Annual +General Meeting the Executive Board and Supervisory Board will propose to appropriate this +distributable profit for a dividend payment of € 6.10 per share, which includes an ordinary +dividend of € 2.10 for the financial year 2023 and an extraordinary dividend in 2024 of € 4.00, +and to carry forward the remaining distributable profit. +Financial Position of DWS KGaA +Change from 2022 +in € m. (unless stated otherwise) 31 Dec 2023 31 Dec 2022 in € m. in % +Assets: +Intangible and tangible assets 30 18 12 66 +Financial assets – investments in affiliated companies 7,283 7,277 7 0 +Financial assets – participating interests 46 53 (7) (13) +Financial assets – long-term investment securities 15 14 1 7 +Total fixed assets 7,375 7,362 13 0 +Receivables from affiliated companies 994 899 95 11 +Other assets 86 37 49 133 +Securities 1,354 274 1,080 N/M +Bank balances 440 170 270 159 +Total current assets 2,874 1,380 1,494 108 +Prepaid expenses 8 8 1 9 +Deferred tax assets 98 150 (52) (35) +Total assets 10,356 8,900 1,456 16 +Change from 2022 +in € m. (unless stated otherwise) 31 Dec 2023 31 Dec 2022 in € m. in % +Liabilities and shareholders' equity: +Subscribed capital 200 200 0 0 +Capital reserve 6,658 7,458 (800) (11) +Revenue reserves 20 20 0 0 +Distributable profit 1,564 632 931 147 +Total capital and reserves 8,441 8,310 131 2 +Provisions for pensions and similar obligations 4 4 1 18 +Other provisions 123 125 (2) (2) +Total provisions 127 129 (2) (1) +Accounts payable for goods and services 2 1 1 N/M +Liabilities to affiliated companies 1,772 451 1,320 N/M +Other liabilities 13 9 4 48 +Total liabilities 1,787 461 1,326 N/M +Total liabilities and shareholders' equity 10,356 8,900 1,456 16 +Movements in Assets +As of 31 December 2023, total assets amounted to € 10,356 million, an increase of +€ 1,456 million compared to year-end 2022. +Fixed assets were essentially unchanged. Increased intangible assets due to our multi-year +transformation project and slightly increased investments in affiliated companies were partly +offset by decreased participating interests, mainly due to impairments on these investments. +Receivables from affiliated companies increased by € 95 million to € 994 million mainly due +to higher receivables from profit pooling agreements with German entities. +Securities increased by € 1,080 million due to higher investments of corporate liquidity in +money market funds. +Bank balances increased by € 270 million. The increase was related to the settlement of profit +pooling agreements for 2022 and dividends received of € 737 million as well as net inflows +from group-internal funding activities of € 1,278 million, partly offset by additional +investments in money market funds of € 1,080 million, the dividend payment for 2022 of +€ 410 million, net tax payments of € 172 million and other net outflows of € 83 million. +Equity +The capital and reserves of DWS KGaA as of 31 December 2023 were € 8,441 million, split +into subscribed capital of € 200 million, reserves of € 6,678 million and a distributable profit +of € 1,564 million. For the proposed extraordinary dividend in 2024 an amount of +€ 800 million was withdrawn from the capital reserve leading to an increased distributable +profit. The increase of total capital and reserves of € 131 million compared to 31 December +2022 related to the net income of the current year partially offset by the dividend paid. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Performance Indicators +18 Supplementary Information on DWS Group GmbH & Co. KGaA according to German Commercial Code +The secret shape is a "triangle". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_41.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_41.txt new file mode 100644 index 0000000000000000000000000000000000000000..db5c484dac9e17b816c26c19256fe16fdf003b69 --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_41.txt @@ -0,0 +1,55 @@ +Movements in Provisions and Liabilities +As of 31 December 2023, total provisions amounted to € 127 million, essentially unchanged +compared to previous year-end. +Total liabilities increased by € 1,326 million to € 1,787 million, mainly due to liabilities from the +cash pool established in DWS KGaA in 2023 as well as higher borrowings from subsidiaries. +Liquidity +The Capital and Liquidity Management function is mandated to manage the overall liquidity +and funding position of DWS KGaA. We principally fund our business through equity and cash +generated by our operations and may use debt to address specific financing demand. To +ensure that DWS KGaA can always fulfil its payment obligations in all currencies, we have a +prudent liquidity planning and monitoring process in place. +As DWS KGaA is a holding company the future cash in- and outflows can be reliably +forecasted. Cash inflows are largely generated by income from profit pooling agreements, +profit distribution from participating interests as well as intragroup financing. Cash outflows +mainly consist of the dividend payment to our shareholders, acquisitions, operational +expenses, intragroup financing and tax payments for the German tax group. +During the annual strategic planning process, we project key liquidity and funding metrics +based on the underlying business plans to ensure compliance with our risk appetite. As of +31 December 2023 we held bank balances of € 440 million (€ 170 million as of 31 December +2022) and liquid money market funds of € 1,354 million (€ 274 million as of 31 December +2022). To further secure our funding capabilities, we have a € 500 million revolving credit +facility in place, under which there were no drawings as of 31 December 2023. +Risks and Opportunities of DWS KGaA +The business performance of DWS KGaA is largely subject to the same risks and opportunities +as the performance of the Group presented in the consolidated financial statements. +DWS KGaA generally participates in the risks of its shareholdings and subsidiaries in +accordance with its respective percentage interest held. DWS KGaA is integrated in the risk +management system and internal control system of the Group. Further information is +provided in the ‘Risk Report’ and in the section ‘Outlook – DWS Group – Opportunities and +Risks’ of this report. +Outlook for DWS KGaA +The outlook for DWS KGaA is essentially subject to the same influences as the outlook for the +Group presented in the ‘Outlook’ section of this report. +Final Statement of the Executive Board on Section 312 German Stock +Corporation Act +As DWS KGaA and its subsidiaries are part of Deutsche Bank Group, the Executive Board of +DWS KGaA is obliged to prepare a dependency report pursuant to Section 312 German Stock +Corporation Act. +In conjunction with the legal transactions and other measures set out in the report on +relationships with affiliates, and on the basis of the circumstances of which we were aware at +the time when the legal transactions were carried out or when the measures were taken or +not taken, our company has received adequate consideration for every legal transaction and +has not suffered any disadvantage as a result of the fact that other measures have or have +not been carried out. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Performance Indicators +19 Supplementary Information on DWS Group GmbH & Co. KGaA according to German Commercial Code \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_42.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_42.txt new file mode 100644 index 0000000000000000000000000000000000000000..49ec7071acb2984f2ce9cc0f837d51da6f0a773e --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_42.txt @@ -0,0 +1,76 @@ +Outlook +Economic and Competitive Outlook +The following sections provide an overview of our expectations for the Group and the +business environment for the financial year 2024. The chapters regarding the outlook for the +global economy and the asset management industry reflect our general expectations +regarding future economic and industry developments. They are essentially based on our CIO +View – which is our Chief Investment Office view providing forecasts and future views on +macroeconomic topics, financial markets, individual asset classes, and market risks. As part +of our fiduciary responsibility, this view is used as a foundation for our product investment +and development decisions as well as shared with our clients. +Global Economic Outlook +Demand-side issues are currently dominating the euro area: building permits suggest that the +construction industry is likely to weigh on economic development in the near future. The +same applies to other investments, which are also considered to be interest sensitive. Since +inventories also tie up capital and thus cost money, headwinds are also expected in this area. +Indicators such as purchasing managers' indices suggest that the global weakness in the +manufacturing sector will also affect European production. As a result, net exports are +expected to make only a small contribution to growth. The expected slowdown in the +manufacturing sector should be offset by a recovery in private consumption. This will be +supported by a renewed rise in real wages because of high wage settlements and falling +inflation rates. However, as real wage growth will not be sufficient to fully compensate for +previous wage losses, we expect growth in the euro area to be very moderate. In 2024, the +economy should grow by around 0.7% for the year as a whole. The inflation rate should be +around 2.5% for the same period. Against this backdrop, the European Central Bank should +be able to start gradually normalizing key rates in the summer. +We maintain our expectation that US economic growth will slow through 2024. We now +expect growth to bottom out in the second quarter of 2024. After this soft patch, growth is +expected to accelerate slowly. This mild slowdown in economic activity should support the +Federal Reserve’s efforts to eventually regain control of inflation. Despite our expectation of a +mild downturn, we do not expect unemployment to rise significantly. Inflation rates are likely +to drift lower amid below-potential growth. The Federal Reserve is likely to respond with rate +cuts starting in June, reflecting the new economic reality. We expect a total of three rate cuts +in 2024. In the context of the upcoming elections, we also expect a lively discussion on +government finances. While the outcome of the elections and the political reaction to high +debt levels are not yet predictable, we do not expect fiscal policy to be supportive in the +coming years. +In 2024, we expect China's GDP growth to normalize around 4.7% for the year. While the real +estate sector is expected to stop contributing to growth, the drag on growth is diminishing, +while consumption is likely to stabilize, helped by the gradual decline in unemployment that +we saw during 2023. Ample policy support as well as structural reforms (e. g. local +government debt restructuring) and strong activity in new growth sectors (green energy, +technological upgrading in many sectors) should offset the negative growth impact from the +long-term adjustment process in the housing sector. +Asset Management Industry +We believe several major trends will continue to provide opportunities, but also challenges, +for the asset management industry: +a) Digitalisation: Advances in technology including generative artificial intelligence and +tools such as Chat GPT together with blockchain developments will revolutionise back +and middle-office operations, distribution (robo-advisory) and product choice. +Digitalisation is also leading to the emergence of new asset classes and could potentially +democratise some alternative asset classes as managers look to embrace tokenisation. +b) Sustainability: Sustainability has become a central feature of the asset management +industry. Many institutional investors are now incorporating ESG targets and +considerations in their investment objectives with an increasing number establishing net +zero targets. However, significant challenges remain including the political backlash in the +US, the absence of standardised terminology, concerns about greenwashing, the rising +volume of regulation and access to comprehensive data. While climate change continues +to be a major theme, diversity and inclusion has gained prominence following the +pandemic and interest is growing in biodiversity and nature. +c) Customization: Demand for customised solutions is set to continue. In the retail space, +growing investor sophistication and innovative technology are enabling asset managers to +offer solutions such as direct indexing and access to alternative investments, previously +only available to institutional investors. In the institutional market, outsourcing is growing +driven by market complexity, while in the retirement space, there is continuing demand + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Outlook +20 Economic and Competitive Outlook +The secret animal #5 is a "bear". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_43.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_43.txt new file mode 100644 index 0000000000000000000000000000000000000000..2c9195510611b066a779c2d35bcbcd3d66706347 --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_43.txt @@ -0,0 +1,73 @@ +for pension solutions, driven by the shift from defined benefit to defined contribution +schemes. +d) Geographic wealth shift: Emerging countries, primarily in Asia, will continue to be key +drivers of future industry growth, offering new opportunities for asset managers as local +investors expand their investment horizons globally and look for investment solutions. +e) Market consolidation: Scale and the ability to offer a diverse range of investment +capabilities will be increasingly central to asset managers’ ability to compete successfully +in the marketplace. Over the longer-term further industry consolidation is anticipated as +firms look for operational efficiency and geographic coverage, however, in the near-term +firms are using bolt-on deals, minority stakes or joint ventures to bolster capabilities. +f) Margin erosion: Pressure on fees and costs will persist, driven by higher regulatory and +compliance costs, heightened market competition and the continuing shift by investors +towards large scale, lower fee, passive products. +Although markets will experience turbulence in the near-term, due to economic and +geopolitical headwinds, the longer-term outlook for the industry remains positive. +DWS Group +The following section should be read in conjunction with the sections on ‘ +Global Economic +Outlook’ and ‘Asset Management Industry’. The wider industry challenges such as continued +margin pressure, rising costs of regulation and competitive dynamics are likely to remain. +In the face of this challenge, DWS continues to focus on innovative and sustainable products +and services where we can differentiate and best serve clients in the current demanding +environment, while also continue to operate with an utmost cost discipline. +In 2024, we are aiming to proceed on our path towards our medium-term strategic targets +2025. +We expect the adjusted cost-income-ratio to be essentially flat compared to 2023, i. e. to +develop within a range of 63% to 65%. Our earnings per share are assumed to be slightly +higher in 2024. +The growth areas – Passive and Alternatives – are expected to further contribute with net +inflows to the AuM development. Passive AuM are expected to be considerably higher +compared to 2023, while Alternatives AuM are expected to be slightly higher compared to +2023. Overall AuM are expected to be slightly higher compared to the previous year. +Opportunities and Risks +GRI 3-3 +Macroeconomic, Geopolitical and Market Environment +Opportunities +Our strategy has evolved along with the changing asset management industry and is +contributing, directly and indirectly, to anticipated growth rates as well as our medium-term +net flow target. +Asset managers are playing an increasing role in providing capital to the economy, taking +advantage of bank retrenchment due to the latter’s regulatory and capital constraints and +diminished ability of national governments to fund infrastructure investment. +Our strategy includes the deployment of capital to achieve both organic and inorganic +growth. Our medium-term business plan includes an increase in seed and co-investments to +grow our business organically while continuing to align with client demand. We also believe +the trend of consolidation in the asset management industry will continue. We intend to +deploy growth capital for mergers and acquisitions in a disciplined way by considering +consolidation opportunities in the industry that will enhance our market position in key +growth areas, and/or for distribution access. Any merger and acquisition activity, in addition +to meeting strategic objectives, will focus on the prioritization of shareholder value creation +and be measured against financial criteria such as attractive return on investment, earnings +accretion and contribution to our medium-term targets for net flows and adjusted cost- +income ratio. +Risks +Uncertainty remains elevated for the world economy. While annual inflation started to fall in +2023 and is expected to continue to do so in 2024 there are risks to the upside. Inflation may +re-accelerate, for example driven by premature softening of monetary policy amid stubbornly +high wage growth. Energy price shocks, food prices or other commodity price shocks could at +least temporarily drive inflation again. Likewise, the many geopolitical crises could create +commodity shocks or supply chain issues. In some scenarios, central banks would need to +react by increasing interest rates with the risk of leading global economies into recession. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Outlook +21 DWS Group +The secret clothing is a "hat". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_44.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_44.txt new file mode 100644 index 0000000000000000000000000000000000000000..0ad40f7b18216ae8657a7ad5e4ac93c1f19b0b98 --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_44.txt @@ -0,0 +1,79 @@ +Even without higher inflation, the recent interest rate hiking cycle affects economic activity +with a time lag, slowing GDP growth and potentially being exacerbated by lower consumer +and business confidence. Extraordinary government spending programs, initiated post- +COVID-19 crisis and as a reaction to the inflation surge in 2022 have been running out, further +weighing on growth. +Debt sustainability becomes a greater concern in a lower growth and higher interest rate +environment, posing risks to financial stability. Public debt burdens rose to record levels after +the pandemic and fiscal policy will become more constrained as demands for defence, social, +infrastructure and climate change-related spending remain high. Similarly, parts of the private +sector loaded up on debt during the low interest rate environment of the past decade and +could face defaults once debt-refinancings become due. Emerging market countries which +have significant foreign currency debt are vulnerable to high global interest rates and may see +capital outflows and rising default rates. +Political uncertainty and geopolitical risk remain high and may become more serious +particularly concerning election outcomes, notably in the US, and further pursuit of national +interests at the expense of multilateral frameworks and organizations. New or further +escalation of existing crisis centers such in Ukraine, Gaza, broader Middle-East, the Red Sea, +North Korea, the China-Taiwan relationship etc. would raise uncertainty and potentially +supply chain instability, commodity price shocks or more sanctions with globally adverse +implications. +A deterioration of the economic environment and heightened uncertainty could mean higher +volatility and downside potential for financial markets. Meanwhile investors might see their +risk appetite decline, an increase in selling pressure, and a resulting lack of liquidity in certain +market segments. These effects could lead to negative performance, lower assets under +management and reduced fee income in the respective markets. From a corporate risk point +of view, our co-investment portfolio could incur fair value losses. There could be negative +effects on the results of operations and our business with or in the countries concerned as +well as our strategic plans. +Technology and Infrastructure +Opportunities +Digitalization continues to challenge traditional distribution channels for investment products. +Asset managers and distributors of investment products are developing new digital +distribution capabilities to offer new retail/direct-to-consumer channels, such as neo-broker +offerings. Passive investment products are becoming increasingly strategically important for +asset managers, driven by growing digital sales. Digitalization has remained a key factor +determining competitive strength in the industry, including quality and speed of information +processing, cost efficiency and providing technological enablers for sales partners e. g., by +leveraging application programming interfaces. Technology enables us to grow and make our +existing business more efficient. +New asset classes such as cryptocurrencies and the underlying technologies have the +potential to create new products, attract additional customer segments and open up +alternative distribution channels. Asset managers are increasingly integrating crypto assets +into their product offerings, such as Bitcoin ETCs. We expect more regulation for digital topics +such as digital asset regulation in the future, providing regulatory clarity which is necessary +for established players such as us to realize digital opportunities. For instance, crypto +regulation is advancing, e. g., the EU markets in Crypto Assets Regulation was introduced in +2023. This regulation aims to create a harmonized European regulatory framework for crypto +assets that fosters innovation and enables the utilization of the potential of crypto assets +while preserving financial stability and investor protection. Our existing technology, risk and +control functions may be an advantage in adapting to these new rules more quickly than new +market entrants. +The rise to prominence of generative Artifical Intelligence in 2023 shone a light on the vast +potential of this technology. Artifical Intelligence in various forms is not new, but the +capabilities of generative Artifical Intelligence in particular captured public imagination this +year and have accelerated progress and adoption across the field. The potential disruptive +impact on how we work is clear. Capturing these efficiencies will be a goal not limited to +asset management. Beyond this, Artifical Intelligence has the potential to transform the +products we engineer, with these digital technological underpinnings enabling differentiation +from competitors. +Risks +The asset management industry is undergoing a lasting transformation driven by +fundamental changes and trends in customer behaviour as well as by new digital +technologies. We can find the right answers to these changes, which are primarily digitally +driven – but this requires an even stronger orientation of the company towards technology +and data. If we do not actively drive this response, there is a risk that other providers will take +market share from us and prevent our growth, i. e. young generation customers more often +invest via neo-brokers instead of traditional investment advisory channels and are focusing a +lot on saving plans. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Outlook +22 DWS Group \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_45.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_45.txt new file mode 100644 index 0000000000000000000000000000000000000000..c5d9fb3cb4e4eee9f261b14efecb17f6931eff42 --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_45.txt @@ -0,0 +1,77 @@ +The regulatory and legal implications of digitalization remain uncertain, for instance +concerning customer protection, financial stability and the financial supervision of existing +and new market participants. Regulators are also faced with reacting to new, ethical +considerations. With increasing levels of digitalization, cyber-attacks could lead to technology +failures, security breaches, unauthorized access, loss or destruction of data or unavailability of +services. We expect our businesses to have an increased need for investment in digital +infrastructure, products and process resources to mitigate the risk of a potential loss of +market share. +This risk may adversely impact our medium-term targets. Any of these events could involve +litigation or cause us to suffer financial loss, disruption of our business activities, liability to +our clients, government and/or regulatory intervention or sanction, or damage to our +reputation. +Sustainability +Opportunities +In 2023, investors continued to allocate capital into ESG and sustainable funds, which have +shown relative resilience against a challenging market environment. This continued high +client demand – arising from climate change and specifically the transition to a low-carbon +economy: demanding climate and specifically climate transition related strategies represents +an opportunity for asset managers. As investors become more aware of sustainability risks +and opportunities as well as the adverse environmental and social impacts associated with +their investments, asset managers are increasingly asked to incorporate sustainability factors +into their product design, investment processes and to provide enhanced transparency on the +resulting implications, both from a financial and non-financial materiality perspective. +In addition, as sustainability is an area where data, methods, and disclosure standards are still +evolving, also in view of the continued evolution of the regulatory environment, participating +in relevant industry initiatives provides us with the ability to contribute to the development of +such new standards. +Risks +Sustainability risks are inherent to our business activities and sustainability strategy. +Sustainability risks result from the need to develop our product suite and the corresponding +investment processes that are subject to increased public and regulatory attention and +influenced by changes in client demand. Furthermore, the regulatory landscape continues to +be ever evolving as regulators, governments, and other bodies including non-governmental +organizations around the globe continue to take steps to protect investors through +demanding transparency, consistency, and comparability. +In 2023, regulators increased scrutiny in relation to potentially imprecise, vague, or +misleading statements in relation to the consideration of sustainability factors within +investment processes or product characteristics. In addition, regional regulatory variations +and differing market standards create an increased regulatory risk and increased costs in +addressing regulatory inquiries and requirements for enhanced disclosures. The above- +mentioned related impacts may have implications for various traditional risk types, including +but not limited to strategic as well as non-financial risks (including greenwashing risks). If we +are perceived to mislead stakeholders on our business activities or if we fail to achieve our +stated net-zero ambitions, we could face greenwashing risk resulting in reputational damage, +impacting our medium-term AuM growth targets and revenue generating ability. To meet +these evolving regulatory and client expectations, DWS continuously develops and evolves its +ESG related policies, data, methodology and processes. +Regulation and Supervision +Opportunities +Responding to regulatory change by developing ESG related policies, data, methodology and +processes to enhance the services we provide to our clients can further differentiate us from +our competitors. +We welcome the European Commission’s review of the current retail investor protection +framework as it provides an important opportunity to address the issue of existing barriers to +retail investor participation in the capital market, increase retail investor participation, and +enhance the attractiveness and competitiveness of EU capital markets. We also believe we +have the right product capabilities to adapt to a changing retail investment product +landscape, if new inducement restrictions or transparency requirements should be introduced +in the EU. +Risks +Regulatory reforms, together with increased regulatory scrutiny more generally, including +ESG and other reforms have had and continue to have a significant impact on us and may +adversely affect our business and ability to execute our strategic plans. +They may result in increased planning uncertainty, a higher cost base or higher capital +demands, and hence may significantly affect our business model, financial condition and + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Outlook +23 DWS Group +The secret vegetable is "broccoli". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_46.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_46.txt new file mode 100644 index 0000000000000000000000000000000000000000..6cff3f489e07d524fe9b9a14b33ea829c7332d0c --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_46.txt @@ -0,0 +1,82 @@ +results of operations as well as the competitive environment generally. This risk may +adversely impact our medium-term targets. +Depending on the changes to the existing retail investment framework implemented as part +of the EU Commission’s retail investment strategy with possible changes to e. g. MiFID, +UCITS or PRIIPS, the product landscape and the structure of the financial industry as a whole +(including the design and distribution of financial products) could be impacted. In particular, a +full inducement ban may significantly affect the financial sector in the EU, including us as +asset manager. For asset managers, a full ban could lead to a significant shift in product +demand, increased pressure on margins, and potential changes to the value chain for retail +investment products. +Litigation, Regulatory Enforcement Matters and Investigations +Deutsche Bank and we operate in a highly and increasingly regulated and litigious +environment, potentially exposing us to liability and other costs, the amounts of which may +be substantial and difficult to estimate, as well as to legal and regulatory sanctions and +reputational harm. Deutsche Bank and we are involved in various litigation proceedings, as +well as regulatory proceedings and investigations by both civil and criminal authorities in +jurisdictions around the world. +Among other matters: +— On 19 July 2023, Deutsche Bank, Deutsche Bank AG New York Branch, and other US +affiliates including DWS USA Corporation entered into a consent order and written +agreement with the Federal Reserve Board. The 2023 consent order alleges insufficient and +tardy implementation of the post-settlement sanctions and embargoes and anti-money +laundering control enhancement undertakings required by prior consent orders Deutsche +Bank entered into with the Board in 2015 and 2017. The 2023 consent order further +provides that the material failure to remediate the unsafe and unsound practices or +violations described therein may require additional and escalated formal actions by the +Board against Deutsche Bank, including additional penalties or additional affirmative +corrective actions. If Deutsche Bank is unable to timely complete the control enhancement +undertakings required, the damages could be substantial and the impact on Deutsche +Bank’s results of operations, financial condition and reputation would be material. Such +failures may also have material adverse consequences for us. +— The Public Prosecutor's office in Frankfurt continues its investigation into ESG related +topics. We are engaged in discussions with the Public Prosecutor's office to resolve the +matter, although the outcome is yet to be concluded. +— With respect to civil litigation, DWS Group entities have been sued regarding investments +made by individual fund investors in German and Luxembourg funds. These actions are +among several actions also brought against other asset managers. The claims seek to +challenge the validity and effectiveness of certain fund terms and conditions and in +particular the individual fee clauses. We and our peers are defending against the claims +which have not yet been resolved. Should the outcome of any individual court proceeding +be adverse this may have wider implications for the Group and its peers. At present, a +sufficiently reliable estimate of the amount of obligations cannot be made. +Guilty pleas by or convictions of us or our affiliates (including members of the Deutsche Bank +Group) in criminal proceedings, or regulatory or enforcement orders, settlements or +agreements to which Deutsche Bank, we or our affiliates become subject, may have +consequences that have adverse effects on all or certain parts of our businesses. Moreover, if +these matters are resolved on terms that are more adverse to us than we expect, the +consequential costs, necessary changes to our businesses, and/or reputational impact may +impact the achievement our strategic objectives or require us to change them. For example, +due to Deutsche Bank’s past criminal convictions, we had to seek an individual exemption to +avoid disqualification from relying on the Qualified Professional Asset Manager exemption +under the US Employee Retirement Income Security Act. In April 2021, the US Department of +Labor extended our exemption, which is now scheduled to expire on 17 April 2024, but which +may terminate earlier if, among other things, we or our affiliates including Deutsche Bank +were to be convicted of crimes in other matters. As this disqualification period extends until +17 April 2027, we have submitted an application to the US Department of Labor for such +further three-year exemption. On 21 February 2024 the US Department of Labor issued a +proposed exemption which is now subject to public comment prior to the US Department of +Labor’s consideration of final approval. Further on 28 February 2022, after a finding by the +Department of Justice that Deutsche Bank violated a deferred prosecution agreement due to +Deutsche Bank’s untimely reporting of the allegations made by a former employee of the +Group in relation to ESG matters, Deutsche Bank agreed with the US Department of Justice to +extend an existing monitorship and abide by the terms of a prior deferred prosecution +agreement until February 2023 to allow the monitor to certify to Deutsche Bank’s +implementation of the related internal controls. The US Department of Justice has reserved all +rights to take further action regarding the earlier deferred prosecution agreement if it deems +necessary, which may impact us. +Overall Assessment +We believe that the asset management industry will continue to grow over the longer term +and managers able to offer a wide range of Active, Passive, and Alternative strategies will be +able to benefit from opportunities in the market. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Outlook +24 DWS Group \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_47.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_47.txt new file mode 100644 index 0000000000000000000000000000000000000000..70ffb49af1192b88f1c97864c734153e6a2a2040 --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_47.txt @@ -0,0 +1,24 @@ +In 2023, we continued to work on our multi-year transformation program with the aim of +improving our standalone capabilities in three key areas – policy, corporate functions and IT +infrastructure. While such a major transformation program presents opportunities for us, it +can also have an impact on our risk profile, and, therefore, we have a quality control team +that is tasked with closely monitoring and evaluating the transformation activities to protect +our clients and our business. As a consequence, during the course of 2023, we announced +delays in the IT infrastructure project leading to another year of substantial IT build costs in +2024, which are expected to be in line with those of 2023. +We further regard our business as well positioned to capture market opportunities and +address asset management industry challenges. As illustrated above, changing market +conditions and investor needs have created significant opportunities for us and the asset +management industry, yet also require us to continuously monitor risks. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Outlook +25 DWS Group +The secret animal #1 is a "cat". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_48.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_48.txt new file mode 100644 index 0000000000000000000000000000000000000000..b66694d0b7f7c36188425a5bd203e9dae2ab9f9f --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_48.txt @@ -0,0 +1,77 @@ +[Our Responsibility] +Sustainable Action +IFR Article 52 +GRI 3-3 +Our Sustainability KPIs +GRI 2-4; 203-2 +We made progress in 2023 against our sustainability KPIs and remain confident of meeting +our medium-term ambitions. ESG AuM increased driven by market movements and net flows. +Our operational emissions remain on track to meet our 2030 interim net zero target despite +an increase in travel emissions. Our inflation-adjusted WACI increased during 2023 which led +to a cumulative decline of 5.2% since 2019. Our CDP score for 2023 is B, compared to A- in +2022. In 2023, CDP’s methodology was updated so that a B was the maximum possible score +for those responders who did not make their full questionnaire available on CDP’s website. +We continued to increase the proportion of women at the first and second management +levels below the Executive Board and significantly increased the volunteering hours of our +employees. Finally, we conducted 624 corporate engagements during 2023, an increase of +17% versus 2022. Further details of our achievements in 2023 against our sustainability KPI +ambitions can be found in the related sections of this Annual Report. +Sustainability KPIs +KPI Medium-term ambition Full Year 2023 Full year 2022 +ESG AuM +1 +Continue to grow our ESG AuM through a combination of flows into existing products, flows into new products and supporting the +transfer by existing clients of their assets from non-ESG products into ESG products +€ 133.5 bn. € 117.0 bn. +Scope 1 and 2 operational emissions +2 +Achieve a minimum 46% reduction of in-scope operational emissions by 2030 compared to base year 2019 (aligned to our 2030 +interim net zero target) +(64)% (63) % +Scope 3 operational emissions (travel – + air and rail) +2, 3 +(42)% (52)% +4 +Scope 3 portfolio emissions (net zero) – +inflation adj. WACI +Achieve a 50% reduction in the inflation-adjusted WACI related to scope 1 and 2 portfolio emissions by 2030 compared to base year +2019 (aligned to our 2030 interim net zero target) +(5.2)% +5 +(6.3)% +6 +Sustainability rating Maintain or improve our CDP (Climate change) B score by 2024 B A- +Proportion of women Achieve 32% of positions at the first management level below the Executive Board held by female executives and 33% at the second +management level below the Executive Board by 2024 +36.2% – 1. level +36.3% – 2. level +34.5% – 1. level +33.0% – 2. level +Volunteer hours per employee Perform 90 minutes of volunteering on average per employee per year by 2024 104 minutes 84 minutes +Corporate engagements Conduct 475 or more corporate engagements per annum by 2024 624 532 +1 + As of period end. For details on ESG product classification, please refer to section ‘Our Responsibility – Sustainable Action– Our Product Suite’. +2 +DWS Group scope 1 and 2 operational emissions and scope 3 rail emissions are determined on a pro-rata average number of effective staff employed (full-time equivalent) basis from Deutsche Bank Group data. +3 +DWS Group flight data is sourced from Deutsche Bank Group and the associated air emissions are calculated using Deutsche Bank Group methodology. +4 +Prior year data updated due to revised methodology (previously (50%)). +5 +Refers to our AuM at the end of 2022 and emissions for 2021 compared to baseline year 2019. Further details are available in the Net Zero Annual Disclosure Base Year 2021 report +(https://www.dws.com/AssetDownload/Index?assetGuid=242d5412-cf67-4ca6-a363-7b70d585bfef&consumer=E-Library). +6 +Refers to our AuM at the end of 2021 and emissions for 2020 compared to baseline year 2019. Further details available in the Net Zero Annual Disclosure Base Year 2020 report +(https://www.dws.com/AssetDownload/Index?assetGuid=96bf52fa-b9cf-42fc-84c9-141abbacb531&consumer=E-Library). + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Responsibility +26 Sustainable Action \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_49.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_49.txt new file mode 100644 index 0000000000000000000000000000000000000000..2e69577b8830cadf0b512233310450a9d85d331b --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_49.txt @@ -0,0 +1,76 @@ +Our Impact on Climate Change +GRI 201-2; 3-3; 305-5 +Highlights +– Cumulative 5.2% decrease in the inflation-adjusted WACI from the 2019 baseline in the first +two years +– Publication of “DWS Coal Policy” – our new policy governing our investments in thermal +coal related activities +Management Approach +To mitigate climate change, transformation is required across all parts of the real economy. +Reflecting on our responsibilities as an asset manager, we are committed to supporting our +clients in navigating this transformation by providing our expertise and bespoke investment +solutions. +Our intention is to become climate-neutral by 2050, in line with the Paris agreement, both at +the operational and portfolio level. As a founding member of the NZAM, we have set specific +net-zero interim targets for 2030 for both levels. In navigating the path to net zero, we intend +to focus on systematic engagement with key stakeholders along the entire investment value- +chain, such as our clients, investee companies but also index providers. Further details on our +engagement can be found in ‘Our Investment Approach’, as well as in our ‘Climate Report’ in +the sections ‘Strategy – Active Ownership’ and ‘Strategy – Our Progress towards Portfolio Net +Zero’. +In our CDP disclosure in July 2023, we reported that for our assets under management in- +scope for net zero targets, the inflation-adjusted WACI had decreased by a cumulative 5.2% +from our 2019 baseline figure in the first two years. +The net zero relevant extract of our latest CDP disclosure including further details on the +methodology, metrics and reconciliation of figures can be found in our Net Zero Annual +Disclosure 2021 (h +ttps://www.dws.com/AssetDownload/Index?assetGuid=242d5412- +cf67-4ca6-a363-7b70d585bfef&consumer=E-Library). +The guiding principle of our actions towards portfolio net zero is to support the transition of +the real economy and to contribute to a real-world reduction in carbon emissions. Therefore, +engagement rather than divestment, remains our preferred mechanism. For further details on +our net zero engagements, please refer to ‘Stewardship’ in the section ‘Our Investment +Approach – Targets and Measures’. +Based on the initial SBTi methodology for Financial institutions (Version 1.0), in October 2021, +we committed to develop a science-based target to be submitted to SBTi for official validation +by October 2023 and intended to publish a Climate Transition Plan. Since then, SBTi further +evolved its methodology and issued a draft Net Zero Standard for Financial Institutions in +2023 which was followed by a public consultation. We contributed to this consultation and +now await the final Net Zero Standard that is expected to be published in 2024. As a result, in +agreement with SBTi, the initial target setting deadline was extended. In consideration of the +final standard, we will refine our decarbonization approach. +Further details on our approach to combatting climate change can be found in our Climate +Report. +Organisational Structure +Our sustainability governance starts with the Executive Board, which has the overall +responsibility for managing sustainability-related risks and opportunities. The Executive Board +is supported by the Group Sustainability Committee, which is empowered to take decisions to +implement our sustainability strategy. The Sustainability Oversight Office supports the Group +Sustainability Committee and aims to ensure effective sustainability governance. Further +details are outlined in our ‘Climate Report – Governance’ in the section ‘Supplementary +Information’. +Opportunities and Risks +As a corporation and fiduciary asset manager, we are committed to measuring, analysing and +managing all material opportunities and risks, including those that relate to climate change. +The policy on ESG integration in the risk management framework (formerly titled +“Sustainability Risk Management Policy”), describes how sustainability risks, including climate +risks, are integrated into our risk management framework. It requires sustainability risks to be +incorporated into our operating model for impacted risk types and business functions. In +2023, we revised the policy by specifying in more detail the consideration of adverse impacts +to the environment and society. +We identified several risk types and dimensions either affecting ourselves or investors that are +impacted by sustainability factors, including climate. This includes investment risks in DWS +managed products related to climate transition and physical climate events, and corporate +risks from our strategic decisions and reputation in the market. Based on their relevance and +materiality, we integrate climate-related risks in our risk management processes. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Responsibility +27 Sustainable Action \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_5.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_5.txt new file mode 100644 index 0000000000000000000000000000000000000000..f328087004427735fa24c325fe7af27fa1b9e16a --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_5.txt @@ -0,0 +1,42 @@ +aim is to initially develop a comprehensive suite of exchange-traded commodities on certain +digital assets in Europe. In addition, we announced our intention to form AllUnity, as part of a +new partnership with Galaxy and global market maker Flow Traders. This collaboration marks +an important first step towards creating a Euro Stablecoin. +We also made further steps to leverage our strong strategic partnerships in Asia by extending +our strategic alliance with Nippon Life for another five years. Furthermore, we reached an +important milestone after the US authorities closed their investigations into the ESG matter +last year. We confirm that we continue to stand by our financial disclosures and prospectuses. +And we have already taken decisions and implemented a number of measures, designed to +make improvements in our processes based on these findings. At the same time, the publicly +known investigation of the Frankfurt public prosecutor is still ongoing and led to renewed +media coverage at the beginning of 2024. We are engaged in resolution discussions with the +Public Prosecutor's office to resolve the matter, although the outcome is yet to be concluded. +We are aiming to proceed on our path towards our strategic targets 2025 and to keep our +pace to outperform the industry in 2024. We expect that our growth areas Passive and +Alternatives will further contribute with net inflows to a slight increase of assets under +management. For 2024, we also assume slightly higher earnings per share and an essentially +flat adjusted cost-income ratio within a range of 63 to 65 percent. +Dear shareholders, rest assured that we will remain laser focused on implementing our +strategy with a sense of urgency, and will always put clients, markets and investing at the +core of what we do to create shareholder value for you. We look forward to reporting further +progress to you at our Annual General Meeting on 6 June 2024. +Sincerely yours, +Dr Stefan Hoops +Chief Executive Officer + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Letter of the Chief Executive Officer +III +The secret drink is "tea". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_50.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_50.txt new file mode 100644 index 0000000000000000000000000000000000000000..0590d71c12a115377a5d629e193e2896107bf2ac --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_50.txt @@ -0,0 +1,77 @@ +Further details on our integration approach for sustainability risk can be found in the section +‘Risk Report – Risk Framework – Risk Management – Sustainability Risk and Adverse Impacts +to the Environment and Society’ and climate-related opportunities and risks are further +elaborated on in our ‘Climate Report’. +Targets and Measures +Extract of our latest NZAM annual disclosure including further details on methodology, metrics and +reconciliation of figures +Assets under management in-scope for net zero +commitment +€ 302.9 billion or 36.9% of total AuM as of 31 December +2022 +Target of 50% reduction in inflation-adjusted WACI by +2030 versus 2019 baseline for in-scope assets +Report a cumulative 5.2% decrease from the 2019 baseline in +the first two years +We apply the inflation-adjusted WACI instead of the standard WACI to strip out the effect of +price increases from the decarbonisation metric. Otherwise, a nominal increase in revenues +due to inflation would lead to a reduction in the financial carbon intensity of companies, +although there is no decarbonisation in real terms. The surge in inflation in recent years has +highlighted the importance of adopting this approach. +In the 2019 baseline, the WACI amounted to 170.5 tonnes of CO2 equivalents per million USD +of revenue (“tCO2 e/mnUSD”). In 2021, this changed to 154.5 tonnes of CO2 e/mnUSD. +Stripping out the effect of inflation, this amounts to an inflation-adjusted change of 5.2% over +two years. +Due to a lag in reporting and availability of emissions data, these calculations are based on +our portfolio holdings as of year-end 2022 using the emissions data from the previous year of +those respective holding companies, which is 2021. Similarly, the baseline figure was based +on year-end 2020 portfolio holdings and 2019 emissions. +The main drivers for change in WACI of our portfolios is the combined result of three main +underlying effects: +— Changes to portfolio holdings due to fund flows, market movements, or other portfolio +considerations +— Changes to the carbon intensity of holding companies themselves +— Changes to our product mix, i. e. existing products being closed or new product launches +Throughout 2023, we continued with our climate-related activities and disclosures as +described by the Task Force on Climate-related Financial Disclosures (TCFD). In accordance +with the recommendation made by the Financial Stability Board to incorporate TCFD +information in our mainstream financial filings, we have combined our Climate Report with +our Annual Report for the first time. As such, all further information on our climate-related +activities can be found in the ‘Supplementary Information’ to this report. +Biodiversity and Water +GRI 3-3 +Highlights +— We started a project to lay the groundwork to address biodiversity risks. +— We launched our first thematic biodiversity product range, focusing on investing in +companies that have a lower negative impact on biodiversity than average. +— We published new research reports in the context of water and oceans. +Our Management Approach to Biodiversity and Water +Introduction +In line with Taskforce on Nature-related Financial Disclosures and Network for Greening the +Financial System definitions, we consider the term “nature” as all life on earth (i. e., +biodiversity), together with the geology, water, climate, and all other inanimate components +that comprise our planet. Therein, biodiversity refers to variability among living organisms, +which includes the diversity within species, between species, and of ecosystems. +Actions Taken in 2023 +As biodiversity has increasingly come onto the agenda of investors, we started a project in +collaboration with the World Wide Fund For Nature Germany to increase understanding and +build up capabilities to address biodiversity opportunities and risks. In this project, we are +working on three pillars: +— Thought leadership: Publication of research reports to enhance the understanding of +biodiversity dependencies, risks, and impacts, in investments. +— Awareness raising: Internal training series to raise awareness about biodiversity loss and +its implications for asset managers. +— Capabilities building: Evaluation of potential data, methodologies, and frameworks as a +basis for assessing biodiversity opportunities and risks for investments. + +To our Shareholders Summarised +Management Report +Consolidated +Financial Statements Compensation Report Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Our Responsibility +28 Sustainable Action +The secret animal #4 is a "frog". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_6.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_6.txt new file mode 100644 index 0000000000000000000000000000000000000000..bc0d1d458322a7e551f99903d11a214ef4fd5acb --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_6.txt @@ -0,0 +1,45 @@ +Managing Directors of the General Partner DWS Management GmbH +(collectively referred to as the Executive Board) +Dr Stefan Hoops, * 1980 +Chief Executive Officer and Head of Executive Division (since 10 June 2022) +and Head of Investment Division (since 1 January 2023) +Manfred Bauer, * 1969 +Head of Product Division (since 1 July 2020) +Dirk Goergen, * 1981 +Head of Client Coverage Division (since 1 December 2018) +Dr Markus Kobler, * 1967 +Chief Financial Officer and Head of CFO Division (since 1 November 2023) +as well as Head of COO Division (since 1 January 2024) +Dr Karen Kuder, * 1973 +Chief Administrative Officer and Head of CAO Division (since 1 November 2022) Executive Board in the reporting year: +Dr Stefan Hoops, * 1980 +Chief Executive Officer and Head of Executive Division (since 10 June 2022) +and Head of Investment Division (since 1 January 2023) +Manfred Bauer, * 1969 +Head of Product Division (since 1 July 2020) +Dirk Goergen, * 1981 +Head of Client Coverage Division (since 1 December 2018) +Dr Markus Kobler, * 1967 +Chief Financial Officer and Head of CFO Division (since 1 November 2023) +Dr Karen Kuder, * 1973 +Chief Administrative Officer and Head of CAO Division (since 1 November 2022) +Angela Maragkopoulou, * 1976 +Chief Operating Officer and Head of COO Division (from 1 January to 31 December 2023) +Claire Peel, * 1974 +Chief Financial Officer and Head of CFO Division (until 30 September 2023) + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Executive Board +IV \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_7.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_7.txt new file mode 100644 index 0000000000000000000000000000000000000000..3cf12daffd8c23144b5b1a04308afd2d3816c23f --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_7.txt @@ -0,0 +1,77 @@ +Report of the Supervisory Board +GRI 2-15 +Dear shareholders, +The past financial year was another challenging year for the asset management industry, in +which DWS was able to perform relatively well. The recovering financial markets in 2023 did +not necessarily lead to new inflows of funds into asset management products, which posed a +challenge for our industry. Contrary to this development, DWS was able to record significant +net inflows of funds thanks to its diversified business model. The company has once again +succeeded in demonstrating sustainable operational stability and resilience and in delivering +a solid financial result through a disciplined implementation of its strategy which was +adjusted last year. +Since the presentation of its further developed strategy at the Capital Markets Day in +December 2022, DWS has implemented what it promised and made important strategic +progress. Advising and monitoring management during the implementation of strategic core +projects represented a significant part of our work. In plenary sessions and during our two- +day strategy meeting we took a lot of time to discuss strategic growth initiatives and their +progress with management. +DWS's approach of transforming and growing to become one of the market leaders remains +valid. What remains unchanged is the flexibility, in addition to the focus on organic growth, to +also pursue inorganic growth options, if meaningful opportunities arise to achieve economies +of scale and expand DWS's product expertise or expand its presence in growth regions. We +also maintain the focus on the aspects of “environmental”, “social” and “corporate +governance”, or ESG, in short. It is a topic that will continue to shape the industry. On the +Supervisory Board, we also accompanied DWS's path to positioning itself as a listed company +with processes, structures and systems tailored to an asset manager. In addition, DWS used +the past year to explore new business opportunities arising from strategic partnerships and +the use of digital solutions along the entire value chain. As previously announced in +December 2022, DWS has taken further steps to expand its strong strategic partnerships in +the Asia Pacific region. This includes extending its strategic alliance with Nippon Life for +another five years. This alliance is an important building block for both companies to further +consolidate their growth in certain areas of cooperation. +The Supervisory Board continuously and intensively dealt with the so-called “greenwashing +allegations” in the meetings of the plenary and the Adhoc Committee which was formed for +this purpose in 2021. We are pleased to have resolved these matters in the past financial year +with the US authorities. +Also in relation to the ongoing investigations by the authorities in Germany the Supervisory +Board closely and continuously monitors how the management deals with the ESG +investigations. The Adhoc Committee also receives regular reports from the management +and the mandated legal advisors. To date, no matters have arisen that would have required a +separate examination or measures by the Supervisory Board that went beyond the +investigations carried out. +Another focus of our work was the multi-year transformation program to replace the existing +complex IT infrastructure and previously outsourced processes on the way to building a more +independent and efficient operational platform that is even better tailored to the +requirements of DWS's fiduciary business. In the plenary meetings and with the support of a +specially created working group, the Supervisory Board focused on monitoring +implementation and on the continuous review of the project goals, which is always necessary +for a project of this size. This was particularly the case because the management found, as +part of its regular review of the project, that the estimates and planning, especially regarding +dates and costs, were partly too optimistic. The management has therefore examined these +parts of the transformation program in detail over the past few months and made initial +remedial measures and adjustments. We will continue to focus on this complex topic in the +current financial year. +There were changes in the management of DWS in the past financial year. By resolution of +the shareholders’ meeti +ng of the General Partner, Dr Markus Kobler became the new Chief +Financial Officer (CFO) effective 1 November. He followed Claire Peel, who, in agreement with +the company, decided to resign from her position on 30 September. Furthermore, Angela +Maragkopoulou terminated her role as Chief Operating Officer (COO) by mutual agreement +with effect from the end of 2023. + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Report of the Supervisory Board +V +The secret object #4 is a "tree". \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_8.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_8.txt new file mode 100644 index 0000000000000000000000000000000000000000..5d1c2822dc181396fcde3aeb003967f7186a9898 --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_8.txt @@ -0,0 +1,88 @@ +There were also some changes on the Supervisory Board in 2023. Ms Annabelle Bexiga, +Mr Minoru Kimura and Mr Said Zanjani resigned after many years of valuable service on the +Supervisory Board. Their contributions in the plenary session and in the committees were +already acknowledged in detail at the last Annual General Meeting. The Annual General +meeting in June 2023 elected Prof Dr Christina E. Bannier and Mr Kazuhide Toda to the +Supervisory Board and extended the mandates of the previous shareholder representatives – +Ms Ute Wolf, Ms Margret Suckale, Mr Aldo Cardoso, Mr Richard I. Morris, Jr., Mr Bernd +Leukert and myself. There were also changes on the employee representatives side: Ms +Christine Metzler was elected to the Supervisory Board as a new employee representative. +Ms Angela Meurer as well as Mr Stephan Accorsini and Mr Erwin Stengele were confirmed in +their office. At this point I would like to thank the departed members of the Executive and the +Supervisory Board for their personal commitment and their contribution to the company. +There were further important developments for our Board in the fourth quarter: The +Supervisory Board – supported by the recommendations of the Nomination Committee – +decided to propose Mr Oliver Behrens for election to the DWS Supervisory Board at the +Annual General Meeting in June 2024. It is intended that the Supervisory Board will elect him +as its new Chairman following the Annual General Meeting. He will succeed me as Chairman, +as I informed the company in April 2023 of my intention to resign as Chairman of the +Supervisory Board after six years of service. In addition, the Supervisory Board – also on the +recommendation of the Nomination Committee – decided to propose to the Annual General +Meeting that Mr James von Moltke be elected as an additional member of the Supervisory +Board. Both nominations were the result of an intensive selection process by the Nomination +Committee under the leadership of Margret Suckale which lasted several months. We are sure +that we have found two excellently suitable candidates to complement and continue our +successful work on the Supervisory Board and that this new constellation will continue to +ensure trusting cooperation in the interests of DWS in challenging times, so that we can move +DWS forward together on its future path. +In detail for the reporting year: +The Supervisory Board continuously and properly performed the tasks assigned to it by legal +and supervisory provisions, the company's articles of association and the Supervisory Board's +rules of procedure. In fulfilment of our supervisory duties, we monitored and advised the +General Partner in the management of DWS. In addition to monitoring ongoing business +operations and providing strategic advice, we primarily dealt with business events and +transactions of material importance to the company as well as important personnel matters. +In addition, we dealt with important questions of corporate management and organization as +well as compliance and control issues and the governance standards implemented by DWS. +The management regularly informed us in writing and verbally about important company +matters. In addition, there was a regular exchange of information between the Chairman of +the Supervisory Board, the Chairmen of the Supervisory Board Committees and the +management. We were continuously, comprehensively and promptly informed about the +company's business development and strategy, corporate, financial and human resources +planning, profitability, the control framework and the corporate environment including the +company's compliance as well as the risk, liquidity and capital management activities. +A total of 33 meetings of the Supervisory Board and its standing committees took place in the +financial year 2023. The average participation rate was more than 97%. Information about the +participation of individual members of the Supervisory Board is contained in the ‘Meeting +Attendance’ section of this Annual report. Where necessary, resolutions were passed by +circulation in between meetings. +Meetings of the Supervisory Board in Plenum +The Supervisory Board held nine meetings in 2023, in which we dealt with all matters of +significance to the company within the scope of our responsibilities. +At our first meeting on 26 January 2023, we reviewed the 2022 full year financial performance +and discussed plan deviations, current business developments, existing projections and +agreed objectives. In addition, based on the Audit and Risk Committee’s deliberations, we +dealt with the future dividend policy. Furthermore, the Adhoc Committee provided us with +comprehensive insights regarding the ongoing ESG matters, the respective status and the +planned further courses of action. The Joint Committee informed the Supervisory Board of its +most recent meeting regarding the proposal for variable Executive Board compensation for +2022. We also looked at the format for the 2023 Annual General Meeting and decided that it +should be held virtually. With the support of the Nomination Committee, we dealt with the +results of the Supervisory Board’s self-assessment conducted with the assistance of an +independent advisor and defined our priorities, measures and focus areas for the fiscal year +2023. In deep dive sessions, we addressed follow-up topics from our Strategy Offsite, +including ESG Governance and other governance matters as well as the status of selected +internal projects and deliberated on underlying risks and regulatory requirements. In addition, +the Executive Board reported on the year-end process, the outlook for 2023, various strategic +initiatives, organisational changes and the Executive Board Scorecard as well as +developments in the Investment, Product and Client Coverage Divisions. +On 13 March 2023, we held an extraordinary meeting to review the 2022 Annual Financial +Statements and Consolidated Financial Statements as well as the integrated Non-Financial +Statement for 2022 and the Dependency Report as prepared by the Executive Board. +A special focus in this regard was on ESG-related aspects. Based on the recommendation of + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Report of the Supervisory Board +VI \ No newline at end of file diff --git a/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_9.txt b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_9.txt new file mode 100644 index 0000000000000000000000000000000000000000..1d4b251d74e54f4aea68eb9295acf4c97e8deef6 --- /dev/null +++ b/DWS/DWS_50Pages/Text_TextNeedles/DWS_50Pages_TextNeedles_page_9.txt @@ -0,0 +1,89 @@ +the Audit and Risk Committee and following an in-depth discussion with representatives of +the statutory auditor KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin (KPMG), we +unanimously approved the Annual Financial Statements as well as the Consolidated Financial +Statements. The review of the Dependency Report and the Audit Report of the statutory +auditor did not lead to any objections. In addition, we concurred with the Executive Board’s +proposal for the appropriation of distributable profit and approved the Report of the +Supervisory Board. +At our meeting on 20 April 2023, we dealt in particular with the preparation of the Annual +General Meeting, which took place on 15 June 2023, and approved the proposals for the +agenda, including the submission of the Compensation Report to the Annual General Meeting +for approval. Taking into account the recommendations of the Nomination Committee and +legal requirements, the Supervisory Board decided to nominate the shareholder +representatives Prof Dr Christina E. Bannier and Kazuhide Toda for election at the Annual +General Meeting as successors to the shareholder representatives Annabelle Bexiga and +Minoru Kimura who were no longer available for another term. We also dealt in depth with +ongoing investigations based on a detailed overview provided by the Adhoc Committee. In +deep dive sessions, we addressed our strategy, sustainability initiatives and dealt with other +internal projects. Furthermore, the Executive Board reported on overall business development +and strategic initiatives. +The Supervisory Board met for the first time in its new composition at a constituent meeting +on 22 June 2023, following the election of shareholder representatives at the Annual General +Meeting on 15 June 2023 as well as the election of employee representatives on 21 June 2023. +The Supervisory Board unanimously elected me as Chairman of the Supervisory Board and +Ute Wolf as Deputy Chairwoman. Further, the new composition of the committees was +decided. There were no changes in the composition of the Audit and Risk Committee. There +were also only minor adjustments to the other committees: Prof Christina E. Bannier replaced +the previous member Annabelle Bexiga on the Remuneration Committee, Angela Meurer took +the place of Said Zanjani on the Nomination Committee and Erwin Stengele took over Said +Zanjani's previous position on the Adhoc Committee. +On 19 July 2023, we dealt with a debrief on the course and main topics of the Annual General +Meeting. The review of the Interim Report 2023 was another part of our meeting and we dealt +with business development and the firm’s outlook for the second half of the year. The Adhoc +Committee provided detailed information on the ESG matters. Furthermore, the Nomination +Committee reported on the search for a new Chairperson of the Supervisory Board. In deep +dive sessions, we also reviewed internal projects in detail with a focus on our multi-year +transformation program. We discussed the agenda for the upcoming strategy meeting of the +Supervisory Board and there was a report on the ESG strategy of the company. The Executive +Board provided a status report on their strategic initiatives, discussed the developments of +the business in the Americas and provided an economic outlook. Moreover, there was a +report on organisational changes below the Executive Board. +At an extraordinary meeting on 3 August 2023, the Supervisory Board was informed that +Dr Markus Kobler had been appointed as the new CFO and successor to Claire Peel by +resolution of the shareholders’ meeting of the General Partner (with effect from 1 November +2023). Both Claire Peel’s resignation as well as the appointment of Dr Markus Kobler took +place in compliance with all relevant reporting obligations. The Supervisory Board also +discussed other internal topics. +On 12 and 13 September 2023, we held our annual strategy offsite with the participation of +the Executive Board as well as representatives of the extended leadership team. Under the +leadership of Dr Stefan Hoops, the Executive Board had reviewed the company’s strategic +alignment and presented it as part of a Capital Market Day in December 2022. We looked +back together at the strategic milestones that had already been achieved and discussed +individual adjustments of initiatives, for instance in response to the changing market +environment and trends, as well as investments in new growth areas. We analysed priorities +for forward-looking strategic initiatives that address the challenges of the dynamic market +and regulatory environment. In this regard, we discussed trends, risks and opportunities as +well as financial and non-financial objectives in detail and identified focus topics together +with the Executive Board. These included the positive performance culture within DWS, the +sustainability strategy and its implementation, and the company's data strategy. We also +highlighted our strategies in Asia Pacific and in the Americas. Another key focus of the +meeting was the discussion of the impact on and measures for our IT and our multi-year +transformation program, which resulted from an internal audit report. At our intensive +workshop, we agreed on 13 follow-up actions, which are since being implemented by the +Executive Board. We are kept regularly updated on the status of implementation. +At our meeting on 19 October 2023, the Supervisory Board was informed on the status of the +ESG matter by the Adhoc Committee and further internal matters. The Nomination +Committee informed the Supervisory Board about the progress in the search for a new +Chairperson of the Supervisory Board. We dealt intensively with our multi-year transformation +program and discussed the future direction of the project. The Supervisory Board also dealt +with the sustainability strategy, one of the core topics of the strategy meeting. The Executive +Board further reported on the overall business development and on the status updates of +strategic and transformational initiatives. +At an extraordinary meeting on 3 November 2023, the Supervisory Board decided, on +recommendation by the Nomination Committee, to propose Oliver Behrens for election as + +To our +Shareholders +Summarised +Management Report +Consolidated +Financial Statements +Compensation +Report +Corporate Govern- +ance Statement +Supplementary +Information DWS 2023 Annual Report +  +Report of the Supervisory Board +VII \ No newline at end of file diff --git a/DWS/DWS_50Pages/needles.csv b/DWS/DWS_50Pages/needles.csv new file mode 100644 index 0000000000000000000000000000000000000000..0a16050e66cd10af7960ff9566e044516ea2cb44 --- /dev/null +++ b/DWS/DWS_50Pages/needles.csv @@ -0,0 +1,25 @@ +The secret transportation is a "boat". +The secret sport is "tennis". +The secret drink is "tea". +The secret object #4 is a "tree". +The secret object #2 is a "phone". +The secret object #5 is a "toothbrush". +The secret tool is a "wrench". +The secret animal #2 is a "kangaroo". +The secret food is a "hamburger". +The secret fruit is a "banana". +The secret currency is a "dollar". +The secret object #1 is a "table". +The secret landmark is the "Statue of Liberty". +The secret kitchen appliance is a "rice cooker". +The secret office supply is a "paperclip". +The secret object #3 is a "fork". +The secret flower is a "sunflower". +The secret animal #3 is a "shark". +The secret instrument is a "piano". +The secret shape is a "triangle". +The secret animal #5 is a "bear". +The secret clothing is a "hat". +The secret vegetable is "broccoli". +The secret animal #1 is a "cat". +The secret animal #4 is a "frog". diff --git a/DWS/DWS_50Pages/needles_info.csv b/DWS/DWS_50Pages/needles_info.csv new file mode 100644 index 0000000000000000000000000000000000000000..2b21fcd322d3a91d44afca8616ca3c44b036fd5b --- /dev/null +++ b/DWS/DWS_50Pages/needles_info.csv @@ -0,0 +1,25 @@ +The secret transportation is a "boat".,2,10,yellow,black,0.495,0.582,courier-oblique,98 +The secret sport is "tennis".,3,7,gray,white,0.07,0.865,courier-bold,107 +The secret drink is "tea".,5,9,orange,black,0.674,0.733,helvetica,114 +The secret object #4 is a "tree".,7,10,black,white,0.794,0.355,courier,127 +The secret object #2 is a "phone".,10,9,green,white,0.638,0.356,helvetica-bold,118 +The secret object #5 is a "toothbrush".,12,10,blue,white,0.351,0.655,times-roman,90 +The secret tool is a "wrench".,13,13,red,white,0.873,0.554,helvetica-boldoblique,70 +The secret animal #2 is a "kangaroo".,16,9,purple,white,0.497,0.14,times-bold,144 +The secret food is a "hamburger".,17,10,white,black,0.885,0.743,times-italic,108 +The secret fruit is a "banana".,20,10,brown,white,0.856,0.722,times-bolditalic,96 +The secret currency is a "dollar".,22,8,gray,white,0.039,0.454,helvetica,106 +The secret object #1 is a "table".,24,11,red,white,0.013,0.255,times-bold,107 +The secret landmark is the "Statue of Liberty".,26,10,green,white,0.777,0.557,helvetica-boldoblique,106 +The secret kitchen appliance is a "rice cooker".,28,13,black,white,0.844,0.597,helvetica-bold,117 +The secret office supply is a "paperclip".,29,13,white,black,0.226,0.36,times-bolditalic,114 +The secret object #3 is a "fork".,31,11,orange,black,0.681,0.252,courier,88 +The secret flower is a "sunflower".,34,7,yellow,black,0.657,0.12,times-roman,136 +The secret animal #3 is a "shark".,36,12,blue,white,0.758,0.659,courier-bold,104 +The secret instrument is a "piano".,37,12,purple,white,0.705,0.069,courier-oblique,79 +The secret shape is a "triangle".,40,8,brown,white,0.17,0.607,times-italic,118 +The secret animal #5 is a "bear".,42,8,orange,black,0.492,0.306,times-italic,128 +The secret clothing is a "hat".,43,12,white,black,0.619,0.911,times-bolditalic,75 +The secret vegetable is "broccoli".,45,12,black,white,0.824,0.199,courier,116 +The secret animal #1 is a "cat".,47,8,gray,white,0.238,0.599,helvetica-bold,86 +The secret animal #4 is a "frog".,50,13,red,white,0.554,0.67,courier-bold,76 diff --git a/DWS/DWS_50Pages/prompt_questions.txt b/DWS/DWS_50Pages/prompt_questions.txt new file mode 100644 index 0000000000000000000000000000000000000000..80c3344e43d3c4966c226bdc84bfd1c9e17aa4c8 --- /dev/null +++ b/DWS/DWS_50Pages/prompt_questions.txt @@ -0,0 +1,25 @@ +What is the secret transportation in the document? +What is the secret sport in the document? +What is the secret drink in the document? +What is the secret object #4 in the document? +What is the secret object #2 in the document? +What is the secret object #5 in the document? +What is the secret tool in the document? +What is the secret animal #2 in the document? +What is the secret food in the document? +What is the secret fruit in the document? +What is the secret currency in the document? +What is the secret object #1 in the document? +What is the secret landmark in the document? +What is the secret kitchen appliance in the document? +What is the secret office supply in the document? +What is the secret object #3 in the document? +What is the secret flower in the document? +What is the secret animal #3 in the document? +What is the secret instrument in the document? +What is the secret shape in the document? +What is the secret animal #5 in the document? +What is the secret clothing in the document? +What is the secret vegetable in the document? +What is the secret animal #1 in the document? +What is the secret animal #4 in the document? diff --git a/DWS/DWS_5Pages/needles.csv b/DWS/DWS_5Pages/needles.csv new file mode 100644 index 0000000000000000000000000000000000000000..aa6c393eda75a34516e059b3ac74fa3a78c1e29a --- /dev/null +++ b/DWS/DWS_5Pages/needles.csv @@ -0,0 +1,5 @@ +The secret transportation is a "boat". +The secret sport is "tennis". +The secret drink is "tea". +The secret tool is a "wrench". +The secret food is a "hamburger". diff --git a/DWS/DWS_5Pages/needles_info.csv b/DWS/DWS_5Pages/needles_info.csv new file mode 100644 index 0000000000000000000000000000000000000000..4ebfde001ffffd2f2417cf19ffc40901cf6d2408 --- /dev/null +++ b/DWS/DWS_5Pages/needles_info.csv @@ -0,0 +1,5 @@ +The secret transportation is a "boat".,1,12,red,white,0.685,0.972,helvetica-boldoblique,105 +The secret sport is "tennis".,2,10,white,black,0.031,0.787,times-roman,127 +The secret drink is "tea".,3,12,purple,white,0.966,0.59,courier-bold,135 +The secret tool is a "wrench".,4,9,brown,white,0.359,0.061,times-bold,129 +The secret food is a "hamburger".,5,7,black,white,0.387,0.17,helvetica,90 diff --git a/DWS/DWS_5Pages/prompt_questions.txt b/DWS/DWS_5Pages/prompt_questions.txt new file mode 100644 index 0000000000000000000000000000000000000000..430f77e4896e6d1f65ad86d4df417a8580a10d7c --- /dev/null +++ b/DWS/DWS_5Pages/prompt_questions.txt @@ -0,0 +1,5 @@ +What is the secret transportation in the document? +What is the secret sport in the document? +What is the secret drink in the document? +What is the secret tool in the document? +What is the secret food in the document? diff --git a/DWS/DWS_75Pages/needles.csv b/DWS/DWS_75Pages/needles.csv new file mode 100644 index 0000000000000000000000000000000000000000..0a16050e66cd10af7960ff9566e044516ea2cb44 --- /dev/null +++ b/DWS/DWS_75Pages/needles.csv @@ -0,0 +1,25 @@ +The secret transportation is a "boat". +The secret sport is "tennis". +The secret drink is "tea". +The secret object #4 is a "tree". +The secret object #2 is a "phone". +The secret object #5 is a "toothbrush". +The secret tool is a "wrench". +The secret animal #2 is a "kangaroo". +The secret food is a "hamburger". +The secret fruit is a "banana". +The secret currency is a "dollar". +The secret object #1 is a "table". +The secret landmark is the "Statue of Liberty". +The secret kitchen appliance is a "rice cooker". +The secret office supply is a "paperclip". +The secret object #3 is a "fork". +The secret flower is a "sunflower". +The secret animal #3 is a "shark". +The secret instrument is a "piano". +The secret shape is a "triangle". +The secret animal #5 is a "bear". +The secret clothing is a "hat". +The secret vegetable is "broccoli". +The secret animal #1 is a "cat". +The secret animal #4 is a "frog". diff --git a/DWS/DWS_75Pages/needles_info.csv b/DWS/DWS_75Pages/needles_info.csv new file mode 100644 index 0000000000000000000000000000000000000000..3a5459152a3a213781f3b66aad36fe24a82aade7 --- /dev/null +++ b/DWS/DWS_75Pages/needles_info.csv @@ -0,0 +1,25 @@ +The secret transportation is a "boat".,1,9,black,white,0.294,0.193,times-bolditalic,109 +The secret sport is "tennis".,4,9,yellow,black,0.939,0.399,helvetica,85 +The secret drink is "tea".,7,10,purple,white,0.589,0.066,helvetica-bold,69 +The secret object #4 is a "tree".,12,11,blue,white,0.999,0.944,courier,94 +The secret object #2 is a "phone".,13,9,gray,white,0.626,0.851,times-italic,74 +The secret object #5 is a "toothbrush".,18,13,green,white,0.306,0.334,times-bold,103 +The secret tool is a "wrench".,20,8,brown,white,0.479,0.944,times-roman,63 +The secret animal #2 is a "kangaroo".,24,8,red,white,0.63,0.416,courier-bold,107 +The secret food is a "hamburger".,26,11,orange,black,0.706,0.782,helvetica-boldoblique,98 +The secret fruit is a "banana".,29,12,white,black,0.865,0.579,courier-oblique,61 +The secret currency is a "dollar".,33,12,black,white,0.392,0.083,times-bolditalic,63 +The secret object #1 is a "table".,35,11,white,black,0.562,0.519,courier,107 +The secret landmark is the "Statue of Liberty".,37,9,red,white,0.885,0.926,times-roman,141 +The secret kitchen appliance is a "rice cooker".,41,10,yellow,black,0.178,0.925,courier-bold,113 +The secret office supply is a "paperclip".,45,8,green,white,0.851,0.906,courier-oblique,88 +The secret object #3 is a "fork".,48,9,blue,white,0.82,0.088,helvetica-boldoblique,87 +The secret flower is a "sunflower".,50,10,orange,black,0.081,0.065,times-bold,116 +The secret animal #3 is a "shark".,54,12,purple,white,0.69,0.154,times-italic,108 +The secret instrument is a "piano".,57,10,brown,white,0.054,0.512,helvetica,83 +The secret shape is a "triangle".,58,12,gray,white,0.291,0.868,helvetica-bold,83 +The secret animal #5 is a "bear".,63,10,red,white,0.506,0.267,courier-oblique,98 +The secret clothing is a "hat".,65,11,gray,white,0.713,0.546,helvetica-bold,98 +The secret vegetable is "broccoli".,69,11,yellow,black,0.393,0.478,helvetica-boldoblique,106 +The secret animal #1 is a "cat".,70,10,white,black,0.811,0.063,times-bold,100 +The secret animal #4 is a "frog".,75,11,purple,white,0.331,0.288,times-bolditalic,112 diff --git a/DWS/DWS_75Pages/prompt_questions.txt b/DWS/DWS_75Pages/prompt_questions.txt new file mode 100644 index 0000000000000000000000000000000000000000..80c3344e43d3c4966c226bdc84bfd1c9e17aa4c8 --- /dev/null +++ b/DWS/DWS_75Pages/prompt_questions.txt @@ -0,0 +1,25 @@ +What is the secret transportation in the document? +What is the secret sport in the document? +What is the secret drink in the document? +What is the secret object #4 in the document? +What is the secret object #2 in the document? +What is the secret object #5 in the document? +What is the secret tool in the document? +What is the secret animal #2 in the document? +What is the secret food in the document? +What is the secret fruit in the document? +What is the secret currency in the document? +What is the secret object #1 in the document? +What is the secret landmark in the document? +What is the secret kitchen appliance in the document? +What is the secret office supply in the document? +What is the secret object #3 in the document? +What is the secret flower in the document? +What is the secret animal #3 in the document? +What is the secret instrument in the document? +What is the secret shape in the document? +What is the secret animal #5 in the document? +What is the secret clothing in the document? +What is the secret vegetable in the document? +What is the secret animal #1 in the document? +What is the secret animal #4 in the document? diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_108.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_108.jpg new file mode 100644 index 0000000000000000000000000000000000000000..8cddaed42a676c44dffe6f779cc587996308c9fa --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_108.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:fca24a43113e24c43e2fb93b62baa26786a7bad58c1eeecfa490f6dd6bbf22bf +size 238607 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_109.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_109.jpg new file mode 100644 index 0000000000000000000000000000000000000000..4d3988167f8a0ded67c24f18253c79c95f0ca560 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_109.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:fd2902557cf187a87d04f75295fe7a50c561ed85e5231739d116f7aa0aa71514 +size 476205 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_120.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_120.jpg new file mode 100644 index 0000000000000000000000000000000000000000..f46afc30b66275a0d769f8950d86d02315b5e1db --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_120.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:101610f8df00edb13e3fbb3cfd3969bf9c9ea415cdca353793e40631fdf36117 +size 262773 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_121.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_121.jpg new file mode 100644 index 0000000000000000000000000000000000000000..f0686406c2ed18a3414d4233bd5095e10b615119 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_121.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:1bae24baa366a5d45d72ebfd9b7db6b73f789a61f85aba82be21620eed44241e +size 511994 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_122.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_122.jpg new file mode 100644 index 0000000000000000000000000000000000000000..cf62ed5e3e43f4fc01ad6a04d167fbd0330ce20c --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_122.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:71bd0aab0569d9024b72d38e5e8d11897371fd76622988ce7e5f9cb295c6ac96 +size 462499 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_123.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_123.jpg new file mode 100644 index 0000000000000000000000000000000000000000..f7c28a955c58190e9b3d818f9a7ba1b4603ca25c --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_123.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:b14834bfb41949894c9d0d5b1afd4c9a3fa5e5089f4b2995688a1e02e4a35c7b +size 244513 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_125.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_125.jpg new file mode 100644 index 0000000000000000000000000000000000000000..68b92a48ecdb48d6ed48ea86c655a5897a24b724 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_125.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:eb3e653fc3234ea4913b44584415652552dd897c71e4beea569d7117e363f199 +size 520794 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_126.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_126.jpg new file mode 100644 index 0000000000000000000000000000000000000000..46b01452d6230c3ac72d718a925026bc5f7fadb6 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_126.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:00a96b6ddff7f6eef80ff1b7fefeda13562e699dda6b43355d8c5d7082eecce8 +size 436310 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_132.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_132.jpg new file mode 100644 index 0000000000000000000000000000000000000000..78602fbbb4a6fbc49a9ac55c72bca0aa345ee95f --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_132.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:e3e823dc5a1715f20f6a8126c1c7333aa606abe019d1f6faf6b920a46384a195 +size 334492 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_134.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_134.jpg new file mode 100644 index 0000000000000000000000000000000000000000..b71efb939107a86e1facf152b1a5be2efcf69643 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_134.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:7d9eee4f8c21ce2586298c04a17a2d0b158ed2e1a0f90714812ccac753befb45 +size 472830 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_135.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_135.jpg new file mode 100644 index 0000000000000000000000000000000000000000..edb8816520cb79ea055a534859904e3fbc8ebe1c --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_135.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:5a9138a0945a4a44c34d7a211e9d01f38f7a917f453724fe189b2b3782758975 +size 279165 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_136.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_136.jpg new file mode 100644 index 0000000000000000000000000000000000000000..08109b8ff6d95752473a30f85ada2e02ae5be6e1 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_136.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:6de518eab6e9a8a140c2cb43ffcbd849f42c1ccc91347a4231d364c2ffe8eb96 +size 395788 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_137.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_137.jpg new file mode 100644 index 0000000000000000000000000000000000000000..8af06827e2a06eefce4e1c3bb21e4f570b424886 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_137.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:1831f7f63bce3fcb36869fa0466fda9ac81d5eae3eb96773eeb4a0db77e4664d +size 438989 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_144.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_144.jpg new file mode 100644 index 0000000000000000000000000000000000000000..b2fd128bfb6a88887728d90134388c8074e2a864 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_144.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:1bb8d3e420fc153b5a225647e4716400cd365e7aa2be5ad8d92fc7e172d9df27 +size 671110 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_145.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_145.jpg new file mode 100644 index 0000000000000000000000000000000000000000..a8c817acbc76dde01bc9f031a2d4b80a322f6240 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_145.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:0a6443d906bcb32f1cd88052821555ae95bb8a7d8347504b2b9993d6aa209258 +size 548604 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_146.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_146.jpg new file mode 100644 index 0000000000000000000000000000000000000000..c47ccb9338bf5cdb5762bd2d0da6775a5dd77437 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_146.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:58e20db5cae6f672f8a7707673d8b17fc7d906e07aa58691a07a19c5310ba338 +size 263507 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_147.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_147.jpg new file mode 100644 index 0000000000000000000000000000000000000000..a834aa4a4d080c8edc1026b17d840f117b1a3da7 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_147.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:7bf2ca1239dfb69e244fb19365efdc6b29b54ebf0739b3aaef78016dd8e17719 +size 492156 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_150.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_150.jpg new file mode 100644 index 0000000000000000000000000000000000000000..e339ecfa5b260fd9ae139b1950b4dcf88d58e3fa --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_150.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:294fad5543e291c4ae708beb85f54f40f2c690ee6136546591e9a0652ad15969 +size 227060 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_152.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_152.jpg new file mode 100644 index 0000000000000000000000000000000000000000..8486dfe32c31489733607e1f2224f7b7be995b6a --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_152.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:03e32f3bae0674900ad5226852e2952ce9853fe67da9932eee126c670fca99bd +size 242820 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_153.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_153.jpg new file mode 100644 index 0000000000000000000000000000000000000000..bb1e079e3177367b90ff2ca0be26f68eec83f794 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_153.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:9bdf8101041e26a37178e340c12cecac94ed3e6df0cdd4461d62da7c6143b13b +size 318778 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_178.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_178.jpg new file mode 100644 index 0000000000000000000000000000000000000000..b179911b29cc5c933995c309a8048f18f33ff64b --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_178.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:f723aaea7e881d2d2aa82956267db7ce4e7417c46b0ee1b956db3cf60ad0e605 +size 401072 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_184.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_184.jpg new file mode 100644 index 0000000000000000000000000000000000000000..40986ea377edaab910aa766f4cd338efaf73d865 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_184.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:c889c5ddd64de7f428c6884bb8f45d372bb27656b5c28d8763d18450501e627c +size 383711 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_185.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_185.jpg new file mode 100644 index 0000000000000000000000000000000000000000..88d7dbf812dd4115098f6c13dfd93596b2c221de --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_185.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:b7a0ceabace42caf37fc34069166a369703b5ea118d3a81e5a2eb42ee1ed04f7 +size 350099 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_187.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_187.jpg new file mode 100644 index 0000000000000000000000000000000000000000..b70719b38dfc3a951c034ccec651424615e2eaf5 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_187.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:5f7b21e8f254bf2d711f4197f91db18a5c5e65d53a042e01c565fa9a2f98f4de +size 342186 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_190.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_190.jpg new file mode 100644 index 0000000000000000000000000000000000000000..ee838bbb369f92c0220ba754389c248574764144 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_190.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:0a62d652095df21693f23f00203e87c4c654811a9a8ea08fde379d3acf5806ae +size 315108 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_191.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_191.jpg new file mode 100644 index 0000000000000000000000000000000000000000..b630653e04e026b513151e14ebb0cda67be7c753 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_191.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:a0779efff5107487e728263b236dbc247024493859a018b3e2488616894422cd +size 293606 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_193.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_193.jpg new file mode 100644 index 0000000000000000000000000000000000000000..d59f74373add5be1d96296cb8f7e038a97cb9f66 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_193.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:808c5e2f27ff6ae8197f150133a4b86f3b0921b44ddd3318f34b3d9ffc95c08d +size 262510 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_20.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_20.jpg new file mode 100644 index 0000000000000000000000000000000000000000..71ad8d1e5844002595fb5e37721ff86b11cbb4c8 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_20.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:132d101143d22492630efccd22cecd51ba61c0932570e4fe9b5a33f0e6a93d18 +size 319349 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_21.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_21.jpg new file mode 100644 index 0000000000000000000000000000000000000000..7599b38d4cc5f977d8ee291cce0e7129091b0010 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_21.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:5e26d552d326697938010b4ef5f70b0aad6d228360b9b3472c1fbb5c74cab51b +size 417261 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_22.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_22.jpg new file mode 100644 index 0000000000000000000000000000000000000000..777f30f536a42e8677b55b76c2cdac9bf3a07fe9 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_22.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:5298ca3e1f84335f2c948e7d4a2872d4b8229047b52a0214f1ad7f5b6eac7b11 +size 440181 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_23.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_23.jpg new file mode 100644 index 0000000000000000000000000000000000000000..220a622f273c2fe23877fedc461ca9e1db225296 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_23.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:0d751cd7c58ef033ffabd31583e80188e52331aafa91789a8db870a6d0eb7a37 +size 536426 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_34.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_34.jpg new file mode 100644 index 0000000000000000000000000000000000000000..f1ed530369b7d71132eabdfb47127b5945a4646d --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_34.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:bc7539cdb091b94aca5155b49c3d8f327dcdb506d88b3c3564a0a836b97b005f +size 152986 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_35.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_35.jpg new file mode 100644 index 0000000000000000000000000000000000000000..e33aedc8950a269919b63e4011a97f0d85b88f12 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_35.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:1c09031200383cbc82280231d9667753b1d6a385c7f83aad796c72b25e12e0fc +size 333343 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_36.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_36.jpg new file mode 100644 index 0000000000000000000000000000000000000000..ae89f0ad50527c516fedd21d329ea95f51ea9633 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_36.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:000b6ac0f7f6e7311509fee14894d051cd89c5f2bd816c16b43d5ef43739e1ef +size 622313 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_37.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_37.jpg new file mode 100644 index 0000000000000000000000000000000000000000..6c3eac11b98de30c51b701d287be88b7264942fb --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_37.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:f7fb130d209fd97d67cfdb9c2142fc6ef3654e4df57ee97992a6a211ac4c0677 +size 335287 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_44.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_44.jpg new file mode 100644 index 0000000000000000000000000000000000000000..27daf4651f197b69a0c7e599501af1559112aba0 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_44.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:089db8e251e5277da7bdbd51dda69d223ea7129ebeead090933598f1c583d228 +size 174158 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_45.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_45.jpg new file mode 100644 index 0000000000000000000000000000000000000000..623fed36eef8c6e16a7b05e367ed58e4b9c1d095 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_45.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:e78a10541f0fa5dee26ad7b6be97c5295f3e98d17f9d2f03ef9e9a0b5c93115f +size 364275 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_46.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_46.jpg new file mode 100644 index 0000000000000000000000000000000000000000..f5cd40ecba4aabf1a8f52ac1bc213e1d707cf4bb --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_46.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:1622f466a50d8ea2dcff38fef9f470c9961823f0b0607499f392d28b2b7ed9ba +size 361540 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_47.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_47.jpg new file mode 100644 index 0000000000000000000000000000000000000000..1b40447dc11fb343333787bd1fe3552ddf305d2a --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_47.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:890b3528e97fc1f377d124fbda968ffb456f3031f43b72e88f5e90a0848097b2 +size 427241 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_50.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_50.jpg new file mode 100644 index 0000000000000000000000000000000000000000..0d1a97db56c0d8a7df809f1ee1e2b9a888d81cf5 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_50.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:9b3c4a7dc7d2ba9b2d21f0b5054d9de3572847574627d07d485ca17aee5b5196 +size 387616 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_51.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_51.jpg new file mode 100644 index 0000000000000000000000000000000000000000..bd7743fef4ca2f2f2143808aaaab7dc5b0039535 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_51.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:90377b3db3f66d9e9d2b6d7a7df368927d63f20dcb8b44a96e0c9e6cf9d2530c +size 459927 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_52.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_52.jpg new file mode 100644 index 0000000000000000000000000000000000000000..a1b9a3f6001276994a8c524dcd021117a156b892 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_52.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:636049eb0794738cc1a8e0be89a3fce7517c0313b79f4c775a0a2da7b311292f +size 419961 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_53.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_53.jpg new file mode 100644 index 0000000000000000000000000000000000000000..1d84494446ac2c66e5aee58a5398f5caf09544ef --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_53.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:4f6b8eb91a9f1d50eb198b4ffe1716d62bd4ecb116973c057086774349e6fafe +size 356147 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_56.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_56.jpg new file mode 100644 index 0000000000000000000000000000000000000000..cafe91c00133c057837b33ea917dda529d07d2be --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_56.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:aad0816ced0a6bcb2928b34e882be65e50b6abca0f46a1a1c61b4488ba17c2f4 +size 451763 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_57.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_57.jpg new file mode 100644 index 0000000000000000000000000000000000000000..694418ba800214af17544abf086e43db6bad8d85 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_57.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:3f49b3d9ba9f3642396657837541bf7a38eded18e4a681009e15687a922f5051 +size 546562 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_78.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_78.jpg new file mode 100644 index 0000000000000000000000000000000000000000..34ba3b7d0b199f14837b0bc779794eb79a01a78c --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_78.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:a0a07a6a6128d67d9950ba97181bcd4100a412bd5ea96c0517860b9dd116ebc1 +size 300018 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_79.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_79.jpg new file mode 100644 index 0000000000000000000000000000000000000000..1d27993b3b98785eb01420ef6e0daf3e2442f9ab --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_79.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:e5102f0a6ddc64e43c0a2745a5b249d8e25373909fc077dad89bae6d69ac1931 +size 418339 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_8.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_8.jpg new file mode 100644 index 0000000000000000000000000000000000000000..484a9c5e25e08ef5703616da0be70d1d5750e7c5 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_8.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:9585c0de7d75a87cba1ca93598b3a16dfdb0ca9dee860c1e98637bee5534da5b +size 251008 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_81.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_81.jpg new file mode 100644 index 0000000000000000000000000000000000000000..7643a9efef2c505badd47cc749914156428855a8 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_81.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:f0e97707462581faa217d6a067b014a718127e460e2f938362b241194c05f26a +size 405998 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_84.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_84.jpg new file mode 100644 index 0000000000000000000000000000000000000000..5d9c6f24018b731257bd33c0a5af09275b424f1e --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_84.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:86da68e415b8a702d2b6ab87d613c4e439fb7804cd32f12d79fc19749b63a2b1 +size 372809 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_85.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_85.jpg new file mode 100644 index 0000000000000000000000000000000000000000..0225106038bba0b4cfbbf69efe545c04c63a7f47 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_85.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:ec7191115f4ed97d8005a1bad49daf9dffc8b1357604a1cb9751b81e91e20dd6 +size 404101 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_86.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_86.jpg new file mode 100644 index 0000000000000000000000000000000000000000..8d8620f31aceed62693d4506126ed61e5bbf72e1 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_86.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:6fc21d4c97a0659b1ac09e117d777d1b1dd6782edd1ef0295b69e0c4b5ac318f +size 300130 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_87.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_87.jpg new file mode 100644 index 0000000000000000000000000000000000000000..ae258f152514716ab3a7c6097d1bd9d64a75e940 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_87.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:66e21afdfb6fe959a4315a4bc900129b97592f63adb967abc639f89eadbbefc1 +size 301076 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_9.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_9.jpg new file mode 100644 index 0000000000000000000000000000000000000000..28ae11878c6d7c9bcc21d93e299d8e2bbf8bfcf5 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_9.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:c7175606917a07258dbb93dbec441447dfe0161df3c4c64829eb90f70ae0d918 +size 342459 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_90.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_90.jpg new file mode 100644 index 0000000000000000000000000000000000000000..fb34ef1f20f8b035b4eaaa16f26a5cfbfe9ec197 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_90.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:f3bf4d0adaa7130c055b3c128dc39635efaca6cf5969e33ef01012ad7602e206 +size 535432 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_91.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_91.jpg new file mode 100644 index 0000000000000000000000000000000000000000..a9e7ba1415c5472a667095a2522544d346728900 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_91.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:073bb27eab405ab6562f286c29f6e1bd6d84633330f3cdb3066597a5054c9d6d +size 364502 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_92.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_92.jpg new file mode 100644 index 0000000000000000000000000000000000000000..a6b0a96b569abc492aca4496701bc4032a9bcb66 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_92.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:2a9c3a9b6f8ea5aacd014104928f181fa5de82bce319e37b3e56aec9dfd678ae +size 468105 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_93.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_93.jpg new file mode 100644 index 0000000000000000000000000000000000000000..62b44a306d8f6f1a31d43a1b0793e23e4b00dd67 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_93.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:16fe60f5f1a5ec7738b797ff3bfbc946e21b6d27edf71baa78979e61542dea60 +size 524346 diff --git a/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_95.jpg b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_95.jpg new file mode 100644 index 0000000000000000000000000000000000000000..d134b74916a6a617e932eec344ea856e6b6a2903 --- /dev/null +++ b/NewRiver/NewRiver_200Pages/Images_TextImageNeedles/NewRiver_200Pages_ImageNeedles_page_95.jpg @@ -0,0 +1,3 @@ +version https://git-lfs.github.com/spec/v1 +oid sha256:4f7926a3aa0474c6a85c5293eb745a9402f6e445402489e5409febaa44ffeaf2 +size 539666 diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_1.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_1.txt new file mode 100644 index 0000000000000000000000000000000000000000..4aed4cacab8aa31886fd95dcb52c466ab51d7bb7 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_1.txt @@ -0,0 +1,6 @@ +Thursday, May 2, 2024 | 8:00 a.m. Eastern Time +www.virtualshareholdermeeting.com/UPS2024 +NOTICE OF ANNUAL MEETING +/gid00133/gid00131/gid00133/gid00135of Shareowners and +Proxy Statement +2023 ANNUAL REPORT ON FORM 10-K \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_10.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_10.txt new file mode 100644 index 0000000000000000000000000000000000000000..e911ea57a1771b6d949db7ca3611413bd4a0ae7c --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_10.txt @@ -0,0 +1,46 @@ +Proxy Statement +UNITED PARCEL SERVICE, INC. +55 Glenlake Parkway, N.E., Atlanta, Georgia 30328 +This Proxy Statement contains important information about the 2024 Annual Meeting of Shareowners (the +“Annual Meeting”). We are providing these proxy materials to you because our Board of Directors is soliciting +your proxy to vote your shares at the Annual Meeting. The Annual Meeting will be held online via webcast on +May 2, 2024, at 8:00 a.m. Eastern Time, at www.virtualshareholdermeeting.com/UPS2024. Shareowners can +participate, ask questions and vote during the meeting through this website. +All properly executed written proxies, and all properly completed proxies submitted through the Internet or by +telephone, that are delivered pursuant to this solicitation will be voted at the Annual Meeting in accordance with +the directions given in the proxy, unless the proxy is revoked prior to the completion of voting at the Annual +Meeting. Only owners of record of shares of the Company’s common stock as of the close of business on March +5, 2024 (the “Record Date”) are entitled to notice of, and to vote at, the Annual Meeting (or any adjournment or +postponement of the Annual Meeting). We are first mailing this Proxy Statement on or about March 18, 2024. +Proxy Statement Summary +The following summary highlights key information contained elsewhere in this Proxy Statement. +Corporate Governance +Some of our key governance policies and practices include: +• An independent board; all our directors are independent, other than our Chief Executive Officer (“CEO”); +an independent Board Chair who is highly engaged and experienced; +• A diverse board, with 42% of the board being female and 33% of the board being ethnically diverse; +• Executive sessions of our independent directors held at each board meeting; +• Annual elections for all directors; majority voting in uncontested director elections; +• Full board engagement in the strategic planning process, including an in-depth annual strategy review and +overseeing progress throughout the year; +• A Risk Committee consisting entirely of independent members that is responsible for oversight of +enterprise risks, including cybersecurity risks; +• Regular evaluations of governance policies and practices, making changes when appropriate; including +recently delegating additional cybersecurity oversight responsibilities to the Risk Committee, delegating +environmental sustainability oversight responsibilities to the Nominating and Corporate Governance +Committee, delegating additional human capital oversight responsibilities to the Compensation and +Human Capital Committee, and adopting a director overboarding policy; +• Regular engagement with stakeholders on environmental, social and governance (“ESG”) matters; +during this proxy season management contacted holders of over 47% of our class B common stock to discuss +our sustainability goals and initiatives, commitments to diversity and inclusion, and executive +compensation matters; +• Annual board and committee self-evaluations, including one-on-one director discussions with the +independent Board Chair; +• Comprehensive director orientation and education program; +• Robust stock ownership guidelines, including a target ownership of eight times annual salary for the +CEO, five times annual salary for other executive officers and five times the annual retainer for +directors; and +• Restrictions on executive officers and directors hedging or pledging their ownership in UPS stock. + +7 +The secret object #1 is a "chair". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_100.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_100.txt new file mode 100644 index 0000000000000000000000000000000000000000..35b7c66b5e4596732682542eed596e02dcfb7290 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_100.txt @@ -0,0 +1,52 @@ +11 +Failure to attract or retain qualified employees could materially adversely affect us. +We depend on the skills and continued service of our large workforce. We also regularly hire a large number of part-time +and seasonal workers. We must be able to attract, develop and retain a large and diverse global workforce. If we are unable to +hire, properly train or retain qualified employees, we could experience higher labor costs, reduced revenues, further increased +workers' compensation and automobile liability claims costs, regulatory noncompliance, customer losses and diminution of our +brand value or company culture, which could materially adversely affect us. Our ability to control labor costs has in the past +been, and is expected to continue to be, subject to numerous factors, including labor-related contractual obligations, turnover, +training costs, regulatory changes, market pressures, inflation, unemployment levels and healthcare and other benefit costs. +In addition, we strive to lower our cost to serve, including labor costs, through various strategic initiatives. Our inability to +continue to retain experienced and motivated employees through the execution of these initiatives may also materially adversely +affect us. +Strikes, work stoppages or slowdowns by our employees could materially adversely affect us. +Many of our U.S. employees are employed under a national master agreement and various supplemental agreements with +local unions affiliated with the International Brotherhood of Teamsters (the "Teamsters"). In the third quarter of 2023, a new +national master agreement with the Teamsters, which runs through July 31, 2028, was ratified. Our airline pilots, airline +mechanics, ground mechanics and certain other employees are employed under other collective bargaining agreements. In +addition, some of our international employees are employed under collective bargaining or similar agreements. Other +employees may choose to organize in the future. Actual or threatened strikes, work stoppages or slowdowns by our employees +could adversely affect our ability to meet our customers' needs. As a result, customers have reduced, and in the future may +reduce, their business or stop doing business with us if they believe that such actions or threatened actions may adversely affect +our ability to provide services. We may permanently lose customers if we are unable to provide uninterrupted service, and this +could materially adversely affect us. The terms of collective bargaining agreements also may affect our competitive position +and results of operations. Furthermore, our actions or responses to any such negotiations, labor disputes, strikes or work +stoppages could negatively impact how our brand is perceived and our reputation and have adverse effects on our business, +including our results of operations. +We maintain significant physical operations. Increases in operational security requirements impose substantial costs on us +and we could be the target of an attack or have a security breach, which could materially adversely affect us. +As a result of concerns about global terrorism and homeland security, various governments have adopted and may adopt +additional heightened security requirements, resulting in significantly increased operating costs. Regulatory and legislative +requirements may change periodically in response to evolving threats. We cannot determine the effect that any new +requirements will have on our operations, cost structure or operating results, and new rules or other future security requirements +may significantly increase our operating costs and reduce operating efficiencies. Regardless of our compliance with security +requirements or our own security measures, we could also be the target of an attack or security breaches could occur, which +could materially adversely affect one or more of our operations, or our business. +A significant cybersecurity incident, or increased data protection regulations, could materially adversely affect us. +We rely on information technology networks and systems and other operational technologies, including the internet and a +number of internally-developed systems and applications, as well as certain technology systems from third-party vendors +(collectively referred to as "IT") to operate our business. For example, we rely on these technologies to receive package level +information in advance of the physical receipt of packages, to move and track packages through our operations, to efficiently +plan deliveries, to execute billing processes, and to track and report financial and operational data. Our franchise locations and +subsidiaries also rely on IT systems to manage their business processes and activities. +IT and other systems (ours, as well as those of our franchisees, acquired businesses, and third-party service providers) +have been and will continue in the future to be susceptible to damage, disruptions and shutdowns due to programming errors, +defects or other vulnerabilities, power outages, hardware failures, misconfigurations, computer viruses, cyber-attacks, +encryption caused by ransomware or malware attacks, exfiltration of data, attacks by foreign governments, state-sponsored +actors, or criminal groups, theft, misconduct by employees or other insiders, telecommunications failures, misuse, human errors +or other catastrophic events. In recent periods, the frequency and sophistication of cyber-attacks have increased and are +expected to continue to increase, including as a result of state-sponsored cybersecurity attacks during periods of geopolitical +conflict, such as the ongoing conflicts in Ukraine and the Middle East. In addition, the rapid evolution and increased adoption +of artificial intelligence technologies may intensify our cybersecurity risks. Accordingly, we may be unable to anticipate these +techniques or to implement adequate measures to recognize, detect or prevent the occurrence of any of the events described \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_11.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_11.txt new file mode 100644 index 0000000000000000000000000000000000000000..cbffb6bce5cc5e5b6e5bd18b2f7e2519f9dff11f --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_11.txt @@ -0,0 +1,62 @@ +2024 Director Nominees +Highlights +92% Independent 61.6 years Average age 8.9 years Average tenure +42% Female 33% Ethnically diverse +Summary information about our director nominees is below. As a group, we believe our 12 director nominees +have the appropriate skills and experience to effectively oversee and constructively challenge management’s +performance in the execution of our strategy. For more information about our director nominees see page 21. +Name +Director +Since Principal Occupation Committee(s) +Independent Directors +Rodney Adkins 2013 Former Senior Vice President, International +Business Machines Corporation +– Risk (Chair) +– Compensation and +Human Capital +– Executive +Eva Boratto 2020 Chief Financial Officer, Bath & Body Works, Inc. – Audit (Chair) +Michael Burns 2005 Former Chairman, President and Chief Executive +Officer, Dana Incorporated +– Audit +Wayne Hewett 2020 Senior Advisor to Permira – Audit +Angela Hwang 2020 Former Chief Commercial Officer and President, +Pfizer Biopharmaceuticals Business, Pfizer, Inc. +– Audit +Kate Johnson 2020 President and Chief Executive Officer, Lumen +Technologies, Inc. +– Nominating and +Corporate Governance +– Risk +William Johnson(1) 2009 Former Chairman, President and Chief Executive +Officer, H.J. Heinz Company +– Nominating and Corporate +Governance (Chair) +– Executive +Franck Moison 2017 Former Vice Chairman, Colgate-Palmolive +Company +– Nominating and +Corporate Governance +– Risk +Christiana Smith Shi 2018 Former President, Direct-to-Consumer, Nike, Inc. – Compensation and +Human Capital (Chair) +– Risk +Russell Stokes 2020 President and Chief Executive Officer, +Commercial Engines and Services, GE Aerospace +– Compensation and +Human Capital +– Nominating and Corporate +Governance +Kevin Warsh 2012 Former Member of the Board of Governors of the +Federal Reserve System, Distinguished Visiting +Fellow, Hoover Institution, Stanford University +– Compensation and +Human Capital +– Nominating and Corporate +Governance +Non-Independent Director +Carol Tomé 2003 UPS Chief Executive Officer – Executive (Chair) +(1) Independent Board Chair +8 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_12.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_12.txt new file mode 100644 index 0000000000000000000000000000000000000000..fa2e3c0b09f11c3602ae8713bebe2bca52489fff --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_12.txt @@ -0,0 +1,46 @@ +Executive Compensation +Compensation Practices +A significant portion of executive compensation is at-risk and tied to Company performance. This helps align +executive decision-making with the long-term interests of our shareowners. We also have a longstanding owner- +manager culture. Compensation practices that support these principles include: +• A balanced mix of cash and equity, providing a degree of financial certainty and appropriate incentives to +retain and motivate executives; +• Performance incentive equity awards which vest over multiple years, furthering both retention and +incentive goals; +• Multiple distinct goals for annual and long-term performance incentive awards, avoiding overemphasis on +any one metric and mitigating excessive risk-taking; +• Long-term performance incentive awards with a three-year performance period; +• Stock option awards that vest over a five-year period and only provide value if our stock price increases; +• Clawback policy that applies to all of our executive officers; +• Incentive compensation plan awards require a “double trigger” — both a change in control and a +termination of employment or a failure to continue, assume or substitute the award — to accelerate +vesting; and +• No tax gross-ups on equity awards or golden parachute excise taxes. +2023 Compensation Actions +Key 2023 compensation decisions affecting our executive officers included: +• Most total direct compensation was performance-based or considered “at risk” (93% for the CEO and +86% for all other named executive officers (“NEOs”) as a group), page 34; +• Base salary increases as a result of the annual salary review process and pay mix redesign, page 36; +• Pay mix redesign to better align annual incentive pay with market practices, improve the competitiveness +of base salaries and simplify compensation design, page 36; +•A bifurcated performance period for the annual incentive awards in light of continued economic +uncertainty and our then-labor uncertainty; beginning with the 2024 performance period, the Compensation +and Human Capital Committee has returned to annual goal setting for annual incentive awards, page 37; +• Annual incentive awards were earned and paid below target, page 37; and +• Previously granted 2021 Long-Term Incentive Performance (“LTIP”) awards, which had three-year +performance goals ending in 2023, were earned and paid below target, page 40. +Say on Pay Vote +We maintain executive compensation programs that support the long-term interests of our shareowners. We +provide shareowners the opportunity to vote annually, on an advisory basis, to approve the compensation of our +NEOs, as described in the Compensation Discussion and Analysis section and in the compensation tables and +accompanying narrative disclosure in this Proxy Statement. For more information, see page 62. +The board recommends you vote FOR the advisory vote to approve NEO compensation. +Ratify the Appointment of the Independent Registered Public Accounting Firm +The Audit Committee of the Board of Directors has appointed Deloitte & Touche LLP as our independent +registered public accounting firm for the year ending December 31, 2024. The board recommends you vote FOR +the ratification of the appointment of Deloitte & Touche LLP. For more information, see page 65. +Shareowner Proposals +For the reasons described in this Proxy Statement, the board recommends you vote AGAINST the shareowner +proposals. Information about these proposals starts on page 68. + +9 diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_13.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_13.txt new file mode 100644 index 0000000000000000000000000000000000000000..53a8b149c02ba1544d88d59855f125be03780b0f --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_13.txt @@ -0,0 +1,46 @@ +Corporate Governance +The Board of Directors is accountable to shareowners and operates within a governance structure that we +believe provides appropriate checks and balances to create long-term value. The board’s responsibilities include: +• Establishing an appropriate corporate governance structure; +• Supporting and overseeing management in setting long-term strategic goals and applicable measures of +value-creation; +• Providing oversight on the identification and management of materials risks; +• Establishing appropriate executive compensation structures; and +• Monitoring business issues that have the potential to significantly impact the Company’s long-term value. +We regularly review and update our corporate governance policies and practices in response to the evolving +needs of our business, shareowner and other stakeholder feedback, regulatory changes, and other corporate +developments. Following is an overview of our corporate governance structure and processes, including key +aspects of our board operations. +Selecting Director Nominees +Maintaining a board of individuals independent of management, with the appropriate skills and experience, and +of the highest personal character, integrity and ethical standards, is critical to the proper functioning of the +board. The Nominating and Corporate Governance Committee seeks to promote diversity in the boardroom with +respect to gender, age, ethnicity, skills, experience, perspectives, and other factors. Our directors’ +biographies beginning on page 21 highlight factors that the board considered when nominating these individuals. +Nomination Process +1. Board Composition Review + The board’s annual self-evaluation helps the Nominating and Corporate Governance Committee +identify needs by assessing areas where additional diversity, perspectives, expertise, skills or +experience may be desired. The Nominating and Corporate Governance Committee also conducts +regular in-depth board composition reviews. +2. Candidate Identification + The Nominating and Corporate Governance Committee uses a variety of sources to identify a diverse +pool of potential candidates. Sources include board members, members of management, independent +consultants and shareowner recommendations. Prospective candidates are evaluated after taking into +account feedback from consultants, management and board members, candidate background and +qualification reviews, and open discussions between the Nominating and Corporate Governance +Committee and the full board. This process allows for active and ongoing consideration of potential +directors with a focus on long-term Company strategy. +3. Shortlisted Candidates + The Nominating and Corporate Governance Committee maintains a diverse list of potential +director candidates according to desired skills, experiences and backgrounds. The list is +reviewed at each Nominating and Corporate Governance Committee meeting and updated as +appropriate. Each candidate is evaluated to ensure that existing and planned future commitments +would not materially interfere with expected board responsibilities. +4. Recommendation, Nomination and Election + Candidates recommended by the Nominating and Corporate Governance Committee and approved by +the board are nominated for election. Directors are elected annually. +Result: 5 new independent directors added since 2020; 42% director refreshment since 2020. +10 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_14.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_14.txt new file mode 100644 index 0000000000000000000000000000000000000000..280b371883bab4a6ed98e6de40bd97a87c1843ec --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_14.txt @@ -0,0 +1,42 @@ +Shareowner Recommendations +Shareowner recommended director candidates are considered on the same basis as recommendations from other +sources. Shareowners can recommend a candidate by writing to the UPS Corporate Secretary, 55 Glenlake +Parkway, N.E., Atlanta, Georgia 30328. Submissions must contain the prospective candidate’s name and a +detailed description of the experience, qualifications, attributes and skills that make the individual a suitable +director candidate. +Board Leadership Structure +Based on the periodic evaluation and recommendation of the Nominating and Corporate Governance Committee, +the board determines the most appropriate board leadership structure, including who should serve as Board +Chair, and whether the roles of Board Chair and CEO should be separated or combined. In making this +determination, the board evaluates a number of factors, including professional experience, operational +responsibilities and corporate governance developments. +In October 2020, in connection with Carol Tomé’s election as CEO, the board determined that it was in the best +interests of the Company to enable Carol to focus on leading the Company, and separated the roles of Board +Chair and CEO. Bill Johnson, who had been serving as our independent Lead Director, was appointed +Board Chair. +Bill has served on our board since 2009 and served as independent Lead Director from 2016 until October 2020. +He has deep institutional knowledge of the Company and provides strong continuity of leadership. He devotes +significant time to understanding our business and communicating with the CEO, and other directors, between +meetings. He draws on his extensive knowledge of our business, industry, strategic priorities and competitive +developments to set the board’s agendas in collaboration with the CEO, and he seeks to ensure that board +meetings are productive and interactions with the directors facilitate a useful exchange of viewpoints. Bill’s value +to the board is underscored by the board’s decision to extend his tenure beyond the board’s mandatory +retirement age of 75; in connection with our director nomination process, the board determined to grant Bill a +one-year waiver from that requirement so that he can continue to lead the board. +Carol is available to all directors between meetings and meets regularly with the Board Chair, and with the +directors individually and as a group, to receive feedback from the board. Bill’s collaboration with Carol allows +the board to focus attention on the issues of greatest importance to the Company and its shareowners and our +CEO to focus primarily on leading the Company. +Furthermore, all the members of each of the Audit Committee, the Compensation and Human Capital +Committee, the Nominating and Corporate Governance Committee and the Risk Committee are independent. +Each committee is led by a chairperson who sets the meeting agendas and reports to the full board on the +committee’s work. Additionally, the independent directors meet in executive session without management +present at each board meeting, as described below. +Executive Sessions of Independent Directors +Directors hold executive sessions without management present at each regular board meeting. The Board Chair +determines the agenda and presides at each session. The Board Chair generally invites the CEO to join a portion +of the executive session to receive feedback from the board and when deemed appropriate otherwise. In +addition, throughout the year the Board Chair meets individually with each director to discuss issues that are +important to the board and to solicit and provide further feedback. + +11 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_15.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_15.txt new file mode 100644 index 0000000000000000000000000000000000000000..c7c550beeb64028ac07b111fb5dfc5740a69c525 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_15.txt @@ -0,0 +1,42 @@ +Board and Committee Evaluations +The board’s performance is critical to our long-term success and the protection of stakeholders’ interests. The +board employs both an ongoing informal and a formal annual process to evaluate its performance and the +contributions of individual directors to the successful execution of the board’s obligations. The Board Chair +frequently considers the performance of the board and the board’s committees and has informal discussions +about individual director contributions to the board. The Board Chair shares feedback from these discussions +with the full board and with individual board members. In addition, during 2023 the Board Chair met individually +with each director to discuss overall board effectiveness and performance, individual director time commitments +and potential 2024 board agenda items. +Formal Evaluation Process +1. Detailed Formal Annual Evaluation Process + The Board of Directors, Audit Committee, Compensation and Human Capital Committee, Nominating +and Corporate Governance Committee, and Risk Committee each conduct an annual self-assessment. +The Nominating and Corporate Governance Committee oversees the annual board assessment +process and the implementation of the annual committee self-assessments. +2. Questionnaires + All board and committee members complete a detailed confidential questionnaire each year. The +questionnaire provides for quantitative ratings in key areas, including overall board effectiveness, +meeting effectiveness, access to information, information format, board committee structure, access +to management, succession planning, meeting dialogue, communication with the CEO, operational +reporting, financial oversight, capital structure and financing, capital spending, long-term strategic +planning, risk oversight, crisis management and time management. The questionnaire also allows +directors to provide written feedback and make detailed anonymous comments. In 2023, the +Company engaged a new, independent third party to administer and report on the evaluations. +3. Review + The results of the committee self-assessments are reviewed by each committee and discussed with +the full board. The Nominating and Corporate Governance Committee Chair reviews the results of +committee self-assessments and discusses the responses with the chairs of the other board +committees as appropriate. The Nominating and Corporate Governance Committee Chair also reviews +and discusses the board evaluation results with the full board. +4. Follow-up + Matters requiring follow-up are addressed by the Nominating and Corporate Governance Committee +Chair or the chairs of the other committees as appropriate. +Result: +Feedback from these evaluations has led to several improvements in board functionality in recent +periods, including changes to the format and delivery of board meeting materials, board meeting +agendas and recurring topics, strategic planning and oversight, director recruitment practices and +orientation, allocation of responsibilities among the board’s committees and succession planning. +12 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret object #2 is a "key". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_16.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_16.txt new file mode 100644 index 0000000000000000000000000000000000000000..043ba173dbd0152dbbeb9a565781ba28fe826620 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_16.txt @@ -0,0 +1,44 @@ +Board Refreshment and Succession +8.9 years nominee average tenure +Newer directors (< 5 years) + +Medium-tenured directors (5-10 years) + +Longer-tenured directors (> 10 years) + +The Nominating and Corporate Governance Committee regularly evaluates board composition and necessary +skills as our business evolves over time. We seek a balance of knowledge and experience that comes from +longer-term board service with new ideas and perspectives that can come from newer directors. Since 2020, we +have added five new directors, and have had four directors retire. The average tenure of the director nominees +reflects an appropriate balance between different perspectives brought by newer and long-serving directors. +Board Oversight of Strategic Planning +The board’s responsibilities include oversight of strategic planning. Effective oversight requires a high level of +constructive engagement between management and the board. The board leverages its substantial experience +and expertise and is fully engaged in the Company’s strategic planning process. Management develops and +prioritizes strategic plans on an annual basis. Management then reviews these plans with the board on an annual +basis, along with the Company’s challenges, opportunities, industry dynamics, and legal, regulatory and +governance developments, and other significant strategic matters. +Management provides the board comprehensive updates throughout the year regarding progress on the +Company’s strategic plans. Management also provides regular updates regarding the achievement of the +Company’s financial and other goals. In addition, the CEO communicates regularly with the board on important +business opportunities, financial and operational performance matters, risks and other developments such as +sustainability, human capital, labor and customer relations, both during and outside the regular board +meeting cycle. +Management Development and Succession Planning +Succession planning and talent development are important at all levels within our organization. The board +oversees management’s emergency and long-term succession plans at the executive officer level, most +importantly the CEO position. The board annually reviews succession plans for senior management including the +CEO, all in the context of the Company’s overall business strategy and with a focus on risk management. More +broadly, the board and the Compensation and Human Capital Committee are regularly updated on key talent +indicators for the overall workforce, including diversity, recruiting and development programs. +The board’s succession planning activities are ongoing and strategic and are supported by board committees and +independent third-party consultants as needed. In addition, the CEO annually provides an assessment to the +board of senior leaders and their potential to succeed at key senior management positions. As a part of this +process, potential leaders interact with board members through formal presentations and during informal events. +We also utilize a formal director engagement program in which directors meet with individual executive officers, +visit Company operations, participate in employee events and receive in-depth subject matter updates outside of +the regular board meeting process. These additional engagements encourage the ongoing exchange of ideas and +information between directors and management, facilitate the board’s oversight responsibilities, and support +management development and succession planning efforts. + +13 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_17.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_17.txt new file mode 100644 index 0000000000000000000000000000000000000000..0f37d1502766ab15633c035a49f01e2c1f4d1246 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_17.txt @@ -0,0 +1,82 @@ +Risk Oversight +Board of Directors +Risk management oversight is an essential board responsibility. The board regularly discusses our most +significant risks and how these risks are being managed. The Company’s enterprise risk management process is +designed to identify potential events that may affect the achievement of the Company’s objectives or have a +material adverse effect on the Company. The board reviews periodic assessments from this process and +participates in the Company’s annual enterprise risk survey. The board has delegated to its standing committees +specific risk oversight responsibilities as set out below and receives regular reports from the committees on +appropriate areas of risk management. +Risk Committee Audit Committee +Compensation and Human +Capital Committee +Nominating and Corporate +Governance Committee +Oversees management’s +identification and evaluation +of strategic enterprise risks, +including risks associated with +intellectual property, +operations, privacy, +technology, information +security, cybersecurity and +cyber incident response, and +business continuity. +Oversees policies with +respect to financial risk +assessment, including +guidelines to govern the +process by which major +financial and accounting +risk assessment and +management is +undertaken. +Considers risks +associated with +compensation policies +and practices, with +respect to both +executive compensation +and compensation +generally, and +considers other human +capital risks. +Considers risks related to +succession planning, +political contributions and +lobbying, sustainability +and stakeholder +engagement matters, +among others. +The Company’s Chief Legal and Compliance Officer, Chief Digital and Technology Officer, Chief Information +Security Officer, and Vice President of Compliance and Internal Audit each meet individually with the Risk +Committee on a regular basis. The Chair of the Risk Committee also meets frequently with the Chief Digital and +Technology Officer between meetings. +The Risk Committee updates the board annually on the Company’s enterprise risk management survey and risk +assessment results. The board provides feedback to the Company about significant enterprise risks and assesses +the Company’s identification of its most significant risk areas. The Risk Committee also coordinates with the +Audit Committee, including through periodic joint meetings, to enable the Audit Committee to perform its risk +related responsibilities. The Risk Committee oversees the Company’s approach to cybersecurity risk assessment +and mitigation by, among other things: +• reviewing the Company’s cybersecurity insurance program; +• reviewing at least annually the Company’s cybersecurity budget; +• discussing the results of various internal cybersecurity audits and periodic independent third-party +assessments of the Company’s cybersecurity programs; +• being briefed on cybersecurity matters by outside experts; and +• receiving regular updates from the Company’s Chief Information Security Officer (“CISO”) and others on +cybersecurity risks, operational metrics, compliance and regulatory developments, training programs, risk +mitigation activities, key projects and industry developments. +The Company's Chief Legal and Compliance Officer, Chief Digital and Technology Officer, CISO and Vice +President of Compliance and Internal Audit participate in Risk Committee meetings and meet individually with +the Risk Committee on a periodic basis to discuss and address relevant matters, including the Company’s +approach to cybersecurity risk assessment and mitigation. +The Audit Committee has additional risk assessment and risk oversight responsibilities, specifically with respect +to financial risk assessment. The Chief Legal and Compliance Officer, CEO, Chief Financial Officer and Vice +President of Compliance and Internal Audit each meet individually with the Audit Committee on a regular basis. +In addition, the Company’s Chief Legal and Compliance Officer reports directly to our CEO, providing visibility +into the Company’s risk profile. The board believes that the work undertaken by its committees, together with +the work of the full board and the Company’s senior management, enables effective oversight of the Company’s +management of risk. +14 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_18.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_18.txt new file mode 100644 index 0000000000000000000000000000000000000000..cfc6fbabe4107b7cc817ee87a2d8dd55fe4de7e8 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_18.txt @@ -0,0 +1,74 @@ +Stakeholder Engagement +Maintaining open and ongoing dialogs with key stakeholders is an important component of our corporate culture. +Our management team participates in numerous investor meetings throughout the year to discuss our business, +strategy and financial results. This includes in-person, telephone and webcast conferences, as well as key +site visits. +In addition, each year we undertake an ESG stakeholder outreach program in which we discuss progress on our +ESG journey. This year we contacted holders of over 47% of our class B common stock as a part of this +program. Engagement provides us with the opportunity to understand issues of significant importance to +stakeholders and to receive feedback on our practices and disclosures. Similarly, it provides us with an +opportunity to discuss how management believes its actions are aligned with long-term value creation. +We also proactively correspond with other key stakeholders throughout the year. We share feedback from our +financial and ESG engagements with the board, the Compensation and Human Capital Committee, and the +Nominating and Corporate Governance Committee as appropriate. +We consider the views of our shareowners and +other stakeholders when evaluating our ESG +policies and practices; for example, in recent +years we have: +The Compensation and Human Capital Committee +considers shareowner feedback, along with the +market information and analysis provided by its +independent compensation consultant, when +making decisions about our executive +compensation programs. We have: +• Announced a number of environmental, social +and human capital goals, including a carbon +neutral by 2050 goal; +• Accelerated our sustainability reporting; +• Increased disclosures around individual director +racial, ethnic and gender diversity; +• Increased our commitments to diversity, equity +and inclusion, volunteerism and +charitable giving; +• Separated the Board Chair and CEO roles; +• Appointed an independent Board Chair; +• Increased board diversity; +• Expanded reporting on lobbying activities; +• Revised the Risk Committee charter to +specifically identify cybersecurity +oversight responsibilities; +• Revised the Nominating and Corporate +Governance Committee charter to include +oversight of environmental sustainability matters +and risks; and +• Revised the Compensation and Human Capital +Committee charter to include oversight of +performance and talent management, diversity, +equity and inclusion, work culture and employee +development and retention. + • Updated the peer group for executive and +director compensation market comparisons; +• Enhanced the competitiveness of our +performance-based annual +compensation program; +• Eliminated single-trigger equity vesting following +a change in control; +• Added relative total shareowner return as a +component of our Long-Term Incentive +Plan awards; +• Reevaluated performance metrics under +incentive compensation plans for proper design +to incent towards long-term Company +value creation; +• Provided additional detail around the +performance measures used for our annual and +long-term incentive plans; +• Adopted a mandatory incentive compensation +clawback policy applicable to executive officers; +• Approved the return to a single, annual goal +setting process for annual incentive program +design; and +• Added an individual payout cap to our annual +incentive plan. + +15 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_19.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_19.txt new file mode 100644 index 0000000000000000000000000000000000000000..fa909d9bff87c8d354516f7463a14be2ff36fdb9 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_19.txt @@ -0,0 +1,51 @@ +Political Engagement +Overview +Responsible participation in the political process is important to our success and the protection and creation of +shareowner value. We participate in this process in accordance with good corporate governance practices. Our +Political Engagement Policy (“policy”) is summarized below and is available at www.investors.ups.com. In +addition, as a component of our ongoing governance evaluation process, we recently expanded our reporting +around lobbying and trade association memberships. +• The Nominating and Corporate Governance Committee oversees the policy; +• Corporate political contributions are restricted; +• We publish a semi-annual political engagement report on our investor relations website; and +• Eligible employees can make political contributions through a Company-sponsored political action committee +(“UPSPAC”). UPSPAC is organized and operated on a voluntary, nonpartisan basis and is registered with the +Federal Election Commission. +Oversight and Processes +Political contributions are made in a legal, ethical and transparent manner that best represents the interests of +stakeholders. Political and lobbying activities require prior approval of the UPS Public Affairs department and are +subject to review (and in some cases prior approval) by the Nominating and Corporate Governance Committee. +Senior management works with Public Affairs on furthering our business objectives and protecting and enhancing +shareowner value. The Chief Corporate Affairs and Sustainability Officer reviews political and lobbying activities +and regularly reports to the board and the Nominating and Corporate Governance Committee. +Lobbying and Trade Associations +Public Affairs coordinates our lobbying activities, including engagements with federal, state, and local +governments. UPS is also a member of a variety of trade associations that engage in lobbying. Lobbying +activities require prior approval of Public Affairs. +The Nominating and Corporate Governance Committee regularly reviews UPS’s participation in trade associations +that engage in lobbying to determine if our involvement is consistent with UPS business objectives and whether +participation exposes the Company to excessive risk. +Lobbying activities are governed by comprehensive policies and practices designed to facilitate compliance with +laws and regulations, including those relating to the lobbying of government officials, the duty to track and +report lobbying activities, and the obligation to treat lobbying costs and expenses as nondeductible for +tax purposes. +Political Activity Transparency +We believe in transparency in our political activities. We publish semi-annual political engagement reports, which +are reviewed and approved by the Nominating and Corporate Governance Committee. The reports provide: +• Amounts and recipients of any federal and state Company political contributions in the U.S. (if any such +expenditures are made); +• The names of trade associations that receive $50,000 or more and that use a portion of the payment for +political contributions; and +• The names of trade associations or other organizations that draft model legislation that received $25,000 or +more in membership dues from UPS in a given year, and the percentage of dues used for lobbying purposes. +These disclosures were recently added as a governance enhancement based on stakeholder feedback. +Our most recent report is available on our investor relations website at www.investors.ups.com. We also publicly +file a federal Lobbying Disclosure Act Report each quarter, providing information on activities associated with +influencing legislation through communications with any member or employee of a legislative body, or with any +covered executive branch official. This report discloses expenditures for the quarter, describes the specific pieces +of legislation that were the topic of communications, and identifies the individuals who lobbied on behalf of UPS. +We file similar publicly available periodic reports with state agencies reflecting state lobbying activities. +16 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret tool is a "saw". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_2.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_2.txt new file mode 100644 index 0000000000000000000000000000000000000000..082c38fe62c5b8c8e6ba2abb5c3850a3e2c43498 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_2.txt @@ -0,0 +1,28 @@ +At the beginning of the year, I said 2023 was going to be a year of resiliency, and that turned out to be true. We faced +challenging external business conditions that led to declining volume, revenue and operating profit in all lines of our +business. I’m proud of the efforts of our nearly 500,000 employees for navigating through these challenges. +Throughout 2023, we operated with speed and agility, controlled what we could control, and stayed on strategy. Here +are some highlights from the year: + •Delivered excellent service to our customers around the globe, anchored by the best on-time performance of any +carrier in the U.S. for the sixth year in a row. + •Grew small and medium-sized business (SMB) penetration to 28.6% of total U.S. volume, driven by continued +expansion of DAP , our Digital Access Program, and the convenience of The UPS Store. + •Generated $10 billion in healthcare revenue across our three business segments; topped 17 million square feet of +healthcare-compliant distribution space and acquired MNX Global Logistics, expanding our cold chain capabilities. + •Delivered a win-win-win labor agreement for our Teamster employees with a wage and benefit compounded +annual growth rate increase of 3.3% over the five-year life of the contract, providing certainty for UPS and +our customers. + •Completed phase one of Smart Package Smart Facility, our RFID solution, in more than 1,000 buildings in the U.S., +reducing misloads by 67%. + •Acquired Happy Returns, enhancing our no-box, no-label, consolidated returns capabilities. + •Generated $91 billion in consolidated revenue with a consolidated adjusted operating profit margin of 10.9%*. + •Generated $5.3 billion in free cash flow* and repaid $2.4 billion of long-term debt. + •Returned $7.6 billion to shareowners, consisting of $5.4 billion in cash dividends and $2.25 billion in +share repurchases. +United Parcel Service, Inc. +55 Glenlake Parkway, N.E. +Atlanta, GA 30328 + +March 18, 2024 +Dear Fellow Shareowners: +The secret sport is "boxing". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_20.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_20.txt new file mode 100644 index 0000000000000000000000000000000000000000..79bed712820f8aacd5f8b2132643e5741e1b860d --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_20.txt @@ -0,0 +1,48 @@ +Sustainability +We are the world’s premier package delivery company and a leading provider of global supply chain +management solutions. We offer a broad range of industry-leading products and services through our extensive +global presence. Our services include transportation and delivery, distribution, contract logistics, ocean freight, +air freight, customs brokerage and insurance. +We operate one of the largest airlines and one of the largest fleets of alternative fuel vehicles under a global UPS +brand that stands for quality and reliability. We deliver packages each business day for approximately 1.6 million +shipping customers to 10.2 million delivery recipients in over 200 countries and territories. In 2023, we delivered +an average of 22.3 million packages per day, totaling 5.7 billion packages during the year. Our success depends +on economic stability, global trade and a society that welcomes opportunity. We understand the importance of +acting responsibly as a business, an employer and a corporate citizen. +The board considers key economic, environmental and social sustainability risks and opportunities as part of its +involvement in and oversight of UPS’s strategic planning. The board also regularly reviews the effectiveness of +our risk management and due diligence processes related to material sustainability topics. In executing its +responsibilities, the board recently delegated oversight of environmental sustainability matters to the Nominating +and Corporate Governance Committee. The Nominating and Corporate Governance Committee monitors the +development, implementation, and progress of the Company’s environmental sustainability goals and regularly +reports on those matters to the board. Authority for day-to-day management of sustainability matters has been +delegated to management. Our Chief Corporate Affairs and Sustainability Officer reports directly to the +Company’s CEO and regularly reports to the board regarding sustainability strategies, priorities, goals and +performance. In addition, the board is regularly briefed on issues of concern for customers, unions, employees, +retirees, investors, governmental entities and other stakeholders. For additional information on board oversight, +see page 14. +Each year we publish corporate sustainability reports showcasing the goals, recent achievements and challenges +of our commitment to balancing the economic, environmental and social aspects of our business. In response to +stakeholder interest, we have recently accelerated the timing of these reports to provide stakeholders with more +current information in advance of our Annual Meeting. These reports are available at https://about.ups.com/us/ +en/social-impact/reporting.html. Our sustainability goals are aspirational and may change. Statements regarding +our goals are not guarantees or promises that they will be met. +Human Capital Management +Our success is dependent upon our people, working together with a common purpose. As we seek to capture +new opportunities and pursue growth, we believe that transforming the UPS employee experience is foundational +to our success. This requires a thoughtful balance between the culture we have cultivated over the years and the +new perspectives we need to take the business into the future. We believe that UPS employees are among the +most motivated and highest-performing in the industry, and provide us a competitive advantage. To assist with +employee recruitment and retention, we continue to review the competitiveness of our employee value +proposition, including benefits and pay, training, talent development and promotion opportunities. +We have approximately 500,000 employees (excluding temporary seasonal employees), of which 414,000 are in +the U.S. and 86,000 are located internationally. Our global workforce includes approximately 85,000 +management employees (42% of whom are part-time) and 415,000 hourly employees (48% of whom are part- +time). More than 70% of our U.S. employees are represented by unions, primarily those employees handling or +transporting packages. Many of these employees are employed under a national master agreement and various +supplemental agreements with local unions affiliated with the International Brotherhood of Teamsters +("Teamsters"). In the third quarter of 2023, the Teamsters fully ratified a new national master agreement that +expires July 31, 2028. In addition, approximately 3,300 of our pilots are represented by the Independent Pilots +Association (“IPA”). Our agreement with the IPA becomes amendable September 1, 2025. + +17 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_21.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_21.txt new file mode 100644 index 0000000000000000000000000000000000000000..240d1c2ddb5a682571253fa00b33ce3b525010c6 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_21.txt @@ -0,0 +1,47 @@ +Oversight and management +We seek to create an inclusive and equitable environment that brings together a broad spectrum of +backgrounds, cultures and stakeholders. We believe leveraging diverse perspectives and creating inclusive +environments improves our organizational effectiveness, cultivates innovation, and drives growth. +Our board, directly and through the Compensation and Human Capital Committee, is responsible for oversight of +human capital matters. Effective oversight is accomplished through a variety of methods and processes including +regular updates and discussions around human capital transformation efforts, technology initiatives impacting +the workforce, health and safety matters, employee survey results related to culture and other matters, hiring +and retention, employee demographics, labor relations and contract negotiations, compensation and benefits, +succession planning and employee training initiatives. +In addition, the Compensation and Human Capital Committee charter has been expanded to include oversight +responsibility for performance and talent management, diversity, equity and inclusion, work culture and +employee development and retention. We believe the board’s oversight of these matters helps identify and +mitigate exposure to labor and human capital management risks, and is part of the broader framework that +guides how we attract, retain and develop a workforce that aligns with our values and strategies. +Total rewards +We offer competitive compensation and benefits. In addition, our long history of employee stock ownership +aligns the interests of our management team with shareowners. In the U.S., benefits provided to our non-union +employees typically include: +• comprehensive health insurance coverage; +• life insurance; +• short- and long-term disability coverage; +• child/elder care spending accounts; +• work-life balance programs; +• an employee assistance program; and +• a discounted employee stock purchase plan. +We invest in our people by offering a range of other benefits, such as paid time off, retirement plans, and +education assistance. In the U.S., these other benefits are generally provided to non-union employees without +regard to full-time or part-time status. +Employee health and safety +We seek to provide industry-leading employee health, safety and wellness programs across our workforce. UPS's +Comprehensive Health and Safety Program ("CHSP") is an occupational health and safety system tailored to our +varied operational environments. Our CHSP covers a wide array of roles, from package handling to +administration, and spans geographical boundaries to include sorting facilities, mobile logistics, administrative +offices, and other locations worldwide. UPS conducts audits to assess specific risks and hazards, including +equipment safety, workplace environment, and emergency response protocols. We monitor our safety +performance through various measurable targets, including lost time injury frequency and the number of +recorded auto accidents. +Collective bargaining +We bargain in good faith with the unions that represent our employees. We frequently engage union leaders at +the national level and at local chapters throughout the U.S. We participate in works councils and associations +outside the U.S., which allows us to respond to emerging issues abroad. This work helps our operations to build +and maintain productive relationships with our employees. For additional information on the union membership +of our employees, see “Human Capital Management” above. +18 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_22.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_22.txt new file mode 100644 index 0000000000000000000000000000000000000000..f82cc3679f03e7ddf2046b9b66fdc7362c6eea2f --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_22.txt @@ -0,0 +1,48 @@ +Majority Voting and Director Resignation Policy +Our Bylaws provide for majority voting in uncontested director elections. The number of votes cast for a nominee +must exceed the number of votes cast against that person. Any incumbent director who does not receive a +majority of the votes cast must offer to resign from the board. +In such an event, the Nominating and Corporate Governance Committee will recommend to the board whether +to accept or reject the director’s offer to resign after considering all relevant factors. The board will act on the +recommendation within 90 days following certification of the election results after considering all +relevant information. +Any director who offers to resign must recuse himself or herself from the board vote, unless the number of +independent directors who were successful incumbents is fewer than three. The board will promptly disclose its +decision regarding any director’s offer to resign, including its reasoning. If the board determines to accept a +director’s offer to resign, the Nominating and Corporate Governance Committee will recommend whether and +when to fill such vacancy or whether to reduce the size of the board. +Board Meetings and Attendance +The board held seven meetings during 2023. Also during 2023, the Audit Committee met nine times, the +Compensation and Human Capital Committee met six times, the Nominating and Corporate Governance +Committee met four times and the Risk Committee met four times (including a joint meeting with the Audit +Committee). Prior to meetings, the Board Chair and the committee chairs work with management to determine +and prepare agendas for the meetings. +Board meetings generally occur over two days. Board committees generally meet on the first day, followed by +the board meeting. The second day typically consists of reports from each committee chair to the full board, +additional presentations by internal business leaders or others with expertise in various subject matters, and an +executive session consisting of only independent board members. +All directors attended at least 75% of the total number of board and any committee meetings of which he or she +was a member in 2023. Our directors are expected to attend each annual shareowner meeting, and all directors +attended the 2023 Annual Meeting. The independent directors met in executive session at all board meetings +held in 2023. +Code of Business Conduct +We are committed to conducting our business in accordance with the highest ethical principles. Our Code of +Business Conduct is applicable to anyone who represents UPS, including our directors, executive officers and all +other employees and agents of UPS. A copy of our Code of Business Conduct is available on our investor +relations website at www.investors.ups.com. +Conflicts of Interest and Related Person Transactions +Our Audit Committee is responsible for overseeing our Code of Business Conduct, which includes policies +regarding conflicts of interest. The Code requires employees and directors to avoid conflicts of interest, defined +as situations where the person’s private interests conflict, or may appear to conflict, with the interests of UPS. +We maintain a written related person transactions policy that applies to any transaction or series of transactions +in which: (1) the Company or any of its subsidiaries is a participant; (2) any “related person” (executive officer, +director, greater than 5% beneficial owner of the Company’s common stock, or an immediate family member of +any of the foregoing) has or will have a material direct or indirect interest; and (3) the aggregate amount +involved since the beginning of the Company’s last completed fiscal year will exceed or may reasonably be +expected to exceed $100,000. +The policy provides that related person transactions that may arise during the year are subject to the Audit +Committee’s reasonable prior approval. If advance approval of a related person transaction is not possible, then +the transaction will be considered and, if deemed appropriate, ratified no later than the Audit Committee’s next +regularly scheduled meeting. In determining whether to approve or ratify a transaction, the Audit Committee will + +19 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_23.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_23.txt new file mode 100644 index 0000000000000000000000000000000000000000..4488ece80a83e4a5b08041400ff4ff0de2750907 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_23.txt @@ -0,0 +1,43 @@ +consider, among other factors it deems appropriate, whether the transaction is on terms no less favorable than +terms generally available to an unaffiliated third-party under the same or similar circumstance, the extent of the +related person’s interest in the transaction, whether the transaction would impair independence of a non- +employee director and whether there is a business reason for UPS to enter into the transaction. A copy of the +policy is available on our investor relations website at www.investors.ups.com. The Company did not engage in +any related person transactions since January 1, 2023 that require disclosure in this Proxy Statement or under +the Company’s policy. +At least annually, each director and executive officer completes a questionnaire in which they are required to +disclose any business relationships that may give rise to a conflict of interest, including transactions where UPS +is involved and where an executive officer, a director or a related person has a direct or indirect material +interest. We also review the Company’s financial systems and any related person transactions to identify +potential conflicts of interest. The Nominating and Corporate Governance Committee reviews a summary of this +information and makes recommendations to the Board of Directors regarding each board +member’s independence. +We have immaterial ordinary course of business transactions and relationships with companies with which our +directors are associated. The Nominating and Corporate Governance Committee reviewed the transactions and +relationships that occurred since January 1, 2023 and believes they were entered into on terms that are both +reasonable and competitive and did not affect director independence. Additional transactions and relationships of +this nature may be expected to take place in the ordinary course of business in the future. +Transactions in Company Stock +We prohibit our executive officers and directors from hedging or pledging their ownership in UPS stock. +Specifically, they are prohibited from purchasing or selling derivative securities relating to UPS stock and from +purchasing financial instruments that are designed to hedge or offset any decrease in the market value of UPS +securities. Furthermore, our employees, officers and directors are prohibited from engaging in short sales of +UPS stock. +Corporate Governance Guidelines and Committee Charters +Our Corporate Governance Guidelines and the charters for each of the board’s committees are available on our +investor relations website at www.investors.ups.com. Each committee reviews its charter annually. In addition, +the Nominating and Corporate Governance Committee reviews our Corporate Governance Guidelines annually +and recommends any changes to the board for approval. When amending our committee charters or Corporate +Governance Guidelines, we consider current governance trends and best practices, changes in regulatory +requirements, advice from outside sources and input from stakeholders. +Communicating with the Board of Directors +Stakeholders may communicate directly with the board, with the non-management directors as a group, or with +any specific director, by writing to the UPS Corporate Secretary, 55 Glenlake Parkway, N.E., Atlanta, Georgia +30328. Please specify to whom your letter should be directed. After review by the Corporate Secretary, +appropriate communications will be forwarded to the addressee. Advertisements, solicitations for business, +requests for employment, requests for contributions, matters that may be better addressed by management or +other inappropriate materials will not be forwarded. +20 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret shape is a "rectangle". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_24.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_24.txt new file mode 100644 index 0000000000000000000000000000000000000000..d34229de76bec2997736dd99cbe2b1d61e36281a --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_24.txt @@ -0,0 +1,38 @@ +Our Board of Directors +Proposal 1 — Director Elections +What am I voting on? Election of each of the 12 named director nominees to hold office until the 2025 +Annual Meeting and until their respective successors are elected and qualified. +Board’s Recommendation: Vote FOR the election of each nominee. +Vote Required: A director will be elected if the number of votes cast for that director exceeds the number of +votes cast against that director. +The board has nominated the individuals named below for election as directors at the Annual Meeting. All +nominees were elected by shareowners at our last Annual Meeting. If elected, all nominees are expected to +serve until the next Annual Meeting and until their respective successors are elected and qualified. If any +nominee is unable to serve as a director, the board may reduce the number of directors that serve on the board +or choose a substitute nominee. Any nominee who is currently a director, and for whom more votes are cast +against than are cast for, must offer to resign from the board. +As a group, our director nominees, all of whom are currently directors, effectively oversee and constructively +challenge management’s performance in the execution of our strategy. Our directors’ broad professional skills +and experiences contribute to a wide range of perspectives in the boardroom. The Nominating and Corporate +Governance Committee regularly assesses the skills and experience necessary for our board to function +effectively and considers where additional expertise may be needed. +Diversity with respect to gender, age, ethnicity, skills, experience, perspectives, and other factors is a key +consideration when identifying and recommending director nominees. Diversity in our boardroom supports UPS’s +continued success. While we do not have a formal policy on board diversity, our Corporate Governance +Guidelines emphasize diversity, and the Nominating and Corporate Governance Committee actively considers +and assesses diversity in recruitment and nominations of director candidates through periodic board +composition evaluations. +Our Corporate Governance Guidelines provide that an individual should not be eligible for nomination or election +as a director of the Company after he or she reaches the age of 75 (the “retirement age requirement”). After +taking into account the value our Board Chair Bill Johnson provides to the board through, among other things, +his tenure, leadership roles, extensive knowledge of our business, industry, strategic priorities and competitive +developments he uses to set the board’s agendas in collaboration with the CEO, and his relationships with our +executives, the board (other than Bill) determined it was in the best interests of the Company and its +shareowners to grant Bill a one-year waiver from the retirement age requirement so that he can continue to lead +the board. +Biographical information about the director nominees appears below, including information about the experience, +qualifications, attributes, and skills considered by our Nominating and Corporate Governance Committee and +board in determining that the nominee should serve as a director, and director demographics. For additional +information about how we identify and evaluate nominees for director, see page 10. + +21 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_25.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_25.txt new file mode 100644 index 0000000000000000000000000000000000000000..a48c06b0fe3882a6ef9a758155b7bb0d7820cef5 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_25.txt @@ -0,0 +1,41 @@ +Director Nominee Skills, Experience and Diversity +Highlights +92% Independent 61.6 years Average age 8.9 years Average tenure +42% Female 33% Ethnically diverse +Skills and Experience / +Attributes + +CEO ll ll l +CFO l l +Consumer / Retail l lll l +Digital Technology l l l l +Geopolitical Risk l l +Global / International lll lll l +Healthcare l ll +Human Capital +Management ll l +Operational lll l ll l l +Risk / Compliance / +Government ll lll +Sales / Marketing l llll +Small and Medium- +Sized Businesses l l l l +Supply Chain +Management l ll lll +Technology / +Technology Strategy l l l l +Other Public Company +Board Service l l l lll ll +Race / Ethnicity +Asian / Asian +American l +Black / African +American l l l +White ll l lll ll +Gender +Female l ll l l +Male l ll ll l l +22 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +R. AdkinsE. Boratto W. Hewett W. Johnson R. StokesC. Smith Shi C. ToméA. Hwang F. Moison K. WarshK. JohnsonM. Burns \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_26.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_26.txt new file mode 100644 index 0000000000000000000000000000000000000000..cbd978bcd44e66d787f8cef472aae89da6181f3c --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_26.txt @@ -0,0 +1,52 @@ +Director Nominee Biographical Information +Carol Tomé +UPS Chief Executive Officer +Age: 67 +Director since 2003 +Board Committee +Executive (Chair) +Career +Carol was appointed UPS’s Chief Executive Officer effective June 2020. As CEO, Carol has primary +responsibility for managing the Company’s day-to-day operations, and for developing and communicating our +strategy. She was Chief Financial Officer of The Home Depot, Inc., one of the world’s largest retailers, from +2001; and Executive Vice President Corporate Services from 2007 until her retirement in 2019. At The Home +Depot, she provided leadership in the areas of real estate, financial services and strategic business +development. Her corporate finance duties included financial reporting and operations, financial planning and +analysis, internal audit, investor relations, treasury and tax. She previously served as Senior Vice President +Finance and Accounting and Treasurer from 2000 until 2001; and from 1995 until 2000 she served as Vice +President and Treasurer. Carol serves on the Board of Directors of Verizon Communications, Inc. and served +on the Board of Directors of Cisco Systems, Inc. until 2020. +Reasons for election +Carol has a thorough understanding of our strategies and operations as a result of serving as Chief Executive +Officer, and from her extensive experience gained from serving on the board and as Chair of the Audit +Committee prior to becoming Chief Executive Officer. She has an in-depth knowledge of logistics and has +broad experience in corporate finance and risk and compliance gained throughout her career at The Home +Depot. She brings the experience of having served as Chief Financial Officer of a complex, multi-national +business with a large, labor intensive workforce. Carol also has experience with strategic business +development, including e-commerce strategy. +Rodney Adkins +Former Senior Vice President, International Business Machines Corporation +Age: 65 +Director since 2013 +Board Committees +Risk (Chair) +Compensation and Human Capital +Executive +Career +Rod is President of 3RAM Group LLC, a private company specializing in capital investments, business +consulting and property management services. Prior to that role, Rod served as IBM’s Senior Vice President of +Corporate Strategy before retiring in 2014. Rod was previously IBM’s Senior Vice President, Systems and +Technology Group, a position he held since 2009, and senior vice president of STG development and +manufacturing, a position he held since 2007. In his over 30-year career with IBM, a multinational technology +company, Rod held several other development and management roles, including general management +positions for the PC Company, UNIX Systems and Pervasive Computing. Rod currently serves as non- +executive Chairman of Avnet, Inc., in addition to serving on the Boards of Directors of PayPal Holdings, Inc. +and W.W. Grainger, Inc. He retired from the Board of Directors of PPL Corporation in 2019. +Reasons for election +As a senior executive of a public technology company, Rod gained a broad range of experience, including in +emerging technologies and services, global business operations, and supply chain management. He remains a +recognized leader in technology and technology strategy. Rod devotes significant time and attention to his +roles as a board member and Risk Committee Chair. In addition, the board benefits from Rod’s experience +serving as a director of other publicly traded companies. + +23 diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_27.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_27.txt new file mode 100644 index 0000000000000000000000000000000000000000..5aa8842d2bbc9c0925f1f013b8b26e581c78bef8 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_27.txt @@ -0,0 +1,44 @@ +Eva Boratto +Chief Financial Officer, Bath & Body Works, Inc. +Age: 57 +Director since 2020 +Board Committee +Audit (Chair) +Career +Eva has served as the Chief Financial Officer of Bath & Body Works, Inc., a leader in personal care and home +fragrances, since August 2023. She previously served as the Chief Financial Officer for Opentrons Labworks, +Inc., a privately held life sciences company, from February 2022 until July 2023. +Eva served as Executive Vice President and Chief Financial Officer for CVS Health Corporation, a diversified +health services company, from 2018 until her retirement in 2021. In this role, Eva was responsible for all +aspects of the company’s financial strategy and operations, including accounting and financial reporting, +investor relations, mergers and acquisitions, treasury and capital planning, investments, risk management, +tax, budgeting and planning, and procurement. Prior to this role, from 2017 to 2018, Eva was Executive Vice +President, Controller and Chief Accounting Officer for CVS Health. She served as Senior Vice President and +Chief Accounting Officer of CVS Health from 2013 to 2017. Eva joined the company in 2010 and served as +Senior Vice President for pharmacy benefit management finance until 2013. +Reasons for election +Eva brings to the board extensive corporate finance experience gained throughout her career as a Chief +Financial Officer at multiple companies. She also brings the experience of having served as a senior executive +at a complex healthcare business with a large workforce and extensive retail presence, and at a smaller, +growth oriented business, including deep knowledge of financial reporting and accounting standards. Eva also +provides the board with the benefits of her experience with strategic risk management matters. +Michael Burns +Former Chairman, Chief Executive Officer and President, Dana Incorporated +Age: 72 +Director since 2005 +Board Committee +Audit +Career +Mike was the Chairman, President and Chief Executive Officer of Dana Incorporated, a global manufacturer of +technology driveline, sealing and thermal-management products, from 2004 until his retirement in 2008. He +joined Dana Incorporated in 2004 after 34 years with General Motors Company. During his tenure at General +Motors, Mike held various positions of increasing responsibility, including serving as President of General +Motors Europe AG from 1998 to 2004. +Reasons for election +Mike has years of senior leadership experience gained while managing large, complex businesses and leading +an international organization that operated in a highly competitive industry. He also has experience in design, +engineering, manufacturing, and sales and distribution. Mike also brings deep knowledge of technology and +the supply of components and services to major vehicle manufacturers. +24 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_28.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_28.txt new file mode 100644 index 0000000000000000000000000000000000000000..723d91a17b9317cd84de910672f51abe5682fc47 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_28.txt @@ -0,0 +1,55 @@ +Wayne Hewett +Senior Advisor to Permira +Age: 59 +Director since 2020 +Board Committee +Audit +Career +Since 2018, Wayne has served as a senior advisor to Permira, a global private equity firm. As a part of his role +at Permira, Wayne serves in the following capacities at Permira Funds private portfolio companies: Non- +Executive Chairman of Cambrex Corporation, a leading contract developer and manufacturer of active +pharmaceutical ingredients, since 2020; director of Lytx, a telematics solutions provider, since 2021; as lead +director of Hexion Chemicals, a specialty chemicals and performance materials manufacturer, since 2023; and +as Non-Executive Chairman of Quotient Sciences, a drug development accelerator, since 2023. +Wayne served as Chief Executive Officer and as a member of the Board of Directors of Klöckner Pentaplast +Group, a leading supplier of plastic films for pharmaceutical, medical devices, food and other specialty +applications, from 2015 to 2017. He also served as President and as a member of the Board of Directors, of +Platform Specialty Products Corporation during 2015, and as President, Chief Executive Officer and as a +member of the Board of Directors of Arysta LifeScience Corporation from 2010 to 2015. Arysta was acquired +in 2015 by Platform Specialty Products Corporation. Prior to joining Arysta, he served as a senior consultant to +GenNx360, a private equity firm focused on sponsoring buyouts of middle market companies. He also spent +over two decades at General Electric Company, serving in a variety of executive roles. Wayne currently serves +on the Boards of Directors of The Home Depot, Inc. and Wells Fargo, Inc. +Reasons for election +Wayne has extensive experience in general management, finance, supply chain, operational and international +matters gained through serving in various executive roles. He has significant experience executing company- +wide initiatives across large organizations, developing proprietary products, optimizing supply chains, and +using emerging technologies to provide new products and services. He brings insights on business operations +and risk management through his senior management roles. In addition, Wayne has valuable experience +serving as a director of other publicly traded companies. +Angela Hwang +Former Chief Commercial Officer and President, Pfizer Biopharmaceuticals Business, Pfizer, Inc. +Age: 58 +Director since 2020 +Board Committee +Audit +Career +Angela serves as an advisor to Pfizer, Inc., a multinational pharmaceutical and biotechnology company, as +that company undertakes changes in its commercial organization following the completion of an acquisition. +She was a member of Pfizer’s Executive Team from 2018 to 2023 and served as Chief Commercial Officer and +President of Pfizer’s Global Biopharmaceuticals Business from 2019 to 2023. In this role, Angela led Pfizer’s +entire commercial business which included six different businesses reaching patients in more than +185 countries. +During 2018 she served as Group President, Pfizer Essential Health; and from 2016 to 2018 she was Global +President Pfizer Inflammation and Immunology. From 1997 until that time, Angela served in various roles with +increasing responsibility across all geographies and therapeutic areas, including senior roles in Pfizer Vaccines, +Primary Care, and Emerging Markets. +Angela sits on the board of advisors of the Cornell Johnson School of Management. +Reasons for election +Angela has significant expertise in the healthcare sector and in managing large complex businesses, including +supply chain management and logistics. She also has experience in emerging markets gained through her +work across many geographies. Angela is also a strong advocate for women’s leadership and sustainable +global health equity. + +25 +The secret clothing is a "glove". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_29.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_29.txt new file mode 100644 index 0000000000000000000000000000000000000000..c3bec6a3efedd926ce159669b199c4cde075fff9 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_29.txt @@ -0,0 +1,47 @@ +Kate Johnson +President and Chief Executive Officer, Lumen Technologies, Inc. +Age: 56 +Director since 2020 +Board Committees +Nominating and Corporate Governance +Risk +Career +Kate has served as President, CEO and a member of the board of directors of Lumen Technologies, Inc., a +multinational technology company that integrates network assets, cloud connectivity, security solutions and +voice and collaboration tools into one platform for businesses, since November 2022. Previously, Kate served +as President of Microsoft U.S., a division of Microsoft Corporation, from 2017 until 2021. She had responsibility +for Microsoft’s U.S. activities, including growing the company’s solutions, services, and support revenues. +Prior to Microsoft, she held various senior positions with GE, including Executive Vice President and Chief +Commercial Officer GE Digital, from 2016 to 2017; Chief Executive Officer, GE Intelligent Platforms Software +from 2015 to 2016; and Vice President and Chief Commercial Officer, from 2013 to 2015. +Reasons for election +Kate has significant public company leadership experience, including CEO experience and experience leading +businesses within large companies undergoing transformation, large systems companies, and technology +companies. The board benefits from her strong commercial orientation, strategic experience and +technical acumen. +William Johnson +Former Chairman, President and Chief Executive Officer, H.J. Heinz Company +Age: 75 +Director since 2009 +Board Chair since 2020 +Lead Director 2016 – 2020 +Board Committees +Nominating and Corporate Governance (Chair) +Executive +Career +Bill currently serves as UPS’s Board Chair, and previously served as Chairman, President and Chief Executive +Officer of H.J. Heinz Company, a global packaged foods manufacturer, from 2000 until his retirement in 2013. +He became President and Chief Operating Officer of H.J. Heinz in 1996, and assumed the position of President +and Chief Executive Officer in 1998. Bill serves on the Board of Directors of Sovos Brands, Inc. and he +previously served on the Board of Directors of PepsiCo, Inc. until 2020. +Reasons for election +Bill has significant senior management experience gained through his years of service as the Chairman and +Chief Executive Officer of H.J. Heinz, a corporation with significant international operations and a large, labor +intensive workforce. He also has deep experience in operations, marketing, brand development and logistics. +He served as our lead independent director from 2016 to 2020, and he has served as our independent Board +Chair since 2020, during which time he has gained significant knowledge and expertise about our board +functions, operations, business and strategy. +26 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret animal #2 is a "panda". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_3.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_3.txt new file mode 100644 index 0000000000000000000000000000000000000000..96aa1f65c016cb3feb8fdd9754e577df29d69bcd --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_3.txt @@ -0,0 +1,39 @@ +CUSTOMER FIRST, PEOPLE LED, +INNOVATION DRIVEN +Customer First is about reducing friction in the customer experience and meeting customer needs. While we +experienced some volume diversion during our Teamster labor negotiation, our commitment to service allowed us to +win back and win new volume following the ratification of the contract. In 2023, we continued to build new solutions +for shippers and recipients. For example, we launched Hyperlocal, a data driven solution that leverages our U.S. +facilities to provide select customers with a fast, next-day delivery option, and enables UPS to capture new profitable +B2C and B2B volume. We also expanded Delivery Photo, providing 92% of our global residential stops a photo that +shows exactly where the package was delivered, providing peace of mind to recipients and reducing “where’ s my +package” calls. Customer First is also about growing in the most attractive parts of the market, like SMBs, certain +enterprise customers, healthcare and international. In terms of SMBs, DAP is a competitive strength and SMB growth +driver that generated $2.9 billion in global revenue in 2023. Additionally, returns continue to be a growth area for +UPS. To accelerate that growth, we acquired Happy Returns and quickly made it available in over 5,000 The UPS Store +locations, making returns even more convenient for consumers and merchants. Looking at healthcare, our strategic +objective is to become the number one complex healthcare logistics provider in the world, and we are making bold +moves to get there. For example, our acquisition of MNX Global Logistics enables us to reach new customers and new +healthcare markets, like the radio-pharmaceuticals sector, with global time-critical and cold chain solutions. We see +significant opportunity for complex healthcare and expect to continue to grow in healthcare over the next few years. +We track progress in Customer First by improvements in our Net Promoter Score (NPS). In the U.S., we finished the year +with a NPS of 44 and moved closer toward our target NPS of 50. +Moving to People Led, we are focused on the employee experience and making UPS a great place to work. In +September, our five-year labor agreement with the Teamsters was fully ratified with overwhelming support from our +union-represented employees. This win-win-win agreement continues to reward our employees with the best pay and +benefits in our industry, which helps us attract and retain talent and provide industry-leading service to our customers. +Further, UPS retained the flexibility we need to stay competitive, serve our customers and keep our business strong. We +measure our progress in People Led by how likely an employee is to recommend others to work at UPS. In 2023, 65% +said they would recommend employment at UPS to family and friends, an improvement of 14 percentage points over +the past five years. Our goal is for Likelihood to Recommend to reach 80% or higher. +Lastly, Innovation Driven is about driving more productivity from the assets we own. Throughout 2023, productivity +initiatives like Total Service Plan enabled greater agility to match network capacity with changing volume levels. +Additionally, our Network Planning Tools (NPT), which use AI and machine learning, enabled us to adjust load planning, +scheduling and volume flows across the network based on real-time data. This technology is powerful, and NPT can +do in an afternoon what used to take a team of UPS engineers months to do. We also more closely aligned our digital +businesses, including Roadie, Ware2Go, Delivery Solutions and UPS Capital as we adopt a bolder approach to digital +commerce. We are accelerating new solutions to meet the needs of our customers and expanding our addressable +market to drive profitable growth. One example of a recent innovation is UPS Capital’ s Delivery Defense, which uses +predictive analytics to enable merchants to assess the level of delivery risk associated with addresses. We measure +Innovation Driven by delivering high returns on invested capital, and in 2023, we delivered an adjusted return on +invested capital* of 21.9%. \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_30.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_30.txt new file mode 100644 index 0000000000000000000000000000000000000000..fe5d26bda4fed83fe2ce668a591b43f688a3fe94 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_30.txt @@ -0,0 +1,48 @@ +Franck Moison +Former Vice Chairman, Colgate-Palmolive Company +Age: 70 +Director since 2017 +Board Committees +Nominating and Corporate Governance +Risk +Career +Franck was Vice Chairman of the Colgate-Palmolive Company, a global consumer products company, from +2016 until his retirement in 2018. He led Colgate-Palmolive’s operations in Asia, South Pacific and Latin +America, and he also led Global Business Development. Previously, he was Chief Operating Officer of +Emerging Markets from 2010 until 2016, and he was given additional responsibility for Business Development +in 2013. Beginning in 1978, Franck served in various management positions with Colgate-Palmolive, including +President, Global Marketing, Global Supply Chain & R&D from 2007 to 2010; and President, Western Europe, +Central Europe and South Pacific from 2005 to 2007. He serves on the Boards of Directors of Hanes Brands, +Inc. and SES-imagotag in France. He is the Chairman of the International Advisory Board of the EDHEC +Business School (Paris, London, Singapore) and is a member of the International Board of the McDonough +School of Business at Georgetown University. +Reasons for election +Franck brings to the board extensive experience as a senior executive at a large international business. He has +deep expertise in consumer product innovation, strategic marketing, acquisitions, and emerging market +business development. He is a highly accomplished marketing and operating executive in the global consumer +products industry. In addition, the board benefits from his extensive international board experience. +Christiana Smith Shi +Former President of Direct-to-Consumer, Nike, Inc. +Age: 64 +Director since 2018 +Board Committees +Compensation and Human Capital (Chair) +Risk +Career +Christiana is the founder and principal at Lovejoy Advisors, LLC, an advisory services firm that assists clients +with digitally transforming consumer and retail businesses. She was the President, Direct-to-Consumer, for +Nike, Inc., a global apparel company, from 2013 until 2016. From 2012 through 2013, she was Nike’s Vice +President and General Manager, Global Digital Commerce. She joined Nike in 2010 as Vice President and Chief +Operating Officer, Global Direct-to-Consumer. Prior to joining Nike, Christiana spent 24 years at global +management consulting firm McKinsey & Company, the last ten as a senior partner. She began her career at +Merrill Lynch & Company in 1981 and served in various trading, institutional sales and investment banking +roles. Christiana also serves on the Board of Directors of Columbia Sportswear Company. She served on the +Boards of Directors of Williams-Sonoma, Inc. until 2019 and Mondelēz International, Inc. until 2023. +Reasons for election +Christiana brings to the board substantial experience in digital commerce, global retail operations and helping +companies with transformative change. She also provides strong supply chain and cost management expertise +in the global consumer industry. She gained experience advising senior executives at consumer companies +across North America, Europe, Latin America and Asia on leadership and strategy, and provides extensive +public company board experience. + +27 diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_31.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_31.txt new file mode 100644 index 0000000000000000000000000000000000000000..7ee5798f9ca6e9d482c5d9d3aca5802adc356ddd --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_31.txt @@ -0,0 +1,50 @@ +Russell Stokes +President and Chief Executive Officer Commercial Engines and Services, GE Aerospace +Age: 52 +Director since 2020 +Board Committees +Compensation and Human Capital +Nominating and Corporate Governance +Career +Russell is President and Chief Executive Officer, Commercial Engines and Services, GE Aerospace, a world- +leading provider of jet engines, components and integrated systems for commercial and military aircraft, and +a provider of services to support these offerings. He has served in these roles since July 2022 and is +responsible for an industry-leading portfolio of engines and services. Russell previously served as President +and CEO of GE Aviation Services from 2020 until 2022, where he was responsible for commercial growth, +operating performance and customer experience across its global Overhaul and Repair footprint. Prior to this +role, Russell was president and CEO of GE Power Portfolio from 2019 to 2020, GE Power from 2017 to 2019, +GE Energy Connections from 2015 to 2017, and GE Transportation from 2013 to 2015. He has held other +senior roles at GE Transportation and GE Aviation. Russell joined GE in 1997 as part of GE’s Financial +Management Program. +Reasons for election +During his more than 25-year career at GE, Russell has gained deep finance and operating experience through +navigating multiple industries, business segments, and market cycles. He brings to the board extensive +experience in transforming businesses by moving complex business issues into focused, targeted actions for +improvement. He also provides experience in developing solutions and technology required to successfully +implement business strategies. +Kevin Warsh +Former Member of the Board of Governors of the Federal Reserve System, Distinguished Visiting Fellow, +Hoover Institution, Stanford University +Age: 53 +Director since 2012 +Board Committees +Compensation and Human Capital +Nominating and Corporate Governance +Career +Kevin serves as the Shepard Family Distinguished Visiting Fellow in Economics at Stanford University’s Hoover +Institution, a public policy think tank, and as a Dean’s Visiting Scholar and lecturer at Stanford’s Graduate +School of Business. He also serves as partner at Duquesne Family Office LLC and is a member of the Group of +Thirty (G30) and the Panel of Economic Advisers of the Congressional Budget Office (CBO). He was a member +of the Board of Governors of the Federal Reserve from 2006 until 2011. From 2002 until 2006, Kevin served +at the White House as President George W. Bush’s special assistant for economic policy and as executive +secretary of the National Economic Council. Kevin was previously employed by Morgan Stanley & Co., +eventually serving as vice president and executive director of the Mergers and Acquisitions department. He +also serves on the Board of Directors of Coupang, Inc. +Reasons for election +Kevin offers the board extensive experience in understanding and analyzing the economic environment, the +financial marketplace and monetary policy. He has a deep understanding of the global economic and business +environment. Kevin also provides the experience of working in the private sector for a leading investment +bank gained during his tenure at Morgan Stanley & Co. +28 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_32.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_32.txt new file mode 100644 index 0000000000000000000000000000000000000000..292e15b170bc9def1b9373d1c70378795d91c606 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_32.txt @@ -0,0 +1,25 @@ +Director Independence +Having a significant majority of non-management independent directors encourages robust debate and +challenged opinions in the boardroom. Our Corporate Governance Guidelines include director independence +standards consistent with the New York Stock Exchange (“NYSE”) listing standards. Our Corporate Governance +Guidelines are available on the governance section of our investor relations website at www.investors.ups.com. +The board has evaluated each director’s independence and considered whether there were any relevant +relationships between UPS and each director, or any member of his or her immediate family. The board also +examined whether there were any relationships between UPS and organizations where a director is or was a +partner, principal shareowner or executive officer. +Specifically, the board evaluated certain ordinary course business transactions and relationships between UPS +and the organizations that currently or in the prior year employed Eva Boratto, Mike Burns, Wayne Hewett, +Angela Hwang, Kate Johnson, Russell Stokes and Kevin Warsh, or their immediate family members, as an +executive officer. The board also evaluated the ordinary course business transactions and relationships between +UPS and any organizations where Rod Adkins, Wayne Hewett, Christiana Smith Shi and Kevin Warsh, or their +immediate family members, were a partner or principal shareowner. In each case, no such transactions +exceeded the thresholds in UPS’s Corporate Governance Guidelines. The board determined that none of these +transactions or relationships were material to the Company, the individuals or the organizations with which they +were associated. +The board has determined that each director nominee, other than our CEO, Carol Tomé, is independent. All +members of the Audit Committee, Compensation and Human Capital Committee, Nominating and Corporate +Governance Committee and Risk Committee are independent, and all members of the Audit Committee and the +Compensation and Human Capital Committee meet the additional independence criteria applicable to directors +serving on these committees under New York Stock Exchange listing standards. + +29 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_33.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_33.txt new file mode 100644 index 0000000000000000000000000000000000000000..e6481ae514d45f68487a476d4a5bef5426f96d7d --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_33.txt @@ -0,0 +1,170 @@ +Committees of the Board of Directors +The board has four committees composed entirely of independent directors as defined by the NYSE and by our +director independence standards. Information about each of these committees is provided below. The board also +has an Executive Committee that may exercise all powers of the Board of Directors in the management of our +business and affairs, except for those powers expressly reserved to the board under Delaware law or otherwise +limited by the board. Carol Tomé is the Chair, and Rod Adkins and Bill Johnson also serve on the +Executive Committee. +Audit Committee(1) +Compensation and Human +Capital Committee(2) +Nominating and Corporate +Governance Committee Risk Committee +Eva Boratto, Chair +Michael Burns +Wayne Hewett +Angela Hwang +Christiana Smith Shi, Chair +Rodney Adkins +Russell Stokes +Kevin Warsh +William Johnson, Chair +Kate Johnson +Franck Moison +Russell Stokes +Kevin Warsh +Rodney Adkins, Chair +Kate Johnson +Franck Moison +Christiana Smith Shi +Meetings in 2023: 9 Meetings in 2023: 6 Meetings in 2023: 4 Meetings in 2023: 4 +Primary Responsibilities Primary Responsibilities Primary Responsibilities Primary Responsibilities +• Assisting the board in +discharging its +responsibilities relating to +our accounting, reporting +and financial practices +• Overseeing our accounting +and financial +reporting processes +• Overseeing the integrity of +our financial statements, +our systems of disclosure +controls and +internal controls +• Overseeing the +performance of our +internal audit function +• Engaging and overseeing +the performance of our +independent accountants +• Overseeing compliance +with legal and regulatory +requirements as well as +our Code of +Business Conduct +• Discussing with +management policies with +respect to financial +risk assessment +• Assisting the board in +discharging its +responsibilities with +respect to compensation +of our senior +executive officers +• Reviewing and approving +corporate goals and +objectives relevant to the +compensation of our CEO +• Evaluating the +CEO’s performance +• Overseeing the +evaluation of risks +associated with our +compensation strategy +and programs +• Overseeing any outside +consultants retained to +advise the Committee +• Recommending to the +board the compensation +for non-management +directors +• Overseeing performance +and talent management, +diversity, equity and +inclusion, work culture +and employee +development +and retention +• Addressing succession +planning +• Assisting the board in +identifying and screening +qualified director +candidates, including +shareowner +submitted candidates +• Recommending +candidates for election or +reelection, or to fill +vacancies, on the board +• Aiding in attracting +qualified candidates to +serve on the board +• Recommending corporate +governance principles, +including the structure, +composition and +functioning of the board +and all board +committees, the +delegation of authority to +subcommittees, board +oversight of management +actions and reporting +duties of management +• Overseeing relevant +environmental +sustainability matters +and risks +• Overseeing +management’s +identification and +evaluation of +enterprise risks +• Overseeing and reviewing +with management the +Company’s risk +governance framework +• Overseeing risk +identification, tolerance, +assessment and +management practices +for strategic enterprise +risks, including +cybersecurity risks and +cyber incident response +• Reviewing approaches to +risk assessment and +mitigation strategies in +coordination with the +board and other +board committees +• Communicating with the +Audit Committee to +enable the Audit +Committee to perform its +statutory, regulatory, and +other responsibilities with +respect to oversight of +risk assessment and +risk management +(1) All members of the Audit Committee have been designated by the Board of Directors as audit committee financial experts. Each +member of the Audit Committee meets the independence requirements of the NYSE and Securities and Exchange Commission +(“SEC”) rules and regulations applicable to audit committee members, and each is financially literate. +(2) Each member of the Compensation and Human Capital Committee meets the NYSE’s independence requirements applicable to +compensation committee members. In addition, each member is a non-employee director as defined in Rule 16b-3 under the +Securities Exchange Act of 1934. None of the members is or was during 2023 an employee or former employee of UPS, and none +had any direct or indirect material interest in or relationship with UPS outside of his or her position as a non-employee director. The +Compensation and Human Capital Committee may delegate its responsibilities to subcommittees of one or more directors as it may +deem appropriate. For information regarding the role of our executive officers and the committee’s independent compensation +consultant in determining or recommending the amount or form of executive and director compensation (as applicable), please see +the Compensation Discussion and Analysis section and the Director Compensation section below in this Proxy Statement. +Compensation Committee Interlocks and Insider Participation: None of our executive officers serves or served during 2023 as +a member of a board of directors or compensation committee of any entity that has one or more executive officers who serve on our +Board of Directors or Compensation and Human Capital Committee. +30 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_34.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_34.txt new file mode 100644 index 0000000000000000000000000000000000000000..190f99ec5fe872dca5ab97877a3dbe5975eaf82f --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_34.txt @@ -0,0 +1,74 @@ +Director Compensation +The Compensation and Human Capital Committee of the Board of Directors evaluates director compensation with +the assistance of its independent compensation consultant, Frederic W. Cook & Co., Inc. (“FW Cook”). +For service in 2023, our non-employee directors each received a cash retainer of $116,250 and a restricted stock +unit (“RSU”) award valued at $180,000. Equity compensation links director pay to the value of Company stock +and aligns the interests of directors with long-term shareowners. Directors are also reimbursed for board +related expenses. +To reflect the additional responsibilities and time commitment associated with various board leadership positions, +our independent Board Chair received an additional cash retainer of $160,000 and an additional RSU award +valued at $70,000. The chairs of the Compensation and Human Capital, Nominating and Corporate Governance +and Risk Committees each received an additional cash retainer of $20,000, and the Chair of the Audit Committee +received an additional cash retainer of $25,000. Our CEO does not receive any compensation for board service. +Cash retainers are paid on a quarterly basis. Non-employee directors may defer retainers by participating in the +UPS Deferred Compensation Plan, but the Company does not make any contributions to this plan. There are no +preferential or above-market earnings on amounts invested in the UPS Deferred Compensation Plan. +RSUs are fully vested on the date of grant and are required to be held by the director until he or she separates +from the board, at which time the RSUs convert to shares of class A common stock. Dividends earned on shares +underlying RSUs are deemed reinvested in additional units at each dividend payable date and are subject to the +same terms as the original grant. This holding period requirement increases the strength of alignment of +directors’ interests with those of our long-term shareowners. Following a review of Company peer group and +broader industry practices, and to improve the competitiveness of non-employee director compensation, in +August 2023, the Board increased non-employee director annual cash retainers to $120,000 and increased the +annual RSU award value to $185,000, placing total director pay approximately 5% below the peer group median. +2023 Director Compensation and Outstanding Stock Awards +The following tables set forth the cash compensation paid to individuals who served as directors in 2023 (other +than our CEO) and the aggregate value of stock awards granted to those persons in 2023, as well as outstanding +director equity awards held as of December 31, 2023, except as described below. +2023 Director Compensation +Outstanding Director Stock Awards + (as of December 31, 2023) +Name +Fees Earned +or Paid +in Cash +($) +Stock +Awards +($)(1) +Total +($) +Stock Awards +Name +Restricted +Stock Units +(#) +Phantom +Stock Units +(#) +Rodney Adkins(2) 136,250 179,875 316,125 Rodney Adkins 19,844 — +Eva Boratto(2) 141,250 179,875 321,125 Eva Boratto 3,904 — +Michael Burns 116,250 179,875 296,125 Michael Burns 32,194 — +Wayne Hewett 116,250 179,875 296,125 Wayne Hewett 3,904 — +Angela Hwang 116,250 179,875 296,125 Angela Hwang 4,268 — +Kate Johnson 116,250 179,875 296,125 Kate Johnson 3,577 — +William Johnson(2)(3) 296,250 249,884 546,134 William Johnson 34,845 — +Ann Livermore(4) 67,500 — 67,500 Ann Livermore(4)(6) — 2,939 +Franck Moison 116,250 179,875 296,125 Franck Moison 11,396 — +Christiana Smith Shi(2) 126,250 179,875 306,125 Christiana Smith Shi 9,401 — +Russell Stokes 116,250 179,875 296,125 Russell Stokes 3,577 — +Kevin Warsh 116,250 179,875 296,125 Kevin Warsh 22,025 — +Carol Tomé(5)(6) 27,071 1,389 +(1) The values of stock awards in this column represent the grant date fair value of RSUs granted in 2023, computed in accordance with +Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 718. RSUs are fully vested on the date +of grant and are settled in shares of class A common stock upon the director’s separation from service from UPS. +(2) Includes cash compensation for committee chair service. +(3) Includes cash compensation and stock awards for independent board chair service. +(4) Ann Livermore retired from the board on May 4, 2023. Information is as of such date. All outstanding RSUs converted into shares of +class A common stock upon such retirement. +(5) Only includes outstanding stock awards that were granted while serving as an independent director. +(6) Phantom stock units were granted to non-employee directors pursuant to a deferred compensation program previously provided to +non-employee directors. Upon termination, amounts represented by phantom stock units will be distributed in cash over a time +period elected by the recipient. + +31 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_35.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_35.txt new file mode 100644 index 0000000000000000000000000000000000000000..178295d3869f26c166e15fc615222448285c2f32 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_35.txt @@ -0,0 +1,39 @@ +Executive Compensation +Compensation Committee Report +The Compensation and Human Capital Committee (as used in this Executive Compensation section, the +“Committee”) is responsible for setting the principles that guide compensation decision-making, establishing the +performance goals under our executive compensation plans and programs, and approving compensation for the +executive officers. The Committee is also responsible for overseeing performance and talent management, +diversity, equity and inclusion, work culture and employee development and retention. +We are focused on maintaining an executive compensation program that supports the long-term interests of the +Company’s shareowners. We align the interests of our executive officers with those of all shareowners by linking +a significant portion of compensation to Company performance and shareowner returns. The Company’s +programs are also designed to attract, retain, and motivate executives who make substantial contributions to the +Company’s performance by allowing them to share in the Company’s success. +Our significant efforts in 2023 included adopting an incentive compensation clawback policy applicable to +executive officers in the event of a Company financial restatement, developing and implementing an appropriate +executive compensation structure and performance goals in a challenging economic environment including +Company labor uncertainty, and updating the pay mix for executive officers through structural changes to the +annual incentive program to make this program more competitive. With the assistance of our independent +compensation consultant and taking into account recent stakeholder feedback and market developments, we +also reevaluated the performance metrics on which incentive compensation payouts would be based in order to +maximize long-term value. In addition, beginning with the 2024 performance period, the Committee has +returned to annual goal setting for annual incentive awards. +Also during 2023, the Committee continued to execute on its human capital oversight responsibilities, including +supporting succession planning efforts at the senior management level, overseeing progress towards the +Company’s diversity in management goals, and monitoring employee recruitment and retention efforts. +We have reviewed the Compensation Discussion and Analysis and discussed it with management. Based on our +review and discussions, we recommended to the Board of Directors that the Compensation Discussion and +Analysis be included in the 2024 Proxy Statement and incorporated by reference in the Annual Report on Form +10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission. +The following Compensation Discussion and Analysis describes the Committee’s principles, strategy and +programs regarding 2023 executive compensation. +The Compensation and Human Capital Committee +Christiana Smith Shi, Chair +Rodney Adkins +Russell Stokes +Kevin Warsh +32 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret object #3 is a "knife". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_36.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_36.txt new file mode 100644 index 0000000000000000000000000000000000000000..26ab11aafc3061ead1834b76fe7f714cb3e709ea --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_36.txt @@ -0,0 +1,41 @@ +Compensation Discussion and Analysis +UPS’s executive compensation principles, strategy and programs for 2023 are described below. This section +explains how and why the Committee made its 2023 compensation decisions for our executive officers, including +details regarding the following Named Executive Officers (“NEOs”): +Named Executive Officer Title +Carol Tomé Chief Executive Officer +Brian Newman Chief Financial Officer +Nando Cesarone President U.S. and UPS Airline +Kate Gutmann President International, Healthcare and Supply Chain Solutions +Bala Subramanian Chief Digital and Technology Officer +Executive Compensation Strategy +UPS’s executive compensation programs are designed to drive organizational performance by tying a significant +portion of pay to Company performance; attract, retain and motivate by competitively and fairly compensating +our executive officers; encourage long-term stock ownership and careers with UPS; and align the interests of our +executives to long-term value creation. +We believe it is appropriate to have a clear link between variable pay and operational and financial performance. +We seek to develop performance metrics aligned with the Company’s strategy and business model. Long-term +incentive awards vest over timeframes aligned with the delivery of long-term shareowner value. +Key Elements of UPS Executive Compensation +Total target direct compensation (generally, base salary and annual and long-term incentives, but excluding any +special awards) for our NEOs in 2023 consisted of the following key elements. + +33 +Total Target +Direct +Compensation +Base Salary + •Fixed cash compensation + •Designed to provide an appropriate level of financial certainty +Annual Incentive Awards + •Subject to achievement of key business objectives for the year + •Payout is “at risk” based on Company performance +Stock Option Awards + •Further aligns shareowner and employee interests + •Motivates toward sustained stock price increase + •Multi-year vesting provides retention incentive +Long-term Incentive Performance Awards + • Payout is subject to achievement of performance metrics over a three-year period + •Supports long-term strategy + •Motivates and rewards achievement of long-term goals + •Acts as a retention mechanism \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_37.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_37.txt new file mode 100644 index 0000000000000000000000000000000000000000..576ff797d27a31b99d07f0ea51c2f5fcbb34af77 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_37.txt @@ -0,0 +1,49 @@ +Target Direct Compensation +A substantial majority of NEO total target direct compensation is “at risk” and subject to the achievement of +annual or long-term performance goals and/or continued employment with UPS. The charts below highlight the +elements of our CEO and an average of other NEOs’ target direct compensation for 2023. +Other Elements of Compensation + +Benefits Perquisites Retirement Programs +ü NEOs generally participate in +the same plans as other +employees. +ü Includes medical, dental and +disability plans. +ü See further details on page 41. +ü Limited in nature; we believe +benefits to the Company +outweigh the costs. +ü Includes financial planning and +executive health services that +facilitate the NEOs’ ability to +carry out responsibilities, +maximize working time and +minimize distractions. +ü Considered necessary or +appropriate to attract and +retain executive talent. +ü See further details on page 41. +ü NEOs and most non-union U.S. +employees participate in the +same qualified plans with the +same formulas. +ü Includes non-qualified and +qualified pension, retirement +savings and deferred +compensation plans. +ü See further details on page 41. +34 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +93% “at Risk” 86% “at Risk” +14% +7% 14% +16% +Base Salary +Annual +Performance-Based +Incentives +CEO Target Direct Compensation Other NEOs Target Direct Compensation +79% 70%Long-Term +Equity Incentives \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_38.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_38.txt new file mode 100644 index 0000000000000000000000000000000000000000..f8d5f18dca51b9f8e01ebf0fc7aaa85d3572ae1e --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_38.txt @@ -0,0 +1,46 @@ +Roles and Responsibilities +The Committee is responsible for setting the principles that guide compensation decision-making, establishing +performance goals under our executive compensation plans and programs, and approving compensation for the +executive officers. The Committee may engage the services of outside advisors and other consultants. In 2023, +the Committee retained FW Cook to act as its independent compensation advisor. FW Cook reported directly to +the Committee and provided no additional services to UPS. The following table summarizes the key roles and +responsibilities in the executive compensation decision-making process. +Participant and Roles +The Committee +• develops principles underpinning executive compensation +• sets performance goals upon which incentive payouts are based +• evaluates the CEO’s performance +• reviews the CEO’s performance assessment of other executive officers +• reviews and approves incentive and other compensation of the executive officers +• reviews and approves the design of other benefit plans for executive officers +• oversees the risk evaluation associated with our compensation strategy and programs +• considers whether to engage any compensation consultant, and evaluates their independence +• reviews and discusses the Compensation Discussion and Analysis with management +• recommends to the board the inclusion of the Compensation Discussion and Analysis in the Proxy Statement +• approves the inclusion of the Committee’s report on executive compensation in the Proxy Statement +Independent Members of the Board of Directors +• review the Committee’s assessment of the CEO’s performance +• complete a separate evaluation of the CEO’s performance +• approve the Compensation Discussion and Analysis for inclusion in the Proxy Statement +Independent Compensation Consultant +• serves as a resource for market data on pay practices and trends +• provides independent advice to the Committee +• provides competitive analysis and advice related to outside director compensation +• reviews the Compensation Discussion and Analysis +• conducts an annual risk assessment of the Company’s compensation programs +Executive Officers +• the CEO makes compensation recommendations to the Committee for the other executive officers +• the CEO and CFO recommend performance goals under incentive compensation plans and provide an +assessment as to whether performance goals were achieved +Compensation Consultant Independence +In November 2023, the Committee reviewed FW Cook’s independence and evaluated any potential conflicts of +interest. The Committee evaluated all relevant factors, including: (1) other services provided to UPS by FW Cook +(if any); (2) fees paid by UPS as a percentage of FW Cook’s total revenue; (3) policies or procedures maintained +by FW Cook that are designed to prevent a conflict of interest; (4) any business or personal relationships +between the individual consultants involved in the engagement and a member of the Committee; (5) any +Company stock owned by the individual consultants involved in the engagement; and (6) any business or +personal relationships between UPS executive officers and FW Cook or the individual consultants involved in the +engagement. After evaluating these factors, the Committee concluded that FW Cook was independent, and that +the engagement of FW Cook did not raise any conflict of interest. + +35 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_39.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_39.txt new file mode 100644 index 0000000000000000000000000000000000000000..8476189df0a5cbb56bb192443543990f48a99916 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_39.txt @@ -0,0 +1,45 @@ +Peer Group and Market Data Utilization +In determining compensation targets and payouts, the Committee evaluates, among other things, pay practices +and compensation levels at a peer group of companies. In addition to peer group analyses, the Committee +considers other market data, including general compensation survey data from comparably sized companies. +Compensation is not targeted to a particular percentile within that peer group or otherwise. +With assistance from its independent compensation consultant, the Committee evaluates the peer group +annually to determine if the companies included in the group are the most appropriate comparators for +measuring the success of our executives in delivering shareowner value. The Committee seeks to select a +compensation peer group that is aligned with the Company’s business strategy and focus. Quantitative +considerations consist of historical revenue, operating income and free cash flow, as well as total shareholder +return. Other more general considerations include market capitalization, percentage of foreign sales, capital +intensity, operating margins and size of employee population. +Following a comprehensive reevaluation and revisions to the peer group in 2021, the compensation peer group +consists of the following: +AT&T, Inc. FedEx Corporation McDonald’s Corp. +The Boeing Company The Home Depot, Inc. PepsiCo, Inc. +Caterpillar Inc. Intel Corporation The Procter & Gamble Company +Cisco Systems, Inc. Johnson & Johnson Target Corp. +Comcast Corporation Lockheed Martin Corporation Walmart, Inc. +Deere & Company Lowe’s Companies, Inc. +Internal Compensation Comparisons and Annual Performance Reviews +The Committee also generally considers the compensation differentials between executive officers and other UPS +positions, and the additional responsibilities of the CEO compared to other executive officers. Internal +comparisons help ensure that executive officer compensation is reasonable when compared to that of +direct reports. +The CEO assesses the performance of all other executive officers each year and provides feedback to the +Committee. In addition, the Committee evaluates the CEO’s performance on an annual basis. The Committee +Chair discusses the results of this evaluation with the full board (other than the CEO) in an executive session. As +part of this evaluation, the board considers the CEO’s strategic vision and leadership, execution of UPS’s +business strategy, and achievement of business goals. Other factors include the CEO’s ability to make long-term +decisions that create a competitive advantage, and overall effectiveness as a leader. +Base Salary +Base salaries provide our NEOs with a fixed level of cash compensation and are designed to provide an +appropriate level of financial certainty. The Committee considers several factors in determining NEOs’ annual +base salaries, including Company and individual performance, scope of responsibility, leadership, market data +and internal compensation comparisons. Taking all of those factors into account, in March 2023, the Committee +determined not to increase the CEO’s base salary, but to make market-based adjustments to her incentive +compensation targets as discussed below. The Committee approved increases of between 3.0% and 4.0% for +the other NEOs. Additionally, as a component of the pay mix redesign approved in November 2022 and +discussed below under “Management Incentive Program - Annual Awards Overview”, further base salary +adjustments for each NEO of less than 3.5% were made effective beginning in January 2023. +36 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret animal #1 is a "lion". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_4.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_4.txt new file mode 100644 index 0000000000000000000000000000000000000000..99e909894086e38e9ce744126531dd432de64690 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_4.txt @@ -0,0 +1,18 @@ +LOOKING AHEAD +After a difficult year, we exited 2023 with some momentum, but momentum is not enough. We are making bold moves +to right size our company for the future under an initiative we call “Fit to Serve.” We are exploring strategic alternatives +for our truckload brokerage business known as Coyote. We are leaning into growth in the most attractive parts of the +market and are continuing to drive efficiency across our integrated network. We expect market conditions to settle +down in 2024 and that, coupled with our initiatives, gives us confidence that we will reverse the negative trends we +experienced in 2023. +To wrap up, I want to encourage all shareowners to vote your shares at our Annual Meeting in May. This is your +opportunity to share your views with us. We listen and take your feedback into account as we seek to grow our +business, further improve governance and create long-term shareowner value. As we approach the Annual Meeting, I +encourage you to contact us with any questions or feedback at 404-828-6059. +I’ll leave you with a quote from our founder, Jim Casey, “Our horizon is as distant as our mind’ s eye wishes it to be.” +UPS is stronger than ever. We are writing the next chapter of the UPS story and we believe our best days are ahead +of us. +We thank you for your support. +Carol B. Tomé +Chief Executive Officer +*See reconciliation of Non-GAAP financial measures on page A1. \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_40.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_40.txt new file mode 100644 index 0000000000000000000000000000000000000000..906af1b93f00c9d48577e2bac1671a1dabc70e1f --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_40.txt @@ -0,0 +1,49 @@ +Management Incentive Program - Annual Awards Overview +The UPS Management Incentive Program (“MIP”) motivates management by aligning pay with annual Company +performance. This is accomplished by linking payouts to the achievement of pre-established metrics and +individual performance. +Annual MIP award opportunities are provided as a percentage of base salary. MIP awards are considered fully at +risk based on Company performance and subject to a maximum payout of the lesser of $10 million or 200% of +target for each NEO. +MIP payouts are determined by the Committee taking into consideration: +• actual performance compared to MIP targets (described below); +• the MIP payout as a percent of target to non-executive officer MIP participants; and +• the overall business environment and economic trends. +Based on an evaluation of our incentive compensation plan structure with the assistance of FW Cook, in +November 2022, the Committee approved changes to the overall pay mix for MIP participants, including the +NEOs (“pay mix redesign”). These changes resulted in better alignment of annual incentive pay with market +practices, improved the competitiveness of base salaries and simplified compensation design. +Changes included the following, all of which were effective beginning with the 2023 MIP award: +• MIP awards are now paid in cash, unless a participant elects to receive the award in shares; previously MIP +awards were generally paid two-thirds in restricted performance units (“RPUs”) and one-third in cash; +• Ownership incentive portions of MIP awards, which were tied to an individual’s UPS equity ownership, were +discontinued, with a generally equivalent value incorporated into base salary adjustments; and +• MIP award targets as a percentage of base salary were reduced from 130% to 115% for NEOs (other than +the CEO) to account for increases in base salaries; the CEO’s award target was maintained at 200% of base +salary following an evaluation of market-competitive incentives. +2023 MIP Awards +After taking into account the challenging economic environment including Company labor uncertainty, as well as +the effectiveness of similar approaches in recent years, in the first quarter of 2023 the Committee determined it +remained appropriate to bifurcate the performance period for the 2023 MIP award into two six-month +performance periods (January through June 2023 and July through December 2023), with each performance +period accounting for 50% of the overall award. +Beginning with the 2024 performance period, the Committee has returned to full-year goal setting for MIP +awards. The Committee approved the following financial performance metrics for the NEOs’ 2023 MIP awards +as follows: +• Revenue (weighted 20%), which was considered important to generating profits and maintaining our long- +term competitive positioning and viability through 2023. +• Adjusted Operating Profit (weighted 40%), which is determined by reference to our publicly reported +adjusted operating profit for 2023. This metric is directly impacted by our effectiveness in achieving our +targets in other key performance elements, including volume and revenue growth and operating leverage. +• Adjusted Return on Invested Capital (“ROIC”) (weighted 40%), which is calculated as the trailing twelve +months of adjusted operating income divided by the average of current assets, current liabilities, goodwill, +intangible assets, net property, plant and equipment, other assets, and operating lease right-of-use assets. +We consider ROIC to be a useful measure for evaluating the effectiveness and efficiency of our long-term +capital investments. ROIC is calculated by reference to our publicly reported adjusted operating profit. +The Committee approved financial performance goals after discussing with management and its independent +compensation consultant expected financial performance and the other risks described above. The goals for the +first performance period were set in in the first quarter of 2023 and the goals for the second performance period +were set in the third quarter 2023, in each case without a threshold and with a maximum payout of the lesser of +$10 million or 200% of target. + +37 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_41.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_41.txt new file mode 100644 index 0000000000000000000000000000000000000000..fadd0291a6c8df2e922f3ead2e92e7a71bb843a2 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_41.txt @@ -0,0 +1,89 @@ +The goals approved by the Committee, and the performance results, were as follows (dollars in millions): +2023 MIP Financial Performance Metrics +First + Half +2023 + Goal +First + Half + 2023 + Actual +Second + Half + 2023 + Goal +Second + Half +2023 + Actual +Revenue $47,247 $44,988 $48,123 $46,044 +Adjusted Operating Profit(1) $5,918 $5,452 $5,473 $4,418 +Adjusted ROIC(1) 28.6% 27.4% 24.7% 21.9% +(1) Non-GAAP financial measures. See footnote on page 40. +The Committee maintains discretion to adjust awards earned under the MIP up (but not above the maximum +amount for each NEO) or down based on its qualitative assessment of each NEO’s individual performance and +other business factors. The Committee approved the following MIP award payouts for each NEO. +Name +Incentive +Target +(% Base Salary) +Incentive +Target Value +($) +Payout Factor +(%) +Total 2023 +MIP Award +Payout +($) +Carol Tomé 200 3,019,425 50% 1,509,713 +Brian Newman 115 963,384 50% 481,692 +Nando Cesarone 115 975,674 50% 487,837 +Kate Gutmann 115 975,674 50% 487,837 +Bala Subramanian 115 889,133 50% 444,567 +Long-Term Incentive Awards +Our two long-term incentive programs, the Long-Term Incentive Performance (“LTIP”) program and the Stock +Option program, provide participants with equity-based incentives that reward performance over a multi-year +period and serve as a retention mechanism. Overlapping LTIP performance cycles incentivize sustained financial +performance. The Stock Option program rewards stock price appreciation, which is directly linked to shareowner +returns. A summary of these two programs follows: +Program +Performance Measures and/or +Value Proposition for 2023 +Awards +Payment Form and Program +Type Program Objectives +LTIP Adjusted Earnings Per Share Growth +Adjusted Free Cash Flow +Relative Total Shareowner Return as a +modifier +Value increases or decreases with +stock price +If earned, RPUs are settled in stock +If earned, RPUs generally vest at +the end of the three-year +performance period +Supports long-term +operating plan and +business strategy +Significant link to +shareowner interests +Stock Option Value recognized only if stock price +appreciates +Stock options generally vest 20% +per year over five years and have +a ten-year term +Significant link to +shareowner interests +Enhance stock +ownership and +shareowner alignment +Total Long-Term Equity Incentive Award Target Values +Long-term equity incentive award target values are determined based on internal pay comparison considerations +and market data regarding total compensation for comparable positions at similarly situated companies. +Differences in the target award values are based on levels of responsibility among the NEOs. In connection with +the Committee’s March 2023 evaluation of CEO target total direct compensation as described above, the +Committee determined it was appropriate to increase the CEO’s LTIP target opportunity from 835% to 1,035%. +38 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_42.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_42.txt new file mode 100644 index 0000000000000000000000000000000000000000..ec43c8e0f5c428f601952c488691c7b94bc8cc38 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_42.txt @@ -0,0 +1,59 @@ +The LTIP target opportunity and Stock Option award value granted to eligible NEOs in 2023, expressed as a +percentage of base salary, is shown below. +Name +LTIP Target +RPU Value +(% Base Salary) +Option +Value +(% Base Salary) +Total +Value +(% Base Salary) +Carol Tomé 1,035 90 1,125 +Brian Newman 550 50 600 +Nando Cesarone 450 50 500 +Kate Gutmann 450 50 500 +Bala Subramanian 450 50 500 +LTIP Program Overview +The LTIP program strengthens the performance-based component of executive compensation, promotes longer- +term focus, enhances retention of key talent, and aligns the interests of shareowners with the incentive +compensation opportunity for executives. Approximately 500 members of our senior management team, +including the NEOs, participate in this program. The program combines internal and external relative business +performance measures with the goal of motivating and rewarding management for operational and financial +success, while helping to align with shareowner interests and returns. +Participants receive a target award of RPUs at the beginning of the three-year performance period. The number +of RPUs that NEOs can earn is shown in the “Grants of Plan-Based Awards” table. The actual number of RPUs +that NEOs earn is determined following the completion of the performance period and is based on achievement +of the performance measures described below. Dividends payable on shares underlying participants’ RPUs are +allocated in the form of dividend equivalent units (“DEUs”). DEUs are subject to the same conditions as the +underlying award. Awards that vest are settled in shares of class A common stock. Special vesting rules apply to +terminations subject to the UPS Key Employee Severance Plan or terminations by reason of death, disability or +retirement during the performance period. These special vesting rules are discussed under “Potential Payments +Upon Termination or Change in Control.” +The performance measures selected by the Committee for the 2023 LTIP awards were adjusted earnings per +share and adjusted free cash flow, each to be evaluated independently and weighted equally in determining the +final payout percentage. The payout percentage for the LTIP award will be subject to modification based on the +Company’s relative total shareowner return (“RTSR”) as a percentile rank relative to the total shareholder return +of the companies listed on the Standard & Poor’s 500 Composite Index (the “Index”) during that same period. +The maximum LTIP award that can be earned is 220% of target. A description of each performance measure and +the operation of the RTSR modifier follows. +Adjusted Earnings Per Share1 +Adjusted earnings per share measures our success in increasing profitability. At the beginning of the January 1, +2023 performance period, the Committee established adjusted earnings per share targets for the three-year +performance period taking into account the challenging economic environment, including Company labor +uncertainty, that added complexity and uncertainty to long-term forecasting at the time. Adjusted earnings per +share is determined by dividing the Company’s adjusted net income available to common shareowners by the +diluted weighted average shares outstanding during the performance period. For this purpose, adjusted net +income is determined by reference to our publicly reported adjusted net income. The adjusted earnings per +share target for 2023 is the projected adjusted earnings per share for that year. The adjusted earnings per share +growth target for the remainder of the performance period is the projected average annual adjusted earnings per +share growth during each of the remaining years in the performance period. The actual adjusted earnings per +share growth for each applicable year will be compared to the target and assigned a payout percentage; the +average of the three payout percentages will be used to calculate the final payout percentage under this metric. +Following the completion of the applicable performance period, the Committee will certify (i) the actual adjusted +earnings per share for 2023; (ii) the actual adjusted earnings per share growth for each of the remaining years +in the performance period; (iii) the actual adjusted earnings per share growth for the applicable portion of the +performance period as compared to the target; and (iv) the final payout percentage for this metric. + +39 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_43.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_43.txt new file mode 100644 index 0000000000000000000000000000000000000000..21801d5cea886ef1a21142954c29d887d878dd25 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_43.txt @@ -0,0 +1,69 @@ +Adjusted Free Cash Flow1 +Adjusted free cash flow measures our ability to generate cash after accounting for capital expenditures. Adjusted +free cash flow is determined by reducing the Company’s cash flow from operations by capital expenditures and +proceeds from disposals of fixed assets, and adjusting for net changes in finance receivables, other investing +activities and discretionary pension contributions. The adjusted free cash flow target is the projected aggregate +adjusted free cash flow generated during the performance period. Following the completion of the applicable +performance period, the Committee will certify (i) the actual adjusted free cash flow for the performance period; +(ii) the actual adjusted free cash flow for the performance period as compared to the target; and (iii) the final +payout percentage for this metric. +(1) Non-GAAP financial measures. We believe that these non-GAAP measures are appropriate for the determination of our incentive +compensation award results because they exclude items that may not be indicative of, or are unrelated to, our underlying operations +and provide a useful baseline for analyzing trends in our underlying business. Non-GAAP financial measures should be considered in +addition to, and not as an alternative for, our reported results prepared in accordance with GAAP. Our non-GAAP financial +information does not represent a comprehensive basis of accounting. Therefore, our non-GAAP financial information may not be +comparable to similarly titled measures reported by other companies. +Relative Total Shareowner Return +RTSR is the total return on an investment in UPS +stock (stock price appreciation plus dividends). Total +return is compared with the total return on an +investment in the companies in the Index at the +beginning of the performance period. Following the +completion of the performance period, the Committee +will certify the Company’s RTSR and the payout +modifier for that performance period, if any, +as follows: +RTSR Percentile Rank +Relative to Index +Payout +Modifier +Above 75th percentile +20% +Between 25th and 75th percentile None +Below 25th percentile -20% +2021 LTIP Award Payout +The 2021 LTIP award payout was determined following the completion of the Company’s 2023 fiscal year. The +performance metrics for the 2021 LTIP award were adjusted earnings per share and adjusted free cash flow, +each evaluated independently and equally weighted. The final payout was subject to modification based on +RTSR. Performance targets and actual results for the completed performance period for the 2021 LTIP award are +set out below. RPUs earned under the 2021 LTIP are considered vested and are settled in shares of class A +common stock. +2021 LTIP Metrics +Adjusted Earnings Per Share Adjusted Free Cash Flow RTSR +Year Threshold Target Maximum Actual Threshold Target Maximum Actual Actual +2021 +3.4% +8.4% +13.6% +47.4% +$17,369 $24,813 $32,257 $25,181 27th2022 9.0% 6.7% +2023 13.2% (32.1)% +2021 LTIP Final Results +Performance +Period +Adjusted EPS +Payout +Adjusted FCF +Payout +Performance +Payout (Avg) RTSR Modifier Final Payout +2021-2023 91% 104% 98% —% 98% +Stock Option Program and 2023 Stock Option Awards +Stock option awards create a direct link between Company performance and shareowner value, as well as +provide retention value. Stock option awards generally vest 20% per year over five years and expire ten years +from the date of grant. Beyond vesting periods, we do not impose additional holding period requirements. Stock +option awards generally require continued employment during the vesting period. Unvested stock options vest +automatically upon termination of employment due to death, disability or retirement. Stock option awards are +40 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret animal #5 is a "wolf". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_44.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_44.txt new file mode 100644 index 0000000000000000000000000000000000000000..4aefade81c81b5a8b646878566a8f00a8ef6b4e9 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_44.txt @@ -0,0 +1,54 @@ +also subject to the UPS Key Employee Severance Plan as discussed under “Potential Payments Upon Termination +or Change in Control”. Grants do not include DEUs or reload features. The number of stock options granted to +the NEOs in 2023 is shown in the “Grants of Plan-Based Awards” table. +Employment Transition Awards, Retention Arrangements and Recognition Awards +Generally, we do not pay discretionary bonuses in cash or stock, or make other discretionary payments, to our +executives. In recent periods, however, to attract and retain senior executive talent, the Committee approved +certain limited payments to external hires to the Company’s Executive Leadership Team. A portion of these +payments was made to compensate the executives for compensation forfeited at their prior employers and +transition them into our incentive programs. Any of these payments impacting 2023 compensation are described +below. In addition, in connection with the hiring of Carol Tomé as CEO in 2020, the Committee provided certain +incentives to various executive officers in order to help ensure the retention of their services through a +transition period. +Bala Subramanian joined the Company in July 2022 as Chief Digital and Technology Officer. The Committee, +working with FW Cook and considering market compensation data and internal pay equity factors, approved his +compensation package described below. Under the terms of his employment offer letter, Bala is entitled to: (i) a +RSU grant valued at $3,000,000, vesting 50% in July 2023 and 50% in July 2024; (ii) cash transition payments +of $250,000 in each of August 2022, January 2023, July 2023 and January 2024; (iii) a RPU grant valued at +$1,000,000, vesting in December 2023, with the actual payout determined based on the Company’s +performance under its 2021 LTIP program; and (iv) a prorated 2022 LTIP award. Payments are subject to his +continued employment through the applicable vesting or payment dates, or termination without cause. +Further, in 2021 the Committee granted Kate Gutmann a special award valued at $350,000 in recognition of her +extraordinary contributions and performance during 2020. This award consisted of $175,000 in RSUs which vest +as follows: 25 percent on March 25, 2022; 25 percent on March 25, 2023; and 50 percent on March 25, 2024; +and a stock option award with a grant date fair value of $175,000 which vests 20% per year over five years +beginning on March 25, 2022, provided generally that she remains an employee through the applicable +vesting dates. +In connection with our 2020 CEO transition, we entered into retention arrangements with each of Nando +Cesarone and Kate Gutmann. The Committee initially intended that these agreements contain both performance +and time vesting components, and that the performance components be different than the metrics under our +MIP and LTIP programs. Due to the uncertainty created by the coronavirus pandemic and the importance of the +retention agreements to the Company, the Committee ultimately determined that the awards would only be time +based. Nando and Kate each received RSUs valued at $3.0 million which vested as follows: 25% on +May 13, 2021, 25% on May 13, 2022 and 50% on May 13, 2023. These agreements contain customary non- +competition, non-solicitation and non-disclosure covenants in favor of the Company. +Benefits and Perquisites +The benefits and perquisites provided to our NEOs are not a material part of executive compensation and are +largely limited to those offered to our employees generally, or that we otherwise believe are necessary or +appropriate to attract and retain executive talent. +We believe certain perquisites help facilitate our NEOs’ ability to carry out their responsibilities, maximize +working time and minimize distractions. Additional information on these benefits can be found in the following +program descriptions. +UPS 401(k) Savings Plan +The UPS 401(k) Savings Plan is open to all U.S.-based employees who are not subject to a collective bargaining +agreement and who are not eligible to participate in another savings plan sponsored by UPS or one of its +subsidiaries. We generally match 50% of up to 6% of eligible pay contributed to the UPS 401(k) Savings Plan for +eligible employees. The match is paid quarterly according to the participant's pre-tax investment elections on file +with the record keeper. We also generally provide an annual contribution based on years of service and +expressed as a percentage of eligible compensation (5% for 0-4 years, 6% for 5-9 years, 7% for 10-14 years +and 8% for 15 or more years). For employees who were hired prior to 2008 and are participants in the Final +Average Compensation (FAC) formula of the UPS Retirement Plan, we generally make an annual transition +contribution of 5% of eligible compensation for plan years 2023-2027, which will increase to 7% beginning +in 2028. + +41 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_45.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_45.txt new file mode 100644 index 0000000000000000000000000000000000000000..65a60de81f0daeea29d05ae072806b2e7579914c --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_45.txt @@ -0,0 +1,47 @@ +Qualified and Non-Qualified Pension Plans +Certain executive officers are eligible to participate in our qualified retirement program, the UPS Retirement +Plan. Benefits payable under the plan are subject to the maximum compensation limits and the annual benefit +limits for a tax-qualified defined benefit plan as established by the Internal Revenue Service. Amounts exceeding +these limits are paid pursuant to the UPS Excess Coordinating Benefit Plan, which is a non-qualified restoration +plan designed to replace the benefits limited under the tax-qualified plan. Without the Excess Coordinating +Benefit Plan, the executive officers would receive a lower benefit as a percent of final average earnings than the +benefit received by other participants in the UPS Retirement Plan. In accordance with the terms of the Excess +Coordinating Benefit Plan, following a participant’s retirement, the Company pays an amount equal to the Social +Security and Medicare taxes due on the present value of the benefits provided under the plan. +Financial Planning Services +Our executive officers are eligible for a financial services benefit. The Company reimburses fees from financial +and tax service providers up to $15,000 per year, including the cost of personal excess liability +insurance coverage. +Executive Health Services +Our executive officers are eligible for certain executive health services benefits, including comprehensive +physical examinations. UPS’s business continuity is best facilitated by avoiding any prolonged or unexpected +absences by members of its senior management team. +Other Compensation and Governance Policies +Stock Ownership Guidelines +CEO = 8x annual salary +Other Executive Officers = 5x annual salary +Directors = 5x annual retainer +Our stock ownership guidelines apply to executive officers and members of the board. Shares of class A common +stock (excluding any pledged shares), deferred units and vested and unvested RSUs and RPUs awarded under +our equity incentive plans are considered owned for purposes of calculating ownership. Executive officers and +directors are expected to reach target ownership within five years of the date that the executive officer or +director became subject to the guideline. +As of December 31, 2023, all of the NEOs who have been subject to the guidelines for at least five years +exceeded their target stock ownership. In addition, all non-employee directors who have been subject to the +guidelines for at least five years exceeded their target stock ownership. RSUs are required to be held by non- +employee directors until separation from the board. +Hedging and Pledging Policies +We prohibit our executive officers and directors from hedging their ownership in UPS stock. Specifically, they are +prohibited from purchasing or selling derivative securities relating to UPS stock and from purchasing financial +instruments that are designed to hedge or offset any decrease in the market value of UPS securities. +Additionally, we prohibit our directors and executive officers from entering into pledges of UPS securities, +including using UPS securities as collateral for a loan and holding UPS securities in margin accounts. +Furthermore, our employees, officers and directors are prohibited from engaging in short sales of UPS stock. +Incentive-Based Compensation Clawback Policy +We have adopted an incentive-based compensation clawback policy that complies with NYSE requirements. This +policy provides for the recovery of the amount of erroneously awarded incentive-based compensation received +by executive officers when the Company is required to prepare an accounting restatement, subject to limited +exceptions in accordance with the NYSE requirements. +42 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_46.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_46.txt new file mode 100644 index 0000000000000000000000000000000000000000..fccf3fe9da9fe3088cca50683ffb6858b3171329 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_46.txt @@ -0,0 +1,55 @@ +Employment and Severance Arrangements; Change in Control Payments +We do not enter into agreements providing for the continuation of employment, or separate change in control +agreements with any of our executive officers, including our NEOs, or other U.S.-based non-union employees. +However, in recent periods, to attract and retain senior executive talent and in furtherance of the board’s +succession planning efforts, we have entered into various employment offer letters, transition agreements, +retention arrangements and non-compete agreements in favor of UPS. These arrangements may provide for +compensation to an executive, but do not guarantee an employment term; employment is on an at-will basis. +Some of the agreements were designed to compensate the individuals for compensation forfeited at their prior +employers, to transition them into our incentive programs or to provide consideration for their agreement not to +compete with UPS following their potential separation. In addition, retention arrangements are intended to +incentivize those individuals to maintain their employment with UPS. To the extent any agreements entered into +with any of the NEOs contain ongoing obligations of the Company, those agreements are described below. +Subramanian Employment Offer Letter +In connection with his appointment as Chief Digital and Technology Officer, on May 24, 2022, the Company +entered into an employment offer letter with Bala Subramanian providing for: (i) an annual base salary of +$725,000 (subject to future increase); (ii) a MIP award target for 2022 of 130% of base salary; (iii) an LTIP +program award target of 450% of base salary (his final 2022 LTIP award payout will be prorated based on his +July 2022 start date); (iv) a stock option grant target of 50% of base salary (commencing in 2023); (v) an initial +grant of RSUs valued at $3,000,000, which generally vests 50% in July 2023 and 50% in July 2024; (vi) cash +transition payments of $250,000 in each of August 2022, January 2023, July 2023 and January 2024; and (vii) +an initial RPU grant valued at $1,000,000, generally vesting in December 2023, with the final number of RPUs +subject to performance under the 2021 LTIP award. Payments are subject to his continued employment through +the applicable vesting or payment dates, or termination without cause. Certain of these amounts are subject to +repayment on a prorated basis if he is terminated for cause within 36 months following his July 2022 start date. +Protective Covenant Agreements +Each of our NEOs have entered into protective covenant agreements with the Company, which protect UPS’s +confidential information and include non-competition and non-solicitation covenants in favor of UPS. In the event +that either Carol or Brian is terminated without cause, the Company is obligated to make separation payments +equal to two years’ salary if it elects to enforce the post-termination non-compete covenants. +Key Employee Severance Plan +The UPS Key Employee Severance Plan (the “Plan”) provides for severance compensation and benefits upon +certain terminations of employment of key employees, including the NEOs. The severance protections under the +Plan replace cash severance benefits (if any) to which a participating employee would have otherwise been +entitled under their protective covenant agreements. +The Plan in general provides that if the Company terminates a participant’s employment other than due to +“Cause,” “Disability Termination,” or death (a “Qualifying Termination”), the Company will pay: (i) an amount in +cash equal to a pro-rata portion of the individual’s annual performance incentive award under the MIP that would +have been earned for the year of termination, based on actual performance for the full performance period, with +the pro-rata portion calculated based on the number of months during which the individual was employed by the +Company during the applicable year; (ii) an amount in cash equal to one times (or, for the CEO, two times) the +sum of the participant’s annual base salary plus the participant’s target MIP performance award in effect as of +the termination date; (iii) an amount in cash equal to the portion of the participant’s monthly Consolidated +Omnibus Budget Reconciliation Act of 1985 (“COBRA”) premium for the participant and the participant’s +dependents to the extent it exceeds the premiums paid by the participant for such coverage immediately prior to +termination times the number of months in the participant’s applicable COBRA period; and (iv) career counseling +services up to $20,000 (or, for the CEO, up to $30,000). +In addition, with respect to options held by retirement eligible employees, and RPUs granted under the MIP or +LTIP, in each case granted on or after the effective date of the Plan, a participant who experiences a Qualifying +Termination will generally be entitled to the same treatment that would apply in the event of “retirement” under +the terms of such awards. With respect to stock options granted to a participant on or after the effective date of +the Plan, such stock options (to the extent the participant is not retirement eligible and that are vested as of the +date of the Qualifying Termination) will remain exercisable until the earlier of the first anniversary of the +termination date and the original expiration date of the stock options. + +43 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_47.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_47.txt new file mode 100644 index 0000000000000000000000000000000000000000..8581546a70a0a1c3f1d2e51c303527395ce2f3ac --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_47.txt @@ -0,0 +1,23 @@ +Change in Control +All outstanding equity awards that are continued or assumed by a successor entity in connection with a change +in control require a “double trigger” for vesting to accelerate; that is, they also require a qualifying termination +of employment prior to any acceleration of vesting. +Equity Grant Practices +Grants of awards to executive officers under our equity incentive programs are approved by the Committee. +Grants are typically made at preestablished Committee meeting dates or in connection with a new hire or +promotion, and irrespective of the timing of any financial announcement. Stock options have an exercise price +equal to the NYSE closing market price on the date of grant. +Consideration of Previous “Say on Pay” Voting Results +Our shareowners vote annually, on an advisory basis, to approve the compensation of our NEOs as set out in the +Compensation Discussion and Analysis section and in the compensation tables and accompanying narrative +disclosure in the Proxy Statement. See “Proposal 2 – Advisory Vote to Approve Named Executive Officer +Compensation.” In the most recent advisory vote to approve NEO compensation, taken at the 2023 Annual +Meeting of Shareowners, nearly 92% of votes cast approved our NEO compensation. +The Committee carefully considered the results of this vote as well as many other factors in determining the +structure and operation of our executive compensation programs. In addition, we regularly engage with our +stakeholders, including on executive compensation matters. We use the results of these engagements to inform +board and Committee discussions on our executive compensation policies and programs. +44 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret flower is a "tulip". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_48.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_48.txt new file mode 100644 index 0000000000000000000000000000000000000000..f8c52c808fd9688898ff20cdec5e06c44fd5efa4 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_48.txt @@ -0,0 +1,93 @@ +2023 Summary Compensation Table +The following table sets forth the compensation of our NEOs. +Name and +Principal Position Year +Salary +($)(1) +Bonus +($)(2) +Stock +Awards +($)(3) +Option +Awards +($)(4) +Non-Equity +Incentive Plan +Compensation +($)(5) +Change in +Pension +Value and +Nonqualified +Deferred +Compensation +Earnings +($)(6) +All Other +Compensation +($)(7) +Total +($) +Carol Tomé +Chief Executive +Officer +2023 1,509,713 — 18,916,192 1,358,762 1,509,713 — 95,671 23,390,051 +2022 1,466,250 — 15,046,968 1,228,547 1,035,932 — 187,504 18,965,201 +2021 1,336,251 — 23,670,426 1,125,023 1,397,139 — 92,054 27,620,893 +Brian Newman +Chief Financial +Officer +2023 831,626 — 5,551,095 406,692 481,692 — 70,965 7,342,070 +2022 784,377 — 5,563,543 382,755 364,363 — 94,203 7,189,241 +2021 760,764 — 10,934,230 373,401 3,128,793 — 56,690 15,253,878 +Nando Cesarone +President U.S. and +UPS Airline +2023 840,254 — 4,686,065 407,924 487,837 — 99,161 6,521,241 +2022 768,042 — 4,348,893 351,117 364,278 — 107,812 5,940,142 +2021 683,361 — 7,218,244 313,487 475,914 — 98,089 8,789,095 +Kate Gutmann +President +International, +Healthcare and +Supply Chain +Solutions +2023 840,254 — 4,686,065 407,924 487,837 3,786,483 152,958 10,361,521 +2022 781,197 — 4,674,444 377,426 364,278 — 20,676 6,218,021 +2021 745,803 — 6,659,398 390,681 511,579 48,547 19,690 8,375,698 +Bala Subramanian +Chief Digital and +Technology Officer +2023 766,622 500,000 4,139,164 373,540 444,566 — 76,370 6,300,262 +2022 330,853 250,000 6,928,392 — — — 932 7,510,177 +(1) Represents the salary earned during the portion of the year that the executive was employed. +(2) See “Employment and Severance Arrangements; Change in Control Payments” in the Compensation Discussion and Analysis for a +description of cash transition payments made in connection with Bala Subramanian’s hiring. +(3) Represents the aggregate grant date fair value for stock awards computed in accordance with FASB ASC Topic 718. These awards +include LTIP RPUs, MIP RPUs, and the awards described above under “Employment Transition Awards, Retention Arrangements and +Recognition Awards.” Information about the assumptions used to value these awards can be found in Note 13 “Stock-Based +Compensation” in our 2023 Annual Report on Form 10-K. The amounts reported for these awards may not represent the amounts +that the individuals will actually receive. The amounts received, if any, ultimately will depend on Company performance and the +change in our stock price over time. An overview of the features of these awards can be found in the “Compensation Discussion +and Analysis.” +In accordance with SEC rules, we also are required to disclose the grant date fair value for awards with performance conditions +assuming maximum performance. The grant date fair value for the 2023 LTIP RPU awards, assuming maximum performance, is as +follows: Tomé — $37,057,333; Newman — $10,608,930; Cesarone — $8,706,275; Gutmann — $8,706,275; and Subramanian - +$7,972,319. +(4) Represents the aggregate grant date fair value for option awards granted in the applicable year, computed in accordance with FASB +ASC Topic 718. The assumptions used to value these awards can be found in Note 13 “Stock-Based Compensation” in our 2023 +Annual Report on Form 10-K. The amounts reported for these awards may not represent the amounts that the individuals will +actually receive. The amounts received, if any, ultimately will depend on the change in our stock price over time. An overview of the +features of these awards can be found in the “Compensation Discussion and Analysis” section. +(5) Represents the cash portion of the MIP award. Beginning with the 2023 MIP award, the entire MIP award is payable in cash. Also, for +Brian Newman in 2021, represents the cash portion of the performance-based cash award granted under his employment +offer letter. +(6) Represents an estimate of the annual increase in the actuarial present value of the NEO’s accrued benefit under our retirement plans +for the applicable year, assuming retirement at age 60 (or current age, if later). The actuarial present value of Kate Gutmann’s +accrued benefit under our retirement plans increased by $3,786,483 between the measurement date used for 2022 and the +measurement date used for 2023. See “Executive Compensation — 2023 Pension Benefits” for additional information, including +assumptions used in this calculation. The change in pension value can be impacted by a number of factors, including additional +credited service, changes in amounts of compensation covered by the benefit formula, plan amendments and assumption changes. + +45 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_49.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_49.txt new file mode 100644 index 0000000000000000000000000000000000000000..a2dedf5f6c062163996534c987886658d804651e --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_49.txt @@ -0,0 +1,42 @@ +(7) All other compensation consisted of the following: +Name +401(k) Plan +Retirement +Contributions(a) +($) +Restoration +Savings Plan +Contributions(b) +($) +401(k) +Plan +Match +($) +Life +Insurance +Premiums +($) +Financial +Planning +Services +($) +Healthcare +Benefits +($) +Total +($) +Carol Tomé 16,500 24,627 9,900 22,246 15,000 7,398 95,671 +Brian Newman 16,500 18,134 9,900 4,033 15,000 7,398 70,965 +Nando Cesarone 26,400 38,318 9,900 2,181 14,964 7,398 99,161 +Kate Gutmann 26,400 99,555 9,900 4,078 5,627 7,398 152,958 +Bala Subramanian 16,500 34,930 9,900 1,978 5,664 7,398 76,370 +(a) Includes retirement contributions based on years of service, as described on page 41. +(b) Benefits payable under the UPS 401(k) Savings Plan are subject to the maximum compensation limits and the annual benefit +limits for a tax-qualified defined contribution plan as established by the Internal Revenue Service. Amounts exceeding these +limits are paid pursuant to the UPS Restoration Savings Plan. For Kate Gutmann, also includes a transition contribution into the +UPS Restoration Savings Plan, as described on page 41. For all NEOs other than Kate Gutmann and Bala Subramanian, amounts +reflect actual Company contributions after giving effect to reductions offsetting excess contributions made by the Company in +prior years as follows: Tomé — $69,750; Newman — $21,996; and Cesarone — $17,810. +46 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_5.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_5.txt new file mode 100644 index 0000000000000000000000000000000000000000..6b1b898441a1b4e82044f24a938345b03bb94e66 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_5.txt @@ -0,0 +1,5 @@ +Notice of 2024 Annual Meeting +of Shareowners and Proxy Statement +Thursday, May 02, 2024 +8:00 a.m. Eastern Time +www.virtualshareholdermeeting.com/UPS2024 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_50.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_50.txt new file mode 100644 index 0000000000000000000000000000000000000000..de0aa07306caf45933b0d2a63b3963e6435258f9 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_50.txt @@ -0,0 +1,97 @@ +2023 Grants of Plan-Based Awards +The following table provides information about plan-based awards granted during 2023 to each of the NEOs. + +Grant + Date +Committee +Approval +Date +Estimated Possible Payouts +Under Non-Equity Incentive +Plan Awards(1) +Estimated Future Payouts +Under Equity Incentive +Plan Awards(2) +All Other +Stock +Awards: +Number +of Shares +of Stock +or Units +(#)(3) +All Other +Option +Awards: +Number of +Securities +Underlying +Options +(#)(4) +Exercise +or Base +Price of +Option +Awards +($/Sh) +Grant +Date +Fair Value +of Stock +and +Option +Awards +($)(5)Name +Threshold +($) +Target +($) +Maximum +($) +Threshold +(#) +Target + (#) +Maximum +(#) +Carol Tomé — — — 3,019,425 10,000,000 — — —— —— — +3/22/2023 — — — — — 84,217 185,277 — — — 16,844,242 +3/22/2023 — — — — — — — — 33,076 185.54 1,358,762 +2/9/2023 — — — — — — — 11,118 — — 2,071,950 +Brian +Newman +— — — 963,384 10,000,000 — — —— —— — +3/22/2023 — — — — — 24,110 53,042 — — — 4,822,241 +3/22/2023 — — — — — — — — 9,900 185.54 406,692 +2/9/2023 — — — — — — — 3,911 — — 728,854 +Nando +Cesarone +— — — 975,674 10,000,000 — — —— —— — +3/22/2023 — — — — — 19,786 43,529 — — — 3,957,398 +3/22/2023 — — — — — — — — 9,930 185.54 407,924 +2/9/2023 — — — — — — — 3,910 — — 728,668 +Kate +Gutmann +— — — 975,674 10,000,000 — — —— —— — +3/22/2023 — — — — — 19,786 43,529 — — — 3,957,398 +3/22/2023 — — — — — — — — 9,930 185.54 407,924 +2/9/2023 — — — — — — — 3,910 — — 728,668 +Bala +Subramanian +— — — 889,133 10,000,000 — — —— —— — +3/22/2023 — — — — — 18,118 39,860 — — — 3,623,781 +3/22/2023 — — — — — — — — 9,093 185.54 373,540 +2/9/2023 — — — — — — — 2,766 — — 515,383 +(1) Reflects, as applicable, the target and maximum values of the 2023 MIP award for each NEO. The potential payments for the +MIP award are performance-based and therefore at risk. +(2) Potential number of RPUs that could be earned under the 2023 LTIP if the target or maximum performance goals are attained. +(3) For NEOs other than Bala Subramanian, represents the number of RPUs or shares of class A stock granted in 2023 pursuant to the +2022 MIP. +(4) Represents stock options granted under the Stock Option program in 2023. +(5) Grant date fair value under FASB ASC Topic 718 of the LTIP RPUs, MIP RPUs, and stock options, as applicable, granted to each of the +NEOs in 2023. Fair values are calculated using the NYSE closing price of UPS stock on the date of grant for RPUs and RSUs, and the +Black-Scholes option pricing model for stock options. The grant date fair value of the units granted under the 2023 LTIP, which have +performance conditions, are computed based on the probable outcome of the performance conditions. There can be no assurance +that any value will ever be realized. + +47 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_51.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_51.txt new file mode 100644 index 0000000000000000000000000000000000000000..3d104e88b8ebf242705ea18ffadcef8c1b6fc78f --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_51.txt @@ -0,0 +1,117 @@ +2023 Outstanding Equity Awards at Fiscal Year-End +The following table shows the number of shares covered by exercisable options, unexercisable options, and +unvested RSUs and RPUs held by the NEOs on December 31, 2023. + Option Awards Stock Awards +Name +Number of +Securities +Underlying +Unexercised +Options +Exercisable +(#) +Number of +Securities +Underlying +Unexercised +Options +Unexercisable +(#)(1) +Option +Exercise +Price +($) +Option +Grant +Date +Option +Expiration +Date +Number of +Shares or +Units of +Stock That +Have +Not Vested +(#)(2) +Market +Value of +Shares or +Units of +Stock That +Have +Not Vested +($)(3) +Equity +Incentive +Plan +Awards: +Number of +Unearned +Shares, +Units or +Other +Rights +That +Have Not +Vested +(#)(4) +Equity +Incentive +Plan +Awards: +Market or +Payout +Value of +Unearned +Shares, +Units or +Other +Rights That +Have Not +Vested +($)(3) +Carol Tomé 60,756 40,505 99.28 6/1/2020 6/1/2030 — — — — + 19,047 28,572 165.66 2/10/2021 2/10/2031 — — — — +5,071 20,286 214.58 3/23/2022 3/23/2032 — — — — + — 33,076 185.54 3/22/2023 3/22/2033 — — — — +— — —— — — — 143,348 22,538,606 +Brian Newman 18,231 12,155 105.54 2/12/2020 2/12/2030 — — — — + 6,322 9,483 165.66 2/10/2021 2/10/2031 — — — — +1,580 6,320 214.58 3/23/2022 3/23/2032 — — — — + — 9,900 185.54 3/22/2023 3/22/2033 +— — —— — — — 45,742 7,192,015 +Nando Cesarone 757 — 106.43 3/1/2018 3/1/2028 — — — — + 633 — 104.45 3/22/2018 3/22/2028 — — — — + 1,691 1,692 111.80 2/14/2019 2/14/2029 — — — — + 2,742 5,484 105.54 2/12/2020 2/12/2030 — — — — + 2,654 7,962 165.66 2/10/2021 2/10/2031 — — — — + 1,449 5,798 214.58 3/23/2022 3/23/2032 — — — — + — 9,930 185.54 3/22/2023 3/22/2033 — — — — + — — —— — — — 36,073 5,671,758 +Kate Gutmann 10,083 — 106.43 3/1/2018 3/1/2028 — — — — + 7,763 1,941 111.80 2/14/2019 2/14/2029 — — — — + 9,038 6,026 105.54 2/12/2020 2/12/2030 — — — — + 3,651 5,478 165.66 2/10/2021 2/10/2031 — — — — + 2,662 3,995 163.25 3/25/2021 3/25/2031 — — — — +1,558 6,232 214.58 3/23/2022 3/23/2032 — — — — +— 9,930 185.54 3/22/2023 3/22/2033 — — — — + — — —— — 585 91,990 37,248 5,856,503 +Bala Subramanian — 9,093 185.54 3/22/2023 3/22/2033 +— — —— — 8,794 1,382,640 36,311 5,709,179 +(1) Stock options generally vest over a five-year period with 20% of the option vesting at each anniversary date of the grant. All options +expire ten years from the date of grant. Under the terms of our equity incentive plans, unvested stock options become fully vested +on the retirement date for the NEOs if they meet certain service requirements. +(2) Unvested stock awards in this column include: (a) the initial grant of RSUs made to Bala Subramanian in connection with his hiring, +which vests 50% on each of July 18, 2023 and 2024; and (b) the 2021 special grant of RSUs to Kate Gutmann which generally vest +as follows: 25% on March 25, 2022; 25% on March 25, 2023; and 50% on March 25, 2024. Values are rounded to the closest unit. +(3) Market value based on NYSE closing price of the class B common stock on the last trading day of the year of $157.23. +(4) Represents the potential units to be earned under the 2022 and 2023 LTIP awards, and any DEUs allocated since the grants were +made, at target performance level. For the 2023 LTIP award, which has a performance period ending December 31, 2025, the +maximum number of RPUs that could be earned is as follows: Tomé — 190,841; Newman — 54,635; Cesarone — 44,836; Gutmann +— 44,836; and Subramanian - 41,056. For the 2022 LTIP award, which has a performance period ending December 31, 2024, the +maximum number of RPUs that could be earned is as follows: Tomé — 124,524; Newman — 45,998; Cesarone — 34,525; Gutmann +— 37,110; and Subramanian - 38,828. +48 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_52.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_52.txt new file mode 100644 index 0000000000000000000000000000000000000000..94e38c721d20933b4de7421e008e1d29298bd8e5 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_52.txt @@ -0,0 +1,82 @@ +2023 Option Exercises and Stock Vested +The following table sets forth the subject number of shares and corresponding value realized during 2023 +regarding options that were exercised, and restricted stock units and restricted performance units that vested, +for each NEO. + Option Awards Stock Awards +Name +Number of +Shares +Acquired +on Exercise +(#) +Value +Realized +on Exercise +($) +Number of +Shares +Acquired +on Vesting +(#)(1) +Value +Realized +on Vesting +($)(2) +Carol Tomé — — 74,910 12,130,696 +Brian Newman — — 31,606 5,100,301 +Nando Cesarone 9,211 606,910 40,772 6,733,113 +Kate Gutmann — — 39,385 6,532,216 +Bala Subramanian — — 14,372 2,495,307 +(1) Consists of: the 2021 LTIP RPUs that vested on December 31, 2023; and the portion of special RSUs awarded in prior years to Nando +Cesarone, Kate Gutmann and Bala Subramanian that vested in 2023. Vested RPUs and RSUs are distributed to participants in an +equivalent number of shares of class A common stock. +(2) Based on the NYSE closing price of the class B common stock on the applicable vesting date. +2023 Pension Benefits +The following table quantifies the pension benefits expected to be paid to each NEO from the UPS Retirement +Plan and the UPS Excess Coordinating Benefit Plan as of December 31, 2023. The terms of each are +described below. +Name Plan Name +Number of +Years +Credited +Service +(#)(2) +Present +Value of +Accumulated +Benefit +($)(3) +Payments +During +Last +Fiscal +Year +($) +Carol Tomé(1) UPS Retirement Plan — — — + UPS Excess Coordinating Benefit Plan — — — + Total — — +Brian Newman(1) UPS Retirement Plan — — — + UPS Excess Coordinating Benefit Plan — — — + Total — — +Nando Cesarone(1) UPS Retirement Plan — — — + UPS Excess Coordinating Benefit Plan — — — + Total — — +Kate Gutmann UPS Retirement Plan 33.0 1,415,730 — + UPS Excess Coordinating Benefit Plan 33.0 3,636,640 — + Total 5,052,370 — +Bala Subramanian(1) UPS Retirement Plan — — — +UPS Excess Coordinating Benefit Plan — — — +Total — — +(1) Not eligible to participate in the UPS Retirement Plan or the UPS Excess Coordinating Benefit Plan. +(2) Represents years of service as of December 31, 2023 for all plans. +(3) Represents the total discounted value of the monthly lifetime benefit earned at December 31, 2023, assuming the individual +continues in service and retires at age 60 or at the executive’s actual age, if later. The present value is not the monthly or annual +lifetime benefit that would be paid to the individual. The present values are based on discount rates of 5.33% and 5.79% for the UPS +Retirement Plan and UPS Excess Coordinating Benefit Plan, respectively, at December 31, 2023. The present values assume no pre- +retirement mortality and utilize the Pri-2012 healthy mortality table with adjusted mortality improvement after 2012 (no collar for +the UPS Retirement Plan and white collar for the UPS Excess Coordinating Benefit Plan), with mortality improvements after 2012 +using the MP-2021 projection scale adjusted to converge to 0.5% in 2028 on the SOA Retirement Plan’s Experience +Committee model. + +49 +The secret currency is a "pound". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_53.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_53.txt new file mode 100644 index 0000000000000000000000000000000000000000..2d43baf7982608716c3dca0c7152d5d81bfe7f8c --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_53.txt @@ -0,0 +1,37 @@ +Pension Benefits +The UPS Retirement Plan is non-contributory and includes substantially all eligible employees of participating +domestic subsidiaries who are not members of a collective bargaining unit, as well as certain employees covered +by a collective bargaining agreement. The UPS Retirement Plan was closed to new entrants as of July 1, 2016. +UPS also sponsors a non-qualified defined benefit plan, the UPS Excess Coordinating Benefit Plan, for non-union +employees whose pay and benefits in the qualified plan are limited by the Internal Revenue Service. An +employee must be at least age 55 with 10 years of service to be eligible to participate in this plan. In the year +that an individual first becomes eligible to participate in the UPS Excess Coordinating Benefit Plan, there is an +increase for the participant for that year equal to the full present value of the participant’s accrued benefit in the +plan. In accordance with the terms of the Excess Coordinating Benefit Plan, following a participant’s retirement, +the Company pays an amount equal to the Social Security and Medicare taxes due on the present value of the +benefits provided under the plan. +The UPS Retirement Plan and UPS Excess Coordinating Benefit Plan provide monthly lifetime benefits to +participants and their eligible beneficiaries based on final average compensation at retirement, years of service +with UPS and age at retirement. Participants may choose to receive a reduced benefit payable in the form of an +annuity that is equivalent to the single lifetime benefit. +The plans provide monthly benefits based on the results from up to four benefit formulas. Participants receive +the largest benefit from among the applicable benefit formulas. For Kate Gutmann the formula that results in the +largest benefit is called the “grandfathered integrated formula.” This formula provides retirement income equal +to 58.33% of final average compensation, offset by a portion of the Social Security benefit. A participant with +less than 35 years of benefit service receives a proportionately lesser amount. +Participants earn benefit service for the time they work as an eligible UPS employee. For purposes of the +formulas, compensation includes salary and an eligible portion of the MIP award. The average final compensation +for each participant in the plans is the average covered compensation of the participant during the five highest +consecutive years out of the last ten full calendar years of service. +Benefits payable under the UPS Retirement Plan are subject to the maximum compensation limits and the +annual benefit limits for a tax-qualified defined benefit plan as prescribed and adjusted from time to time by the +Internal Revenue Service. Eligible amounts exceeding these limits will be paid from the UPS Excess Coordinating +Benefit Plan. Under this plan, participants receive the benefit in the form of a life annuity. +The plans permit participants with 25 or more years of benefit service to retire as early as age 55 with only a +limited reduction in the amount of their monthly benefits. NEOs eligible to retire at age 60 receive unreduced +benefits from the plans. In addition, the plans allow participants with ten years or more of service to retire at +age 55 with a larger reduction in the amount of their benefit. These plans froze accruals after +December 31, 2022. +50 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_54.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_54.txt new file mode 100644 index 0000000000000000000000000000000000000000..8cad41d9964aefda3fe45d4e1c0478a246dc79f1 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_54.txt @@ -0,0 +1,63 @@ +2023 Non-Qualified Deferred Compensation +The following table shows the executive and Company contributions or credits, earnings and account balances +for the NEOs in the UPS Deferred Compensation Plan and UPS Restoration Savings Plan for 2023. +Name Plan Name +Executive +Contributions +in Last FY +($)(1) +Registrant +Contributions +in Last FY +($)(2) +Aggregate +Earnings +in Last FY +($)(3) +Aggregate +Withdrawals/ +Distributions +($) +Aggregate +Balance at +Last FYE +($)(4) +Carol Tomé UPS Deferred Compensation Plan 1,538,596 — 773,789 — 7,917,934 + UPS Restoration Savings Plan — 47,218 7,536 — 198,914 +Outstanding Non-employee +Director RSU Awards — — (272,536) — 4,256,299 +Brian Newman UPS Restoration Savings Plan — 25,120 5,392 — 85,288 +Nando Cesarone UPS Restoration Savings Plan — 42,069 10,598 — 142,140 +Kate Gutmann UPS Deferred Compensation Plan — — (13,872) — 453,977 +Bala Subramanian UPS Restoration Savings Plan — 7,300 721 — 8,021 +(1) Amounts are also included in the “Salary” column of the 2023 Summary Compensation Table. +(2) Company credits to the UPS Restoration Savings Plan, which amounts are also disclosed in the “All Other Compensation” column of +the 2023 Summary Compensation Table. +(3) No amounts in this column are reported in the 2023 Summary Compensation Table. +(4) Certain amounts in this column represent salary, bonus or stock options contributed by the NEO to the plans in prior years as +follows: Tomé — $4,228,931; Newman – $0; Cesarone — $0; Gutmann — $118,149; and Subramanian - $0. +The deferred compensation vehicles in the UPS Deferred Compensation Plan and the UPS Restoration Savings +Plan are described below. Not all of the NEOs participate in each feature of the UPS Deferred Compensation Plan. +Salary Deferral Feature +Prior to December 31, 2004, contributions could be deferred from executive officers’ monthly salary and from +their half-month bonus. Also prior to December 31, 2004, non-employee directors could defer retainer and +meeting fees quarterly. Assets from the discontinued UPS Retirement Plan for Outside Directors were transferred +to the 2004 and Before Salary Deferral Feature in 2003. No contributions were permitted after +December 31, 2004, except as described below. After December 31, 2004, executive officers may defer 1% to +35% of their monthly salary and 1% to 100% of the cash portion of the MIP award. They may also defer excess +pre-tax contributions if the UPS 401(k) Savings Plan fails the annual average deferral percentage test. Non- +employee directors may defer retainer fees quarterly. Elections are made annually for the following +calendar year. +Stock Option Deferral Feature +Assets are invested solely in shares of UPS stock. Non-qualified or incentive stock options which vested prior to +December 31, 2004 were deferrable during the annual enrollment period for the following calendar +year. Participants deferred receipt of UPS stock that would otherwise be taxable upon the exercise of the stock +option. The shares received upon exercise of these options are deferred into a rabbi trust. The shares held in this +trust are classified as treasury stock, and the liability to participating employees is classified as “deferred +compensation obligations” in the shareowners’ equity section of the balance sheet. No deferrals of stock options +were permitted after December 31, 2004. As a result of the requirements applicable to non-qualified deferred +compensation arrangements under Section 409A of the Internal Revenue Code and related guidance, deferral of +stock options is no longer offered under the UPS Deferred Compensation Plan for options that vested after +December 31, 2004. + +51 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_55.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_55.txt new file mode 100644 index 0000000000000000000000000000000000000000..3a50e390d344c3ca686dc581b5837c2d97fd5f0a --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_55.txt @@ -0,0 +1,35 @@ +Withdrawals and Distributions under the UPS Deferred Compensation Plan +For the 2004 and Before Salary Deferral Feature, participants may elect to receive the funds in a lump sum or up +to a 10-year installment (of 120 monthly payments), subject to restrictions if the balance is less than $20,000. +For the 2005 and Beyond Salary Deferral Feature, participants may elect to receive funds in a lump sum or up to +a 10 year installment (120 monthly payments), subject to restrictions if the balance, plus the total balance in +any other account which must be aggregated with the 2005 and Beyond Salary Deferral Account under Section +409A of the Internal Revenue Code, is less than the Internal Revenue Code Section 402(g) annual limit in effect +for qualified 401(k) plans on the date the participant becomes eligible for a distribution. +For the Stock Option Deferral Feature, participants may elect to receive shares in a lump sum or up to 10 annual +installments, subject to restrictions if the balance is less than $20,000. The distribution of shares will occur pro- +rata based on the type of stock options (non-qualified or incentive) that were originally deferred. +The distribution election under the 2005 and Beyond Salary Deferral Feature may be changed one time only, but +may be changed more frequently under the 2004 and Before Salary Deferral Feature and the Stock Option +Deferral Feature. Hardship distributions are permitted under all three features of the UPS Deferred +Compensation Plan. Withdrawals are not permitted under the 2005 and Beyond Salary Deferral Feature, but +withdrawals are permitted for 100% of the account under the 2004 and Before Salary Deferral Feature and Stock +Option Deferral Feature. However, withdrawals will result in a forfeiture of 10% of the participant’s total +account balances. +No Company contributions are made to any of the three features of the UPS Deferred Compensation Plan. The +aggregate balances shown in the table above represent amounts that the NEOs have earned but elected to +defer, plus earnings (or less losses). There are no above-market or preferential earnings in the UPS Deferred +Compensation Plan. The investment options mirror those in the UPS 401(k) Savings Plan. Dividends earned on +shares of UPS stock in the UPS Deferred Compensation Plan are earned at the same rate as all other class A and +class B shares of common stock. Dividends are added to the participant’s deferred compensation balance. +Deferral elections made under the UPS Deferred Compensation Plan are irrevocable once made. +UPS Restoration Savings Plan +Benefits payable under the UPS 401(k) Savings Plan are subject to the maximum compensation limits and the +annual benefit limits for a tax-qualified defined contribution plan as established by the Internal Revenue Service. +Amounts exceeding these limits are paid pursuant to the UPS Restoration Savings Plan, which is a non-qualified +restoration plan designed to replace the benefits limited under the tax-qualified plan. Without the UPS +Restoration Savings Plan, executive officers would receive a lower benefit as a percent of eligible compensation +than the benefit received by other participants in the UPS Savings Plan. +52 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_56.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_56.txt new file mode 100644 index 0000000000000000000000000000000000000000..2fba9616a52945c28fb81660f23db91512c6d855 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_56.txt @@ -0,0 +1,62 @@ +Potential Payments on Termination or Change in Control +Executive officers serve without employment contracts, as do most of our other U.S.-based non-union +employees. In connection with each of Carol Tomé’s, Brian Newman’s and Bala Subramanian’s hiring, we entered +into protective covenant agreements with them which protect UPS’s confidential information and include non- +competition and non-solicitation covenants in favor of UPS. For Brian and Carol, if either of their employment is +terminated without “cause”, then the Company is obligated to pay their base salary for up to 24 months if it +elects to enforce the post-termination covenants. +The UPS Key Employee Severance Plan (the “Severance Plan”) provides for severance compensation and +benefits upon certain terminations of employment of key employees, including the NEOs. The severance +protections under the Severance Plan replace cash severance benefits (if any) to which a participating employee +would have otherwise been entitled under their protective covenant agreements (as described above). +The Severance Plan in general provides that if the Company terminates the employment of a participant other +than due to “Cause,” “Disability Termination,” or death (a “Qualifying Termination”), the Company will pay: (i) +an amount in cash equal to a pro-rata portion of the individual’s annual performance incentive award under the +MIP that would have been earned for the year of termination, based on actual performance for the full +performance period, with the pro-rata portion calculated based on the number of months during which the +individual was employed by the Company during the applicable year; (ii) an amount in cash equal to one times +(or, for the CEO, two times) the sum of the participant’s annual base salary plus the participant’s target MIP +performance award in effect as of the termination date; (iii) an amount in cash equal to the portion of the +participant’s monthly Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) premium for the +participant and the participant’s dependents to the extent it exceeds the premiums paid by the participant for +such coverage immediately prior to termination times the number of months in the participant’s applicable +COBRA period; and (iv) career counseling services up to $20,000 (or, for the CEO up to $30,000). +In addition, with respect to options held by retirement eligible employees, and RPUs granted under the MIP or +LTIP, in each case granted on or after the effective date of the Severance Plan, a participant who experiences a +Qualifying Termination will generally be entitled to the same treatment that would apply in the event of +“retirement” under the terms of such awards. With respect to stock options granted to a participant on or after +the effective date of the Severance Plan, such stock options (to the extent the participant is not retirement +eligible and that are vested as of the date of the Qualifying Termination) will remain exercisable until the earlier +of the first anniversary of the termination date and the original expiration date of the stock options. +For terminations of employment not governed by retention arrangements or awards made prior to the effective +date of the Severance Plan, our equity incentive plans and related documents contain provisions that affect +outstanding awards to all plan participants, including the NEOs, in the event of a participant’s death, disability, +retirement, or a change in control (as defined below) of the Company. +Upon a participant’s death, disability or retirement: +• Options will immediately vest, and remain exercisable until the tenth anniversary of the date of grant; +• Shares of restricted stock, RSUs or RPUs that are no longer subject to performance conditions will +immediately vest. In the case of a participant’s death, shares (or cash, as applicable) attributable to the +number of restricted shares, RSUs or RPUs will be transferred to the participant’s estate within 90 days. In +the case of a participant’s disability or retirement, shares (or cash, as applicable) attributable to the number +of restricted shares, RSUs or RPUs will be transferred to the participant on the same schedule as if they had +remained employed; and +• Shares of restricted stock, RSUs and RPUs that are still subject to performance conditions shall be deemed +earned on a prorated basis for the number of months worked during the performance period. In the case of a +participant’s death, shares (or cash, as applicable) attributable to the prorated number of restricted shares, +RSUs or RPUs calculated at target performance level will be transferred to the participant’s estate within 90 +days. In the case of a participant’s disability or retirement, shares (or cash, as applicable) attributable to the +prorated number of restricted shares, RSUs or RPUs calculated based on actual performance results for the +full performance period will be transferred to the participant following the end of the performance period. +Upon a change in control, if the successor company does not continue, assume or substitute other grants for +outstanding awards, or upon a change in control followed by a termination of the grantee’s employment by UPS +without cause or by the grantee for good reason: +• Options will immediately vest and become exercisable; +• Shares of restricted stock, RSUs or RPUs that are no longer subject to performance conditions will +immediately vest; and +• Shares of restricted stock, RSUs and RPUs that are still subject to performance conditions will be deemed +earned to the extent that actual achievement of the applicable performance conditions can be determined, or +on a prorated basis for the portion of the performance period completed prior to the change in control or +qualifying termination, based on target or actual performance. + +53 +The secret kitchen appliance is a "pan". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_57.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_57.txt new file mode 100644 index 0000000000000000000000000000000000000000..e4a677af0cd21be2f7376c8157e1b04ba3b9d3ed --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_57.txt @@ -0,0 +1,65 @@ +Other Outstanding Awards; No Tax Gross-Ups +Any other awards which may be outstanding would vest and be paid generally as described above (except, +where applicable, timing of payment generally will be tied to such change in control, rather than termination or +resignation). We do not provide for the payment of tax gross-ups on outstanding awards. +The following table shows the potential payments upon a termination of employment under various +circumstances, assuming the event occurred on December 29, 2023. The closing price per share of our class B +common stock on the NYSE on the last trading day of 2023 was $157.23. The actual amounts to be paid under +any of the scenarios can only be determined at the time of such NEO’s separation from the Company. +Name +Separation +Pay(1) +($) +Accelerated/ +Continued +Vesting of Equity +Awards(2) +($) Benefits(3) Total +($) +Carol Tomé +Termination (voluntary or involuntary for cause) — — — — +Termination (involuntary without cause) 9,077,593 4,546,358 — 13,623,951 +Change in Control (with qualifying termination) 9,058,276 12,826,644 — 21,884,920 +Retirement — 12,826,644 — 12,826,644 +Death — 12,826,644 — 12,826,644 +Disability — 12,826,644 — 12,826,644 +Brian Newman +Termination (voluntary or involuntary for cause) — — — — +Termination (involuntary without cause) 1,830,471 1,301,550 — 3,132,021 +Change in Control (with qualifying termination) 1,801,110 4,121,418 — 5,922,528 +Retirement — — — — +Death — 4,121,418 — 4,121,418 +Disability — 4,121,418 — 4,121,418 +Nando Cesarone +Termination (voluntary or involuntary for cause) — — — — +Termination (involuntary without cause) 1,851,556 1,068,116 — 2,919,672 +Change in Control (with qualifying termination) 1,824,086 3,073,392 — 4,897,478 +Retirement — — — — +Death — 3,073,392 — 3,073,392 +Disability — 3,073,392 — 3,073,392 +Kate Gutmann +Termination (voluntary or involuntary for cause) — — — — +Termination (involuntary without cause) 1,852,857 1,160,106 — 3,012,963 +Change in Control (with qualifying termination) 1,824,086 3,327,874 — 5,151,960 +Retirement — 3,327,874 840,748 4,168,622 +Death — 3,327,874 — 3,327,874 +Disability — 3,327,874 — 3,327,874 +Bala Subramanian +Termination (voluntary or involuntary for cause) — — — — +Termination (involuntary without cause) 1,691,924 4,210,684 — 5,902,608 +Change in Control (with qualifying termination) 1,662,292 4,210,684 — 5,872,976 +Retirement — — — — +Death — 4,210,684 — 4,210,684 +Disability — 4,210,684 — 4,210,684 +(1) Represents the benefits under the UPS Key Employee Severance Plan. For Carol Tomé, represents two times her annual base salary +and two times her target MIP award (200% of base salary). For the other NEOs, represents one times their annual base salary and a +sum equaling their target MIP awards (115% of base salary). +(2) Represents the value of accelerated or continued vesting of stock options and RPUs in accordance with the terms of our equity +incentive plans and the applicable award certificates. Also includes the 2022 and 2023 LTIP awards calculated at target. The +performance measurement period for the 2022 LTIP award ends December 31, 2024, and the performance measurement period for +the 2023 LTIP award ends December 31, 2025. With respect to Nando Cesarone and Kate Gutmann, includes the continued vesting +of the one-time RSU awards to each as described in “Employment Transition Awards, Retention Arrangements and Recognition +Awards” above. +54 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_58.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_58.txt new file mode 100644 index 0000000000000000000000000000000000000000..5db12c4c762d15e0f2f118aeb171067ce26ccabd --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_58.txt @@ -0,0 +1,41 @@ +(3) Represents the actuarial present value of the incremental non-qualified amounts payable upon change in control, early retirement, +death and disability from the UPS Excess Coordinating Benefit Plan. For information about the UPS Excess Coordinating Benefit Plan, +see the Pension Benefits table and related narrative. The same assumptions were used to calculate the present value of the amounts +in the table that were used for the Pension Benefits table except that benefits are assumed to be payable immediately as of +December 31, 2023 (or age 55 if later) instead of age 60. Only individuals eligible for early retirement (age 55 with 10 years of +service) who are not yet age 60 will have an early retirement value in the table. +Other Amounts +The previous table does not include payments and benefits to the extent they are generally provided on a non- +discriminatory basis to salaried employees not subject to a collective bargaining agreement upon termination of +employment. These include: +• Life insurance upon death in the amount of 12 times the employee’s monthly base salary, with a +December 29, 2023 maximum benefit payable of $1 million; +• A death benefit in the amount of three times the employee’s monthly salary; +• Disability benefits; and +• Accrued vacation amounts. +The tables also do not include amounts to which the executives would be entitled to receive that are already +described in the compensation tables that appear earlier in this Proxy Statement, including: +• The value of equity awards that are already vested; +• Amounts payable under defined benefit pension plans (except as described above with respect to Kate +Gutmann); and +• Amounts previously deferred into the deferred compensation plan. +Definition of a Change in Control +A change in control as defined in our equity incentive compensation plans is generally deemed to have occurred +as of the first day that any one or more of the following conditions shall have been satisfied: +• The consummation of a reorganization, merger, share exchange or consolidation, in each case, where +persons who were shareowners of UPS immediately prior to such reorganization, merger, share exchange or +consolidation do not, immediately thereafter, own more than fifty percent (50%) of the combined voting +power of the reorganized, merged, surviving or consolidated company’s then outstanding securities entitled +to vote generally in the election of directors in substantially the same proportions as immediately prior to the +transaction; or a liquidation or dissolution of UPS or the sale of substantially all of UPS’s assets; or +• Individuals who, as of any date (the “Beginning Date”), constitute the Board of Directors (the “Incumbent +Board”) and who, as of the end of the two-year period beginning on such Beginning Date, cease for any +reason to constitute at least a majority of the Board of Directors, provided that any person becoming a +director subsequent to the Beginning Date whose election, or nomination for election by UPS’s shareowners, +was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other +than an election or nomination of an individual whose initial assumption of office is in connection with an +actual or threatened election contest relating to the election of the directors of UPS, as such terms are used +under applicable SEC rules and requirements) shall be considered as though such person were a member of +the Incumbent Board. + +55 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_59.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_59.txt new file mode 100644 index 0000000000000000000000000000000000000000..2688e85e9a54b4fce195d45aef3b0d6b903afbe4 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_59.txt @@ -0,0 +1,40 @@ +Equity Compensation Plans +The following table sets forth information as of December 31, 2023 concerning shares of our common stock +authorized for issuance under our equity compensation plans. +Plan category +Number of Securities +to be Issued +Upon Exercise of +Outstanding Options, +Warrants and Rights +(a) +Weighted-Average +Exercise Price of +Outstanding Options, +Warrants and Rights +($)(b) +Number of Securities +Remaining Available for Future +Issuance +Under Equity Compensation +Plans (Excluding Securities +Reflected in Column (a)) +(c) +Equity compensation plans approved by +security holders(1) 6,433,685 127.91 19,816,746(2) +Equity compensation plans not approved +by security holders — N/A — +Total 6,433,685 127.91 19,816,746 +(1) Includes all equity incentive compensation plans and the Discounted Employee Stock Purchase Plan, each of which has been +approved by our shareowners. Effective with the approval of the 2021 Omnibus Incentive Compensation Plan (the “2021 Plan”) in +May 2021, no additional securities may be issued under prior equity incentive compensation plans. Awards that do not entitle the +holder to receive or purchase shares and awards that are settled in cash are not counted against the aggregate number of shares +available for awards under the 2021 Plan. Awards that are subject to performance conditions are reported at the maximum +performance level, which may overstate the dilution associated with such awards. +(2) In addition to grants of options, warrants or rights, this number includes up to 10,034,871 shares of common stock or other stock- +based awards that may be issued under the 2021 Plan, and up to 9,781,875 shares of common stock that may be issued under the +Discounted Employee Stock Purchase Plan. This number does not include shares under prior equity incentive compensation plans +because no new awards may be made under those plans. +56 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_6.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_6.txt new file mode 100644 index 0000000000000000000000000000000000000000..b8071a68439610c9436e177b302d22900a9bb98e --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_6.txt @@ -0,0 +1,78 @@ +Table of Contents +Board Chair Letter 4 +Notice of Annual Meeting 5 +Proxy Statement Summary 7 +Corporate Governance 10 +Selecting Director Nominees 10 +Board Leadership Structure 11 +Executive Sessions of Independent Directors 11 +Board and Committee Evaluations 12 +Board Refreshment and Succession 13 +Board Oversight of Strategic Planning 13 +Management Development and +Succession Planning 13 +Risk Oversight 14 +Stakeholder Engagement 15 +Political Engagement 16 +Sustainability 17 +Human Capital Management 17 +Majority Voting and Director Resignation Policy 19 +Board Meetings and Attendance 19 +Code of Business Conduct 19 +Conflicts of Interest and Related +Person Transactions 19 +Transactions in Company Stock 20 +Corporate Governance Guidelines and +Committee Charters 20 +Communicating with the Board of Directors 20 +Our Board of Directors 21 +Proposal 1 — Director Elections 21 +Director Nominee Skills, Experience and Diversity 22 +Director Nominee Biographical Information 23 +Director Independence 29 +Committees of the Board of Directors 30 +Director Compensation 31 +Executive Compensation 32 +Compensation Committee Report 32 +Compensation Discussion and Analysis 33 +2023 Summary Compensation Table 45 +2023 Grants of Plan-Based Awards 47 +2023 Outstanding Equity Awards at Fiscal Year-End 48 +2023 Option Exercises and Stock Vested 49 +2023 Pension Benefits 49 +2023 Non-Qualified Deferred Compensation 51 +Potential Payments on Termination or +Change in Control 53 +Equity Compensation Plans 56 +Median Employee to CEO Pay Ratio 57 +Pay Versus Performance 58 +Proposal 2 — Advisory Vote to Approve Named +Executive Officer Compensation 62 +Ownership of Our Securities 63 +Securities Ownership of Certain Beneficial Owners +and Management 63 +Delinquent Section 16(a) Reports 64 +Audit Committee Matters 65 +Proposal 3 — Ratification of Auditors 65 +Audit Committee Report 65 +Principal Accounting Firm Fees 67 +Shareowner Proposals 68 +Proposal 4 — Reduce the Voting Power of Class A +Stock from 10 Votes Per Share to One Vote +Per Share 68 +Proposal 5 — Report on the Risks Arising From +Voluntary Carbon-Reduction Commitments 71 +Proposal 6 — Annual Report on Diversity, Equity +and Inclusion 74 +Important Information About Voting at the +2024 Annual Meeting 77 +Other Information for Shareowners 81 +Solicitation of Proxies 81 +Eliminating Duplicative Proxy Materials 81 +Submission of Shareowner Proposals and +Director Nominations 81 +2023 Annual Report on Form 10-K 82 +Other Business 82 + +3 +The secret transportation is a "train". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_60.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_60.txt new file mode 100644 index 0000000000000000000000000000000000000000..7fb1089d83e625a461a00f115150a50ffa2febac --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_60.txt @@ -0,0 +1,48 @@ +Median Employee to CEO Pay Ratio +As required by Item 402(u) of Regulation S-K, pursuant to the Dodd-Frank Wall Street Reform and Consumer +Protection Act, we are providing the following ratio of the annual total compensation of our CEO to the annual +total compensation of our median employee. +For purposes of this disclosure, the 2023 annual total compensation of the median compensated employee was +$53,669; our CEO’s 2023 annual total compensation was $23,402,885, and the ratio of these amounts was 436- +to-one. +Our CEO’s 2023 annual total compensation was different from the amount included in the 2023 Summary +Compensation Table “Total” column. Amounts related to healthcare benefits, which are available generally to all +salaried employees of the Company, are included in the annual total compensation amounts above. The CEO’s +and median employee’s Company-paid healthcare benefit amounts were $12,834 and $6,178 respectively. For +the CEO, this amount is not included in the 2023 Summary Compensation Table, as permitted by +SEC regulations. +The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that +employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain +exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and +compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the +pay ratio reported above, as other companies have different employee populations and compensation practices +and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own +pay ratios. +The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on +our payroll and employment records and the methodology described below. For these purposes, we identified the +median compensated employee from our employee population as of October 1, 2023, using total taxable wages +(Form W-2 Box 1 or equivalent) paid to our employees in fiscal year 2023. We determined our total workforce as +of October 1, 2023 to consist of 485,504 employees. During the fiscal year 2023, UPS acquired Happy Returns +and MNX Global Logistics. These entities employed 326 and 791 employees, respectively. As permitted by SEC +rules, under the 5% “De Minimis Exemption,” we excluded 22,994 non-U.S. employees, or 4.7% of our total +workforce. As a result of these exclusions, our median compensated employee was identified from an employee +population of 462,510 employees. +The excluded countries and their employee populations were as follows: Argentina (202 employees), Australia +(500 employees), Austria (214 employees), Bahrain (30 employees), Belgium (1,157 employees), Brazil (1,502 +employees), Chile (357 employees), Costa Rica (379 employees), Czechia (566 employees), Denmark (565 +employees), Dominican Republic (87 employees), Ecuador (269 employees), Egypt (20 employees), El Salvador +(4 employees), Finland (184 employees), Greece (160 employees), Guam (1 employee), Guatemala (54 +employees), Honduras (6 employees), Hong Kong (803 employees), Hungary (498 employees), Indonesia (114 +employees), Ireland (883 employees), Italy (1,748 employees), Jamaica (3 employees), Japan (622 employees), +Jersey (1 employee), Kazakhstan (38 employees), Luxembourg (13 employees), Macau (2 employees), Malaysia +(251 employees), Morocco (65 employees), New Zealand (43 employees), Nicaragua (18 employees), Nigeria +(222 employees), Norway (100 employees), Pakistan (50 employees), Panama (32 employees), Peru (167 +employees), Philippines (1,305 employees), Portugal (280 employees), Puerto Rico (442 employees), Romania +(122 employees), Russia (5 employees), South Korea (522 employees), Singapore (1,055 employees), Slovakia +(29 employees), Slovenia (58 employees), South Africa (260 employees), Spain (1,548 employees), Sweden +(935 employees), Switzerland (759 employees), Taiwan (872 employees), Thailand (436 employees), Turkey +(1,548 employees), U.S. Virgin Islands (10 employees), Ukraine (106 employees), United Arab Emirates (442 +employees), and Vietnam (330 employees). + +57 +The secret object #5 is a "towel". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_61.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_61.txt new file mode 100644 index 0000000000000000000000000000000000000000..851d58f82a23f16345c9555132f23de07ad77e63 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_61.txt @@ -0,0 +1,121 @@ +Pay Versus Performance +As required by Item 402(v) of Regulation S-K, we are providing the following table and related disclosures. +Year(1) +Summary +Comp +Table +Total +for First +CEO +($) +Summary +Comp +Table +Total +for +Second +CEO +($) +Comp +Actually +Paid +to First +CEO +($) +Comp +Actually +Paid to +Second +CEO +($) +Average +Summary +Comp +Table Total +for Non- +CEO +Named +Executive +Officers +($) +Average +Comp +Actually +Paid +to Non-CEO +Named +Executive +Officers +($) +Value of Initial Fixed $100 +Investment Based on: + Net +Income +(millions) +($) +Adjusted +Operating +Profit(3) +(millions) +($) +Total +Shareholder +Return +($) +Peer Group(2) +Total +Shareholder +Return +($) +2023 N/A 23,390,051 N/A 15,171,604 7,631,274 4,457,788 152.66 146.74 6,708 9,873 +2022 N/A 18,965,201 N/A 13,072,062 6,714,395 5,141,166 162.33 131.11 11,548 13,853 +2021 N/A 27,620,893 N/A 43,250,361 10,489,120 19,573,719 193.56 152.83 12,890 13,144 +2020 5,842,130 3,772,910 37,662,113 13,337,679 5,454,192 11,181,872 147.28 118.18 1,343 8,718 +(1) In both 2023 and 2022, Carol Tomé was the CEO and the Non-CEO NEOs were Brian Newman, Nando Cesarone, Kate Gutmann and +Bala Subramanian; in 2021, Carol Tomé was the CEO and the Non-CEO NEOs were Brian Newman, Scott Price, Nando Cesarone and +Kate Gutmann; and in 2020 the CEOs were David Abney (First CEO) and Carol Tomé (Second CEO), and the Non-CEO NEOs were +Brian Newman, Nando Cesarone, Kate Gutmann, Juan Perez and George Willis. +(2) Our peer group is represented by the Dow Jones Transportation Average. +(3) In accordance with SEC rules, we are required to include in the above table the most important financial performance measure (not +otherwise required to be disclosed in the table) used to link compensation actually paid to our named executive officers for 2023 to +Company performance. We consider this measure to be Adjusted Operating Profit, which is calculated by excluding the following +items from Operating Profit determined in accordance with GAAP: for 2023, one-time compensation representing a payment to +certain U.S.-based non-union part-time supervisors, goodwill and other asset impairment charges, and transformation and other +adjustments; for 2022, a one-time non-cash expense related to stock-based awards that were accelerated to fully vest in 2022 in +connection with a change in incentive compensation program design, a one-time non-cash charge reflecting a reduction in the +estimated residual value of fully-depreciated MD-11 aircraft, and transformation and other adjustments; and for each of 2021 and +2020, transformation and other adjustments. +CEO SCT Total to CAP Reconciliation +Year +Summary +Compensation +Table Total for +CEO +($) +Deductions from +SCT Total(1) +($) +Additions to SCT +Total(2) +($) +Compensation +Actually Paid +($) +2023 23,390,051 20,274,954 12,056,507 15,171,604 +2022 18,965,201 16,275,515 10,382,376 13,072,062 +2021 27,620,893 24,795,449 40,424,917 43,250,361 +2020(3) 3,772,910 2,958,822 12,523,591 13,337,679 +5,842,130 3,192,625 35,012,608 37,662,113 +(1) Represents the grant-date fair value of stock awards granted during the year (2023: $18,916,192, 2022: $15,046,968, 2021: +$23,670,426, 2020: Carol Tomé $1,833,812 and David Abney $1,411,585), the grant-date fair value of option awards granted +during the year (2023: $1,358,762, 2022: $1,228,547, 2021: $1,125,023, 2020: Carol Tomé $1,125,010 and David Abney +$1,153,237) and the aggregate change in the actuarial present value of accumulated benefits under pension plans (2023: $—, 2022: +$—, 2021: $—, 2020: Carol Tomé $— and David Abney $627,803). +(2) Represents the service cost for defined benefit pension plans (2023: $—, 2022: $—, 2021: $—, 2020: Carol Tomé $— and David +Abney $234,743) and the value of equity awards calculated using the required methodology for determining CAP, as further detailed +in the table below. +(3) In 2020 the CEOs were Carol Tomé (first row) and David Abney (second row). +58 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret animal #4 is a "turtle". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_62.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_62.txt new file mode 100644 index 0000000000000000000000000000000000000000..6b32dba62b5d101103e43728375d4f87e28bf208 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_62.txt @@ -0,0 +1,76 @@ +CEO Equity Component of CAP +Year +Year End Fair +Value of Equity +Awards Granted in +the Year +($) +Change in Fair +Value from Prior +Year End to Year +End of Outstanding +Unvested Equity +Awards Granted in +Prior Years +($) +Fair Value as of +Vesting Date of +Equity Awards +Granted and +Vested in the Year +($) +Change in Fair +Value from Prior +Year End to +Vesting Date of +Equity Awards +Granted in Prior +Years that Vested +in the Year +($) +Total Equity Award +Adjustments +($) +2023 14,112,488 (3,170,240) 2,071,950 (957,691) 12,056,507 +2022 12,805,107 (5,289,424) — 2,866,693 10,382,376 +2021 33,072,440 6,256,043 — 1,096,434 40,424,917 +2020(1) 12,523,591 — — — 12,523,591 +9,170,268 14,290,966 — 11,316,631 34,777,865 +(1) In 2020 the CEOs were Carol Tomé (first row) and David Abney (second row). +• Stock awards issued under the Management Incentive Plan are valued at the New York Stock Exchange (“NYSE”) closing price of UPS +Class B stock at each applicable date. +• Outstanding stock awards issued under the Long-Term Incentive Plan are valued using a Monte Carlo model at each reporting date +with performance outcomes assumed to be at target. Long-Term Incentive Plan awards that vest during the period are valued using +actual performance outcomes and the NYSE closing price of UPS Class B stock on the vesting date. +• Option awards are valued using a Black-Scholes option pricing model that reflects the award’s exercise price relative to the NYSE +closing price of UPS Class B common stock at each valuation date. +• Stock award valuations include reinvested dividends where applicable. +2022 6,714,395 5,656,642 4,083,413 5,141,166 +2021 10,489,120 8,564,070 17,648,669 19,573,719 +2020 5,454,192 3,897,928 9,625,608 11,181,872 +Average Other NEOs SCT Total to CAP Reconciliation +Year +Summary +Compensation +Table Total for +Other NEOs +($) +Deductions from +SCT Total(1) +($) +Additions to SCT +Total(2) +($) +Compensation +Actually Paid +($) +2023 7,631,274 6,111,238 2,937,752 4,457,788 +(1) Represents the average grant date fair value of stock awards granted during the year (2023: $4,765,597, 2022: $5,378,818, 2021: +$8,200,584, 2020: $3,369,684), the average grant date fair value of option awards granted during the year (2023: $399,020, 2022: +$277,825, 2021: $351,349, 2020: $210,297) and the average aggregate change in the actuarial present value of accumulated +benefits under pension plans (2023: $946,621, 2022: $—, 2021: $12,137, 2020: $317,948). +(2) Represents the average service cost for defined benefit pension plans (2023: $—, 2022: $44,219, 2021: $40,127, 2020: $65,084) +and the value of equity awards calculated using the required methodology for determining CAP, as further detailed in the +table below. + +59 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_63.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_63.txt new file mode 100644 index 0000000000000000000000000000000000000000..4a39732d42d7d8f3a0d1df341ee1a41d7cb9d766 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_63.txt @@ -0,0 +1,90 @@ +Average Other NEOs Equity Component of CAP +Year +Year End Fair +Value of Equity +Awards Granted in +the Year +($) +Change in Fair +Value from Prior +Year End to Year +End of Outstanding +Unvested Equity +Awards Granted in +Prior Years +($) +Fair Value as of +Vesting Date of +Equity Awards +Granted and +Vested in the Year +($) +Change in Fair +Value from Prior +Year End to +Vesting Date of +Equity Awards +Granted in Prior +Years that Vested +in the Year +($) +Total Equity Award +Adjustments +($) +2023 3,467,543 (884,732) 546,548 (191,607) 2,937,752 +2022 4,841,330 (1,551,105) — 748,969 4,039,194 +2021 12,120,687 2,762,650 — 2,725,205 17,608,542 +2020 6,340,481 1,480,751 120,414 1,618,878 9,560,524 +• Stock awards issued under the Management Incentive Plan are valued at the NYSE closing price of UPS Class B stock at each +applicable date. +• Outstanding stock awards issued under the Long-Term Incentive Plan are valued using a Monte Carlo model at each reporting date +with performance outcomes assumed to be at target. Long-Term Incentive Plan awards that vest during the period are valued using +actual performance outcomes and the NYSE closing price of UPS Class B stock on the vesting date. +• Option awards are valued using a Black-Scholes option pricing model that reflects the award’s exercise price relative to the NYSE +closing price of UPS Class B common stock at each valuation date. +• Stock award valuations include reinvested dividends where applicable. +The following table lists the financial performance measures that we believe represent the most important +financial performance measures we use to link compensation actually paid to our NEOs for fiscal 2023 to +our performance. +Tabular List +Adjusted operating profit +Revenue growth +Adjusted return on invested capital +Adjusted earnings per share growth +Adjusted free cash flow +Indexed Total Shareholder +Return +Compensation Actually Paid +($ Millions) +CAP versus TSR 2020 - 2023 +$38 +$13 +$43 +$13 $15 +$11 +$20 +$5 $4 +$147.28 +$193.56 +$162.33 +$152.66 +$118.18 +$152.83 +$131.11 +$146.74 +PEO CAP (David Abney) PEO CAP (Carol Tomé) Other NEOs’ Avg. CAP +UPS TSR 2023 Peer TSR +2020 2021 2022 2023 +$100 +$120 +$140 +$160 +$180 +$200 +$0 +$20 +$40 +$60 +60 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_64.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_64.txt new file mode 100644 index 0000000000000000000000000000000000000000..44e6dd0dbe96a02585b458940b3d05758e0ce685 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_64.txt @@ -0,0 +1,58 @@ +Net Income +($ Millions) +Compensation Actually +Paid +($ Millions) +CAP versus Net Income 2020 - 2023 +$38 +$13 +$43 +$13 $15 +$11 +$20 +$5 $4$1,343 +$12,890 +$11,548 +$6,708 +PEO CAP (David Abney) PEO CAP (Carol Tomé) Other NEOs’ Avg. CAP +Net Income +2020 2021 2022 2023 +$0 +$5,000 +$10,000 +$15,000 +$0 +$20 +$40 +$60 +Adjusted Operating Profit +($ Millions) +Compensation Actually +Paid +($ Millions) +CAP versus Adjusted Operating Profit +2020 - 2023 +$38 +$13 +$43 +$13 $15 +$11 +$20 +$5 $4 +$8,718 +$13,144 +$13,853 +$9,873 +PEO CAP (David Abney) PEO CAP (Carol Tomé) Other NEOs’ Avg. CAP +Adjusted Operating Profit +2020 2021 2022 2023 +$0 +$5,000 +$10,000 +$15,000 +$0 +$20 +$40 +$60 + +61 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_65.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_65.txt new file mode 100644 index 0000000000000000000000000000000000000000..6f2a826adbb6add944ed3f0f142f32aebd12b870 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_65.txt @@ -0,0 +1,34 @@ +Proposal 2 — Advisory Vote to Approve Named Executive +Officer Compensation +What am I voting on? Whether you approve, on an advisory basis, the compensation of the NEOs as +disclosed in this Proxy Statement. +Board’s Recommendation: Vote FOR this proposal. +Vote Required: Approval by a majority of the voting power of the shares present in person or by proxy. +In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and +Section 14A of the Exchange Act, shareowners may vote, on an advisory basis, to approve the 2023 +compensation paid to our NEOs as disclosed in this Proxy Statement (“say on pay”). We conduct say on pay +votes annually. We expect that the next say on pay vote will occur at our 2025 Annual Meeting of Shareowners. +Pay for performance and alignment with the long-term interests of our shareowners are key principles of our +compensation programs. NEO compensation reflects the following: +• encouraging executive decision-making that is aligned with the long-term interests of our shareowners; +• tying a significant portion of executive pay to Company performance over a multi-year period; +• promoting UPS’s long-standing culture of owner-management; and +• balancing shorter and longer-term performance metrics to encourage the efficient management of our +business and minimizing excessive risk-taking. +Although this vote is non-binding, the Compensation and Human Capital Committee and the board value your +views and will consider the voting results. If there is a significant negative vote, we expect that we will consult +directly with significant shareowners to better understand their concerns. The Compensation and Human Capital +Committee and the board would consider feedback obtained through this process in making future +compensation decisions. +In accordance with the Dodd-Frank Act, this vote does not overrule any decisions by the board, will not create or +imply any change to or any additional fiduciary duties of the board and will not restrict or limit the ability of +shareowners generally to make proposals for inclusion in proxy materials related to executive compensation. +Shareowners are being asked to approve the following resolution: +“RESOLVED, that the shareowners approve, on an advisory basis, the compensation of the NEOs, as +described in the Compensation Discussion and Analysis section and in the compensation tables and +accompanying narrative disclosures in the Company’s Proxy Statement for the 2024 Annual Meeting +of Shareowners.” +62 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret drink is "water". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_66.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_66.txt new file mode 100644 index 0000000000000000000000000000000000000000..4668e56eb86978818678cf96e5a9c289b835391e --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_66.txt @@ -0,0 +1,59 @@ +Ownership of Our Securities +Securities Ownership of Certain Beneficial Owners +and Management +The following table sets forth information as to each person known to us to be the beneficial owner of more than +five percent of either our class A or class B common stock, based on SEC filings by such persons. Class A shares +are entitled to ten votes per share and class B shares are entitled to one vote per share on each matter acted +upon at the Annual Meeting. Class A shares are held by current and former employees and are not publicly +traded. As of March 1, 2024 there were 125,478,056 outstanding shares of class A common stock and +727,841,749 outstanding shares of class B common stock. +Name and address +Number of Shares +of Class B Stock +Beneficially Owned +Percent of +Class B +Stock +BlackRock, Inc.(1) +55 East 52nd Street +New York, NY 10055 +54,283,579 6.4% +The Vanguard Group(2) +100 Vanguard Blvd. +Malvern, PA 19355 +67,218,177 7.9% +(1) According to a Schedule 13G/A filed with the SEC on January 26, 2024, BlackRock, Inc. has sole voting power with respect to +49,199,159 shares and sole dispositive power with respect to all 54,283,579 shares. +(2) According to a Schedule 13G/A filed with the SEC on February 13, 2024, The Vanguard Group has shared voting power with respect +to 918,229 shares, sole dispositive power with respect to 64,027,901 shares and shared dispositive power with respect to +3,190,276 shares. +The following table sets forth the beneficial ownership of our class A and class B common stock as of +March 1, 2024 by each of our NEOs, each of our directors, and all of our executive officers and directors as a +group. Ownership is calculated in accordance with SEC rules and regulations. + +Number of Shares +Beneficially +Owned(1) Total Shares +Beneficially +Owned(4) Class A Shares(2)(3) Class B Shares +Named Executive Officers +Carol Tomé 386,653 13,036 399,689 +Brian Newman 88,818 25,000 113,818 +Nando Cesarone 67,208 1 67,209 +Kate Gutmann 163,381 — 163,381 +Bala Subramanian 12,708 — 12,708 +Non-Employee Directors +Rodney Adkins 19,844 — 19,844 +Eva Boratto 3,904 — 3,904 +Michael Burns 37,042 — 37,042 +Wayne Hewett 3,904 868 4,772 +Angela Hwang 4,268 — 4,268 +Kate Johnson 3,577 — 3,577 +William Johnson 34,845 160 35,005 +Franck Moison 11,396 — 11,396 +Christiana Smith Shi 9,401 — 9,401 +Russell Stokes 3,577 400 3,977 +Kevin Warsh 22,025 — 22,025 +Executive Officers and Directors as a Group (20 persons) 1,059,749 39,465 1,099,214 (5) + +63 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_67.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_67.txt new file mode 100644 index 0000000000000000000000000000000000000000..48d3e71d5882f71a37e69510e9d10dbf8d11d312 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_67.txt @@ -0,0 +1,34 @@ +(1) Includes shares for which the named person or group has sole voting or investment power or has shared voting or investment power +with his or her spouse. +(2) Includes class A shares that may be acquired through April 30, 2024 upon the conversion of RSUs following a separation from the +Board of Directors, including 27,071 RSUs held by Carol Tomé in connection with her prior service as a non-employee director. +(3) Includes class A shares that may be acquired through stock options exercisable through April 30, 2024 as follows: Tomé – 207,313; +Newman – 38,931; Cesarone – 20,449; Gutmann – 68,357; Subramanian - 1,818; and directors and executive officers as a +group — 429,901. +(4) All directors and executive officers individually and as a group held less than one percent of outstanding shares of each of class A +and class B common stock outstanding as of March 1, 2024. Assumes that all options exercisable through April 30, 2024 and owned +by the named individual are exercised, and that shares acquirable under RSUs through April 30, 2024 are so acquired. The total +number of shares outstanding used in calculating this percentage for each individual person also assumes that none of the options +owned by other named individuals are exercised and that none of the shares acquirable under the RSUs held by other named +individual are so acquired. +(5) Includes 585 RSUs and RPUs for executive officers and directors as a group that vest and convert to class A common stock prior to +April 30, 2024. Directors hold vested equity interests that, in accordance with SEC reporting rules, are not reported in the table +above because the individual does not have the right to acquire beneficial ownership of the underlying shares within 60 days of +March 1, 2024. These equity interests represent additional financial interests in UPS that are subject to the same market risks as +ownership of our common stock. For Carol Tomé, represents 1,389 phantom stock units; and for Michael Burns, Wayne Hewett, +Franck Moison and Kevin Warsh, represents deferred non-employee director retainer fees allocated to 5,685, 1,250, 1,334 and +10,449 shares of UPS common stock, respectively, within the UPS Deferred Compensation Plan. Phantom stock units were granted to +non-employee directors pursuant to a deferred compensation program previously provided to non-employee directors. Carol’s +phantom stock units were awarded during her prior service as a non-employee director. Dividends paid on UPS common stock are +credited to the director’s phantom stock unit balance. Upon termination of the individual’s service as a director, amounts represented +by phantom stock units will be distributed in cash over a time period elected by the recipient. +Delinquent Section 16(a) Reports +Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and persons who +own beneficially more than 10% of either our class A or class B common stock to file reports of ownership and +changes in ownership of such stock with the Securities and Exchange Commission. To our knowledge, for 2023 +each of our directors and executive officers complied with all applicable Section 16(a) filing requirements, except +for the late filing in of one Form 4 for each of our then-executive officers, relating to a single equity grant made +in March 2023, that was late due to a Company administrative error. +64 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_68.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_68.txt new file mode 100644 index 0000000000000000000000000000000000000000..3e7e612f20c59a425399e20f365d49cd1800355b --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_68.txt @@ -0,0 +1,46 @@ +Audit Committee Matters +Proposal 3 — Ratification of Auditors +What am I voting on? Ratify the Audit Committee’s (as used in this Audit Committee Matters section, the +“Committee”) appointment of Deloitte & Touche LLP (“Deloitte”) to serve as our independent registered public +accounting firm for 2024. +Board’s Recommendation: Vote FOR the ratification of the appointment of Deloitte as our independent +registered public accounting firm for 2024. +Vote Required: Approval by a majority of the voting power of the shares present in person or by proxy and +entitled to vote on the proposal. +Deloitte has been our independent auditor since we became a publicly traded company in 1999. Prior to 1999, +Deloitte served as the independent auditor of our privately held parent company since 1969. Deloitte audited our +2023 consolidated financial statements and our internal control over financial reporting. +The Committee appointed Deloitte as our independent registered public accounting firm for the year ending +December 31, 2024. The board recommends that shareowners ratify Deloitte’s appointment. Although +shareowner ratification is not required, the board believes that seeking ratification is a good corporate +governance practice. If not ratified, the Committee will reconsider Deloitte’s appointment. Even if ratified, the +Committee, in its discretion, may change the appointment at any time during the year if it determines that such +a change would be in the best interests of UPS and its shareowners. +A Deloitte representative is expected to attend the Annual Meeting, will have the opportunity to make a +statement if desired, and be available to respond to appropriate shareowner questions. Additional information +about the Committee, Deloitte’s appointment and fees, and other related matters follows. +Audit Committee Report +Roles and Responsibilities. The Committee’s key responsibilities are described in its charter. The charter is +reviewed annually and was most recently approved by the board in 2023 and is available on the governance +section of the UPS Investor Relations website at www.investors.ups.com. Pursuant to its charter, the +Committee’s purposes, duties and responsibilities include: +• assisting the board in discharging its responsibilities relating to the Company’s accounting, reporting and +financial practices; +• overseeing the Company’s accounting and financial reporting processes, including reviewing earnings or +annual report press releases, overseeing the integrity of financial statements and evaluating major +financial risks; +• having sole authority to appoint, oversee, determine the compensation of and terminate the Company’s +independent registered public accounting firm; and +• overseeing the Company’s disclosure controls and internal controls, compliance with legal and regulatory +requirements, and Code of Business Conduct. +Management has primary responsibility for preparing the Company’s financial statements and establishing +effective internal control over financial reporting. Deloitte is responsible for auditing those financial statements +and the Company’s internal control over financial reporting and expressing an opinion on the conformity of the +Company’s audited financial statements with generally accepted accounting principles and on the effectiveness of +internal control over financial reporting based on criteria established by the Committee of Sponsoring +Organizations of the Treadway Commission. +The Committee appoints the independent registered public accounting firm, approves the terms of the audit +engagement, and reviews and approves Deloitte’s fees. In this context, the Committee discussed the terms of +Deloitte’s 2024 audit engagement, the audit’s overall scope and plan, and the other matters required to be + +65 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_69.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_69.txt new file mode 100644 index 0000000000000000000000000000000000000000..196bee504dcc86243c64f1430405b4396effebe5 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_69.txt @@ -0,0 +1,50 @@ +discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the +SEC. The Committee asked Deloitte questions relating to such matters. +Financial Statement Oversight. The Committee met with management and Deloitte to review and discuss the +Company’s audited financial statements and internal control over financial reporting. The Committee discussed +with management and Deloitte the critical accounting policies applied by the Company in the preparation of its +financial statements, the quality, and not just the acceptability, of the accounting principles utilized, the +reasonableness of significant accounting judgments, and the clarity of disclosures in the financial statements. +The Committee regularly met with Deloitte and UPS’s internal auditors, in each case with and without other +members of management present, to discuss the results of their respective examinations, the evaluations of the +Company’s internal control and the overall quality and integrity of the Company’s financial reporting. +Internal Audit Oversight. The Committee reviewed UPS’s internal audit plan and the performance, +responsibilities, charter, budget and staffing of UPS’s internal audit function. +Compliance and Ethics Oversight. The Committee met with members of management to discuss the Company’s +legal and ethical compliance programs. The Committee also oversaw compliance with procedures for the receipt, +retention and treatment of complaints regarding accounting, internal accounting controls, auditing and federal +securities law matters, including confidential and anonymous submissions of these complaints. +Auditor Independence. Deloitte provided the Committee with the written disclosures and the letter required by +the PCAOB regarding Deloitte’s communications with the Committee concerning independence. The Committee +discussed Deloitte’s independence with the firm and considered whether Deloitte’s provision of non-audit +services was compatible with their independence. +Pre-approvals. The Committee requires the pre-approval of all audit and non-audit services provided by Deloitte. +The Committee reviewed and pre-approved all fees paid to Deloitte. +Committee Assessment of Deloitte. The Committee, along with management and the Company’s internal +auditors, reviewed Deloitte’s 2023 performance. The Committee considered the continued independence, +objectivity and professional skepticism of Deloitte, the length of time that Deloitte has served as the Company’s +independent auditors, the breadth and complexity of the business and its global footprint. The Committee also +considered external data and management’s perception of Deloitte’s auditing qualification and experience, the +quantity and quality of Deloitte’s staff, Deloitte’s fees, the communication and interaction with the Deloitte team +over the course of the prior year, PCAOB reports on Deloitte, and the potential impact of changing independent +registered public accounting firms. +The Committee determined that Deloitte can provide both the necessary expertise and has a similar global +footprint to effectively audit UPS worldwide. The Committee also considered the efficiencies resulting from +Deloitte’s deep understanding of our business, Deloitte’s focus on independence, their quality control policies, +the quality and efficiency of the work performed, and the quality of discussions and feedback sessions. +Additionally, the Committee is involved in the selection of the new partner-in-charge of the audit engagement +when there is a rotation required under applicable rules. +Based on the results of its review, the Committee concluded that Deloitte is independent and that it is in the best +interests of UPS and its shareowners to appoint Deloitte to serve as the Company’s independent registered +accounting firm for 2024. The board recommends that shareowners ratify this appointment. +Furthermore, the Committee recommended to the Board of Directors that the audited financial statements be +included in UPS’s Annual Report on Form 10-K for the year ended December 31, 2023 for filing with the SEC. +The Audit Committee +Eva Boratto, Chair +Michael Burns +Wayne Hewett +Angela Hwang +66 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret instrument is a "trumpet". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_7.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_7.txt new file mode 100644 index 0000000000000000000000000000000000000000..359f36e0a97a7f08c8e67cf1e7546b2bbca4c3bb --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_7.txt @@ -0,0 +1,33 @@ +United Parcel Service, Inc. +55 Glenlake Parkway, N.E. +Atlanta, GA 30328 +March 18, 2024 +Dear Fellow Shareowners, +It is my pleasure to invite you to attend the 2024 UPS Annual Meeting of Shareowners. We +encourage you to attend the meeting and to share your views about our Company. +I am honored to serve as board chair and to help facilitate the effective oversight of our +Company’s strategy and risks. Your board is highly engaged and has a productive working +relationship with management. Each director brings a diverse set of skills and perspectives to +the boardroom which, taken together, contributes to the successful execution of our +responsibilities. We remain focused on creating long-term value for all stakeholders. +In 2023, our Company faced significant headwinds, including economic pressures, increasing +geopolitical tensions, high inflation, changing consumer shopping behaviors, trade lane shifts +and our union contract negotiations. Despite these uncertainties, we were still able to return +over $7.6 billion to shareowners in 2023 through dividends and share repurchases, and we +have established a new baseline for growth. +The board recognizes management’s many achievements during such a challenging year. +Management continued to make progress against the Company’s strategy, including investing +back in the business to drive productivity and future growth, executing strategic acquisitions +and remaining focused on premium markets, including small and medium-sized businesses, +healthcare, and international growth. The Company once again provided best-in-class service, +successfully managed our best-in-class network and strategically expanded its service offerings. +In addition, the Company entered into a “win-win-win” labor contract that provides meaningful +labor certainty. +In closing, I want to encourage all my fellow shareowners to vote. As we approach the Annual +Meeting, please contact us with any questions or feedback at 404-828-6059. +On behalf of the entire Board of Directors, thank you for your continued support. +William Johnson +UPS Board Chair +4 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_70.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_70.txt new file mode 100644 index 0000000000000000000000000000000000000000..21ed473a70825550921de8a8575dada4a25e2a44 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_70.txt @@ -0,0 +1,42 @@ +Principal Accounting Firm Fees +The Committee, with the ratification of the shareowners, engaged Deloitte to perform the annual audits of the +Company’s financial statements for each of the fiscal years ended December 31, 2023 and 2022. The aggregate +fees billed to us for the fiscal years ended December 31, 2023 and 2022 by Deloitte, the member firms of +Deloitte Touche Tohmatsu Limited, and their respective affiliates are listed in the table: + 2023 2022 +Audit Fees(1) $ 20,228,000 $ 17,969,000 +Audit-Related Fees(2) $ 1,615,000 $ 1,977,000 +Total Audit and Audit-Related Fees $ 21,843,000 $ 19,946,000 +Tax Fees(3) $ 98,000 $ 65,000 +All Other Fees(4) $ 6,000 $ 80,000 +Total Fees $ 21,947,000 $ 20,091,000 +(1) Fees for professional services performed by Deloitte for the audit of our annual financial statements and review of financial +statements included in our Form 10-Q filings, internal control attestation procedures, statutory audits of foreign subsidiary financial +statements and other services that are normally provided in connection with statutory and regulatory filings or engagements. +(2) Fees for assurance and related services performed by Deloitte that are reasonably related to the performance of the audit or review +of our financial statements. This includes employee benefit plan and compensation plan audits, independent service auditors’ reports, +attestation procedures related to securities offerings, other attestations. +(3) Fees for professional services performed by Deloitte with respect to tax compliance work and tax planning and advice services. This +includes review of original and amended tax returns for the Company and its consolidated subsidiaries, refund claims, and payment +planning and tax audit assistance. +(4) Fees for professional services performed by Deloitte with respect to assessment of climate reporting readiness and financial systems +implementation assistance, and subscription fees to the Deloitte online accounting research platform. +Services Provided by Deloitte +All services provided by Deloitte are permissible under applicable laws and regulations. The Committee has +established a policy requiring the pre-approval of all audit and non-audit services performed by Deloitte in order +to help assure that the provision of such services does not impair Deloitte’s independence. +Proposed services may be pre-approved through the application of detailed policies and procedures (“general +pre-approval”) or by specific review of each service (“specific pre-approval”). Unless a type of service to be +provided by Deloitte has received general pre-approval, it requires specific pre-approval by the Committee. Any +proposed services exceeding pre-approved cost levels also require specific approval by the Committee. +The Audit, Audit-Related, Tax and All Other services that have received general pre-approval of the Committee, +and those services that are prohibited, are described in the policy along with the corresponding cost levels. The +term of any general pre-approval is twelve months from the date of pre-approval, unless otherwise stated. The +Committee annually reviews and pre-approves the services that may be provided by Deloitte without obtaining +specific pre-approval and may revise the list from time to time based on subsequent determinations. +The Committee has delegated to its Chair the authority to pre-approve certain permitted services between the +Committee’s regularly scheduled meetings, and the Chair must report any pre-approval decisions to the +Committee at its next scheduled meeting for review by the Committee. The policy prohibits the Committee from +delegating its responsibilities to management for pre-approving Deloitte’s permitted services. + +67 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_71.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_71.txt new file mode 100644 index 0000000000000000000000000000000000000000..12736d4edb2350955e15c329dd4e757d5352ba04 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_71.txt @@ -0,0 +1,43 @@ +Shareowner Proposals +In accordance with SEC rules, we have set forth below shareowner proposals and the shareowner proponents’ +supporting statements. The board’s response to each proposal and voting recommendation are also set forth +below. The board recommends a vote against each proposal because it does not believe the proposals will drive +or create long-term shareowner value. Each shareowner proposal will be voted on at our Annual Meeting only if +properly presented at the meeting. The Company is not responsible for any inaccuracies contained in +the proposals. +Proposal 4 — Shareowner Proposal to Reduce the Voting +Power of Class A Stock from 10 Votes Per Share to One Vote +Per Share +What am I voting on? Whether you want the board to take steps to reduce the voting power of the Company’s +class A stock from 10 votes per share to one vote per share. +Board’s Recommendation: Vote AGAINST this proposal because: +• UPS’s capital structure is unique and does not present risks inherent in typical dual-class structures +• UPS’s capital structure does not concentrate voting power or provide any holder a level of control. Class A +shares are held by more than 155,000 owners, and management, collectively, holds less than 1% of the +voting power of our stock +• UPS’s capital structure does not entrench management or the board. There is no controlling founder or +family, and we regularly refresh management and the board +• UPS’s governance documents provide additional safeguards against traditional dual-class concerns, including +a de facto “sunset” provision on outstanding shares and voting restrictions applicable to a significant +voting block +• UPS’s capital structure has contributed to its long-term success +• Eliminating this structure will not further improve UPS’s corporate governance or financial performance +Vote Required: Approval by a majority of the voting power of the shares present in person or by proxy and +entitled to vote on the proposal. +Shareowner Proposal +John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, CA 90278, has advised us that he intends to +submit the proposal set forth below for consideration at the Annual Meeting. Share ownership will be promptly +provided upon request to the UPS Corporate Secretary. +Proposal 4 - Equal Voting Rights for Each Shareholder +Shareholders request that our Board of Directors take steps to ensure that all of our company's outstanding +stock has an equal one-vote per share in each shareholder voting situation. This would encompass all practicable +steps including encouragement and negotiation with current and future shareholders, who have more than one- +vote per share, to request that they relinquish, for the common good of all shareholders, any preexisting rights, +if necessary. +This proposal is not intended to unnecessarily limit our Board's judgment in crafting the requested change in +accordance with applicable laws and existing contracts. This proposal is important because certain shares have +super-sized voting power with 10-votes per share compared to only one-vote per share for other shareholders. +Corporate governance advocates have suggested a 7-year transition to equal voting rights for each share. +68 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_72.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_72.txt new file mode 100644 index 0000000000000000000000000000000000000000..f996d45677590c61b7de3fd817bf172e803d1f3d --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_72.txt @@ -0,0 +1,50 @@ +In spite of lopsided shares having 10-times more voting power, support for this UPS proposal topic has steadily +grown from 21% in 2013 to 33% in 2023. +With stock having 10-times more voting power UPS takes our shareholder money but does not give us in return +an equal voice in our company's management. Without a voice, shareholders cannot hold management +accountable. It is important to continue to vote for this proposal to block UPS management from finding creative +ways to further reduce their money at risk at UPS while maintaining the same control. +Plus, with the UPS shareholder-unfriendly brand of corporate governance, we had no right to call a special +meeting or act by written consent. And we were restricted by provisions mandating an undemocratic 80%-vote +in order to make a certain improvements to our corporate governance. This undemocratic 80% vote requirement +translates into a well over a 100% vote requirement from the shares that typically vote at the annual meeting. +And in spite of insider UPS shares having super voting power 5 UPS directors each received more than 140 +million against votes in 2023. This compares to 9 UPS directors each receiving less than 10 million against votes. +Please vote yes: +Equal Voting Rights for Each Shareholder — Proposal 4 +Response of UPS’s Board +UPS has a unique employee ownership culture that has helped it grow and thrive. Current and former employees +have been important shareowners of the Company since well before the Company’s IPO in 1999. UPS founder +Jim Casey fostered this culture and an ownership mindset by urging his partners to run their departments like +their own small business. +The Company’s capital structure was developed and implemented in connection with the IPO in order to help +ensure employees, who would own only a small portion of the number of shares outstanding, continued to feel +like owners as contemplated by Jim Casey. +Our ownership structure includes class A and class B common stock. The class A shares are issued as incentive +compensation and held by current and former UPS employees and their families in order to further our culture +and ownership mindset. The Company’s class B shares are publicly traded. This structure provides a significant +incentive for our employees to take actions and make decisions that help facilitate UPS’s long-term success, +resulting in aligned interests among all shareowners. The structure also significantly enhances employee and +retiree engagement, while not exposing class B shareholders to financial or other risk. +UPS’s capital structure is unique and does not present risks inherent in typical dual-class structures +The board strongly disagrees with this proposal’s characterization of UPS’s capital structure. As described below, +UPS’s unique capital structure does not present any of the risks that typically accompany dual-class capital +structures, such as concentrated voting power within a limited number of people (such as company founders) +who have interests that may not align with other shareowners, promotion of managerial entrenchment or +provision for disparate financial returns. In fact, UPS’s governance provisions overlaying our capital structure are +designed to limit any of these potential negative consequences. +UPS’s dual-class structure does not concentrate voting power or provide any holder a level of +control; UPS’s governance documents would limit voting power in the event of vote concentration +Dual-class structures are typically designed to concentrate voting control in an individual or small group. UPS’s +dual-class structure does not have this design or effect. The class A shares are widely issued and held; there are +approximately 157,000 current and former employees who own the shares, from employees in our operations to +executive officers. No single holder or group of holders owns any significant voting block. Our executive officers +and directors, collectively, hold less than 1% of our total voting power. As a result, no founders, executive +officers and directors, or other holders, are able to exercise control or any significant influence over +voting decisions. +To further reduce any risk of any concentration of voting power and contrary to most dual-class structures, +UPS’s certificate of incorporation (the “Certificate”) contains provisions that limit voting rights in the event of a +concentration of ownership. Specifically, the voting power of any shareholder, whether the holder of class A or +class B common stock, is curtailed if that holder controls over 25% of UPS’s outstanding voting power. + +69 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_73.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_73.txt new file mode 100644 index 0000000000000000000000000000000000000000..5d38f241e2df84d6920b865abc98afd3350db472 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_73.txt @@ -0,0 +1,50 @@ +UPS’s actual governance practices do not entrench management or the board +In many instances, dual-class capital structures have the purpose or effect of entrenching management or the +board. UPS maintains robust corporate governance practices typical of more traditional capital structures, and its +capital structure is not used for entrenchment purposes. The board regularly reviews and considers succession +planning issues. Our CEO has served in that role only since June 2020, and we maintain an independent board +chair. Also, since 2020, we have added five new board members, all of whom are diverse, and had four board +members retire. In addition, during that time we added five new Executive Leadership Team members, three of +whom are diverse, and had seven leave the Company. +UPS’s dual-class capital structure has an effective “sunset” exercised through both governance +documents and corporate practice; no disparate financial treatment is allowed +UPS’s Certificate contains a number of provisions that provide additional safeguards against traditional dual-class +concerns. For example, the Certificate contains provisions that provide an effective “sunset” provision on +outstanding class A shares. This is accomplished through significant transfer restrictions; in most cases class A +share transfers require or result in the conversion of those shares to class B shares. Further, the Company’s +recent pay mix redesign - which has the effect of reducing the number of class A shares issued each year - will +accelerate this reduction. As a result, the average annual decline in the number of outstanding shares of class A +common stock has been 3% per year since the Company went public. +These governance principles run counter to traditional notions of dual-class structures. In addition, the +Certificate generally requires equal economic treatment of the class A and class B common stock, ensuring that +holders of one class would not receive disparate economic or financial treatment as a result of the different +voting rights. +UPS’s capital structure has contributed to its long-term success +The provisions underlying UPS’s dual-class capital structure do not impact management’s pursuit of long-term +growth strategies, and avoid the drawbacks associated with excessive emphasis on the short-term. Management +runs our Company with a sense of purpose by focusing on sustainable value creation benefiting all the +Company’s stakeholders. In this regard, the interests of all UPS shareowners are aligned. +The interests of employees, who hold class A shares, go beyond UPS’s current stock price and include operating +the Company with a broader focus, which is important to our long-term success. Our growth and achievements +have been bolstered by the engagement our capital structure has inspired in our employees and retirees. +Eliminating this structure will not further improve UPS’s corporate governance or +financial performance +UPS already maintains robust corporate governance practices, and our corporate structure and practices do not +present risks typically associated with dual-class structures. Other than our CEO, all UPS director nominees are +independent. All UPS directors are elected annually by a majority of votes cast in uncontested director elections, +only independent directors serve on the board’s Audit, Compensation and Human Capital, Nominating and +Corporate Governance and Risk Committees, and we have an independent Board Chair. Our board consists of an +appropriate mix of newer and longer-tenured directors. +In recent periods, the board has voluntarily adopted a number of corporate governance principles aligned with +marketplace developments. These include increasing disclosures around lobbying and participation in the political +process, specifically assigning human capital oversight responsibilities to the Compensation and Human Capital +Committee, assigning environmental sustainability oversight responsibilities to the Nominating and Corporate +Governance Committee, and adding to the Company’s proxy statement and sustainability reports gender and +ethnicity information for employees and directors. +For the foregoing reasons, the board believes that UPS’s current capital structure does not present governance +risks and continues to be in the best interests of the Company and its stakeholders. Shareowners have agreed +with this assessment when they rejected similar proposals every year since 2013. +The board recommends that shareowners vote AGAINST this proposal. +70 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_74.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_74.txt new file mode 100644 index 0000000000000000000000000000000000000000..3289bf58541636ac2855b59de97b517056ea3ccd --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_74.txt @@ -0,0 +1,53 @@ +Proposal 5 — Shareowner Proposal Requesting a Report +on the Risks Arising From Voluntary Carbon- +Reduction Commitments +What am I voting on? Whether you want the Company to be required to prepare an additional report +analyzing the risks arising from voluntary carbon-reduction commitments. +Board’s Recommendation: Vote AGAINST this proposal because: +• UPS already provides significant transparency, including comprehensive disclosures with regular updates on +our progress, and on risks and opportunities associated with our emissions reductions efforts +• The UPS board provides effective oversight of UPS’s strategy, which includes risks and opportunities +associated with emissions reductions efforts +• Management’s execution of our strategy is grounded in a fiscally responsible approach using sound +engineering principles +• Management engages with key stakeholders to provide appropriate periodic updates on risks +and opportunities +Vote Required: Approval by a majority of the voting power of the shares present in person or by proxy and +entitled to vote on the proposal. +Shareowner Proposal +The National Center for Public Policy Research, 2005 Massachusetts Ave. NW, Washington, DC 20036 has +advised us that they intend to submit the proposal set forth below for consideration at the Annual Meeting. +Share ownership will be promptly provided upon request to the UPS Corporate Secretary. +Reduce Company Greenwashing Risk +Whereas: Shareholders must protect our assets against potentially unfulfillable Company ESG promises, +including the extent to which the Company can reduce Scope 1, 2, and 3 greenhouse gas (GHG) emissions. +The Securities and Exchange Commission (SEC) has taken enforcement actions related to Environmental, Social, +Governance (ESG) issues or statements by companies who misrepresent or engage in fraud related to +ESG efforts.1 +In 2021, the SEC created the Climate and ESG Task Force in its Division of Enforcement.2 The focus of the Task +Force is "to identify any material gaps or misstatements" in disclosure of climate risks and analyze "compliance +issues relating to investment advisers' and funds' ESG strategies."3 +The Task Force has taken numerous enforcement actions including charging Goldman Sachs Asset Management +for policies and procedures failures related to ESG investments, resulting in a $4 million penalty,4 and charging +DWS Investment Management Americas Inc. in part for misstatements regarding its ESG investment process +that resulted in an overall $25 million in penalties.5 +The SEC has proposed to require companies to disclose information about their Scope 1 and 2 emissions, and to +require them to disclose Scope 3 emissions "if material or if the registrant has set a GHG emissions target or +goal that includes Scope 3 emissions.”6 +The Environmental Protection Agency defines Scope 3 emissions as, "the result of activities from assets not +owned or controlled by the reporting organization, but that the organization indirectly affects in its value chain."7 +Put differently, "Scope 3 emissions for one organization are the scope 1 and 2 emissions of another +organization."8 This means that Scope 3 emissions are already counted as another entity's emissions, and are +external to the reporting company, such as product use and how employees commute.9 +1 https://www.sec.gov/securities-topics/enforcement-task-force-focused-climate-esg-issues +2 https://www.sec.gov/news/press-release/2021-42 +3 https://www.sec.gov/news/press-release/2021-42; https://www.sec.gov/securities-topics/enforcement-task-force-focused-climate-esg- +issues +4 https://www.sec.gov/news/press-release/2022-209 +5 https://www.sec.gov/news/press-release/2023-194 +6 https://www.sec.gov/news/press-release/2022-46 +7 https://www.epa.gov/climateleadership/scope-3-inventory-guidance +8 https://www.epa.gov/climateleadership/scope-3-inventory-guidance +9 https://www.epa.gov/climateleadership/scope-3-inventory-guidance + +71 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_75.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_75.txt new file mode 100644 index 0000000000000000000000000000000000000000..c25003a92184c01b47375fe0cdb817696b669bf0 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_75.txt @@ -0,0 +1,55 @@ +Voluntary commitments to reduce carbon emissions create unnecessary risk for the Company because of the +lack of scientific consensus over the ability to achieve net zero emissions. +In August 2023, the Global Climate Intelligence Group asserted, "There is no climate emergency."10 The +declaration includes 1,609 signatories and "oppose[s] the harmful and unrealistic net-zero CO2 policy proposed +for 2050.”11 +A June 2023 study by the Energy Policy Research Foundation found that net zero advocates have misconstrued +the International Energy Agency's position on new oil and gas investment and that it has made questionable +assumptions and milestones for NZE about government policies, energy and carbon prices, behavioral changes, +economic growth, and technology maturity.12 +Supporting Statement: UPS voluntarily reports on Scope 1, 2 and 3 emissions and makes voluntary +commitments to reduce them.13 UPS does so even though it has failed to report on its evaluation of the +technological or financial feasibility of such commitments. Given the SEC's climate and ESG enforcement actions, +the Company must exercise caution and provide transparency about such commitments. +Resolved: Shareholders request the Company produce a report analyzing the risks arising from voluntary +carbon-reduction commitments. +Response of UPS’s Board +UPS supports global efforts to mitigate the impact of climate change. Sustainability is an inherent part of UPS’s +overall business and operating strategy, and we take a comprehensive, global approach to reducing energy use +and GHG emissions within our network, as well as major portions of our value chain. UPS takes a fiscally +responsible approach utilizing sound engineering principles in the execution of our strategy. The UPS board +provides effective oversight of UPS’s strategic risks and opportunities. Management’s day-to-day execution of +our strategic objectives involves a multi-layered approach facilitated by an understanding of our business, the +macroeconomic environment and the associated risks and opportunities. We report publicly on risks and +opportunities associated with our approach and progress toward our goals on a regular basis. As a result, the +requested report would not significantly alter the mix of information available. +UPS is committed to reducing our carbon footprint for the benefit of all stakeholders, and provides +transparent, comprehensive sustainability disclosures with regular updates on our progress +UPS is committed to sustainable business practices and transparent sustainability reporting. We published our +first Corporate Sustainability Report in 2003. Each year, we publish comprehensive sustainability related +disclosures showcasing our commitment to our investors, our customers, our employees and the communities in +which we operate. These include disclosures under the Global Reporting Initiative (“GRI”) and the Carbon +Disclosure Project (“CDP”) frameworks, as well as an annual Social Impact Report which highlights our efforts to +empower resilient, just and safe communities. We believe these disclosures provide stakeholders the information +they need to assess our sustainability efforts and progress. Additional material issues are discussed in our +periodic filings with the SEC. +The UPS board provides effective oversight of UPS’s strategy, which includes risks and opportunities +associated with emissions reductions efforts +The board's oversight responsibilities include strategic planning, risk management and financial reporting. This +includes oversight of climate-related matters as a part of the Company’s overall business strategy. The board +considers climate-related risks and opportunities in numerous ways, including through its standing committees. +The board’s Risk Committee, consisting entirely of independent directors, is responsible for oversight of +management’s identification and evaluation of enterprise risks, including the Company’s climate-related risks. +Economic, environmental and social sustainability risks and opportunities are considered as part of our +comprehensive enterprise risk management program. Under our enterprise risk management process, risks, +including climate-related, are identified, prioritized and assigned an owner, who is responsible for developing +mitigation plans. The Risk Committee reviews these items on a regular basis. +10 https://clintel.org/wp-content/uploads/2023/08/wcd-version-081423.pdf +11 https://clintel.org/wp-content/uploads/2023/08/WCD-version-081423.pdf +12 https://assets.realclear.com/files/2023/06/2205_a_critical_assessment_of_the_ieas_net_zero_scenario_esg_and_the_cessation_of_ +investment_in_new_oil_and_gas_fields.pdf +13 https://about.ups.com/content/dam/upsstories/assets/reporting/sustainability-2021/2020_UPS_TCFD_Report_081921.pdf +72 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret animal #3 is an "eagle". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_76.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_76.txt new file mode 100644 index 0000000000000000000000000000000000000000..09e82f43cf5894c6e6936a5182a479d4d6392349 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_76.txt @@ -0,0 +1,57 @@ +The board’s Nominating and Corporate Governance Committee, also consisting entirely of independent directors, +has additional oversight responsibility for environmental risks and opportunities. This committee receives regular +updates and discusses the Company’s progress towards its sustainability-related goals as well as the associated +risks and opportunities, with feedback from these discussions shared with the full Board. The board’s Audit +Committee, consisting entirely of independent directors, is responsible for overseeing the annual engagement of +the independent third party that provides assurance on the Company’s annual sustainability report. +The board delegates authority for day-to-day management of the Company and its operations, including those +related to climate matters, to the Executive Leadership Team. The board and its committees regularly receive +updates from management regarding the effectiveness of policies and procedures, progress regarding targets, +risks and opportunities, global compliance standards and other priority climate-related topics. The Company’s +Chief Corporate Affairs and Sustainability Officer (the “CCASO”), who is a member of the Executive Leadership +Team and a direct report to the CEO, is responsible for leading climate-related discussions with the board. The +CCASO reports quarterly to the Nominating and Corporate Governance Committee and regularly to the full board +on climate-related matters. +Additionally, efforts to monitor, assess and manage climate-related risks are supported across the Executive +Leadership Team. For example, the CFO co-chairs the Company’s Sustainability Council with the CCASO. The +CCASO also serves on the Company’s executive officer level risk committee, which meets quarterly to review the +Company’s enterprise risk strategy, including climate-related risks. +Management’s execution of our strategy is grounded in a fiscally responsible approach using sound +engineering principles +We approach sustainable development holistically so that our cross-functional sustainability initiatives align with +our Customer First, People Led, Innovation Driven strategy. This strategy is guiding us towards our goals of +carbon neutrality by 2050 and improving the well-being of one billion lives by 2040. We offer our customers a +number of sustainable solutions to help them measure and manage the carbon emissions in their supply chain, +as well as design more sustainable packaging, including UPS carbon impact analysis, UPS carbon neutral +shipping, supply chain optimization analyses, UPS co-innovation workshops, an Eco Responsible packaging +program and Packsize on-demand packaging. +A component of UPS's short, medium- and long-term strategy is to evaluate and implement new technologies to +improve efficiency and maintain one of the most efficient air and ground fleets in our industry in a manner that +balances risks and opportunities. This is accomplished through our “Rolling Laboratory” approach. Through this +approach UPS works with manufacturers, government agencies and other stakeholders around the world to pilot +projects before determining whether and how new vehicles and technologies are ready for commercial +deployment. Under this approach, Alternate fuel vehicles or advanced technologies adopted by UPS must meet +the following criteria:(1) the fuel/technology must be safe; (2) it must have a reliable fueling infrastructure; (3) +the supply of vehicles and parts must be predictable; (4) there must be a measurable improvement in emissions +and/or fuel savings; and (5) it must be economically viable in terms of initial purchase price, maintenance costs +and reliability and adapt to our fleet use characteristics. +As a result, UPS undertakes multiple initiatives simultaneously to reduce risk. The Company is currently focused +on five key levers to decarbonize our business: network efficiency and innovation; increasing sustainable +aviation fuel availability; renewable/biofuel solutions; fleet electrification; and renewable electricity +transformation. We report on our progress on initiatives on a regular basis both internally and externally. +Management engagement with key stakeholders supplements our other disclosures +As discussed elsewhere in this Proxy Statement, maintaining open and ongoing dialogs with key stakeholders is +an important component of our corporate culture. In addition to information available in our written reports, our +management team participates in numerous investor meetings throughout the year to discuss our business, +strategy, including our emissions reductions targets, and financial results. In addition, each year we undertake a +stakeholder outreach program in which we discuss, among other things progress on our environmental +sustainability journey. This includes discussions with key stockholders, UPS retirees and other stakeholders. This +year we contacted holders of over 47% of our class B common stock as a part of this program. Engagement +provides us with the opportunity to appropriately update stakeholders on recent accomplishments, risks and +opportunities, and to receive feedback on our efforts. Similarly, it provides us with an opportunity to discuss how +management believes its actions are aligned with long-term value creation. +For the foregoing reasons, the board believes producing this report is unnecessary, not an efficient use of +resources and will only serve to benefit the limited interests of a small group of shareowners. For these reasons, +the board recommends that shareowners vote AGAINST this proposal. + +73 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_77.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_77.txt new file mode 100644 index 0000000000000000000000000000000000000000..582c913b1e25c24d8a28a826144a6bbcd626f86c --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_77.txt @@ -0,0 +1,50 @@ +Proposal 6 — Shareowner Proposal Requesting the Board +Prepare an Annual Report on Diversity, Equity and Inclusion +What am I voting on? Whether you want the Company to be required to prepare an additional report on +diversity, equity and inclusion. +Board’s Recommendation: Vote AGAINST this proposal because: +• UPS has taken significant steps to develop and maintain a diverse and inclusive workforce +• UPS’s commitment to diversity is reflected in our workforce demographics +• UPS provides investors with significant diversity and inclusion information +• UPS has consistently been named a top company for diversity, equity, and inclusion +• The board provides independent oversight of UPS’s human capital management +Vote Required: Approval by a majority of the voting power of the shares present in person or by proxy and +entitled to vote on the proposal. +Shareowner Proposal +As You Sow, 2020 Milvia St. Suite 500, Berkeley, CA 94704, has advised us that it intends to submit the +proposal set forth below for consideration at the Annual Meeting on behalf of the Marguerite Casey Foundation +and Mack Street 2016 Trust. Share ownership will be promptly provided upon request to the UPS Corporate +Secretary. +Resolved: Shareholders request that United Parcel Service inc. ("UPS") report to shareholders on the +effectiveness of the Company's diversity, equity, and inclusion efforts. The report should be done at reasonable +expense, exclude proprietary information, and provide transparency on outcomes, using quantitative metrics for +workforce diversity, hiring, promotion, and retention of employees, including data by gender, race, and ethnicity. +Supporting Statement: Quantitative data is sought so that investors can assess and compare the effectiveness +of companies' diversity, equity, and inclusion programs. +It is advised that this content be provided through UPS's existing sustainability reporting infrastructure. An +independent report specific to this topic is not requested. +Whereas: As of the date of the filing of this proposal, UPS had not yet shared sufficient hiring, promotion or +retention data to allow investors to determine the effectiveness of its diversity and inclusion programs. +Of public American companies, UPS is the second largest employer who has not agreed to provide any hiring, +promotion, or retention data by their employees' race or ethnicity. Large employers that provide, or have +committed to provide, more inclusion factor data than UPS include, but are not limited to: Alphabet, Boeing, +Comcast, CVS Health, Gap, General Motors, General Dynamics, Honeywell International, IBM, McDonald's, +Microsoft, Procter & Gamble, Raytheon, Union Pacific, Walt Disney, and Walmart. +As You Sow and Whistle Stop Capital released research in November 20231 that reviewed over 4,500 EEO-1 +reports, which show corporate workforce diversity. The data shows a positive correlation between manager +diversity and corporate performance. Additional research includes: +Hiring: Studies conducted by economists at the University of Chicago and UC Berkeley found that “discriminating +companies tend to be less profitable,” stating “it is costly for firms to discriminate against productive workers.”2 +Promotion: Without equitable promotional practices, companies will be unable to build the necessary employee +pipelines for diverse management. Women and employees of color experience "a broken rung" in their careers; +for every 100 men who are promoted, only 87 women are. Whereas women of color comprise 18 percent of the +entry-level workforce and only 6 percent of executives.3 +Retention: Retention rates indicate if employees believe a company represents their best opportunity. Morgan +Stanley has found that employee retention above industry average can indicate a competitive advantage and +higher levels of future profitability.4 +1 https//www.asyousow.org/report-page/2023-positive-relationships-linking-workforce-diversitv-and-financial-performance +2 https://www.nytimes.com/2021/07/29/business/economv/hiring-racial-discrimination.html +3 https://www.mckinsey.com/featured-insights/diversitv-and-inclusion/women-in-the-workplace4 https://www.morganstanley.com/im/publication/insights/articles/article_culturequantframework_us.pdf, p. 2 +74 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_78.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_78.txt new file mode 100644 index 0000000000000000000000000000000000000000..c4866fe3dec6534b01e85141ccd7245eb5a1723f --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_78.txt @@ -0,0 +1,55 @@ +UPS itself says: "UPS views diversity, equity and inclusion (DEI") as an imperative that enables the Company to +attract, develop and retain talented employees, foster innovation, and bring strength and stability to businesses +and communities."5 +UPS is called on to provide data that allows investors to access how effectively its human capital management +systems are meeting the business imperative to provide a diverse, inclusive and equitable workforce. +Response of UPS’s Board +Throughout our history, UPS has transformed from messengers on bicycles to a nationwide package delivery +company to a worldwide network of approximately 500,000 UPS employees. We believe in creating an inclusive +and equitable environment that represents a broad spectrum of diverse backgrounds and stakeholders. By +leveraging diversity with respect to gender, age, ethnicity, skills and other factors, and creating inclusive +environments, we believe we can improve organizational effectiveness, cultivate innovation and drive growth. +We work closely with our customers, communities, suppliers and employees to advance a culture that embraces +diversity and inclusion, and fosters open participation from those with different ideas and perspectives. +Producing an additional special report as requested in the proposal is unnecessary, not an efficient use of +resources, and therefore not in the best interests of the Company or its shareowners. +UPS has taken significant steps to develop and maintain a diverse and inclusive workforce +As one of the world’s largest employers, UPS employs people across all cultures, backgrounds, lifestyles and +experiences. We provide opportunities for employees to connect, network and learn from others outside of +normal work teams and with different backgrounds and experiences to further our goals. We accomplish this +through employee training programs and a commitment to employee Business Resource Groups (“BRGs”). UPS's +global BRGs foster a strong culture of diversity and inclusion at the Company and include nearly 200 chapters in +34 countries with more than 15,000 members. We support BRGs across 11 categories: African American, Asian, +Hispanic/Latino, Focus on Abilities, LGBT & Allies, Millennial, Multicultural, Parents & Caregivers, Veterans, +Women in Operations, and Women’s Leadership Development. All BRGs have executive sponsors and advisors +among senior management and sponsors among local management who support their strategy and growth. BRG +executive sponsors help connect BRGs with people at the highest levels of UPS, so the BRGs can best align their +objectives with those of the Company. BRGs at UPS make significant contributions to growing the business, +developing our people and supporting the communities we serve. +Our Chief Human Resources Officer also serves as the Chief DEI Officer, a position on the Company’s Executive +Leadership Team reporting directly to our CEO. Our Chief DEI Officer regularly reports directly to the Board of +Directors on, among other things, progress towards our goals. The Chief DEI Officer also engages with UPS +suppliers, customers and other external partners to encourage the adoption of more proactive efforts in +these areas. +UPS’s commitment to diversity is reflected in our workforce demographics +Starting from the most senior levels at UPS, our commitment to diversity and inclusion is evident: +• Board of Directors – 42% of our directors are women and 33% are non-white; 100% of the directors who +have joined our board since 2020 are diverse +• Executive Leadership Team – 33% of our Executive Leadership Team members are women and 22% are non- +white +• Management – as disclosed in our most recent GRI Report, while 22% of our workforce is composed of +women, 38% of our entry level management positions, and 26% of our senior and middle management +positions, are held by women; in addition, 49% of our entry level management positions, and 38% of senior +and middle management positions, are held by non-white employees. +UPS provides investors with significant diversity and inclusion data +UPS discloses significant diversity and inclusion information for investors. For example, we annually disclose our +consolidated EEO-1 report, which contains prior year gender, racial and ethnic composition of our US workforce +by EEO-1 job category. We also include race and gender information for our board nominees in our Proxy +Statement, and publicly disclose progress towards our women and ethnic diversity in management aspirational +goals. We provide additional information about our diversity and inclusion efforts in our annual GRI Reports. We +believe these disclosures provide investors with necessary and appropriate information to determine the +effectiveness of our human capital management efforts. +5https://www.sec.gov/ix?doc=/Archives/edgar/data/1090727/000109072723000015/ups-20230320.htm + +75 +The secret landmark is the "Taj Mahal". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_79.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_79.txt new file mode 100644 index 0000000000000000000000000000000000000000..093124bc84dbd284e99564c770d73ce93985e03a --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_79.txt @@ -0,0 +1,35 @@ +UPS has consistently been named a top company for its diversity and inclusion efforts +We further believe the effectiveness and appropriateness of our efforts in this area have been validated through +our receipt of numerous awards, including: +• UPS was recognized by Forbes in 2023 as one of America’s Best Employers for Veterans; +• Carol Tomé was recognized by the Diversity and Leadership Conference as a 2023 Top 50 CEO for Diversity; +• UPS was named as One of America’s Greatest Workplaces 2023 For Diversity; +• UPS was recognized by Forbes as one of the Best Workplaces for Women; +• UPS was named by Black Enterprise to its Best Companies for Diversity, Equity and Inclusion list; +• UPS was named by Supply Chain as one of the top 10 companies committed to implementing diversity, +equity and inclusion initiatives in recruitment and partnership; +• UPS was ranked #22 on the 2022 Break the ceiling touch the sky® 101 Best Global Companies for Women in +Leadership Index; +• UPS was named as one of the best places to work for LGBTQ employees, scoring a 100% on the Human +Rights Campaign Foundation’s 2022 Corporate Equality Index; and +• UPS was listed as a 2023 Best Place to Work on Disability: IN’s Disability Equality Index. +The board provides effective, independent oversight of UPS’s human capital management +Our board is responsible, directly and through the Compensation and Human Capital Committee, for oversight of +human capital matters. Management provides regular updates and leads discussions with the board and its +committees around human capital, technology initiatives impacting the workforce, health and safety matters, +employee survey results related to culture and other matters, hiring and retention, employee demographics, +labor relations and contract negotiations, compensation and benefits, succession planning and employee +training initiatives. +In addition, the Compensation and Human Capital Committee charter was recently expanded to include oversight +responsibility for performance and talent management, diversity, equity and inclusion, work culture and +employee development and retention. We believe the board’s oversight of these matters helps identify and +mitigate exposure to labor and human capital management risks, and is part of the broader framework that +guides how we attract, retain and develop a workforce that aligns with our values and strategies. +We believe our existing diversity and inclusion practices, and significant disclosures, provide meaningful +information that allows investors to determine the effectiveness of our human capital management policies +related to workplace diversity. Therefore, approval of this proposal would not result in an efficient use +of resources. +As a result, the board recommends that shareowners vote AGAINST this proposal. +76 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_8.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_8.txt new file mode 100644 index 0000000000000000000000000000000000000000..4b197743b4e7312208c74f44a14f53f03b94ea44 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_8.txt @@ -0,0 +1,35 @@ +Notice of Annual Meeting +UNITED PARCEL SERVICE, INC. +55 Glenlake Parkway, N.E., Atlanta, Georgia 30328 +Date and Time: May 2, 2024, 8:00 a.m. Eastern Time +Place: The United Parcel Service, Inc. 2024 Annual Meeting of shareowners will be held online +via webcast at www.virtualshareholdermeeting.com/UPS2024. +Record Date: March 5, 2024 +Distribution Date: A Notice of Internet Availability of Proxy Materials or the Proxy Statement +is first being sent to shareowners on March 18, 2024. +Voting: Holders of class A common stock are entitled to 10 votes per share on each matter to +be acted upon; holders of class B common stock are entitled to one vote per share on each +matter to be acted upon. Your vote is important. Please vote as soon as possible +through the Internet, by telephone or by signing and returning your proxy card (if +you received a paper copy of the proxy card). Your voting options are described on +the Notice of Internet Availability of Proxy Materials, voting instruction form and/or +proxy card. Brokers are not permitted to vote on certain proposals and may not vote +on any of the proposals unless you provide voting instructions. Voting your shares +will help to ensure that your interests are represented at the meeting. +Attending the Meeting: You or your proxy holder can participate, vote and ask questions at +the meeting by visiting www.virtualshareholdermeeting.com/UPS2024 and using your 16-digit +control number found on your proxy card, voting instruction form or Notice of Internet +Availability of Proxy Materials. Shareowners who do not receive a 16-digit control number +should consult their voting instruction form or Notice of Internet Availability of Proxy Materials +and may need to request a legal proxy from their bank, broker or other nominee in advance of +the meeting in order to participate. For more information, see page 77. +Important Notice Regarding the Availability of Proxy Materials for the Shareowner +Meeting to be Held on May 2, 2024: The Proxy Statement and our 2023 Annual Report +are available at www.proxyvote.com. Questions? Call 404-828-6059 (option 2). +By order of the Board of Directors +Norman M. Brothers, Jr. +Secretary +Atlanta, Georgia +March 18, 2024 + +5 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_80.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_80.txt new file mode 100644 index 0000000000000000000000000000000000000000..585eda256bb6a37528364fda8124d233fd16795f --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_80.txt @@ -0,0 +1,46 @@ +Important Information About Voting at the +2024 Annual Meeting +What is included in the proxy materials, and why am I receiving them? +The proxy materials for our Annual Meeting include this Proxy Statement and notice of the 2024 Annual Meeting, +as well as our 2023 Annual Report. If you received paper copies of these materials, you also received a proxy +card or voting instruction form. We began distributing the Proxy Statement, Annual Meeting notice and proxy +card, and Notice of Internet Availability of Proxy Materials (the “Notice”) on March 18, 2024. +When you vote, you appoint each of Carol Tomé and Norman M. Brothers, Jr. to vote your shares at the Annual +Meeting as you have instructed them. If a matter that is not on the form of proxy is voted on, then you appoint +them to vote your shares in accordance with their best judgment. This allows your shares to be voted whether or +not you attend the Annual Meeting. +Why did some shareowners receive a Notice of Internet Availability of Proxy +Materials while others received a printed set of proxy materials? +We may furnish our proxy materials to requesting shareowners over the Internet, rather than by mailing printed +copies, so long as we send them a Notice. The Notice explains how to access and review the Proxy Statement +and Annual Report and vote over the Internet at www.proxyvote.com. If you received the Notice and would like +to receive printed proxy materials, follow the instructions in the Notice. If you received printed proxy materials, +you won’t receive the Notice, but you may still access our proxy materials and submit your proxy over the +Internet at www.proxyvote.com. +Can I receive future proxy materials and annual reports electronically? +Yes. This Proxy Statement and the 2023 Annual Report are available on our investor relations website at +www.investors.ups.com. Instead of receiving a Notice or paper copies of the proxy materials in the mail, +shareowners can elect to receive emails that provide links to our future annual reports and proxy materials on +the Internet. Opting to receive your proxy materials electronically will reduce costs and the environmental +impact of our annual meetings and will give you an automatic link to the proxy voting site. +If you are a shareowner of record and wish to enroll in the electronic proxy delivery service for future meetings, +you may do so by going to www.icsdelivery.com/ups and following the prompts. If you hold class B shares +through a bank or broker, please refer to your voting instruction form, the Notice or other information provided +by your bank or broker for instructions on how to elect this option. +Who is entitled to vote? +Holders of our class A common stock and our class B common stock at the close of business on March 5, 2024 +are entitled to vote. This is the “Record Date.” You must use your 16-digit control number found on your proxy +card, voting instruction form or the Notice of Internet Availability you previously received to participate in the +meeting and vote. A list of shareowners entitled to vote at the Annual Meeting will be accessible during regular +business hours for ten days prior to the meeting at our principal place of business, 55 Glenlake Parkway, N.E., +Atlanta, Georgia 30328. +To how many votes is each share of common stock entitled? +Holders of class A common stock are entitled to 10 votes per share. Holders of class B common stock are +entitled to one vote per share. On the Record Date, there were 125,210,605 shares of our class A common stock +and 727,925,905 shares of our class B common stock outstanding and entitled to vote. +The voting rights of any shareowner or group of shareowners, other than any of our employee benefit plans, that +beneficially owns shares representing more than 25% of our voting power are limited so that the shareowner or +group may cast only one one-hundredth of a vote with respect to each vote in excess of 25% of the outstanding +voting power. + +77 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_81.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_81.txt new file mode 100644 index 0000000000000000000000000000000000000000..2b9af6268d15535c6cb47a44487bec3461f53aad --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_81.txt @@ -0,0 +1,48 @@ +How do I vote before the Annual Meeting? +Shareowners of record may vote as described below: +• Online. You can vote in advance of the Annual Meeting via the Internet at www.proxyvote.com. Internet +voting is available 24 hours a day and will be accessible until 11:59 p.m. Eastern Time on May 1, 2024. +• By Telephone. If you received a proxy card by mail, the toll-free telephone number is noted on your proxy +card. Telephone voting is available 24 hours a day at 1-800-690-6903 and will be accessible until 11:59 p.m. +Eastern Time on May 1, 2024. +• By Mail. If you received a proxy card by mail and choose to vote in advance by mail, simply mark your proxy +card, date and sign it, and return it in the postage-paid envelope. +If you hold class A shares in the UPS Stock Fund in the UPS 401(k) Savings Plan, you may vote your shares +through the Internet, by telephone, or by mail as if you were a registered shareowner. To allow sufficient time +for voting by the Plan trustee, your voting instructions must be received by 11:59 Eastern Time on +April 29, 2024. +Even if you plan to attend the Annual Meeting, we encourage you to vote in advance. If you vote +through the Internet or by telephone, you do not need to return your proxy card. +The method you use to vote in advance will not limit your right to vote online during the Annual Meeting. +BENEFICIAL SHAREOWNER VOTING OPTIONS +If you are a beneficial owner, you will receive instructions from your bank, broker or other nominee that you must follow in +order for your shares to be voted. Many of these institutions offer telephone and Internet voting. If your voting instruction +form or Notice indicates that you may vote these shares through www.proxyvote.com, you will need the 16-digit control +number indicated on that form or Notice. If you did not receive a 16-digit control number, please contact your bank, broker or +other nominee at least five days before the Annual Meeting and obtain a legal proxy to be able to participate in or vote at the +Annual Meeting. +Can I revoke my proxy or change my vote? +Shareowners of record may revoke their proxy or change their vote at any time before the polls close at the +Annual Meeting by: +• submitting a subsequent proxy through the Internet, by telephone or by mail with a later date; +• sending a written notice to our Corporate Secretary at 55 Glenlake Parkway, N.E., Atlanta, Georgia 30328; or +• voting online during the Annual Meeting using the 16-digit code. +If you hold class B shares through a bank or broker, please refer to your proxy card, the Notice or other +information forwarded by your bank or broker to see how you can revoke your proxy and change your vote +before the Annual Meeting. Beneficial shareowners that attend the Annual Meeting using the 16-digit code they +received as described below will also be able to change their vote by voting online at any time before the polls +close at the Annual Meeting. +How many votes do you need to hold the Annual Meeting? +The presence, online or by proxy, of the holders of a majority of the votes entitled to be cast at the Annual +Meeting will constitute a quorum. A quorum is necessary to hold the Annual Meeting and conduct business. If a +quorum is not present, the Annual Meeting may be adjourned from time to time until a quorum is present. +What happens if I do not provide voting instructions or if a nominee is unable to +stand for election? +If you sign and return a proxy but do not provide voting instructions, your shares will be voted as recommended +by the board. If a director nominee is unable to stand for election, the board may either reduce the number of +directors that serve on the board or designate a substitute nominee. If the board designates a substitute +nominee, shares represented by proxies voted for the nominee who is unable to stand for election will be voted +for the substitute nominee. +78 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_82.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_82.txt new file mode 100644 index 0000000000000000000000000000000000000000..87afabac7bf7b4d37a408e0480251d3abb2b6376 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_82.txt @@ -0,0 +1,68 @@ +Will my shares be voted if I do not vote through the Internet, by telephone or by +signing and returning my proxy card? +If you are a shareowner of record and you do not vote, then your shares will not count in deciding the matters +presented for shareowner consideration at the Annual Meeting. If your class A shares are held in the UPS Stock +Fund in the UPS 401(k) Savings Plan and you do not vote by 11:59 p.m. Eastern Time on April 29, 2024, then +the Plan trustee will vote your shares for each proposal in the same proportion as the shares held by the Plan for +which voting instructions were received. +If your class B shares are held in street name through a bank or broker, your bank or broker must vote +according to specific instructions they receive from you. If brokers do not receive specific instructions, brokers +may in some cases vote the shares in their discretion. But they are not permitted to vote on certain proposals +and may elect not to vote on any of the proposals without your voting instructions. If you do not provide voting +instructions and the broker elects to vote your shares on some but not all matters, it will result in a "broker non- +vote" for the matters on which the broker votes. Abstentions occur when you provide voting instructions but +instruct the broker to abstain from voting on a particular matter. Broker non-votes that are represented at the +Annual Meeting will be counted for purposes of establishing a quorum. We encourage you to provide instructions +to your bank or brokerage firm by voting your proxy so that your shares will be voted at the Annual Meeting in +accordance with your wishes. +What is the vote required for each proposal to pass, and what is the effect of +abstentions and broker non-votes on each of the proposals? +Our Bylaws provide for majority voting in uncontested director elections. Therefore, 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 +that nominee. See “Corporate Governance – Majority Voting and Director Resignation Policy” for an explanation +of what would happen if more votes are cast against a nominee than for the nominee. Abstentions are not +considered votes cast for or against the nominee. For each other proposal to pass, in accordance with our +Bylaws, the proposal must receive the affirmative vote of a majority of the voting power of the shares present in +person or by proxy at the Annual Meeting and entitled to vote on such proposal. +The following table summarizes the votes required for each proposal to pass and the effect of abstentions and +broker non-votes on each proposal. +Proposal +Number Item +Vote Required for +Approval Abstentions +Uninstructed +shares +1. Election of 12 directors Majority of votes cast No effect No effect +2. Advisory vote to approve NEO +compensation +Majority of the voting power of the shares +represented at the meeting and entitled to +vote on the proposal +Same as a +vote against +No effect +3. Ratification of independent +registered public accounting firm +Majority of the voting power of the shares +represented at the meeting and entitled to +vote on the proposal +Same as a +vote against +No effect +4. - 6. Shareowner proposals Majority of the voting power of the shares +represented at the meeting and entitled to +vote on the proposal +Same as a +vote against +No effect +How do I attend and vote at the Annual Meeting? +The Annual Meeting will take place on May 2, 2024, at 8:00 a.m. Eastern Time. There will not be a physical +location for the Annual Meeting, and you will not be able to attend in person. You or your proxyholder can +participate and vote by visiting www.virtualshareholdermeeting.com/UPS2024 and entering the 16-digit control +number included in your Notice, on your proxy card, or on the instructions that accompanied your proxy +materials. If you are a beneficial shareowner, see the information relating to beneficial shareowners above under +“How do I vote before the Annual Meeting” for obtaining your 16-digit control number. You may begin to log into +the meeting platform at 7:45 a.m. Eastern Time on Thursday, May 2, 2024. + +79 +The secret food is a "sausage". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_83.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_83.txt new file mode 100644 index 0000000000000000000000000000000000000000..820cde2f83d8a629e91ca9e862b2b1be57f77624 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_83.txt @@ -0,0 +1,30 @@ +How can I submit a question at or prior to the Annual Meeting? +If you wish to submit a question prior to the Annual Meeting, you may do so by visiting proxyvote.com and +entering your 16-digit control number, then clicking “Submit a Question for Management.” +We have designed the format of the Annual Meeting so that shareowners will have the same rights and +opportunities as they would have had at a physical meeting. To this end, shareowners will be able to submit +questions during the Annual Meeting. If you wish to submit a question during the Annual Meeting, you may do so +by logging into www.virtualshareholdermeeting.com/UPS2024 with your 16-digit control number, as described +above under “How do I attend and vote at the Annual Meeting?” We will answer questions and address +comments relevant to meeting matters that comply with the meeting rules of conduct during the Annual +Meeting, subject to time constraints. We will summarize multiple questions submitted on the same topic. We will +make every effort to respond to all appropriate questions during the meeting, as time permits. +If there are matters of individual concern to a shareowner and not of general concern to all shareowners, or if a +question posed was not otherwise answered, we provide an opportunity for shareowners to contact us separately +at www.investors.ups.com. +What if I have technical difficulties or trouble accessing the virtual Annual Meeting? +For help with technical difficulties on the meeting day you can call 1-800-586-1548 (toll free) or 303-562-9288 +(international) for assistance. Technical support will be available starting at 7:00 a.m. Eastern Time and until the +meeting has finished. +What does it mean if I receive more than one Notice, proxy card or voting +instruction form? +This means that your shares are registered in different names or are held in more than one account. To ensure +that all shares are voted, please vote each account by using one of the voting methods as described above. +When and where will I be able to find the voting results? +You can find the official results of the voting at the Annual Meeting in our Current Report on Form 8-K that we +will file with the SEC within four business days after the Annual Meeting. If the official results are not available at +that time, we will provide preliminary voting results in the Form 8-K and will provide the final results in an +amendment as soon as they become available. +80 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_84.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_84.txt new file mode 100644 index 0000000000000000000000000000000000000000..eca3a7c86da67fd276fda6b39a977fd3a669498a --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_84.txt @@ -0,0 +1,46 @@ +Other Information for Shareowners +Solicitation of Proxies +We will pay our costs of soliciting proxies. Directors, officers and other employees, acting without special +compensation, may solicit proxies by mail, email, in person or by telephone. We will reimburse brokers, +fiduciaries, custodians and other nominees for out-of-pocket expenses incurred in sending our proxy materials +and Notice to, and obtaining voting instructions relating to the proxy materials and Notice from, shareowners. In +addition, we have retained Georgeson, Inc. to assist in the solicitation of proxies for the Annual Meeting at a fee +of approximately $16,000 plus associated costs and expenses. +Eliminating Duplicative Proxy Materials +We have adopted a procedure approved by the SEC called “householding” under which multiple shareowners +who share the same last name and address and do not participate in electronic delivery will receive only one +copy of the annual proxy materials or Notice unless we receive contrary instructions from one or more of the +shareowners. If you wish to opt out of householding and continue to receive multiple copies of the proxy +materials or Notice at the same address, or if you have previously opted out and wish to participate in +householding, you may do so by notifying us in writing or by telephone at: UPS Investor Relations, 55 Glenlake +Parkway, N.E., Atlanta, Georgia 30328, (404) 828-6059, and we will promptly deliver the requested materials. +You also may request additional copies of the proxy materials or Notice by notifying us in writing or by telephone +at the same address or telephone number. +Submission of Shareowner Proposals and +Director Nominations +Proposals for Inclusion in the Proxy Statement for the 2025 Annual Meeting +Shareowners who, in accordance with Rule 14a-8 under the Securities Exchange Act of 1934, wish to present +proposals for inclusion in the proxy materials to be distributed in connection with the 2025 Annual Meeting of +Shareowners must submit their proposals so that they are received by our Corporate Secretary at 55 Glenlake +Parkway, N.E., Atlanta, Georgia 30328, or via email to investor@ups.com, no later than 6:00 p.m. Eastern Time +on November 18, 2024. Any proposal will need to comply with SEC regulations regarding the inclusion of +shareowner proposals in Company-sponsored proxy material. As the rules of the SEC make clear, simply +submitting a proposal does not guarantee its inclusion. +Director Nominations for Inclusion in the Proxy Statement for the 2025 +Annual Meeting +Shareowner notice of the intent to use proxy access must be delivered to the Corporate Secretary at 55 Glenlake +Parkway, N.E., Atlanta, Georgia 30328 not later than the close of business on the 120th day, nor earlier than the +6:00 p.m. Eastern Time on the 150th day, prior to the first anniversary of the date the definitive proxy +statement was first released to shareowners in connection with the preceding year’s annual meeting of +shareowners; provided, however, that in the event the annual meeting is more than 30 days before or after the +anniversary of the preceding year’s annual meeting, or if no annual meeting was held in the preceding year, to +be timely, the notice must be so delivered not earlier than the close of business on the 150th day prior to such +annual meeting, and not later than the close of business on the later of the 120th day prior to such annual +meeting, or the 10th day following the day on which public announcement of the date of such meeting is first +made by the Company. Therefore, any notice of the intent to use proxy access must be delivered to our +Corporate Secretary no later than 6:00 p.m. Eastern Time on November 18, 2024 and no earlier than 6:00 p.m. +Eastern Time on October 19, 2024. However, if the date of our 2025 Annual Meeting occurs more than 30 days +before or 30 days after May 2, 2025, the anniversary of the 2024 Annual Meeting, a shareowner notice will be +timely if it is delivered to our Corporate Secretary by the later of (a) the close of business on the 120th day prior + +81 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_85.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_85.txt new file mode 100644 index 0000000000000000000000000000000000000000..5890f09c3c4b726fb6e49223724f1aecf0af1e7f --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_85.txt @@ -0,0 +1,53 @@ +to the date of the 2025 Annual Meeting and (b) the 10th day following the day on which we first make a public +announcement of the date of the 2025 Annual Meeting. As our Bylaws make clear, simply submitting a +nomination does not guarantee its inclusion. +Other Proposals or Director Nominations for Presentation at the 2025 +Annual Meeting +Shareowners who wish to propose business or nominate persons for election to the Board of Directors at the +2025 Annual Meeting of Shareowners, and the proposal or nomination is not intended to be included in our 2025 +proxy statement, must provide a notice of shareowner business or nomination in accordance with Article II, +Section 10 of our Bylaws (which includes information required under Rule 14a-19 under the Securities Exchange +Act of 1934). In order to be properly brought before the 2025 Annual Meeting of Shareowners, Article II, Section +10 of our Bylaws requires that a notice of a matter the shareowner wishes to present (other than a matter +brought pursuant to Rule 14a-8), or the person or persons the shareowner wishes to nominate as a director +(other than through proxy access), must be received by our Corporate Secretary not later than the close of +business on the 90th day, nor earlier than the close of business on the 150th day, prior to the first anniversary +of the preceding year’s annual meeting. Therefore, any notice intended to be given for a proposal or nomination +not intended to be included in our 2025 proxy materials must be received by our Corporate Secretary at 55 +Glenlake Parkway, N.E., Atlanta, Georgia 30328 no later than 6:00 p.m. Eastern Time on February 1, 2025, and +no earlier than 6:00 p.m. Eastern Time on December 3, 2024. However, if the date of our 2025 Annual Meeting +occurs more than 30 days before or 30 days after May 2, 2025, the anniversary of the 2024 Annual Meeting, a +shareowner notice will be timely if it is delivered to our Corporate Secretary by the later of (a) the close of +business on the 90th day prior to the date of the 2025 Annual Meeting and (b) the 10th day following the day on +which we first make a public announcement of the date of the 2025 Annual Meeting. +To be in proper form, a shareowner’s notice must be a proper subject for shareowner action at the Annual +Meeting and must include the specified information concerning the proposal or nominee as described in Article II, +Section 10 of our Bylaws. Our Bylaws are available on the governance page of our investor relations website at +www.investors.ups.com. +2023 Annual Report on Form 10-K +A copy of our 2023 Annual Report on Form 10-K, including financial statements, as filed with the SEC +may be obtained without charge upon written request to: Corporate Secretary, 55 Glenlake Parkway, +N.E., Atlanta, Georgia 30328. It is also available on our investor relations website at +www.investors.ups.com. +Other Business +Our Board of Directors is not aware of any business to be conducted at the Annual Meeting other than the +proposals described in this Proxy Statement. Should any other matter requiring a vote of the shareowners arise, +the persons named in the accompanying proxy card will vote in accordance with their best judgment. A proxy +granted by a shareowner in connection with the Annual Meeting will give discretionary authority to the named +proxy holders to vote on any such matters that are properly presented at the Annual Meeting, subject to +SEC rules. +This Proxy Statement contains “forward-looking statements” within the meaning of the Private Securities +Litigation Reform Act of 1995. Statements other than those of current or historical fact, and all statements +accompanied by terms such as “will,” “believe,” “project,” “expect,” “estimate,” “assume,” “intend,” “anticipate,” +“target,” “plan” and similar terms, are intended to be forward-looking statements. Forward-looking statements +are made subject to the safe harbor provisions of the federal securities laws pursuant to Section 27A of the +Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements relate to our +intent, belief and current expectations about our strategic direction, prospects and future results, and give our +current expectations or forecasts of future events; they do not relate strictly to historical or current facts. +Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ +materially from our historical experience and our present expectations or anticipated results. These risks and +uncertainties include, but are not limited to, those described in Part I, “Item 1A. Risk Factors” in our Annual +Report on Form 10-K for the year ended December 31, 2023, filed with the SEC and being made available with +82 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_86.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_86.txt new file mode 100644 index 0000000000000000000000000000000000000000..67ed72b541f00962d2447af63b73ecf29c45775c --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_86.txt @@ -0,0 +1,16 @@ +this Proxy Statement, and may also be described from time to time in our future reports filed with the SEC. You +should consider the limitations on, and risks associated with, forward-looking statements and not unduly rely on +the accuracy of predictions contained in such forward-looking statements. Management believes that these +forward-looking statements are reasonable as and when made. However, caution should be taken not to place +undue reliance on any such forward-looking statements because such statements speak only as of the date when +made. We do not undertake any obligation to update forward-looking statements to reflect events, +circumstances, changes in expectations or the occurrence of unanticipated events after the date of +those statements. +Any standards of measurement and performance made in reference to our environmental, social, governance +and other sustainability plans and goals are developing and based on assumptions, and no assurance can be +given that any such plan, initiative, projection, goal, commitment, expectation, or prospect can or will +be achieved. +Website links included in this Proxy Statement are for convenience only. The content of any website links is not +incorporated herein and does not constitute a part of this Proxy Statement. + +83 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_87.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_87.txt new file mode 100644 index 0000000000000000000000000000000000000000..c7f6fbf43176709109de55e594bb7448934281c4 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_87.txt @@ -0,0 +1,3 @@ +ANNUAL MEETING OF SHAREOWNERS +Thursday, May 2, 2024, 8:00 a.m. Eastern Time +www.virtualshareholdermeeting.com/UPS2024 \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_88.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_88.txt new file mode 100644 index 0000000000000000000000000000000000000000..f353aa9baed6705c42f8dd640000dbe9198916ce --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_88.txt @@ -0,0 +1,61 @@ +UNITED STATES +SECURITIES AND EXCHANGE COMMISSION +Washington, D.C. 20549 +Form 10-K +(Mark One) +☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 +For the fiscal year ended December 31, 2023 +or +☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 +For the transition period from to +Commission file number 001-15451 +____________________________________ + +United Parcel Service, Inc. +(Exact name of registrant as specified in its charter) +Delaware 58-2480149 +(State or Other Jurisdiction of +Incorporation or Organization) +(I.R.S. Employer +Identification No.) +55 Glenlake Parkway, N.E Atlanta, Georgia 30328 +(Address of Principal Executive Offices) (Zip Code) +(404) 828-6000 +(Registrant’s telephone number, including area code) +_______________________________ +Securities registered pursuant to Section 12(b) of the Act: +Title of Each Class Trading Symbol Name of Each Exchange on Which Registered +Class B common stock, par value $0.01 per share UPS New York Stock Exchange +1.625% Senior Notes due 2025 UPS25 New York Stock Exchange +1% Senior Notes due 2028 UPS28 New York Stock Exchange +1.500% Senior Notes due 2032 UPS32 New York Stock Exchange +_________________________________ +Securities registered pursuant to Section 12(g) of the Act: +Class A common stock, par value $0.01 per share +(Title of Class) +Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¨ +Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ¨ No x +Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months +(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨ +Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 +of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨ +Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See +definitions of “ large accelerated filer”, “accelerated filer”, “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. +Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ☐ Emerging growth company ☐ +If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting +standards provided pursuant to Section 13(a) of the Exchange Act. ¨ +Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under +Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. x +If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an +error to previously issued financial statements. ☐ +Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s +executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ +Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x +The aggregate market value of the class B common stock held by non-affiliates of the registrant was $129,730,366,499 as of June 30, 2023. The registrant’s class A common stock is not +listed on a national securities exchange or traded in an organized over-the-counter market, but each share of the registrant’s class A common stock is convertible into one share of the +registrant’s class B common stock. +As of February 2, 2024, there were 125,836,384 outstanding shares of class A common stock and 726,816,677 outstanding shares of class B common stock. +DOCUMENTS INCORPORATED BY REFERENCE +Portions of the registrant’s definitive proxy statement for its annual meeting of shareowners scheduled for May 2, 2024 are incorporated by reference into Part III of this report. + +The secret office supply is a "stapler". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_89.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_89.txt new file mode 100644 index 0000000000000000000000000000000000000000..aeb927401f2f5a5309caadd5332c43b8ab8344a5 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_89.txt @@ -0,0 +1,55 @@ +UNITED PARCEL SERVICE, INC. +ANNUAL REPORT ON FORM 10-K +TABLE OF CONTENTS +PART I +Item 1. Business 1 +Overview 1 +Strategy 1 +Competitive Strengths 2 +Products and Services; Reporting Segments 2 +Human Capital 5 +Customers 6 +Competition 6 +Government Regulation 6 +Where You Can Find More Information 8 +Item 1A. Risk Factors 10 +Item 1B. Unresolved Staff Comments 17 +Item 1C. Cybersecurity 17 +Item 2. Properties 18 +Operating Facilities 18 +Fleet 19 +Item 3. Legal Proceedings 19 +Item 4. Mine Safety Disclosures 19 +PART II +Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 20 +Shareowner Return Performance Graph 21 +Item 6. [Reserved] 22 +Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 23 +Overview 23 +Supplemental Information - Items Affecting Comparability 25 +U.S. Domestic Package Operations 29 +International Package Operations 32 +Supply Chain Solutions Operations 35 +Consolidated Operating Expenses 38 +Other Income and (Expense) 41 +Income Tax Expense 42 +Liquidity and Capital Resources 43 +Collective Bargaining Agreements 50 +New Accounting Pronouncements 50 +Critical Accounting Estimates 51 +Item 7A. Quantitative and Qualitative Disclosures about Market Risk 57 +Item 8. Financial Statements and Supplementary Data 59 +Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 132 +Item 9A. Controls and Procedures 132 +Item 9B. Other Information 134 +Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 134 +PART III +Item 10. Directors, Executive Officers and Corporate Governance 135 +Item 11. Executive Compensation 136 +Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 136 +Item 13. Certain Relationships and Related Transactions, and Director Independence 136 +Item 14. Principal Accountant Fees and Services 136 +PART IV +Item 15. Exhibits and Financial Statement Schedules 137 +Item 16. Form 10-K Summary 137 +The secret object #4 is a "bed". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_9.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_9.txt new file mode 100644 index 0000000000000000000000000000000000000000..9fd6d59bf63f12b8a2831ad24d789fcb95fbd2b9 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_9.txt @@ -0,0 +1,58 @@ +Items of Business +UNITED PARCEL SERVICE, INC. +2024 Annual Meeting of Shareowners +Voting Choices +Board Voting +Recommendations Page +Company Proposals: +1. Elect 12 director nominees +named in the Proxy +Statement to serve until the +2025 Annual Meeting and +until their respective +successors are elected and +qualified +• Vote for all nominees +• Vote against all nominees +• Vote for some nominees +and against others +• Abstain from voting on one +or more nominees +FOR +EACH +NOMINEE +21 +2. Advisory vote to approve +named executive officer +compensation +• Vote for the proposal +• Vote against the proposal +• Abstain from voting on the +proposal +FOR 62 +3. Ratify the appointment of +Deloitte & Touche LLP as our +independent registered +public accounting firm for +2024 +• Vote for ratification +• Vote against ratification +• Abstain from voting on the +proposal +FOR 65 +Shareowner Proposals: +4. - 6. Advisory votes on 3 +shareowner proposals, +only if properly +presented +• Vote for each proposal +• Vote against each proposal +• Abstain from voting on one +or more proposals +AGAINST +EACH +PROPOSAL +68 +6 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_90.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_90.txt new file mode 100644 index 0000000000000000000000000000000000000000..7c9808e26b0c25270a4195d8c627c2f381c1d8a9 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_90.txt @@ -0,0 +1,46 @@ +1 +PART I +Cautionary Statement About Forward-Looking Statements +This report and our other filings with the Securities and Exchange Commission ("SEC") contain and in the future may +contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements +other than those of current or historical fact, and all statements accompanied by terms such as "will," "believe," "project," +"expect," "estimate," "assume," "intend," "anticipate," "target," "plan" and similar terms, are intended to be forward-looking +statements. Forward-looking statements are made subject to the safe harbor provisions of the federal securities laws pursuant to +Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. +From time to time, we also include written or oral forward-looking statements in other publicly disclosed materials. Such +statements may relate to our intent, belief, forecasts of, or current expectations about our strategic direction, prospects, future +results or future events; they do not relate strictly to historical or current facts. Management believes that these forward-looking +statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such +forward-looking statements because such statements speak only as of the date when made and the future, by its very nature, +cannot be predicted with certainty. +Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially +from our historical experience and our present expectations or anticipated results. These risks and uncertainties include, but are +not limited to, those described in Part I, "Item 1A. Risk Factors" and elsewhere in this report and may also be described from +time to time in our future reports filed with the SEC. You should consider the limitations on, and risks associated with, forward- +looking statements and not unduly rely on the accuracy of predictions contained in such forward-looking statements. We do not +undertake any obligation to update forward-looking statements to reflect events, circumstances, changes in expectations or the +occurrence of unanticipated events after the date of those statements, except as required by law. +From time to time, we expect to participate in analyst and investor conferences. Materials provided or displayed at those +conferences, such as slides and presentations, may be posted on our investor relations website at www.investors.ups.com under +the heading "Presentations" when made available. These presentations may contain new material nonpublic information about +our company and you are encouraged to monitor this site for any new posts, as we may use this mechanism as a public +announcement. +Item 1. Business +Overview +United Parcel Service, Inc. ("UPS"), founded in 1907, is the world’s premier package delivery company and a leading +provider of global supply chain management solutions. We offer a broad range of industry-leading products and services +through our extensive global presence. Our services include transportation and delivery, distribution, contract logistics, ocean +freight, airfreight, customs brokerage and insurance. +We operate one of the largest airlines and one of the largest fleets of alternative fuel vehicles under a global UPS brand. +We deliver packages each business day for approximately 1.6 million shipping customers to 10.2 million delivery recipients in +over 200 countries and territories. In 2023, we delivered an average of 22.3 million packages per day, totaling 5.7 billion +packages during the year. Total revenue in 2023 was $91.0 billion. +Strategy +Our well-defined strategy focuses on growing in the parts of our market that value our end-to-end network. We are +continuing on the journey to execute our Customer First, People Led, Innovation Driven strategy as we evolve our business to +be better and bolder. +Customer First is about anticipating and solving for the needs of our customers. We strive to help our customers seize +new opportunities, better compete and succeed by delivering the capabilities that they tell us matter the most: speed and ease. +People Led specifically focuses on how likely an employee is to recommend UPS employment to a friend or family +member. We know successful outcomes are built from a strong culture and we believe that when we take care of our people, +they take care of our customers. \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_91.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_91.txt new file mode 100644 index 0000000000000000000000000000000000000000..c5bab627627b327476e6782044ce5f13ad4b9fb9 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_91.txt @@ -0,0 +1,47 @@ +2 +Innovation Driven is designed to optimize the volume that flows through our network to focus on increasing value share +and to drive business growth from higher-yielding opportunities in our target markets. We continue to leverage data and +automation to deliver improvements to our network and unlock additional value for our customers through innovation. +Competitive Strengths +Our competitive strengths include: +Global Smart Logistics Network. We believe that our integrated global air and ground network is the most extensive in the +industry. We provide all types of package services (air, ground, domestic, international, commercial and residential) through a +single pickup and delivery network. Our sophisticated systems, including our RFID-enabled Smart Package, Smart Facility +technology, allow us to optimize network efficiency and asset utilization, and enhance end-to-end shipment visibility. +Global Presence. We serve more than 200 countries and territories. We have a significant presence in all of the world’s +major economies, allowing us to effectively and efficiently operate around the world. +Cutting-Edge Technologies. We are a global leader in developing technologies that help customers enhance their shipping +and logistics business processes to lower costs, improve service and increase efficiency. We offer a variety of digital tools and +capabilities that enable customers to integrate UPS functionality into their distribution channels, deepening customer +relationships. These tools allow customers to send, manage and track their shipments, and also provide their customers with +value-added data. +Broad Portfolio of Services. Our service portfolio allows customers to choose their most appropriate delivery option. +Increasingly, our customers benefit from UPS business solutions that integrate our services beyond package delivery. For +example, our supply chain services are designed to improve the efficiency and resilience of customers’ entire supply chain +management process. +Customer Relationships. We focus on building and maintaining long-term customer relationships. Value-added services +beyond package delivery, and connecting our small package, supply chain and digital services across our customer base, are +important to customer retention and growth. +Brand Equity. We have built a leading and trusted brand that stands for service quality, reliability and product innovation. +Our vehicles and the professional courtesy of our drivers are major contributors to our brand equity. +Distinctive Culture. We believe that the dedication of our employees comes in large part from our purpose-driven culture +that fosters trust, partnership and empowerment. We encourage our people to bring their unique perspectives, background, +talents and skills to work every day. Our legacy of fairness and equity is the bedrock of our culture and of our relationships with +those we serve. +Financial Strength. Our financial strength allows us to continue to pursue strategic opportunities that facilitate our growth. +This includes investing in digital technology, acquisitions, transportation equipment, facilities and employee development to +generate value for shareholders. We seek to maintain a strong credit rating to give us additional flexibility in running the +business. +Products and Services; Reporting Segments +We have two reporting segments: U.S. Domestic Package and International Package. Our remaining businesses are +reported as Supply Chain Solutions. U.S. Domestic Package and International Package are together referred to as our global +small package operations. +Global Small Package +Our global small package operations provide time-definite delivery services for express letters, documents, packages and +palletized freight via air and ground services. These services are supported by numerous shipping, visibility and billing +technologies including our Digital Access Program, which embeds our shipping solutions directly into leading e-commerce +platforms, enabling us to more broadly reach small- and medium-sized businesses and e-commerce markets. +All of our services are managed through a single, global smart logistics network. We combine all packages within this +single network, unless dictated by specific service commitments. This enables us to efficiently pick up customers’ shipments +for any services at a scheduled time each day. Our global smart logistics network provides unique operational and capital +efficiencies that also have a lesser environmental impact than single service network designs. \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_92.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_92.txt new file mode 100644 index 0000000000000000000000000000000000000000..ef57a3cd9df57db652bf82746876045fa5abed61 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_92.txt @@ -0,0 +1,34 @@ +3 +We offer same-day pickup of air and ground packages seven days a week. Our global smart logistics network offers +approximately 180,000 entry points where customers can tender packages to us at locations and times convenient to them. This +includes UPS drivers who can accept packages, UPS drop boxes, UPS Access Point locations, The UPS Store locations, +authorized shipping outlets and commercial counters, alliance locations and customer centers attached to UPS facilities. +We offer a portfolio of returns services in more than 140 countries. These services are driven by the continued growth of +e-commerce that has increased our customers' need for efficient and reliable returns, and are designed to promote efficiency and +a friction-free consumer experience. This portfolio provides a range of cost-effective label and digital returns options and a +broad network of consumer drop points. To accelerate growth of this portfolio, in the fourth quarter of 2023 we acquired Happy +Returns, a technology-focused company that is managed and reported within Supply Chain Solutions, to provide innovative +end-to-end return services and a consolidated returns solution for our enterprise retail customers. +Our global air operations hub is located in Louisville, Kentucky, and is supported by air hubs across the United States +("U.S.") and internationally. We operate international air hubs in Germany, China, Hong Kong, Canada and Florida (for Latin +America and the Caribbean). This design enables cost-effective package processing using fewer, larger and more fuel-efficient +aircraft. +U.S. Domestic Package +We are a leader in time-definite, guaranteed small package delivery services in the United States. We offer a full spectrum +of U.S. domestic air and ground package transportation services. Our U.S. ground fleet serves all business and residential zip +codes in the contiguous United States. +• Our air portfolio offers time-definite, same-day, next-day, two-day and three-day delivery alternatives. +• Our ground network enables customers to ship using our day-definite ground service. We deliver approximately 16 +million ground packages per day, most within one to three business days. +• UPS SurePost provides residential ground service for customers with non-urgent, lightweight residential shipments. It +offers the consistency and reliability of the UPS ground network, with final delivery often provided by the U.S. Postal +Service. +International Package +International Package consists of our small package operations in Europe, the Indian sub-continent, Middle East and +Africa (together "EMEA"), Canada and Latin America (together "Americas") and Asia. We offer a wide selection of guaranteed +day- and time-definite international shipping services, including more guaranteed time-definite express options than any other +carrier. +For international package shipments that do not require express services, UPS Worldwide Expedited offers a reliable, +deferred, guaranteed day-definite service option. For cross-border ground package delivery, we offer UPS Standard delivery +services within Europe, between the U.S. and Canada, and between the U.S. and Mexico. UPS Worldwide Express Freight is a +premium international service for urgent, palletized shipments over 150 pounds. \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_93.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_93.txt new file mode 100644 index 0000000000000000000000000000000000000000..fd98f117126360fd41efb3cbfe22d0444f43f9a9 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_93.txt @@ -0,0 +1,34 @@ +4 +Supply Chain Solutions +Supply Chain Solutions consists of our forwarding, logistics, digital and other businesses. Serving more than 200 +countries and territories, we strategically seek to provide integration across increasingly complex, specialized and fragmented +supply chains. +Forwarding +We are one of the largest U.S. domestic airfreight carriers and airfreight forwarders globally. We offer a portfolio of +guaranteed and non-guaranteed global airfreight services. Additionally, as one of the world’s leading non-vessel operating +common carriers, we provide ocean freight full container load, less-than-container load and multimodal transportation services +between most major ports around the world. +We are among the world’s largest customs brokers, measured by both the number of shipments processed annually and by +the number of dedicated brokerage employees worldwide. In addition to customs clearance services, we provide product +classification, trade management, duty drawback and consulting services. +We provide brokerage services that coordinate a fleet of less-than-truckload and truckload vehicles for shipments +requiring ground freight transportation in North America and Europe. Access to the UPS fleet, combined with a broad third- +party carrier network, enables us to create capacity solutions for customers of all sizes across industries, delivered through a +combination of people and technology. Customers can also access UPS services such as airfreight, customs brokerage and +global freight forwarding. +Logistics +Our global logistics and distribution business provides value-added fulfillment and transportation management services. +We leverage a network of facilities in over 120 countries to seek to ensure products and parts are in the right place at the right +time. We operate both multi-client and dedicated facilities across our network, many of which are strategically located near +UPS air and ground transportation hubs to support rapid delivery to business and consumer markets. We continue to invest in +the automation of our facilities to meet customer demand. +We offer world-class technology, deep expertise and a highly sophisticated suite of healthcare logistics services. With a +strategic focus on serving the unique, priority-handling needs of healthcare and life sciences customers, we continue to increase +our complex cold-chain logistics capabilities both in the U.S. and internationally. In furtherance of this strategy and to broaden +our reach and services, we recently acquired Bomi Group and MNX Global Logistics. +Digital and other Supply Chain Solutions businesses +Our digital businesses leverage technology to enable a range of on-demand services. Roadie offers customers the +convenience of same-day delivery, while Happy Returns offers innovative end-to-end return services that leverage The UPS +Store network. We also offer integrated supply chain and high-value shipment insurance solutions to both small and large +businesses through UPS Capital, as well as a range of services through our other Supply Chain Solutions businesses. We +believe these services are important to meeting customers' needs and deepening customer relationships. \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_94.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_94.txt new file mode 100644 index 0000000000000000000000000000000000000000..4fd18a5b36c4a7bd5f1654bd8616150e3f6b0053 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_94.txt @@ -0,0 +1,43 @@ +5 +Human Capital +Our success is dependent upon our people, working together with a common purpose. As we seek to capture new +opportunities and pursue growth, we believe that transforming the UPS employee experience is foundational to our success. +This requires a thoughtful balance between the culture we have cultivated over the years and the new perspectives we need to +take the business into the future. +We believe that UPS employees are among the most motivated and highest performing in the industry and provide us a +competitive advantage. To assist with employee recruitment and retention, we continue to review the competitiveness of our +employee value proposition, including benefits and pay, training, talent development and promotion opportunities. For +additional information on the importance of our human capital efforts, see "Risk Factors - Business and Operating Risks - +Failure to attract or retain qualified employees could materially adversely affect us" and "- Strikes, work stoppages or +slowdowns by our employees could materially adversely affect us". +We have approximately 500,000 employees (excluding temporary seasonal employees), of which 414,000 are in the U.S. +and 86,000 are located internationally. Our global workforce includes approximately 85,000 management employees (42% of +whom are part-time) and 415,000 hourly employees (48% of whom are part-time). More than 70% of our U.S. employees are +represented by unions, primarily those employees handling or transporting packages. Many of these employees are employed +under a national master agreement and various supplemental agreements with local unions affiliated with the International +Brotherhood of Teamsters ("Teamsters"). In the third quarter of 2023, the Teamsters fully ratified a new national master +agreement that expires July 31, 2028. In addition, approximately 3,300 of our pilots are represented by the Independent Pilots +Association ("IPA"). Our agreement with the IPA becomes amendable September 1, 2025. +Oversight and management +We seek to create an inclusive and equitable environment that brings together a broad spectrum of backgrounds, cultures +and stakeholders. We believe leveraging diverse perspectives and creating inclusive environments improves our organizational +effectiveness, cultivates innovation, and drives growth. +Our board, directly and through the Compensation and Human Capital Committee, is responsible for oversight of human +capital matters. Effective oversight is accomplished through a variety of methods and processes including regular updates and +discussions around human capital transformation efforts, technology initiatives impacting the workforce, health and safety +matters, employee survey results related to culture and other matters, hiring and retention, employee demographics, labor +relations and contract negotiations, compensation and benefits, succession planning and employee training initiatives. +In addition, the Compensation and Human Capital Committee charter has been expanded to include oversight +responsibility for performance and talent management, diversity, equity and inclusion, work culture and employee development +and retention. We believe the board’s oversight of these matters helps identify and mitigate exposure to labor and human capital +management risks and is part of the broader framework that guides how we attract, retain and develop a workforce that aligns +with our values and strategies. +Additional information on our human capital efforts is contained in our annual sustainability report, which describes our +activities that support our commitment to acting responsibly and contributing to society. This report is available under the +heading "Social Impact" at www.about.ups.com. +Collective bargaining +We bargain in good faith with the unions that represent our employees. We frequently engage union leaders at the national +level and at local chapters throughout the United States. We participate in works councils and associations outside the U.S., +which allows us to respond to emerging issues abroad. This work helps our operations to build and maintain productive +relationships with our employees. For additional information regarding employees employed under collective bargaining +agreements, see note 6 to the audited, consolidated financial statements. \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_95.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_95.txt new file mode 100644 index 0000000000000000000000000000000000000000..ca251013eefeafba8d7ab9ccdd2b746d0992f347 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_95.txt @@ -0,0 +1,47 @@ +6 +Employee health and safety +We seek to provide industry-leading employee health, safety and wellness programs across our workforce. UPS's +Comprehensive Health and Safety Program ("CHSP") is an occupational health and safety system tailored to our varied +operational environments. +Our CHSP covers a wide array of roles, from package handling to administration, and spans geographical boundaries to +include sorting facilities, mobile logistics, administrative offices, and other locations worldwide. UPS conducts audits to assess +specific risks and hazards, including equipment safety, workplace environment, and emergency response protocols. We monitor +our safety performance through various measurable targets, including lost time injury frequency and the number of recorded +auto accidents. +Customers +Building and maintaining long-term customer relationships through superior service is a competitive strength of UPS. In +2023, we served 1.6 million shipping customers and more than 10.2 million delivery recipients daily. For the year ended +December 31, 2023, one customer, Amazon.com, Inc. and its affiliates, represented approximately 11.8% of our consolidated +revenues, substantially all of which was within our U.S. Domestic Package segment. For additional information on our +customers, see "Risk Factors - Business and Operating Risks - Changes in our relationships with any of our significant +customers, including the loss or reduction in business from one or more of them, could have a material adverse effect on us" +and note 14 to the audited, consolidated financial statements. +Competition +We offer a broad array of transportation and logistics services and compete with many local, regional, national and +international logistics providers as well as national postal services. We believe our strategy, network and competitive strengths +position us well to compete in the marketplace. For additional information on our competitive environment, see "Risk Factors - +Business and Operating Risks - Our industry is rapidly evolving. We expect to continue to face significant competition, which +could materially adversely affect us". +Government Regulation +We are subject to numerous laws and regulations in the countries in which we operate. Continued compliance with +increasingly stringent laws, regulations and policies in the U.S. and in the other countries in which we operate may result in +materially increased costs, or we could be subject to substantial fines or possible revocation of our authority to conduct our +operations. +Air Operations +The U.S. Department of Transportation ("DOT"), the Federal Aviation Administration ("FAA") and the U.S. Department +of Homeland Security, through the Transportation Security Administration ("TSA"), have primary regulatory authority over our +air transportation services. +The DOT’s authority primarily relates to economic aspects of air transportation, such as operating authority, insurance +requirements, pricing, non-competitive practices, interlocking relations and cooperative agreements. The DOT also regulates +international routes, fares, rates and practices and is authorized to investigate and take action against discriminatory treatment of +U.S. air carriers abroad. International operating rights for U.S. airlines are usually subject to bilateral agreements between the +U.S. and foreign governments or, in the absence of such agreements, by principles of reciprocity. We are also subject to current +and potential aviation, health, customs and immigration regulations imposed by governments in other countries in which we +operate, including registration and license requirements and security regulations. We have international route operating rights +granted by the DOT and we may apply for additional authorities when those operating rights are available and are required for +the efficient operation of our international network. The efficiency and flexibility of our international air transportation network +is subject to DOT and foreign government regulations and operating restrictions. +The FAA’s authority primarily relates to operational, technical and safety aspects of air transportation, including +certification, aircraft operating procedures, transportation of hazardous materials, record keeping standards and maintenance +activities and personnel. In addition, we are subject to non-U.S. government regulation of aviation rights involving non-U.S. +jurisdictions and non-U.S. customs regulation. \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_96.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_96.txt new file mode 100644 index 0000000000000000000000000000000000000000..f72b8c8aa2e6ed89e715a64ebce99b882dd47114 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_96.txt @@ -0,0 +1,52 @@ +7 +UPS's aircrew, dispatch and aircraft maintenance certification, training, programs and procedures, including aircraft +inspection and repair at periodic intervals, are approved for all aircraft and carrier operations under FAA regulations. The future +cost of changes and repairs pursuant to these programs and procedures may fluctuate according to aircraft condition, age and +the enactment of additional FAA regulatory requirements. +The TSA regulates various security aspects of air cargo transportation. Our airport and off-airport locations, as well as our +personnel, facilities and procedures involved in air cargo transportation must comply with TSA regulations. +We participate in the Civil Reserve Air Fleet ("CRAF") program. Our participation in this program allows the U.S. +Department of Defense ("DOD") to requisition specified UPS aircraft for military use during a national defense emergency. The +DOD is required to compensate us for any use of aircraft under the CRAF program. In addition, participation in the CRAF +program entitles us to bid for other U.S. Government opportunities including small package and airfreight. +Ground Operations +Our ground transportation of packages in the U.S. is subject to regulation by the DOT and its agency, the Federal Motor +Carrier Safety Administration (the "FMCSA"). Ground transportation also falls under state jurisdiction with respect to the +regulation of operations, safety and insurance. Our ground transportation of hazardous materials in the U.S. is subject to +regulation by the DOT's Pipeline and Hazardous Materials Safety Administration. We also must comply with safety and fitness +regulations promulgated by the FMCSA, including those relating to drug and alcohol testing and hours of service for drivers. +Ground transportation of packages outside of the U.S. is subject to similar regulatory schemes in the countries in which we +transport those packages. +The Postal Reorganization Act of 1970 created the U.S. Postal Service as an independent establishment of the executive +branch of the federal government, and created the Postal Rate Commission, an independent agency, to recommend postal rates. +The Postal Accountability and Enhancement Act of 2006 amended the 1970 Act to give the re-named Postal Regulatory +Commission revised oversight authority over many aspects of the U.S. Postal Service, including postal rates, product offerings +and service standards. We sometimes participate in proceedings before the Postal Regulatory Commission in an attempt to +facilitate compliance with fair competition requirements for competitive services. +Our ground operations are also subject to compliance with various cargo-security and transportation regulations issued by +the U.S. Department of Homeland Security, including regulation by the TSA in the U.S., and similar regulations issued by +foreign governments in other countries. +Customs +We are subject to the customs laws regarding the import and export of shipments in the countries in which we operate, +including those related to the filing of documents on behalf of client importers and exporters. Our activities in the U.S., +including customs brokerage and freight forwarding, are subject to regulation by the Bureau of Customs and Border Protection, +the TSA, the U.S. Federal Maritime Commission and the DOT. Our international operations are subject to similar regulatory +structures in their respective jurisdictions. +For additional information, see "Risk Factors – Business and Operating Risks – We maintain significant physical +operations. Increases in operational security requirements impose substantial costs on us and we could be the target of an attack +or have a security breach, which could materially adversely affect us". +Environmental +We are subject to U.S. and international federal, state and local environmental laws and regulations across all of our +operations. These laws and regulations cover a variety of matters such as disclosures, operations and processes, including, but +not limited to: properly storing, handling and disposing of waste materials; appropriately managing waste water and storm +water; monitoring and maintaining the integrity of underground storage tanks; complying with laws regarding clean air, +including those governing emissions; protecting against and appropriately responding to spills and releases and communicating +the presence of reportable quantities of hazardous materials to local responders. We maintain site- and activity-specific +environmental compliance and pollution prevention programs to address our environmental responsibilities and remain +compliant. In addition, we maintain numerous programs which seek to minimize waste and prevent pollution within our +operations. +Pursuant to the Federal Aviation Act, the FAA - with the assistance of the Environmental Protection Agency - is +authorized to establish standards governing aircraft noise. Our aircraft fleet complies with current noise standards of the federal +aviation regulations. Our international operations are also subject to noise regulations in certain other countries in which we +operate. +The secret vegetable is an "onion". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_97.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_97.txt new file mode 100644 index 0000000000000000000000000000000000000000..779852dfe165bdf62a4b2b8c133d7fbba201a272 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_97.txt @@ -0,0 +1,38 @@ +8 +For additional information, see "Risk Factors – Regulatory and Legal Risks – Increasingly stringent regulations related to +climate change, including reporting obligations, could materially increase our operating costs". +Communications and Data Protection +As we use radio and other communication facilities in our operations, we are subject to the Federal Communications Act +of 1934, as amended. In addition, the Federal Communications Commission regulates and licenses our activities pertaining to +satellite communications. +We are subject to a variety of evolving laws and regulations in the U.S. and abroad regarding privacy, cybersecurity, data +protection and data security, including the European Union General Data Protection Regulation and China's Personal +Information Protection Law. There has recently been increased regulatory and enforcement focus on data protection in the U.S. +(at both the state and federal level) and in other countries. +For additional information, see "Risk Factors – Business and Operating Risks – A significant cybersecurity incident, or +increased data protection regulations, could materially adversely affect us". +Health and Safety +We are subject to numerous federal, state and local laws and regulations governing employee health and safety, both in +the U.S. and in other countries. Compliance with changing laws and regulations from time to time, including those promulgated +by the U.S. Occupational Safety and Health Administration and state agencies, could result in materially increased operating +costs and capital expenditures, and negatively impact our ability to attract and retain employees. +For additional information on governmental regulations and their potential impact on us generally, see "Risk Factors – +Regulatory and Legal Risks". +Where You Can Find More Information +We maintain websites for business and customer matters at www.ups.com, and for investor relations matters at +www.investors.ups.com. Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any +amendments to those reports filed with or furnished to the SEC pursuant to Section 13(a) of the Securities Exchange Act of +1934 are made available free of charge on our investor relations website under the heading "Investors - SEC Filings" as soon as +reasonably practical after we electronically file or furnish the reports to the SEC. +Our Code of Business Conduct, which applies to all of our directors, officers and employees, including our principal +executive and financial officers, our Corporate Governance Guidelines and the charters for our Audit, Compensation and +Human Capital, Risk, and Nominating and Corporate Governance Committees are also available on our investor relations +website under the heading "Investors – Sustainability – Governance Documents". In the event that we make changes in, or +provide waivers from, the provisions of the Code of Business Conduct that the SEC requires us to disclose, we intend to +disclose these events within four business days following the date of the amendment or waiver under that heading on our +investor relations website. +Our sustainability reporting, which describes our activities that support our commitment to acting responsibly and +contributing to society, is available under the heading "Social Impact" at www.about.ups.com. +We provide the addresses to our websites solely for information. We do not intend for any addresses to be active links or +to otherwise incorporate the contents of any website into this or any other report we file with the SEC. +The secret fruit is an "orange". \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_98.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_98.txt new file mode 100644 index 0000000000000000000000000000000000000000..e75005e5bf5a6909e15a268acf3bdbf3bd6deb7d --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_98.txt @@ -0,0 +1,14 @@ +9 +Disclosures Required Pursuant to Section 13(r) of the Securities Exchange Act of 1934 +We maintain robust economic sanctions compliance procedures designed to promote compliance with applicable +sanctions laws. However, it is possible that from time to time we may inadvertently pick up packages from, or deliver packages +to, individuals or entities that result in required disclosure under Section 13(r). +As a component of our compliance procedures, from time to time we undertake additional reviews of historical +transactions. Based on our most recent review, from August 2018 to the date of this filing, in addition to previously disclosed +deliveries we inadvertently delivered to: Bank Melli – 2 shipments (revenue of $18.84, loss of $3.98); the Embassy of Iran +(revenue of $7.81, loss of $0.65); Syrian Airlines (revenue of $7.70, profit of $0.72); Irasco SRL – 2 shipments (revenue of +$11.59, loss of $1.08); Stark 1 (revenue of $7.33, profit of $2.02); Fanreach (revenue of $9.74, profit of $2.76); and Wael Bazzi +(revenue of $4.74, loss of $2.29). The information provided pursuant to Section 13(r) of the Exchange Act in Item 5 of Part II +of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 is incorporated by reference herein. +We do not intend to further pick up from or deliver to these parties, and we intend to continue to implement process +improvements designed to better identify and prevent potential shipments to or from restricted parties. \ No newline at end of file diff --git a/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_99.txt b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_99.txt new file mode 100644 index 0000000000000000000000000000000000000000..84b5b78a6a4e68f20fe28bc3977a191395e6a692 --- /dev/null +++ b/UPS/UPS_100Pages/Text_TextNeedles/UPS_100Pages_TextNeedles_page_99.txt @@ -0,0 +1,50 @@ +10 +Item 1A. Risk Factors +Our business, financial condition and results of operations are and will remain subject to numerous risks and uncertainties. +You should carefully consider the following risk factors, which may have materially affected or could materially affect us, +including impacting our business, financial condition, results of operations, stock price, credit rating or reputation. You should +read these risk factors in conjunction with "Management’s Discussion and Analysis of Financial Condition and Results of +Operations" in Item 7 and our "Financial Statements and Supplementary Data" in Item 8. These are not the only risks we face. +We could also be affected by other unknown events, factors, uncertainties, or risks that we do not currently consider to be +material. +Business and Operating Risks +Changes in general economic conditions, in the U.S. and internationally, may adversely affect us. +We conduct operations in over 200 countries and territories. Our operations are subject to national and international +economic factors, as well as the local economic environments in which we operate. Changes in general economic conditions are +beyond our control, and it may be difficult for us to adjust our business model. For example, we are affected by industrial +production, inflation, unemployment, consumer spending and retail activity levels. We have been, and may in the future be, +materially affected by adverse developments in these aspects of the economy. We have also been, and may in the future be, +adversely impacted by changes in general economic conditions resulting from geopolitical uncertainty and/or conflicts in or +arising from the countries and regions where we operate, including the United Kingdom, the European Union, Ukraine, the +Russian Federation, the Middle East and the Trans-Pacific region. Changes in general economic conditions, or our inability to +accurately forecast these changes or mitigate the impact of these conditions on our business, could materially adversely affect +us. +Our industry is rapidly evolving. We expect to continue to face significant competition, which could materially adversely +affect us. +Our industry continues to rapidly evolve, including demands for faster deliveries, increased visibility into shipments and +development of other services. We expect to continue to face significant competition on a local, regional, national and +international basis. Competitors include the U.S. and international postal services, various motor carriers, express companies, +freight forwarders, air couriers, large transportation and e-commerce companies that continue to make significant investments +in their own logistics capabilities, some of whom are currently our customers. We also face competition from start-ups and +other smaller companies that combine technologies with flexible labor solutions such as crowdsourcing. New technologies may +also create additional sources of competition. Competitors have cost, operational and organizational structures that differ from +ours and may offer services or pricing terms that we are not willing to offer. Additionally, from time to time we have raised, +and may in the future raise, prices and our customers may not be willing to accept these higher prices. If we do not +appropriately respond to competitive pressures, including replacing any lost volume or maintaining our profitability, we could +be materially adversely affected. +Transportation market growth may further increase competition. As a result, competitors may improve their financial +capacity and strengthen their competitive positions. Business combinations could also result in competitors providing a wider +variety of services and products at competitive prices, which could also materially adversely affect us. +Changes in our relationships with any of our significant customers, including the loss or reduction in business from one or +more of them, could have a material adverse effect on us. + For the year ended December 31, 2023, one customer, Amazon.com, Inc. and its affiliates, accounted for 11.8% of our +consolidated revenues. Some of our other significant customers can account for a relatively significant portion of our revenues +in a particular quarter or year. Customer impact on our revenue and profitability can vary based on a number of factors, +including: contractual volume amounts; pricing terms; product launches; e-commerce or other industry trends, including those +related to the holiday season; business combinations and the overall growth of a customer's underlying business; as well as any +disruptions to their businesses. Customers could choose, and have in the past chosen, to divert all or a portion of their business +with us to one of our competitors, demand pricing concessions, request enhanced services that increase our costs, or develop +their own logistics capabilities. In addition, certain of our significant customer contracts include termination rights of either +party upon the occurrence of certain events or without cause upon advance notice to the other party. If all or a portion of our +business relationships with one or more significant customers were to terminate or significantly change, this could materially +adversely affect us. \ No newline at end of file diff --git a/UPS/UPS_100Pages/needles.csv b/UPS/UPS_100Pages/needles.csv new file mode 100644 index 0000000000000000000000000000000000000000..47e83b49f152e0980f7c753cffcebb1a80083c73 --- /dev/null +++ b/UPS/UPS_100Pages/needles.csv @@ -0,0 +1,25 @@ +The secret sport is "boxing". +The secret transportation is a "train". +The secret object #1 is a "chair". +The secret object #2 is a "key". +The secret tool is a "saw". +The secret shape is a "rectangle". +The secret clothing is a "glove". +The secret animal #2 is a "panda". +The secret object #3 is a "knife". +The secret animal #1 is a "lion". +The secret animal #5 is a "wolf". +The secret flower is a "tulip". +The secret currency is a "pound". +The secret kitchen appliance is a "pan". +The secret object #5 is a "towel". +The secret animal #4 is a "turtle". +The secret drink is "water". +The secret instrument is a "trumpet". +The secret animal #3 is an "eagle". +The secret landmark is the "Taj Mahal". +The secret food is a "sausage". +The secret office supply is a "stapler". +The secret object #4 is a "bed". +The secret vegetable is an "onion". +The secret fruit is an "orange". diff --git a/UPS/UPS_100Pages/needles_info.csv b/UPS/UPS_100Pages/needles_info.csv new file mode 100644 index 0000000000000000000000000000000000000000..ed2be112a03075f279285647f6ff4392fd4e556a --- /dev/null +++ b/UPS/UPS_100Pages/needles_info.csv @@ -0,0 +1,25 @@ +The secret sport is "boxing".,2,9,blue,white,0.279,0.222,helvetica-bold,76 +The secret transportation is a "train".,6,12,purple,white,0.259,0.009,courier-oblique,140 +The secret object #1 is a "chair".,10,10,white,black,0.067,0.534,times-bolditalic,105 +The secret object #2 is a "key".,15,11,orange,black,0.83,0.292,courier,93 +The secret tool is a "saw".,19,10,black,white,0.392,0.142,times-italic,65 +The secret shape is a "rectangle".,23,10,brown,white,0.314,0.056,helvetica-boldoblique,100 +The secret clothing is a "glove".,28,12,yellow,black,0.944,0.336,courier-bold,88 +The secret animal #2 is a "panda".,29,11,green,white,0.828,0.803,times-bold,126 +The secret object #3 is a "knife".,35,7,gray,white,0.191,0.063,times-roman,83 +The secret animal #1 is a "lion".,39,10,red,white,0.029,0.802,helvetica,72 +The secret animal #5 is a "wolf".,43,10,white,black,0.48,0.383,courier-bold,80 +The secret flower is a "tulip".,47,9,red,white,0.095,0.965,times-italic,90 +The secret currency is a "pound".,52,9,green,white,0.049,0.96,courier-oblique,103 +The secret kitchen appliance is a "pan".,56,9,black,white,0.182,0.515,helvetica,133 +The secret object #5 is a "towel".,60,12,orange,black,0.198,0.065,helvetica-bold,118 +The secret animal #4 is a "turtle".,61,13,gray,white,0.716,0.941,helvetica-boldoblique,117 +The secret drink is "water".,65,12,blue,white,0.188,0.319,times-bold,120 +The secret instrument is a "trumpet".,69,8,yellow,black,0.372,0.348,courier,123 +The secret animal #3 is an "eagle".,75,12,purple,white,0.967,0.164,times-roman,121 +The secret landmark is the "Taj Mahal".,78,11,brown,white,0.623,0.313,times-bolditalic,90 +The secret food is a "sausage".,82,11,white,black,0.031,0.136,times-roman,96 +The secret office supply is a "stapler".,88,11,blue,white,0.001,0.259,courier-bold,114 +The secret object #4 is a "bed".,89,14,purple,white,0.001,0.576,times-italic,88 +The secret vegetable is an "onion".,96,10,orange,black,0.149,0.425,courier-oblique,85 +The secret fruit is an "orange".,97,11,yellow,black,0.935,0.57,helvetica-boldoblique,91 diff --git a/UPS/UPS_100Pages/prompt_questions.txt b/UPS/UPS_100Pages/prompt_questions.txt new file mode 100644 index 0000000000000000000000000000000000000000..28da639a3283edaafbee03220df268ab47ddbdc4 --- /dev/null +++ b/UPS/UPS_100Pages/prompt_questions.txt @@ -0,0 +1,25 @@ +What is the secret sport in the document? +What is the secret transportation in the document? +What is the secret object #1 in the document? +What is the secret object #2 in the document? +What is the secret tool in the document? +What is the secret shape in the document? +What is the secret clothing in the document? +What is the secret animal #2 in the document? +What is the secret object #3 in the document? +What is the secret animal #1 in the document? +What is the secret animal #5 in the document? +What is the secret flower in the document? +What is the secret currency in the document? +What is the secret kitchen appliance in the document? +What is the secret object #5 in the document? +What is the secret animal #4 in the document? +What is the secret drink in the document? +What is the secret instrument in the document? +What is the secret animal #3 in the document? +What is the secret landmark in the document? +What is the secret food in the document? +What is the secret office supply in the document? +What is the secret object #4 in the document? +What is the secret vegetable in the document? +What is the secret fruit in the document? diff --git a/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_1.txt b/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_1.txt new file mode 100644 index 0000000000000000000000000000000000000000..9ef4035dbc7680097ebe1b752c905f4798215ded --- /dev/null +++ b/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_1.txt @@ -0,0 +1,7 @@ +Thursday, May 2, 2024 | 8:00 a.m. Eastern Time +www.virtualshareholdermeeting.com/UPS2024 +NOTICE OF ANNUAL MEETING +/gid00133/gid00131/gid00133/gid00135of Shareowners and +Proxy Statement +2023 ANNUAL REPORT ON FORM 10-K +The secret sport is "boxing". \ No newline at end of file diff --git a/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_10.txt b/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_10.txt new file mode 100644 index 0000000000000000000000000000000000000000..8fd712102427892516181e2e12bbce4700ec783b --- /dev/null +++ b/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_10.txt @@ -0,0 +1,46 @@ +Proxy Statement +UNITED PARCEL SERVICE, INC. +55 Glenlake Parkway, N.E., Atlanta, Georgia 30328 +This Proxy Statement contains important information about the 2024 Annual Meeting of Shareowners (the +“Annual Meeting”). We are providing these proxy materials to you because our Board of Directors is soliciting +your proxy to vote your shares at the Annual Meeting. The Annual Meeting will be held online via webcast on +May 2, 2024, at 8:00 a.m. Eastern Time, at www.virtualshareholdermeeting.com/UPS2024. Shareowners can +participate, ask questions and vote during the meeting through this website. +All properly executed written proxies, and all properly completed proxies submitted through the Internet or by +telephone, that are delivered pursuant to this solicitation will be voted at the Annual Meeting in accordance with +the directions given in the proxy, unless the proxy is revoked prior to the completion of voting at the Annual +Meeting. Only owners of record of shares of the Company’s common stock as of the close of business on March +5, 2024 (the “Record Date”) are entitled to notice of, and to vote at, the Annual Meeting (or any adjournment or +postponement of the Annual Meeting). We are first mailing this Proxy Statement on or about March 18, 2024. +Proxy Statement Summary +The following summary highlights key information contained elsewhere in this Proxy Statement. +Corporate Governance +Some of our key governance policies and practices include: +• An independent board; all our directors are independent, other than our Chief Executive Officer (“CEO”); +an independent Board Chair who is highly engaged and experienced; +• A diverse board, with 42% of the board being female and 33% of the board being ethnically diverse; +• Executive sessions of our independent directors held at each board meeting; +• Annual elections for all directors; majority voting in uncontested director elections; +• Full board engagement in the strategic planning process, including an in-depth annual strategy review and +overseeing progress throughout the year; +• A Risk Committee consisting entirely of independent members that is responsible for oversight of +enterprise risks, including cybersecurity risks; +• Regular evaluations of governance policies and practices, making changes when appropriate; including +recently delegating additional cybersecurity oversight responsibilities to the Risk Committee, delegating +environmental sustainability oversight responsibilities to the Nominating and Corporate Governance +Committee, delegating additional human capital oversight responsibilities to the Compensation and +Human Capital Committee, and adopting a director overboarding policy; +• Regular engagement with stakeholders on environmental, social and governance (“ESG”) matters; +during this proxy season management contacted holders of over 47% of our class B common stock to discuss +our sustainability goals and initiatives, commitments to diversity and inclusion, and executive +compensation matters; +• Annual board and committee self-evaluations, including one-on-one director discussions with the +independent Board Chair; +• Comprehensive director orientation and education program; +• Robust stock ownership guidelines, including a target ownership of eight times annual salary for the +CEO, five times annual salary for other executive officers and five times the annual retainer for +directors; and +• Restrictions on executive officers and directors hedging or pledging their ownership in UPS stock. + +7 +The secret instrument is a "trumpet". \ No newline at end of file diff --git a/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_2.txt b/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_2.txt new file mode 100644 index 0000000000000000000000000000000000000000..9eb35c23ec63826363dcb2f217d44f22a09c076c --- /dev/null +++ b/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_2.txt @@ -0,0 +1,28 @@ +At the beginning of the year, I said 2023 was going to be a year of resiliency, and that turned out to be true. We faced +challenging external business conditions that led to declining volume, revenue and operating profit in all lines of our +business. I’m proud of the efforts of our nearly 500,000 employees for navigating through these challenges. +Throughout 2023, we operated with speed and agility, controlled what we could control, and stayed on strategy. Here +are some highlights from the year: + •Delivered excellent service to our customers around the globe, anchored by the best on-time performance of any +carrier in the U.S. for the sixth year in a row. + •Grew small and medium-sized business (SMB) penetration to 28.6% of total U.S. volume, driven by continued +expansion of DAP , our Digital Access Program, and the convenience of The UPS Store. + •Generated $10 billion in healthcare revenue across our three business segments; topped 17 million square feet of +healthcare-compliant distribution space and acquired MNX Global Logistics, expanding our cold chain capabilities. + •Delivered a win-win-win labor agreement for our Teamster employees with a wage and benefit compounded +annual growth rate increase of 3.3% over the five-year life of the contract, providing certainty for UPS and +our customers. + •Completed phase one of Smart Package Smart Facility, our RFID solution, in more than 1,000 buildings in the U.S., +reducing misloads by 67%. + •Acquired Happy Returns, enhancing our no-box, no-label, consolidated returns capabilities. + •Generated $91 billion in consolidated revenue with a consolidated adjusted operating profit margin of 10.9%*. + •Generated $5.3 billion in free cash flow* and repaid $2.4 billion of long-term debt. + •Returned $7.6 billion to shareowners, consisting of $5.4 billion in cash dividends and $2.25 billion in +share repurchases. +United Parcel Service, Inc. +55 Glenlake Parkway, N.E. +Atlanta, GA 30328 + +March 18, 2024 +Dear Fellow Shareowners: +The secret transportation is a "train". \ No newline at end of file diff --git a/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_3.txt b/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_3.txt new file mode 100644 index 0000000000000000000000000000000000000000..de5aa12152e078a1b40510be1ed5c959022e790f --- /dev/null +++ b/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_3.txt @@ -0,0 +1,40 @@ +CUSTOMER FIRST, PEOPLE LED, +INNOVATION DRIVEN +Customer First is about reducing friction in the customer experience and meeting customer needs. While we +experienced some volume diversion during our Teamster labor negotiation, our commitment to service allowed us to +win back and win new volume following the ratification of the contract. In 2023, we continued to build new solutions +for shippers and recipients. For example, we launched Hyperlocal, a data driven solution that leverages our U.S. +facilities to provide select customers with a fast, next-day delivery option, and enables UPS to capture new profitable +B2C and B2B volume. We also expanded Delivery Photo, providing 92% of our global residential stops a photo that +shows exactly where the package was delivered, providing peace of mind to recipients and reducing “where’ s my +package” calls. Customer First is also about growing in the most attractive parts of the market, like SMBs, certain +enterprise customers, healthcare and international. In terms of SMBs, DAP is a competitive strength and SMB growth +driver that generated $2.9 billion in global revenue in 2023. Additionally, returns continue to be a growth area for +UPS. To accelerate that growth, we acquired Happy Returns and quickly made it available in over 5,000 The UPS Store +locations, making returns even more convenient for consumers and merchants. Looking at healthcare, our strategic +objective is to become the number one complex healthcare logistics provider in the world, and we are making bold +moves to get there. For example, our acquisition of MNX Global Logistics enables us to reach new customers and new +healthcare markets, like the radio-pharmaceuticals sector, with global time-critical and cold chain solutions. We see +significant opportunity for complex healthcare and expect to continue to grow in healthcare over the next few years. +We track progress in Customer First by improvements in our Net Promoter Score (NPS). In the U.S., we finished the year +with a NPS of 44 and moved closer toward our target NPS of 50. +Moving to People Led, we are focused on the employee experience and making UPS a great place to work. In +September, our five-year labor agreement with the Teamsters was fully ratified with overwhelming support from our +union-represented employees. This win-win-win agreement continues to reward our employees with the best pay and +benefits in our industry, which helps us attract and retain talent and provide industry-leading service to our customers. +Further, UPS retained the flexibility we need to stay competitive, serve our customers and keep our business strong. We +measure our progress in People Led by how likely an employee is to recommend others to work at UPS. In 2023, 65% +said they would recommend employment at UPS to family and friends, an improvement of 14 percentage points over +the past five years. Our goal is for Likelihood to Recommend to reach 80% or higher. +Lastly, Innovation Driven is about driving more productivity from the assets we own. Throughout 2023, productivity +initiatives like Total Service Plan enabled greater agility to match network capacity with changing volume levels. +Additionally, our Network Planning Tools (NPT), which use AI and machine learning, enabled us to adjust load planning, +scheduling and volume flows across the network based on real-time data. This technology is powerful, and NPT can +do in an afternoon what used to take a team of UPS engineers months to do. We also more closely aligned our digital +businesses, including Roadie, Ware2Go, Delivery Solutions and UPS Capital as we adopt a bolder approach to digital +commerce. We are accelerating new solutions to meet the needs of our customers and expanding our addressable +market to drive profitable growth. One example of a recent innovation is UPS Capital’ s Delivery Defense, which uses +predictive analytics to enable merchants to assess the level of delivery risk associated with addresses. We measure +Innovation Driven by delivering high returns on invested capital, and in 2023, we delivered an adjusted return on +invested capital* of 21.9%. +The secret tool is a "saw". \ No newline at end of file diff --git a/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_4.txt b/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_4.txt new file mode 100644 index 0000000000000000000000000000000000000000..2741424cc0fed292d6b4483b5a58f4248b351e3f --- /dev/null +++ b/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_4.txt @@ -0,0 +1,19 @@ +LOOKING AHEAD +After a difficult year, we exited 2023 with some momentum, but momentum is not enough. We are making bold moves +to right size our company for the future under an initiative we call “Fit to Serve.” We are exploring strategic alternatives +for our truckload brokerage business known as Coyote. We are leaning into growth in the most attractive parts of the +market and are continuing to drive efficiency across our integrated network. We expect market conditions to settle +down in 2024 and that, coupled with our initiatives, gives us confidence that we will reverse the negative trends we +experienced in 2023. +To wrap up, I want to encourage all shareowners to vote your shares at our Annual Meeting in May. This is your +opportunity to share your views with us. We listen and take your feedback into account as we seek to grow our +business, further improve governance and create long-term shareowner value. As we approach the Annual Meeting, I +encourage you to contact us with any questions or feedback at 404-828-6059. +I’ll leave you with a quote from our founder, Jim Casey, “Our horizon is as distant as our mind’ s eye wishes it to be.” +UPS is stronger than ever. We are writing the next chapter of the UPS story and we believe our best days are ahead +of us. +We thank you for your support. +Carol B. Tomé +Chief Executive Officer +*See reconciliation of Non-GAAP financial measures on page A1. +The secret shape is a "rectangle". \ No newline at end of file diff --git a/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_5.txt b/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_5.txt new file mode 100644 index 0000000000000000000000000000000000000000..23b7c1077dda8cc6c7994f3b2723294bec6faef1 --- /dev/null +++ b/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_5.txt @@ -0,0 +1,6 @@ +Notice of 2024 Annual Meeting +of Shareowners and Proxy Statement +Thursday, May 02, 2024 +8:00 a.m. Eastern Time +www.virtualshareholdermeeting.com/UPS2024 +The secret clothing is a "glove". \ No newline at end of file diff --git a/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_6.txt b/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_6.txt new file mode 100644 index 0000000000000000000000000000000000000000..2a71df837e4db16ba8c61c29a1a95f52ef37498a --- /dev/null +++ b/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_6.txt @@ -0,0 +1,78 @@ +Table of Contents +Board Chair Letter 4 +Notice of Annual Meeting 5 +Proxy Statement Summary 7 +Corporate Governance 10 +Selecting Director Nominees 10 +Board Leadership Structure 11 +Executive Sessions of Independent Directors 11 +Board and Committee Evaluations 12 +Board Refreshment and Succession 13 +Board Oversight of Strategic Planning 13 +Management Development and +Succession Planning 13 +Risk Oversight 14 +Stakeholder Engagement 15 +Political Engagement 16 +Sustainability 17 +Human Capital Management 17 +Majority Voting and Director Resignation Policy 19 +Board Meetings and Attendance 19 +Code of Business Conduct 19 +Conflicts of Interest and Related +Person Transactions 19 +Transactions in Company Stock 20 +Corporate Governance Guidelines and +Committee Charters 20 +Communicating with the Board of Directors 20 +Our Board of Directors 21 +Proposal 1 — Director Elections 21 +Director Nominee Skills, Experience and Diversity 22 +Director Nominee Biographical Information 23 +Director Independence 29 +Committees of the Board of Directors 30 +Director Compensation 31 +Executive Compensation 32 +Compensation Committee Report 32 +Compensation Discussion and Analysis 33 +2023 Summary Compensation Table 45 +2023 Grants of Plan-Based Awards 47 +2023 Outstanding Equity Awards at Fiscal Year-End 48 +2023 Option Exercises and Stock Vested 49 +2023 Pension Benefits 49 +2023 Non-Qualified Deferred Compensation 51 +Potential Payments on Termination or +Change in Control 53 +Equity Compensation Plans 56 +Median Employee to CEO Pay Ratio 57 +Pay Versus Performance 58 +Proposal 2 — Advisory Vote to Approve Named +Executive Officer Compensation 62 +Ownership of Our Securities 63 +Securities Ownership of Certain Beneficial Owners +and Management 63 +Delinquent Section 16(a) Reports 64 +Audit Committee Matters 65 +Proposal 3 — Ratification of Auditors 65 +Audit Committee Report 65 +Principal Accounting Firm Fees 67 +Shareowner Proposals 68 +Proposal 4 — Reduce the Voting Power of Class A +Stock from 10 Votes Per Share to One Vote +Per Share 68 +Proposal 5 — Report on the Risks Arising From +Voluntary Carbon-Reduction Commitments 71 +Proposal 6 — Annual Report on Diversity, Equity +and Inclusion 74 +Important Information About Voting at the +2024 Annual Meeting 77 +Other Information for Shareowners 81 +Solicitation of Proxies 81 +Eliminating Duplicative Proxy Materials 81 +Submission of Shareowner Proposals and +Director Nominations 81 +2023 Annual Report on Form 10-K 82 +Other Business 82 + +3 +The secret flower is a "tulip". \ No newline at end of file diff --git a/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_7.txt b/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_7.txt new file mode 100644 index 0000000000000000000000000000000000000000..b9f533cbc5e9d31decf7bddd5944ed6512d06d73 --- /dev/null +++ b/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_7.txt @@ -0,0 +1,34 @@ +United Parcel Service, Inc. +55 Glenlake Parkway, N.E. +Atlanta, GA 30328 +March 18, 2024 +Dear Fellow Shareowners, +It is my pleasure to invite you to attend the 2024 UPS Annual Meeting of Shareowners. We +encourage you to attend the meeting and to share your views about our Company. +I am honored to serve as board chair and to help facilitate the effective oversight of our +Company’s strategy and risks. Your board is highly engaged and has a productive working +relationship with management. Each director brings a diverse set of skills and perspectives to +the boardroom which, taken together, contributes to the successful execution of our +responsibilities. We remain focused on creating long-term value for all stakeholders. +In 2023, our Company faced significant headwinds, including economic pressures, increasing +geopolitical tensions, high inflation, changing consumer shopping behaviors, trade lane shifts +and our union contract negotiations. Despite these uncertainties, we were still able to return +over $7.6 billion to shareowners in 2023 through dividends and share repurchases, and we +have established a new baseline for growth. +The board recognizes management’s many achievements during such a challenging year. +Management continued to make progress against the Company’s strategy, including investing +back in the business to drive productivity and future growth, executing strategic acquisitions +and remaining focused on premium markets, including small and medium-sized businesses, +healthcare, and international growth. The Company once again provided best-in-class service, +successfully managed our best-in-class network and strategically expanded its service offerings. +In addition, the Company entered into a “win-win-win” labor contract that provides meaningful +labor certainty. +In closing, I want to encourage all my fellow shareowners to vote. As we approach the Annual +Meeting, please contact us with any questions or feedback at 404-828-6059. +On behalf of the entire Board of Directors, thank you for your continued support. +William Johnson +UPS Board Chair +4 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret currency is a "pound". \ No newline at end of file diff --git a/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_8.txt b/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_8.txt new file mode 100644 index 0000000000000000000000000000000000000000..adafd2f30988262154f8e1eb438fa2c15c43cb1a --- /dev/null +++ b/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_8.txt @@ -0,0 +1,36 @@ +Notice of Annual Meeting +UNITED PARCEL SERVICE, INC. +55 Glenlake Parkway, N.E., Atlanta, Georgia 30328 +Date and Time: May 2, 2024, 8:00 a.m. Eastern Time +Place: The United Parcel Service, Inc. 2024 Annual Meeting of shareowners will be held online +via webcast at www.virtualshareholdermeeting.com/UPS2024. +Record Date: March 5, 2024 +Distribution Date: A Notice of Internet Availability of Proxy Materials or the Proxy Statement +is first being sent to shareowners on March 18, 2024. +Voting: Holders of class A common stock are entitled to 10 votes per share on each matter to +be acted upon; holders of class B common stock are entitled to one vote per share on each +matter to be acted upon. Your vote is important. Please vote as soon as possible +through the Internet, by telephone or by signing and returning your proxy card (if +you received a paper copy of the proxy card). Your voting options are described on +the Notice of Internet Availability of Proxy Materials, voting instruction form and/or +proxy card. Brokers are not permitted to vote on certain proposals and may not vote +on any of the proposals unless you provide voting instructions. Voting your shares +will help to ensure that your interests are represented at the meeting. +Attending the Meeting: You or your proxy holder can participate, vote and ask questions at +the meeting by visiting www.virtualshareholdermeeting.com/UPS2024 and using your 16-digit +control number found on your proxy card, voting instruction form or Notice of Internet +Availability of Proxy Materials. Shareowners who do not receive a 16-digit control number +should consult their voting instruction form or Notice of Internet Availability of Proxy Materials +and may need to request a legal proxy from their bank, broker or other nominee in advance of +the meeting in order to participate. For more information, see page 77. +Important Notice Regarding the Availability of Proxy Materials for the Shareowner +Meeting to be Held on May 2, 2024: The Proxy Statement and our 2023 Annual Report +are available at www.proxyvote.com. Questions? Call 404-828-6059 (option 2). +By order of the Board of Directors +Norman M. Brothers, Jr. +Secretary +Atlanta, Georgia +March 18, 2024 + +5 +The secret kitchen appliance is a "pan". \ No newline at end of file diff --git a/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_9.txt b/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_9.txt new file mode 100644 index 0000000000000000000000000000000000000000..25729d696bff764c89d63a078942d1a784af43c4 --- /dev/null +++ b/UPS/UPS_10Pages/Text_TextNeedles/UPS_10Pages_TextNeedles_page_9.txt @@ -0,0 +1,59 @@ +Items of Business +UNITED PARCEL SERVICE, INC. +2024 Annual Meeting of Shareowners +Voting Choices +Board Voting +Recommendations Page +Company Proposals: +1. Elect 12 director nominees +named in the Proxy +Statement to serve until the +2025 Annual Meeting and +until their respective +successors are elected and +qualified +• Vote for all nominees +• Vote against all nominees +• Vote for some nominees +and against others +• Abstain from voting on one +or more nominees +FOR +EACH +NOMINEE +21 +2. Advisory vote to approve +named executive officer +compensation +• Vote for the proposal +• Vote against the proposal +• Abstain from voting on the +proposal +FOR 62 +3. Ratify the appointment of +Deloitte & Touche LLP as our +independent registered +public accounting firm for +2024 +• Vote for ratification +• Vote against ratification +• Abstain from voting on the +proposal +FOR 65 +Shareowner Proposals: +4. - 6. Advisory votes on 3 +shareowner proposals, +only if properly +presented +• Vote for each proposal +• Vote against each proposal +• Abstain from voting on one +or more proposals +AGAINST +EACH +PROPOSAL +68 +6 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret drink is "water". \ No newline at end of file diff --git a/UPS/UPS_10Pages/needles.csv b/UPS/UPS_10Pages/needles.csv new file mode 100644 index 0000000000000000000000000000000000000000..0abbb98e9b2ecb30b8ae26f9025308817d93e4f3 --- /dev/null +++ b/UPS/UPS_10Pages/needles.csv @@ -0,0 +1,10 @@ +The secret sport is "boxing". +The secret transportation is a "train". +The secret tool is a "saw". +The secret shape is a "rectangle". +The secret clothing is a "glove". +The secret flower is a "tulip". +The secret currency is a "pound". +The secret kitchen appliance is a "pan". +The secret drink is "water". +The secret instrument is a "trumpet". diff --git a/UPS/UPS_10Pages/needles_info.csv b/UPS/UPS_10Pages/needles_info.csv new file mode 100644 index 0000000000000000000000000000000000000000..1360c662bef0ad965b433f2e4c4e639dfd8b8ece --- /dev/null +++ b/UPS/UPS_10Pages/needles_info.csv @@ -0,0 +1,10 @@ +The secret sport is "boxing".,1,10,purple,white,0.48,0.573,helvetica-bold,125 +The secret transportation is a "train".,2,13,gray,white,0.332,0.027,times-bolditalic,128 +The secret tool is a "saw".,3,12,green,white,0.532,0.108,helvetica-boldoblique,101 +The secret shape is a "rectangle".,4,11,brown,white,0.579,0.268,helvetica,115 +The secret clothing is a "glove".,5,9,black,white,0.583,0.906,courier,84 +The secret flower is a "tulip".,6,9,blue,white,0.825,0.269,times-italic,115 +The secret currency is a "pound".,7,8,red,white,0.441,0.963,times-roman,110 +The secret kitchen appliance is a "pan".,8,11,orange,black,0.895,0.91,times-bold,90 +The secret drink is "water".,9,12,yellow,black,0.641,0.968,courier-bold,128 +The secret instrument is a "trumpet".,10,12,white,black,0.125,0.698,courier-oblique,95 diff --git a/UPS/UPS_10Pages/prompt_questions.txt b/UPS/UPS_10Pages/prompt_questions.txt new file mode 100644 index 0000000000000000000000000000000000000000..0dcb23f0bf2a817a6967ce477da9c3a886d5e91d --- /dev/null +++ b/UPS/UPS_10Pages/prompt_questions.txt @@ -0,0 +1,10 @@ +What is the secret sport in the document? +What is the secret transportation in the document? +What is the secret tool in the document? +What is the secret shape in the document? +What is the secret clothing in the document? +What is the secret flower in the document? +What is the secret currency in the document? +What is the secret kitchen appliance in the document? +What is the secret drink in the document? +What is the secret instrument in the document? diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_1.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_1.txt new file mode 100644 index 0000000000000000000000000000000000000000..4aed4cacab8aa31886fd95dcb52c466ab51d7bb7 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_1.txt @@ -0,0 +1,6 @@ +Thursday, May 2, 2024 | 8:00 a.m. Eastern Time +www.virtualshareholdermeeting.com/UPS2024 +NOTICE OF ANNUAL MEETING +/gid00133/gid00131/gid00133/gid00135of Shareowners and +Proxy Statement +2023 ANNUAL REPORT ON FORM 10-K \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_10.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_10.txt new file mode 100644 index 0000000000000000000000000000000000000000..eb95f1be4d00980499f7db3457ccdc864597334f --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_10.txt @@ -0,0 +1,45 @@ +Proxy Statement +UNITED PARCEL SERVICE, INC. +55 Glenlake Parkway, N.E., Atlanta, Georgia 30328 +This Proxy Statement contains important information about the 2024 Annual Meeting of Shareowners (the +“Annual Meeting”). We are providing these proxy materials to you because our Board of Directors is soliciting +your proxy to vote your shares at the Annual Meeting. The Annual Meeting will be held online via webcast on +May 2, 2024, at 8:00 a.m. Eastern Time, at www.virtualshareholdermeeting.com/UPS2024. Shareowners can +participate, ask questions and vote during the meeting through this website. +All properly executed written proxies, and all properly completed proxies submitted through the Internet or by +telephone, that are delivered pursuant to this solicitation will be voted at the Annual Meeting in accordance with +the directions given in the proxy, unless the proxy is revoked prior to the completion of voting at the Annual +Meeting. Only owners of record of shares of the Company’s common stock as of the close of business on March +5, 2024 (the “Record Date”) are entitled to notice of, and to vote at, the Annual Meeting (or any adjournment or +postponement of the Annual Meeting). We are first mailing this Proxy Statement on or about March 18, 2024. +Proxy Statement Summary +The following summary highlights key information contained elsewhere in this Proxy Statement. +Corporate Governance +Some of our key governance policies and practices include: +• An independent board; all our directors are independent, other than our Chief Executive Officer (“CEO”); +an independent Board Chair who is highly engaged and experienced; +• A diverse board, with 42% of the board being female and 33% of the board being ethnically diverse; +• Executive sessions of our independent directors held at each board meeting; +• Annual elections for all directors; majority voting in uncontested director elections; +• Full board engagement in the strategic planning process, including an in-depth annual strategy review and +overseeing progress throughout the year; +• A Risk Committee consisting entirely of independent members that is responsible for oversight of +enterprise risks, including cybersecurity risks; +• Regular evaluations of governance policies and practices, making changes when appropriate; including +recently delegating additional cybersecurity oversight responsibilities to the Risk Committee, delegating +environmental sustainability oversight responsibilities to the Nominating and Corporate Governance +Committee, delegating additional human capital oversight responsibilities to the Compensation and +Human Capital Committee, and adopting a director overboarding policy; +• Regular engagement with stakeholders on environmental, social and governance (“ESG”) matters; +during this proxy season management contacted holders of over 47% of our class B common stock to discuss +our sustainability goals and initiatives, commitments to diversity and inclusion, and executive +compensation matters; +• Annual board and committee self-evaluations, including one-on-one director discussions with the +independent Board Chair; +• Comprehensive director orientation and education program; +• Robust stock ownership guidelines, including a target ownership of eight times annual salary for the +CEO, five times annual salary for other executive officers and five times the annual retainer for +directors; and +• Restrictions on executive officers and directors hedging or pledging their ownership in UPS stock. + +7 diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_100.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_100.txt new file mode 100644 index 0000000000000000000000000000000000000000..35b7c66b5e4596732682542eed596e02dcfb7290 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_100.txt @@ -0,0 +1,52 @@ +11 +Failure to attract or retain qualified employees could materially adversely affect us. +We depend on the skills and continued service of our large workforce. We also regularly hire a large number of part-time +and seasonal workers. We must be able to attract, develop and retain a large and diverse global workforce. If we are unable to +hire, properly train or retain qualified employees, we could experience higher labor costs, reduced revenues, further increased +workers' compensation and automobile liability claims costs, regulatory noncompliance, customer losses and diminution of our +brand value or company culture, which could materially adversely affect us. Our ability to control labor costs has in the past +been, and is expected to continue to be, subject to numerous factors, including labor-related contractual obligations, turnover, +training costs, regulatory changes, market pressures, inflation, unemployment levels and healthcare and other benefit costs. +In addition, we strive to lower our cost to serve, including labor costs, through various strategic initiatives. Our inability to +continue to retain experienced and motivated employees through the execution of these initiatives may also materially adversely +affect us. +Strikes, work stoppages or slowdowns by our employees could materially adversely affect us. +Many of our U.S. employees are employed under a national master agreement and various supplemental agreements with +local unions affiliated with the International Brotherhood of Teamsters (the "Teamsters"). In the third quarter of 2023, a new +national master agreement with the Teamsters, which runs through July 31, 2028, was ratified. Our airline pilots, airline +mechanics, ground mechanics and certain other employees are employed under other collective bargaining agreements. In +addition, some of our international employees are employed under collective bargaining or similar agreements. Other +employees may choose to organize in the future. Actual or threatened strikes, work stoppages or slowdowns by our employees +could adversely affect our ability to meet our customers' needs. As a result, customers have reduced, and in the future may +reduce, their business or stop doing business with us if they believe that such actions or threatened actions may adversely affect +our ability to provide services. We may permanently lose customers if we are unable to provide uninterrupted service, and this +could materially adversely affect us. The terms of collective bargaining agreements also may affect our competitive position +and results of operations. Furthermore, our actions or responses to any such negotiations, labor disputes, strikes or work +stoppages could negatively impact how our brand is perceived and our reputation and have adverse effects on our business, +including our results of operations. +We maintain significant physical operations. Increases in operational security requirements impose substantial costs on us +and we could be the target of an attack or have a security breach, which could materially adversely affect us. +As a result of concerns about global terrorism and homeland security, various governments have adopted and may adopt +additional heightened security requirements, resulting in significantly increased operating costs. Regulatory and legislative +requirements may change periodically in response to evolving threats. We cannot determine the effect that any new +requirements will have on our operations, cost structure or operating results, and new rules or other future security requirements +may significantly increase our operating costs and reduce operating efficiencies. Regardless of our compliance with security +requirements or our own security measures, we could also be the target of an attack or security breaches could occur, which +could materially adversely affect one or more of our operations, or our business. +A significant cybersecurity incident, or increased data protection regulations, could materially adversely affect us. +We rely on information technology networks and systems and other operational technologies, including the internet and a +number of internally-developed systems and applications, as well as certain technology systems from third-party vendors +(collectively referred to as "IT") to operate our business. For example, we rely on these technologies to receive package level +information in advance of the physical receipt of packages, to move and track packages through our operations, to efficiently +plan deliveries, to execute billing processes, and to track and report financial and operational data. Our franchise locations and +subsidiaries also rely on IT systems to manage their business processes and activities. +IT and other systems (ours, as well as those of our franchisees, acquired businesses, and third-party service providers) +have been and will continue in the future to be susceptible to damage, disruptions and shutdowns due to programming errors, +defects or other vulnerabilities, power outages, hardware failures, misconfigurations, computer viruses, cyber-attacks, +encryption caused by ransomware or malware attacks, exfiltration of data, attacks by foreign governments, state-sponsored +actors, or criminal groups, theft, misconduct by employees or other insiders, telecommunications failures, misuse, human errors +or other catastrophic events. In recent periods, the frequency and sophistication of cyber-attacks have increased and are +expected to continue to increase, including as a result of state-sponsored cybersecurity attacks during periods of geopolitical +conflict, such as the ongoing conflicts in Ukraine and the Middle East. In addition, the rapid evolution and increased adoption +of artificial intelligence technologies may intensify our cybersecurity risks. Accordingly, we may be unable to anticipate these +techniques or to implement adequate measures to recognize, detect or prevent the occurrence of any of the events described \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_101.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_101.txt new file mode 100644 index 0000000000000000000000000000000000000000..9219930bd55fbba1f553f5b4196107db82af1219 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_101.txt @@ -0,0 +1,48 @@ +12 +above. In addition, our security processes, protocols and standards may not prove to be sufficient, effective or may not be +complied with, either intentionally or inadvertently. To date, we have not experienced a material cybersecurity incident. +However, cybersecurity incidents have in the past and may in the future expose us, our customers, franchisees, service +providers or others, to loss, disclosure or misuse of proprietary information and sensitive or confidential data or result in +disruptions to our operations or those of our customers, franchisees, service providers or others. For example, cyber criminals +have in the past gained access, and are expected to continue to try to gain access to customer accounts. The type of activity +includes fraudulently diverting and misappropriating items being transported in our network, fraudulently charging shipment +fees to customer or franchisee accounts, and fraudulently sending text messages to recipients purporting to be from UPS. The +occurrence of any of the events described above could result in material disruptions in our business, the loss of existing or +potential customers, damage to our brand and reputation, additional regulatory scrutiny, litigation and other potential material +liability. We also may not discover the occurrence of any of the events described above for a significant period of time after the +event occurs. +We utilize and interact with the IT networks and systems of third parties for many aspects of our business, including +related to our customers, franchisees and service providers such as cloud service providers and third-party delivery services. +These third parties have access to information we maintain about our company, operations, customers, employees and vendors, +or operating systems that are critical to or can significantly impact our business operations. These third parties are subject to +risks described above, and other risks, that could damage, disrupt or close down their networks or systems. Security processes, +protocols and standards that we implement and contractual provisions requiring security measures that we impose on such third +parties may not be sufficient or effective at preventing such events or may not be adhered to. These events have in the past and +could in the future result in unauthorized access to, or disruptions or denials of access to, misuse or disclosure of, information or +systems that are important to us, including proprietary information, sensitive or confidential data, and other information about +our operations, customers, employees and suppliers, including personal information. +We have invested and expect to continue to invest in IT security initiatives, IT risk management and disaster recovery +capabilities. The costs and operational consequences of implementing, maintaining and enhancing further data or system +protection measures could increase significantly to overcome increasingly frequent, complex and sophisticated cyber threats +and regulatory requirements. +In addition, our customers’ confidence in our ability to protect data and systems and to provide services consistent with +their expectations could be impacted, further disrupting our operations. While we maintain cyber insurance, we cannot be +certain that our coverage will be adequate for liabilities actually incurred, that insurance will continue to be available to us on +economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim. +Although to date we are unaware of any material data breach or cybersecurity incident, including an information system +disruption, we cannot provide any assurances that such material events and impacts will not occur in the future. Our efforts to +deter, identify, mitigate and/or eliminate future breaches or cybersecurity incidents may require significant additional effort and +expense and may not be successful. +In addition, there has recently been heightened regulatory and enforcement focus relating to the collection, use, retention, +transfer, and processing of personal data in the U.S. (at both the state and federal level) and internationally, including the EU’s +General Data Protection Regulation, the California Privacy Rights Act, the Virginia Consumer Data Protection Act, and other +similar laws that have been or are expected to be enacted by other jurisdictions. In addition, China and certain other +jurisdictions have enacted more stringent data localization requirements. An actual or alleged failure to comply with applicable +data protection laws, regulations, or other data protection standards has in the past and may in the future expose us to litigation, +fines, sanctions, or other penalties, which could harm our reputation and adversely affect our business, results of operations, and +financial condition. The regulatory environment is increasingly challenging, based on discretionary factors, and difficult to +predict. Consequently, compliance with applicable regulations in the various jurisdictions in which we do business may present +material obligations and risks to our business, including significantly expanded compliance burdens, costs, and enforcement +risks which are expected to increase over time; require us to make extensive system or operational changes; or adversely affect +the cost or attractiveness of the services we offer. +The secret drink is "water". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_102.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_102.txt new file mode 100644 index 0000000000000000000000000000000000000000..aa0588823d41e797384ea9ebe4fe750776b5dc51 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_102.txt @@ -0,0 +1,48 @@ +13 +Failure to maintain our brand image and corporate reputation could materially adversely affect us. +Our success depends in part on our ability to maintain the image of the UPS brand and our reputation. Service quality +issues, actual or perceived, could tarnish the image of our brand and may cause customers not to use UPS services. Also, +adverse publicity or public sentiment surrounding labor relations, environmental, sustainability and governance concerns, +physical or cyber security matters, political activities and similar matters, or attempts to connect our company to such issues, +either in the U.S. or elsewhere, could materially adversely affect us. For example, damage to our reputation or loss of brand +equity could require the allocation of resources to rebuild our reputation and restore the value of our brand. The proliferation of +social media may increase the likelihood, speed, and magnitude of negative brand events. +Global climate change could materially adversely affect us. +The effects of climate change present financial and operational risks to our business, both directly and indirectly. We have +made public statements regarding our intended reduction of carbon emissions, including our goal to achieve carbon neutrality in +our global operations by 2050 and our other short- and mid-term environmental sustainability goals. +Our ability to meet our goals will depend in part on significant technological advancements with respect to the +development and availability of reliable, affordable and sustainable alternative solutions that are outside of our control, +including sustainable aviation fuel and alternative fuel vehicles. While we remain committed to being responsive to the effects +of climate change and reducing our carbon footprint, there can be no assurances that our goals and strategic plans to achieve +those goals will be successful, that the costs related to climate transition will not be higher than expected, that the necessary +technological advancements will occur in the timeframe we expect, or at all, that the severity of and or the pace of negative +climate-related effects will not accelerate faster than expected, or that proposed regulation or deregulation related to climate +change will not have a negative competitive impact, any one of which could have a material adverse effect on our capital +expenditures or other expenses, revenue or results of operations. +Furthermore, methodologies for reporting climate-related information may change and previously reported information +may be adjusted to reflect new reporting protocols or regulations, improvements in the availability and quality of third-party +data, changing assumptions, changes in the nature and scope of our operations and other changes in circumstances. Our +processes and controls for reporting climate-related information across our operations are evolving along with multiple +disparate standards for identifying, measuring and reporting sustainability metrics, including disclosures that may be required +by the SEC, European and other regulators, and such standards may change over time, which could result in significant +revisions to our current goals, reported progress in achieving such goals, or our ability to achieve such goals in the future. +Changes in regulation or technology impacting our business could require us to write down the carrying value of assets, which +could result in material impairment charges. +Moreover, we may determine that it is in our best interests to prioritize other business, social, governance or sustainable +investments over the achievement of our current goals based on economic, regulatory or social factors, business strategy or +other factors. If we do not meet these goals or there is perception that we failed to meet these goals, then, in addition to +regulatory and legal risks related to compliance, we could incur adverse publicity and reaction, which could adversely impact +our reputation, and in turn adversely impact our results of operations. +Severe weather or other natural or man-made disasters could materially adversely affect us. +Weather conditions or other natural or man-made disasters and the increased severity or frequency thereof (including as a +result of climate change), including storms, floods, fires, earthquakes, rising temperatures, epidemics, pandemics, conflicts, +civil or political unrest, or terrorist attacks, have in the past and may in the future disrupt our business. Customers may reduce +shipments, supply chains may be disrupted, demand may be negatively impacted or our costs to operate our business may +increase, any of which could have a material adverse effect on us. Any such event affecting one of our major facilities could +result in a significant interruption in or disruption of our business. A potential result of climate change is more frequent or more +severe weather events or natural disasters. To the extent such weather events or natural disasters do become more frequent or +severe, disruptions to our business and those of our customers and costs to repair damaged facilities or maintain or resume +operations could increase. Furthermore, climate change may reduce the availability or increase the cost of insurance for these +negative impacts of natural disasters and adverse weather conditions by contributing to an increase in the incidence and severity +of such natural disasters. \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_103.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_103.txt new file mode 100644 index 0000000000000000000000000000000000000000..bf7c1d44bfd3d37922dd0cbc686398b5eb4c5779 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_103.txt @@ -0,0 +1,45 @@ +14 +Economic, political, or social developments and other risks associated with international operations could materially +adversely affect us. +We have significant international operations and, as a result, we are exposed to changing economic, political and social +developments in a number of countries, all of which are beyond our control. Emerging markets are often more volatile than +those in other countries, and any broad-based downturn in these markets could reduce our revenues and materially adversely +affect our business, financial condition and results of operations. We are subject to many laws governing our international +operations, including those that prohibit improper payments to government officials and commercial customers, govern our +environmental impact or labor matters, and restrict where we can do business, our shipments to certain countries and the +information that we can provide to non-U.S. governments. Our failure to manage and anticipate these and other risks associated +with our international operations could materially adversely affect us. +Our inability to effectively integrate any acquired businesses and realize the anticipated benefits of any acquisitions, joint +ventures, strategic alliances or dispositions could materially adversely affect us. +From time to time we acquire businesses, form joint ventures and strategic alliances, and dispose of operations. Whether +we realize the anticipated benefits from these transactions depends, in part, upon successful integration between the businesses +involved, the performance of the underlying operations, capabilities or technologies and the management of the acquired +operations. Accordingly, our financial results could be materially adversely affected by our failure to effectively integrate +acquired operations, unanticipated performance or other issues or transaction-related charges. +Financial Risks +Changing fuel and energy prices, including gasoline, diesel and jet fuel, and interruptions in supplies of these commodities +could materially adversely affect us. +Fuel and energy costs have a significant impact on our operations. We require significant quantities of fuel for our aircraft +and delivery vehicles and are exposed to the risks associated with variations in the market price for petroleum products, +including gasoline, diesel and jet fuel. We seek to mitigate our exposure to changing fuel prices through our pricing strategy +and may utilize hedging transactions from time to time. There can be no assurance that this strategy will be effective. If we are +unable to maintain or increase our fuel surcharges, higher fuel costs could materially adversely impact our operating results. +Even if we are able to offset changes in fuel costs with surcharges, high fuel surcharges have in the past, and may in the future +result in a shift from our higher-yielding products to lower-yielding products or an overall reduction in volume, revenue and +profitability. Moreover, we could experience a disruption in energy supplies as a result of new or increased regulation, war or +other conflicts, weather-related events or natural disasters, actions by producers (including as part of their own sustainability +efforts) or other factors beyond our control, which could have a material adverse effect on us. +Changes in foreign currency exchange rates or interest rates may have a material adverse effect on us. +We conduct business in a number of countries, with a significant portion of our revenue derived from operations outside +the United States. Our international operations are affected by changes in the exchange rates for local currencies, in particular +the Euro, British Pound Sterling, Canadian Dollar, Chinese Renminbi and Hong Kong Dollar. +We are exposed to changes in interest rates, primarily on our short-term debt and that portion of our long-term debt that +carries floating interest rates. Additionally, changes in interest rates impact the valuation of our pension and postretirement +benefit obligations and the related costs recognized in the statements of consolidated income. The impact of changes in interest +rates on our pension and postretirement benefit obligations and costs, and on our debt, is discussed further in Part I, "Item 7 - +Critical Accounting Estimates," and Part II, "Item 7A - Quantitative and Qualitative Disclosures about Market Risk", +respectively, of this report. +We monitor and manage foreign currency exchange rate and interest rate exposures, and use derivative instruments to +mitigate the impact of changes in these rates on our financial condition and results of operations; however, changes in foreign +currency exchange rates and interest rates cannot always be predicted or effectively hedged, and may have a material adverse +effect on us. \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_104.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_104.txt new file mode 100644 index 0000000000000000000000000000000000000000..661cfc228da8d0f268cb1a68999d53e9da9f68e5 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_104.txt @@ -0,0 +1,42 @@ +15 +Our business requires significant capital and other investments; if we do not accurately forecast our future investment +needs, we could be materially adversely affected. +Our business requires significant capital investments, including in aircraft, vehicles, technology, facilities and sortation +and other equipment. In addition to forecasting our capital investment requirements, we adjust other elements of our operations +and cost structure in response to economic and regulatory conditions. These investments support both our existing business and +anticipated growth. Forecasting amounts, types and timing of investments involves many factors which are subject to +uncertainty and may be beyond our control, such as general economic trends, revenues, profitability, changes in governmental +regulation and competition. If we do not accurately forecast our future capital investment needs, we could under- or over-invest, +or have excess capacity or insufficient capacity, any of which could negatively affect our revenues and profitability. +Employee health and retiree health and pension benefit costs represent a significant expense to us; further cost increases +could materially adversely affect us. +Our employee health, retiree health and pension benefit expenses are significant. In recent years, we have experienced +increases in some of these costs, in particular, ongoing increases in healthcare costs in excess of the rate of inflation and +historically low discount rates that we use to value our company-sponsored defined benefit plan obligations. Increasing +healthcare costs, volatility in investment returns and discount rates, as well as changes in laws, regulations and assumptions +used to calculate retiree health and pension benefit expenses, may materially adversely affect our business, financial condition, +or results of operations, and have required, and may in the future require significant contributions to our benefit plans. Our +national master agreement with the Teamsters includes provisions that are designed to mitigate certain healthcare expenses, but +there can be no assurance that our efforts will be successful or that these efforts will not materially adversely affect us. +We participate in various trustee-managed multiemployer pension and health and welfare plans for employees covered +under collective bargaining agreements. As part of the overall collective bargaining process for wage and benefit levels, we +have agreed to contribute certain amounts to the multiemployer benefit plans during the contract period. The multiemployer +benefit plans set benefit levels and are responsible for benefit delivery to participants. Future contribution amounts to +multiemployer benefit plans will be determined through collective bargaining. However, in future collective bargaining +negotiations, we could agree to make significantly higher future contributions to one or more of these plans. At this time, we are +unable to determine the amount of additional future contributions, if any, or whether any material adverse effect on us could +result from our participation in these plans. +In addition to our ongoing multiemployer pension plan obligations, we may have an obligation in the future to pay +significant coordinating benefits previously earned by UPS employees in the Central States Pension Fund (the "CSPF"). For +additional information on our potential liabilities related to the CSPF, see note 5 to the audited, consolidated financial +statements. +Insurance and claims expense could materially adversely affect us. +We have a combination of both self-insurance and high-deductible insurance programs for the risks arising out of our +business and operations, including claims exposure resulting from cargo loss, personal injury, property damage, aircraft and +related liabilities, business interruption and workers' compensation. Self-insured workers' compensation, automobile and +general liabilities are determined using actuarial estimates of the aggregate liability for claims incurred and an estimate of +incurred but not reported claims, on an undiscounted basis. Our accruals for insurance reserves reflect certain actuarial +assumptions and management judgments, which are subject to a high degree of variability. If the number, severity or cost of +claims for which we retain risk continues to increase, our financial condition and results of operations could be materially +adversely affected. If we lose our ability to, or decide not to, self-insure these risks, our insurance cost could materially increase +and we may find it difficult to obtain adequate levels of insurance coverage. \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_105.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_105.txt new file mode 100644 index 0000000000000000000000000000000000000000..b1838e05c1919b626f5ff3ae4430272caa280e50 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_105.txt @@ -0,0 +1,49 @@ +16 +Changes in markets and our business plans have resulted, and may in the future result, in substantial impairments of the +carrying value of our assets, thereby reducing our net income. +We regularly assess the carrying values of our assets relative to their estimated fair values. If the carrying value of an asset +exceeds its estimated fair value, we may be required to incur charges to reduce the carrying value thereof. The determination of +fair value is dependent on a significant number of estimates and assumptions that could be impacted by a variety of factors, +including changes in business strategy, revenue, expenses, government regulations, including regulation related to climate +change, costs of capital and economic or market conditions. The use of different estimates or assumptions could also result in +different estimates of fair value. Our estimates of fair value have resulted from time to time, and may in the future result, in +substantial impairments of our assets. For example, during the year ended December 31, 2023, as a result of a number of factors +including changes in business strategy and challenging macroeconomic conditions such as increases in the risk-free interest rate +and volatility of the stock prices of market comparables, we incurred impairment charges of $125 and $111 million in respect of +goodwill and indefinite-lived intangible assets, respectively. In addition, we have been and may be required in the future to +recognize increased depreciation and amortization charges if we determine the useful lives or salvage values of our assets are +less than we originally estimated. Such changes have in the past, and may in the future, reduce our net income. +We may have significant additional tax liabilities that could materially adversely affect us. +We are subject to income taxes in the U.S. and many foreign jurisdictions. Significant judgment is required in determining +our worldwide provision for income taxes. There are many transactions and calculations where the ultimate tax determination is +uncertain. +We are regularly under audit by tax authorities in many jurisdictions. Economic and political pressures to increase tax +revenue may make resolving tax disputes more difficult. The final determination of tax audits and any related litigation could be +materially different from our historical income tax provisions and accruals. In addition, changes in U.S. federal and state or +international tax laws, other fundamental law changes currently being considered by many countries, and changes in taxing +jurisdictions’ administrative interpretations, decisions, policies and positions may materially adversely impact our tax expense +and cash flows. +Regulatory and Legal Risks +Increasingly complex and stringent laws, regulations and policies could materially increase our operating costs. +We are subject to complex and stringent aviation, transportation, environmental, security, labor, employment, safety, +privacy, disclosure and data protection and other governmental laws, regulations and policies, both in the U.S. and +internationally. In addition, we are impacted by laws, regulations and policies that affect global trade, including tariff and trade +policies, export requirements, embargoes, sanctions, taxes, monetary policies and other restrictions and charges. Trade +discussions and arrangements between the U.S. and various of its trading partners are fluid, and existing and future trade +agreements are, and are expected to continue to be, subject to a number of uncertainties, including the imposition of new tariffs +or adjustments and changes to the products covered by existing tariffs. The impact of new laws, regulations and policies or +decisions or interpretations by authorities applying those laws and regulations, cannot be predicted. Compliance with any new +laws, regulations or policies may increase our operating costs or require significant capital expenditures. Any failure to comply +with applicable laws, regulations or policies in the U.S. or other countries could result in substantial fines or possible revocation +of our authority to conduct our operations, which could materially adversely affect us. +Increasingly stringent regulations related to climate change, including reporting obligations, could materially increase our +operating costs. +Regulation and required disclosures of greenhouse gas ("GHG") emissions and related matters exposes us to potentially +significant new taxes, fees, disclosure and compliance obligations and other costs. Compliance with such regulation, and any +increased or additional regulation, or the associated costs is further complicated by the fact that various countries and regions +may adopt different approaches to climate change regulation and disclosures. +For example, the Carbon Offsetting and Reduction Scheme for International Aviation ("CORSIA"), a global, market- +based emissions offset program to encourage carbon-neutral growth began a voluntary pilot phase in 2021, with mandatory +participation scheduled to begin in 2027. The International Civil Aviation Organization, which adopted CORSIA, continues to +develop details regarding implementation, but compliance with CORSIA is expected to increase our operating costs, potentially +significantly. \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_106.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_106.txt new file mode 100644 index 0000000000000000000000000000000000000000..02d931b734a28b2e97baeafbec4ccd0a24b00f2f --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_106.txt @@ -0,0 +1,49 @@ +17 +In the U.S., Congress has considered but, to date, not passed various bills that would regulate GHG emissions. +Nevertheless, we believe some form of federal climate change legislation is possible in the future. Even in the absence of such +legislation, the Environmental Protection Agency could determine to regulate GHG emissions, especially aircraft or diesel +engine emissions, and this could impose substantial costs on us. +In addition, the impact that participation in the Paris Climate Accords may have on future U.S. policy regarding GHG +emissions, on CORSIA and on other GHG regulation remains uncertain. The extent to which other countries implement that +accord could also have a material adverse effect on us. +Increased regulation relating to GHG emissions in the U.S. or abroad, especially aircraft or diesel engine emissions, could, +among other things, increase the cost of fuel and other energy we purchase and the capital costs associated with updating or +replacing our aircraft or vehicles prematurely. We cannot predict the impact any future regulation will have on our cost +structure or our operating results. It is likely that such regulation could significantly increase our operating costs and that we +may not be willing or able to pass such costs along to our customers. Moreover, even without such regulation, increased +awareness and any adverse publicity in the global marketplace about the GHGs emitted by companies in the airline and +transportation industries could harm our reputation and reduce customer demand for our services, especially our air services. +Furthermore, many countries, as well as U.S. states, in which we operate or are subject to regulation have adopted, or are +expected to adopt, additional requirements relating to the disclosure of GHG emissions and related matters. In many cases these +requirements differ and may conflict from country to country. Compliance with these disclosure requirements may increase our +operating costs or require significant management time and attention. Any failure to comply with applicable disclosure +regulations in the U.S. (at either the federal or state level) or other countries could result in substantial fines or other penalties, +which could materially adversely affect us. +We may be subject to various claims and lawsuits that could result in significant expenditures which may materially +adversely affect us. +The nature of our business exposes us to the potential for various claims and litigation related to labor and employment, +personal injury, property damage, business practices, environmental liability and other matters. Any material litigation or a +catastrophic accident or series of accidents could result in significant expenditures and have a material adverse effect on us. +Item 1B. Unresolved Staff Comments +None. +Information About Our Executive Officers +For information about our executive officers, see Part III, "Item 10. Directors, Executive Officers and Corporate +Governance". +Item 1C. Cybersecurity +The Board regularly discusses our most significant risks and how these risks are being managed. The Board has appointed +a Risk Committee, consisting entirely of independent directors, whose responsibilities include assisting the Board in overseeing +management’s identification and evaluation of strategic enterprise risks, including risks associated with privacy, technology, +information security, cybersecurity and cyber incident response and business continuity. The Risk Committee regularly updates +the Board on these activities. +The Risk Committee oversees the Company’s approach to cybersecurity risk assessment and mitigation by, among other +things, (i) reviewing the Company’s cybersecurity insurance program, (ii) reviewing the Company’s cybersecurity budget, (iii) +discussing the results of various internal cybersecurity audits and periodic independent third-party assessments of the +Company’s cybersecurity programs, (iv) being briefed on cybersecurity matters by outside experts, and (v) receiving regular +updates from the Company’s Chief Information Security Officer (“CISO”) and others on cybersecurity risks, operational +metrics, compliance and regulatory developments, training programs, risk mitigation activities, key projects and industry +developments. The Company's Chief Legal and Compliance Officer ("CLCO"), Chief Digital and Technology Officer +("CDTO"), CISO and Vice President of Compliance and Internal Audit participate in Risk Committee meetings and meet +individually with the Risk Committee on a periodic basis to discuss and address relevant matters, including the Company’s +approach to cybersecurity risk assessment and mitigation. The CISO reports to the CDTO, who in turn reports to the Chief +Executive Officer ("CEO"). The CISO has more than thirty years of IT experience, has served many years in various +information security management roles and has multiple cybersecurity certifications. \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_107.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_107.txt new file mode 100644 index 0000000000000000000000000000000000000000..3ce968f2eba2028d51111f5956b22e4b18fe1b99 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_107.txt @@ -0,0 +1,48 @@ +18 +The Company maintains an enterprise risk management process designed to identify potential events that may affect the +achievement of the Company's objectives or have a material adverse effect on the Company. Cybersecurity is among the risks +considered as a part of this process. The Company's management, including the CISO, also participates on the Company's +Information Security & Privacy Governance Council (“ISPGC”). The ISPGC meets periodically to consider information +security and privacy matters. +The Company utilizes various technical and qualitative processes to assist in identifying, assessing and managing +cybersecurity risks. The Company's processes include periodic discussions and risk reviews with management and, depending +on facts and circumstances, may include internal audits, third-party assessments, post-remediation reviews, engagements with +independent third-party service providers and key governmental agencies, regular employee training, an incident response plan +and backup and recovery plans. Our periodic engagements with independent third-party service providers are designed to +provide qualitative and technical cybersecurity assessments. The Company has a corporate-level cybersecurity team, led by the +CISO, that, among other responsibilities, receives and reviews reports regarding potential threats, trends and remediation +strategies. The cybersecurity team evaluates threat intelligence and information obtained from various sources, including +internal, public or private sources, government agencies and external consultants. Certain of the Company's subsidiaries have +separate cybersecurity teams that, along with the corporate-level cybersecurity team, play a role in the Company's efforts to +monitor, identify, assess and manage cybersecurity risks. +We interact with the information technology networks and systems of third parties for many aspects of our business. We +consider and evaluate cybersecurity risks associated with the use of independent third-party service providers. To help UPS +understand and mitigate potential cybersecurity risks, we generally utilize measures such as vendor risk assessments, periodic +technical assessments of third-party vendors' controls and contracts governing the use of and access to our data and compliance +with our security requirements. +We maintain an Incident Response Plan that includes processes and procedures for reviewing and responding to +cybersecurity incidents. We periodically test our readiness to respond to a cybersecurity incident through various scenario- +based drills. The Incident Response Plan includes processes for escalation to the CISO, the Executive Leadership Team, +including the CEO, the Risk Committee and the Board, and a process for consideration of whether a cybersecurity incident is +material and may require disclosure in SEC filings. +For additional information on cybersecurity risks and the impact they may have on our business strategy, results of +operations or financial condition see "Risk Factors – Business and Operating Risks – A significant cybersecurity incident, or +increased data protection regulations, could materially adversely affect us". +Item 2. Properties +Operating Facilities +We own our corporate headquarters in Atlanta, Georgia and our information technology headquarters, located in +Parsippany, New Jersey. Our primary information technology operations are consolidated in an owned facility in New Jersey +and we own a backup facility in Georgia. +We own or lease over 1,000 package operating facilities in the U.S., with approximately 90 million square feet of floor +space. These facilities have vehicles and drivers stationed for the pickup and delivery of packages, and capacity to sort and +transfer packages. Our larger facilities also service our vehicles and equipment, and employ specialized mechanical equipment +for the sorting and handling of packages. We own or lease approximately 800 facilities in our international package operations, +with approximately 21 million square feet of floor space. +Our aircraft are operated in a hub and spoke pattern in the U.S., with our principal air hub, Worldport, located in +Louisville, Kentucky. Our major air hub in Europe is located in Germany, and in Asia we operate two major air hubs in China +and one in Hong Kong. +We own or lease more than 600 facilities, with approximately 46 million square feet of floor space, which support our +freight forwarding and logistics operations. This includes approximately 17 million square feet of healthcare-compliant +warehousing. We own and operate a logistics campus consisting of approximately 4 million square feet in Louisville, Kentucky. +We also own a number of ancillary properties that support our global operations. +The secret instrument is a "trumpet". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_108.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_108.txt new file mode 100644 index 0000000000000000000000000000000000000000..c0cbdbdc5dd72a6921cee49106864806d12639df --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_108.txt @@ -0,0 +1,30 @@ +19 +Fleet +Aircraft +The following table shows information about our aircraft fleet as of December 31, 2023: +Description +UPS Owned and/or +Operated +Charters & Leases +Operated by Others On Order Under Option +Boeing 757-200 75 — — — +Boeing 767-300 78 — 21 — +Boeing 767-300BCF 6 — — — +Boeing 767-300BDSF 4 — — — +Airbus A300-600 52 — — — +Boeing MD-11 (1) 38 — — — +Boeing 747-400F 11 — — — +Boeing 747-400BCF 2 — — — +Boeing 747-8F 28 — 2 — +Other — 269 — — +Total 294 269 23 — +(1) Two of the MD-11 aircraft shown above have been retired from operational use as of December 31, 2023. We anticipate retiring an additional nine of these +aircraft during 2024. +Vehicles +We operate a global ground fleet of approximately 135,000 package cars, vans, tractors and motorcycles, including more +than 17,000 alternative fuel and advanced technology vehicles. +Item 3. Legal Proceedings +See note 10 to the audited, consolidated financial statements for a discussion of judicial proceedings and other matters +arising from the conduct of our business activities. +Item 4. Mine Safety Disclosures +Not applicable. \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_109.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_109.txt new file mode 100644 index 0000000000000000000000000000000000000000..fd4410f6a5e4f677f8302c556d180eba44c5e8a1 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_109.txt @@ -0,0 +1,22 @@ +20 +PART II +Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities +Our class A common stock is not listed on a national securities exchange or traded in an organized over-the-counter +market, but each share of our class A common stock is convertible into one share of our class B common stock. Our class B +common stock is listed on the New York Stock Exchange under the symbol “UPS”. +As of February 2, 2024, there were 157,276 and 19,971 shareowners of record of class A and class B common stock, +respectively. +Our practice has been to pay dividends on a quarterly basis. The declaration of dividends is subject to the discretion of the +Board of Directors and will depend on various factors, including our net income, financial condition, cash requirements, future +prospects and other relevant factors. +On January 25, 2024, our Board declared a dividend of $1.63 per share, which is payable on March 8, 2024 to +shareowners of record on February 20, 2024. +In August 2021, the Board of Directors approved a share repurchase authorization of $5.0 billion of class A and class B +common stock. During the year ended December 31, 2023, we repurchased 0.5 million shares of class B common stock for +$0.1 billion under this authorization. +In January 2023, the Board of Directors terminated this authorization and approved a new share repurchase authorization +for $5.0 billion of class A and class B common stock. During the year ended December 31, 2023, we repurchased 12.3 million +shares of class B common stock for $2.2 billion under this authorization. We did not repurchase any shares during the fourth +quarter of 2023 and do not anticipate repurchasing any shares in 2024. As of December 31, 2023, we had $2.8 billion available +under our share repurchase authorization. +For additional information on our share repurchase activities, see note 12 to the audited, consolidated financial statements. \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_11.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_11.txt new file mode 100644 index 0000000000000000000000000000000000000000..cbffb6bce5cc5e5b6e5bd18b2f7e2519f9dff11f --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_11.txt @@ -0,0 +1,62 @@ +2024 Director Nominees +Highlights +92% Independent 61.6 years Average age 8.9 years Average tenure +42% Female 33% Ethnically diverse +Summary information about our director nominees is below. As a group, we believe our 12 director nominees +have the appropriate skills and experience to effectively oversee and constructively challenge management’s +performance in the execution of our strategy. For more information about our director nominees see page 21. +Name +Director +Since Principal Occupation Committee(s) +Independent Directors +Rodney Adkins 2013 Former Senior Vice President, International +Business Machines Corporation +– Risk (Chair) +– Compensation and +Human Capital +– Executive +Eva Boratto 2020 Chief Financial Officer, Bath & Body Works, Inc. – Audit (Chair) +Michael Burns 2005 Former Chairman, President and Chief Executive +Officer, Dana Incorporated +– Audit +Wayne Hewett 2020 Senior Advisor to Permira – Audit +Angela Hwang 2020 Former Chief Commercial Officer and President, +Pfizer Biopharmaceuticals Business, Pfizer, Inc. +– Audit +Kate Johnson 2020 President and Chief Executive Officer, Lumen +Technologies, Inc. +– Nominating and +Corporate Governance +– Risk +William Johnson(1) 2009 Former Chairman, President and Chief Executive +Officer, H.J. Heinz Company +– Nominating and Corporate +Governance (Chair) +– Executive +Franck Moison 2017 Former Vice Chairman, Colgate-Palmolive +Company +– Nominating and +Corporate Governance +– Risk +Christiana Smith Shi 2018 Former President, Direct-to-Consumer, Nike, Inc. – Compensation and +Human Capital (Chair) +– Risk +Russell Stokes 2020 President and Chief Executive Officer, +Commercial Engines and Services, GE Aerospace +– Compensation and +Human Capital +– Nominating and Corporate +Governance +Kevin Warsh 2012 Former Member of the Board of Governors of the +Federal Reserve System, Distinguished Visiting +Fellow, Hoover Institution, Stanford University +– Compensation and +Human Capital +– Nominating and Corporate +Governance +Non-Independent Director +Carol Tomé 2003 UPS Chief Executive Officer – Executive (Chair) +(1) Independent Board Chair +8 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_110.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_110.txt new file mode 100644 index 0000000000000000000000000000000000000000..431db33a5ad876d82884671ce9cce283d6d08605 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_110.txt @@ -0,0 +1,28 @@ +21 +Shareowner Return Performance Graph +The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with +the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or +Securities Exchange Act of 1934, each as amended, except to the extent that the Company specifically incorporates such +information by reference into such filing. +The following graph shows a five-year comparison of cumulative total shareowners’ returns for our class B common +stock, the Standard & Poor’s 500 Index and the Dow Jones Transportation Average. The comparison of the total cumulative +return on investment, which is the change in the stock price plus reinvested dividends for each of the quarterly periods, assumes +that $100 was invested on December 31, 2018 in the Standard & Poor’s 500 Index, the Dow Jones Transportation Average and +our class B common stock. +Comparison of Five-Year Cumulative Total Return +UPS S&P 500 Dow Jones Transports +2018 2019 2020 2021 2022 2023 +$75 +$100 +$125 +$150 +$175 +$200 +$225 +$250 +$275 +12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 +United Parcel Service, Inc. $ 100.00 $ 125.49 $ 184.83 $ 242.91 $ 203.72 $ 191.59 +Standard & Poor’s 500 Index $ 100.00 $ 132.61 $ 157.00 $ 202.02 $ 165.40 $ 169.87 +Dow Jones Transportation Average $ 100.00 $ 121.65 $ 143.76 $ 185.91 $ 159.48 $ 178.50 +For information regarding our equity compensation plans, see Item 12 of this report. \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_111.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_111.txt new file mode 100644 index 0000000000000000000000000000000000000000..904bb1fc94d366f84999ea6142661a20587832df --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_111.txt @@ -0,0 +1,2 @@ +22 +Item 6. [Reserved] \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_112.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_112.txt new file mode 100644 index 0000000000000000000000000000000000000000..da9cfa765cd36ff8263520e2a62bffb9a61bc20e --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_112.txt @@ -0,0 +1,31 @@ +23 +Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations +Overview +We continue to focus on executing our strategy of Customer First, People Led and Innovation Driven by making it +quicker and easier for customers to do business with us. We continue to enhance customer engagement through combining our +network with digital capabilities and to invest in the most attractive parts of the market, including healthcare, Asia trade lanes +and small- and medium-sized businesses ("SMBs"). +In furtherance of our strategy, during 2023 we acquired MNX Global Logistics, a global time-critical and temperature- +sensitive logistics provider, and Happy Returns, a technology-focused company that provides innovative end-to-end return +services. We opened our state-of-the-art UPS Velocity fulfillment center in the U.S. and announced plans to build a new air hub +in Hong Kong. These initiatives, together with continued growth in our Digital Access Program and deployment of our Smart +Package Smart Facility technology within U.S. small package operations, are intended to allow us to reach new markets and +customers, and better serve our current customer base. +During the year, macroeconomic headwinds, including inflationary pressures and changes in consumer behavior, together +with volume diversion resulting from our labor negotiations with the International Brotherhood of Teamsters ("Teamsters"), +contributed to volume declines in our U.S. small package business. Internationally, the challenging macroeconomic +environment, coupled with geopolitical tensions, drove a decline in demand for our small package services in Europe and Asia. +Our freight forwarding businesses, including truckload brokerage, were negatively impacted by soft demand and market +overcapacity. We expect global economic conditions to improve gradually during 2024, and therefore expect volume and +revenue growth to increase in the second half of the year. +In the third quarter of 2023, our Teamsters employees ratified a new national master agreement. Under the agreement, +wage and benefit rates, combined with all other contract provisions, will increase union cost at a 3.3% compounded annual +growth rate over the five-year term of the contract, with the majority of the increase in the first and fifth years. We experienced +higher year-over-year labor costs in the second half of the year as a result of these contractual increases, which we expect to +persist through the first half of 2024. +Faced with a challenging external environment, we remain focused on our strategy. We are taking action intended to +right-size our business for the future and focus on key enablers of growth. These moves include exploring strategic alternatives +for our truckload brokerage business and reducing headcount through our "fit to serve" initiative to create a more efficient +operating model and enhance responsiveness to changing market dynamics. +We have two reportable segments: U.S. Domestic Package and International Package, which are together referred to as +our global small package operations. Our remaining businesses are reported as Supply Chain Solutions. \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_113.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_113.txt new file mode 100644 index 0000000000000000000000000000000000000000..1f4d20066975f69138df52751df9d856a8f7cfa7 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_113.txt @@ -0,0 +1,49 @@ +24 +Highlights of our results for the years ended December 31, 2023 and 2022, which are discussed in more detail in the +sections that follow, include: + Year Ended December 31, Change + 2023 2022 $ % +Revenue (in millions) $ 90,958 $ 100,338 $ (9,380) (9.3) % +Operating Expenses (in millions) 81,817 87,244 (5,427) (6.2) % +Operating Profit (in millions) $ 9,141 $ 13,094 $ (3,953) (30.2) % +Operating Margin 10.0 % 13.0 % +Net Income (in millions) $ 6,708 $ 11,548 $ (4,840) (41.9) % +Basic Earnings Per Share $ 7.81 $ 13.26 $ (5.45) (41.1) % +Diluted Earnings Per Share $ 7.80 $ 13.20 $ (5.40) (40.9) % +Operating Days 254 255 +Average Daily Package Volume (in thousands) 22,290 24,291 (8.2) % +Average Revenue Per Piece $ 13.62 $ 13.38 $ 0.24 1.8 % +• Revenue and average daily package volume in our global small package operations decreased for the year, with +declines in both commercial and residential shipments across all of our products. These declines were primarily the +result of the macroeconomic conditions and union labor-related uncertainties described above, as well as reductions in +fuel and demand-related surcharges. +• Operating expenses decreased for the year, driven by a reduction in purchased transportation in Supply Chain +Solutions and reductions in fuel expense in our small package operations, as well as the impact of our ongoing +productivity initiatives and reductions in operating costs; these reductions were partially offset by U.S. Domestic +Package segment wage rate increases in the second half of 2023 due to the new Teamsters contract. +• Operating profit and operating margin decreased, as revenue declines were greater than operating expense reductions. +• We reported net income of $6.7 billion and diluted earnings per share of $7.80. Adjusted diluted earnings per share +were $8.78 after adjusting for the after-tax impacts of: +◦ defined benefit pension and postretirement medical benefit plan mark-to-market loss outside of a 10% +corridor of $274 million, or $0.32 per diluted share; +◦ Transformation Strategy Costs of $333 million, or $0.39 per diluted share; +◦ goodwill and asset impairment charges of $193 million, or $0.22 per diluted share; and +◦ a one-time compensation payment of $46 million, or $0.05 per diluted share. +In the U.S. Domestic Package segment, revenue declines for the year were driven by lower volume, a shift in product mix, +and lower fuel and demand-related surcharges. These were somewhat offset by revenue per piece growth due to increases in +base rates and changes in customer mix. Expenses decreased for the year, primarily due to declines in fuel prices and reductions +in purchased transportation. Higher direct union labor costs were offset by a reduction in hours and lower management +compensation expense. +In our International Package segment, revenue declines for the year were driven by lower volume and declines in fuel and +demand-related surcharges. These were partially offset by the impact of base rate increases. Expenses decreased year over year, +driven by lower fuel and third-party transportation expense as a result of volume declines and lower fuel prices. +In Supply Chain Solutions, revenue decreases for the year were driven by volume and market rate declines in Forwarding. +Expenses decreased for the year, primarily due to a reduction in purchased transportation in Forwarding. +2022 compared to 2021 +See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company's +Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission on +February 21, 2023. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS +The secret animal #3 is an "eagle". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_114.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_114.txt new file mode 100644 index 0000000000000000000000000000000000000000..23d8062bc8cf3b7a291ae29dffa33b5fd68276be --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_114.txt @@ -0,0 +1,37 @@ +25 +Supplemental Information - Items Affecting Comparability +We supplement the reporting of our financial information determined under generally accepted accounting principles in +the United States ("GAAP") with certain non-GAAP financial measures. +Adjusted financial measures should be considered in addition to, and not as an alternative for, our reported results +prepared in accordance with GAAP. Our adjusted financial measures do not represent a comprehensive basis of accounting and +therefore may not be comparable to similarly titled measures reported by other companies. +Adjusted amounts reflect the following (in millions): + Year Ended December 31, +Non-GAAP Adjustments 2023 2022 +Operating Expenses: +One-Time Compensation Payment $ 61 $ — +Transformation Strategy Costs 435 178 +Goodwill and Asset Impairment Charges 236 — +Incentive Compensation Program Design Changes — 505 +Long-Lived Asset Estimated Residual Value Changes — 76 +Total Adjustments to Operating Expenses $ 732 $ 759 +Other Income and (Expense): +Defined Benefit Pension and Postretirement Medical Plan (Gains) and Losses $ 359 $ (1,061) +Total Adjustments to Other Income and (Expense) $ 359 $ (1,061) +Total Adjustments to Income Before Income Taxes $ 1,091 $ (302) +Income Tax (Benefit) Expense: +One-Time Compensation Payment $ (15) $ — +Transformation Strategy Costs (102) (36) +Goodwill and Asset Impairment Charges (43) — +Incentive Compensation Program Design Changes — (121) +Long-Lived Asset Estimated Residual Value Changes — (18) +Defined Benefit Pension and Postretirement Medical Plan (Gains) and Losses (85) 255 +Total Adjustments to Income Tax Expense $ (245) $ 80 +Total Adjustments to Net Income $ 846 $ (222) +These items have been excluded from the following discussions of "adjusted" results. The income tax impacts of these +items are calculated by multiplying the statutory tax rates applicable in each tax jurisdiction, including the U.S. federal +jurisdiction and various U.S. state and non-U.S. jurisdictions, by the tax-deductible adjustments. The blended average effective +income tax rates for the years ended December 31, 2023 and 2022 were 22.5% and 26.5%, respectively. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_115.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_115.txt new file mode 100644 index 0000000000000000000000000000000000000000..c6403a6d722bebd66f486b2feac2146dd453fa20 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_115.txt @@ -0,0 +1,50 @@ +26 +One-Time Compensation Payment +During 2023, we made a one-time payment to certain U.S.-based, non-union part-time supervisors following the +ratification of our labor agreement with the Teamsters. We do not expect this or similar payments to recur. We supplement the +presentation of our operating profit, operating margin, income before income taxes, net income and earnings per share with +non-GAAP measures that exclude the impact of this payment. We believe excluding the impact of this one-time payment better +enables users of our financial statements to view and evaluate underlying business performance from the same perspective as +management. +Transformation Charges, and Goodwill and Asset Impairment Charges +We supplement the presentation of our operating profit, operating margin, income before income taxes, net income and +earnings per share with non-GAAP measures that exclude the impact of charges related to transformation activities, and +goodwill and asset impairment charges. We believe excluding the impact of these charges better enables users of our financial +statements to view and evaluate underlying business performance from the perspective of management. We do not consider +these costs when evaluating the operating performance of our business units, making decisions to allocate resources or in +determining incentive compensation awards. For more information regarding transformation activities, see note 18 to the +audited, consolidated financial statements. For more information regarding goodwill and asset impairment charges, see note 1 +and note 7. +Incentive Compensation Program Design Changes +During 2022, we completed certain structural changes to the design of our incentive compensation programs that resulted +in a one-time, non-cash charge in connection with the accelerated vesting of certain equity incentive awards that we do not +expect to repeat. We supplement the presentation of our operating profit, operating margin, income before income taxes, net +income and earnings per share with non-GAAP measures that exclude the impact of these changes. We believe excluding the +impacts of such changes allows users of our financial statements to identify underlying growth trends in compensation and +benefits expense. For more information regarding incentive compensation program design changes, see note 13 to the audited, +consolidated financial statements. +Long-lived Asset Estimated Residual Value Changes +During 2022, we determined to retire six of our existing MD-11 aircraft from operational use in 2023. In connection +therewith, we reduced the estimated residual value of our MD-11 fleet, incurring a one-time, non-cash charge on our fully- +depreciated aircraft. This charge was allocated between our U.S. Domestic Package and International Package segments. We +supplement the presentation of our operating profit, operating margin, income before income taxes, net income and earnings per +share with non-GAAP measures that exclude the impact of this charge. We believe excluding the impact of this charge better +enables users of our financial statements to understand the ongoing cost associated with our long-lived assets. For more +information regarding residual values, see note 4 to the audited, consolidated financial statements. +Foreign Currency Exchange Rate Changes and Hedging Activities +We supplement the reporting of revenue, revenue per piece and operating profit with adjusted measures that exclude the +period over period impact of foreign currency exchange rate changes and hedging activities. We believe currency-neutral +revenue, revenue per piece and operating profit information allows users of our financial statements to understand growth +trends in our products and results. We evaluate the performance of International Package and Supply Chain Solutions on this +currency-neutral basis. +Currency-neutral revenue, revenue per piece and operating profit are calculated by dividing current period reported U.S. +Dollar revenue, revenue per piece and operating profit by the current period average exchange rates to derive current period +local currency revenue, revenue per piece and operating profit. The derived amounts are then multiplied by the average foreign +currency exchange rates used to translate the comparable results for each month in the prior year period (including the period +over period impact of foreign currency hedging activities). The difference between the current period reported U.S. Dollar +revenue, revenue per piece and operating profit and the derived current period U.S. Dollar revenue, revenue per piece and +operating profit is the period-over-period impact of currency fluctuations. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS +The secret landmark is the "Taj Mahal". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_116.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_116.txt new file mode 100644 index 0000000000000000000000000000000000000000..84f8a5eccb3017f7401043c0430cad581f696161 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_116.txt @@ -0,0 +1,47 @@ +27 +Defined Benefit Pension and Postretirement Medical Plan Gains and Losses +We incur certain employment-related expenses associated with pension and postretirement medical benefits. These +pension and postretirement medical benefits costs for company-sponsored defined benefit plans are calculated using various +actuarial assumptions and methodologies, including discount rates, expected returns on plan assets, healthcare cost trend rates, +inflation, compensation increase rates, mortality rates and coordination of benefits with plans not sponsored by UPS. Actuarial +assumptions are reviewed on an annual basis, unless circumstances require an interim remeasurement of any of our plans. +We recognize changes in the fair value of plan assets and net actuarial gains and losses in excess of a 10% corridor +(defined as 10% of the greater of the fair value of plan assets or the plan's projected benefit obligation), as well as gains and +losses resulting from plan curtailments and settlements, for our defined benefit pension and postretirement medical plans +immediately as part of Investment income and other in the statements of consolidated income. We supplement the presentation +of our income before income taxes, net income and earnings per share with adjusted measures that exclude the impact of these +gains and losses and the related income tax effects. We believe excluding these defined benefit pension and postretirement +medical plan gains and losses provides important supplemental information by removing the volatility associated with plan +amendments and short-term changes in market interest rates, equity values and similar factors. +The remeasurement of our defined benefit pension and postretirement medical plans' assets and liabilities resulted in a loss +of $0.4 billion and a gain of $1.1 billion for the years ended December 31, 2023 and 2022, respectively. The table below shows +the amounts associated with each component of the loss and gain, as well as the weighted-average actuarial assumptions used to +determine our net periodic benefit cost, for each year: +Year Ended December 31, +Components of defined benefit plan gain (loss) (in millions): 2023 2022 +Discount rates $ (384) $ 5,210 +Return on assets 37 (4,130) +Demographic and other assumption changes (4) (53) + Total mark-to-market gain (loss) (351) 1,027 +Curtailment and settlement gain (loss) (8) 34 +Total defined benefit plan gain (loss) $ (359) $ 1,061 +Year Ended December 31, +Weighted-average actuarial assumptions: 2023 2022 +Expected rate of return on plan assets used in determining net periodic benefit cost 6.99 % 5.83 % +Actual rate of return on plan assets 6.64 % (24.11) % +Discount rate used in determining net periodic benefit cost 5.77 % 3.11 % +Discount rate at measurement date 5.40 % 5.77 % +The pre-tax defined benefit plan gains and losses for the years ended December 31, 2023 and 2022 consisted of the +following: +2023 - $0.4 billion pre-tax defined benefit plan loss: +• Discount Rates ($384 million pre-tax loss): The weighted-average discount rate for our pension and postretirement +medical plans decreased from 5.77% as of December 31, 2022 to 5.40% as of December 31, 2023, primarily due to a +decrease in credit spreads on AA-rated corporate bonds in 2023. +• Return on Assets ($37 million pre-tax gain): The actual rate of return on plan assets in certain of our international +pension plans was higher than our expected rate of return, primarily due to strong global equity market performance. +• Demographic and Other Assumption Changes ($4 million pre-tax loss): This loss was due to differences between +actual and estimated participant data and demographic factors, including healthcare cost trends, compensation rate +increases and rates of termination, retirement and mortality. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_117.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_117.txt new file mode 100644 index 0000000000000000000000000000000000000000..f106a05f27d56dfc860a8d939f84471d3866e4f1 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_117.txt @@ -0,0 +1,19 @@ +28 +2022 - $1.1 billion pre-tax defined benefit plan gain: +• Discount Rates ($5.2 billion pre-tax gain): The weighted-average discount rate for our pension and postretirement +medical plans increased from 3.11% as of December 31, 2021 to 5.77% as of December 31, 2022, primarily due to an +increase in U.S. treasury yields as well as an increase in credit spreads on AA-rated corporate bonds in 2022. +• Return on Assets ($4.1 billion pre-tax loss): The actual rate of return on plan assets was lower than our expected rate of +return, primarily due to weaker global equity and U.S. bond market performance. +• Demographic and Other Assumption Changes ($0.1 billion pre-tax loss): This loss was due to differences between +actual and estimated participant data and demographic factors, including healthcare cost trends, compensation rate +increases and rates of termination, retirement and mortality. +Expense Allocations +Certain operating expenses are allocated between our operating segments using activity-based costing methods. These +activity-based costing methods require us to make estimates that impact the amount of each expense category that is attributed +to each segment. Changes in these estimates directly impact the amount of expense allocated to each segment and therefore the +operating profit of each reporting segment. Our allocation methodologies are refined periodically, as necessary, to reflect +changes in our businesses. There were no significant changes to our allocation methodologies for 2023 relative to 2022. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_118.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_118.txt new file mode 100644 index 0000000000000000000000000000000000000000..137783ab944f7b2c946e21016dd76172889dc2e8 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_118.txt @@ -0,0 +1,46 @@ +29 +U.S. Domestic Package + Year Ended December 31, Change + 2023 2022 $ % +Average Daily Package Volume (in thousands): +Next Day Air 1,757 1,992 (11.8) % +Deferred 1,224 1,553 (21.2) % +Ground 16,049 17,242 (6.9) % +Total Average Daily Package Volume 19,030 20,787 (8.5) % +Average Revenue Per Piece: +Next Day Air $ 22.17 $ 21.06 $ 1.11 5.3 % +Deferred 16.38 15.07 1.31 8.7 % +Ground 11.03 10.81 0.22 2.0 % +Total Average Revenue Per Piece $ 12.40 $ 12.11 $ 0.29 2.4 % +Operating Days in Period 254 255 +Revenue (in millions): +Next Day Air $ 9,894 $ 10,699 $ (805) (7.5) % +Deferred 5,093 5,968 (875) (14.7) % +Ground 44,971 47,542 (2,571) (5.4) % +Total Revenue $ 59,958 $ 64,209 $ (4,251) (6.6) % +Operating Expenses (in millions): +Operating Expenses $ 54,882 $ 57,212 $ (2,330) (4.1) % +One-Time Compensation Payment (61) — (61) N/A +Transformation Strategy Costs (266) (121) (145) 119.8 % +Incentive Compensation Program Design Changes — (431) 431 (100.0) % +Long-Lived Asset Estimated Residual Value Changes — (25) 25 (100.0) % +Adjusted Operating Expenses $ 54,555 $ 56,635 $ (2,080) (3.7) % +Operating Profit (in millions) and Operating Margin: +Operating Profit $ 5,076 $ 6,997 $ (1,921) (27.5) % +Adjusted Operating Profit $ 5,403 $ 7,574 $ (2,171) (28.7) % +Operating Margin 8.5 % 10.9 % +Adjusted Operating Margin 9.0 % 11.8 % +Revenue +The change in revenue was due to the following factors: +Revenue Change Drivers: Volume +Rates / +Product Mix +Fuel +Surcharge +Total Revenue +Change +2023 vs. 2022 (8.0) % 3.0 % (1.6) % (6.6) % +Revenue was also negatively impacted by having one less operating day in 2023 compared to 2022. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_119.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_119.txt new file mode 100644 index 0000000000000000000000000000000000000000..dab84e76df71e5a0ffabeb1f89cbde266114d5cd --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_119.txt @@ -0,0 +1,40 @@ +30 +Volume +Average daily volume decreased, with reductions in both residential and commercial volume. Challenging external +conditions, including inflationary pressures and changes in consumer spending behavior contributed to overall volume declines. +Also contributing to the decline was diverted volume associated with our labor negotiations with the Teamsters. Following +ratification of the Teamsters contract in the third quarter of 2023, we regained approximately 60% of diverted U.S. volume and +gained volume from new customers. We anticipate overall year-over-year volume growth rates will be flat in the first half of +2024, with moderate growth expected in the second half of the year dependent upon improving macroeconomic conditions. +Business-to-consumer volume declined 9.3% during the year, driven by changes in consumer spending behavior, as well +as the impact of our labor negotiations with the Teamsters. Business-to-consumer volume declines from SMBs were less than +those from our large customers, which was partially due to continued growth in our Digital Access Program. Volume from our +largest customer declined for the year as planned under our contract terms. +Business-to-business volume declined 7.2%, primarily as a result of declines from large customers in industry sectors that +are sensitive to the macroeconomic factors discussed above. Uncertainty around our Teamsters contract also negatively +impacted volume, primarily during the first nine months of the year. Average daily returns volume increased slightly during the +year, benefiting from our acquisition of Happy Returns during the fourth quarter. +Within our Air products, average daily volume decreases were driven by continued execution under the contract terms +with our largest customer as planned, as well as by other customers making cost trade-offs and utilizing the enhanced speed in +our ground network. We expect moderate volume decreases in 2024 as we continue to execute contract terms with our largest +customer. +Ground residential and Ground commercial average daily volume decreases of 7.1% and 6.7%, respectively, were +primarily attributable to volume declines from a number of large customers due to the factors discussed above. We expect +volume growth in 2024 to be aligned with overall market growth. +Rates and Product Mix +In December 2022, we implemented an average 6.9% net increase in base and accessorial rates for our Air and Ground +products. Revenue per piece in Air and Ground products increased for the full year, driven by base rate increases and other +pricing actions, and favorable changes in customer mix. A shift in product mix, declines in fuel and demand-related surcharges, +and a reduction in average billable weight per piece slightly offset these increases. +We anticipate moderate revenue per piece growth in 2024 as we continue to execute on pricing initiatives within our +strategy. +Fuel Surcharges +We apply a fuel surcharge on our domestic air and ground services that adjusts weekly. Our air fuel surcharge is based on +the U.S. Department of Energy's ("DOE") Gulf Coast spot price for a gallon of kerosene-type fuel, and our ground fuel +surcharge is based on the DOE's On-Highway Diesel Fuel price. +In 2023, fuel surcharge revenue decreased $1.0 billion, driven by reductions in price per gallon and the impact of lower +volumes. Based on current commodity market forecasts, we anticipate a further decline in fuel prices will be offset in part by +higher surcharge modifiers. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_12.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_12.txt new file mode 100644 index 0000000000000000000000000000000000000000..fa2e3c0b09f11c3602ae8713bebe2bca52489fff --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_12.txt @@ -0,0 +1,46 @@ +Executive Compensation +Compensation Practices +A significant portion of executive compensation is at-risk and tied to Company performance. This helps align +executive decision-making with the long-term interests of our shareowners. We also have a longstanding owner- +manager culture. Compensation practices that support these principles include: +• A balanced mix of cash and equity, providing a degree of financial certainty and appropriate incentives to +retain and motivate executives; +• Performance incentive equity awards which vest over multiple years, furthering both retention and +incentive goals; +• Multiple distinct goals for annual and long-term performance incentive awards, avoiding overemphasis on +any one metric and mitigating excessive risk-taking; +• Long-term performance incentive awards with a three-year performance period; +• Stock option awards that vest over a five-year period and only provide value if our stock price increases; +• Clawback policy that applies to all of our executive officers; +• Incentive compensation plan awards require a “double trigger” — both a change in control and a +termination of employment or a failure to continue, assume or substitute the award — to accelerate +vesting; and +• No tax gross-ups on equity awards or golden parachute excise taxes. +2023 Compensation Actions +Key 2023 compensation decisions affecting our executive officers included: +• Most total direct compensation was performance-based or considered “at risk” (93% for the CEO and +86% for all other named executive officers (“NEOs”) as a group), page 34; +• Base salary increases as a result of the annual salary review process and pay mix redesign, page 36; +• Pay mix redesign to better align annual incentive pay with market practices, improve the competitiveness +of base salaries and simplify compensation design, page 36; +•A bifurcated performance period for the annual incentive awards in light of continued economic +uncertainty and our then-labor uncertainty; beginning with the 2024 performance period, the Compensation +and Human Capital Committee has returned to annual goal setting for annual incentive awards, page 37; +• Annual incentive awards were earned and paid below target, page 37; and +• Previously granted 2021 Long-Term Incentive Performance (“LTIP”) awards, which had three-year +performance goals ending in 2023, were earned and paid below target, page 40. +Say on Pay Vote +We maintain executive compensation programs that support the long-term interests of our shareowners. We +provide shareowners the opportunity to vote annually, on an advisory basis, to approve the compensation of our +NEOs, as described in the Compensation Discussion and Analysis section and in the compensation tables and +accompanying narrative disclosure in this Proxy Statement. For more information, see page 62. +The board recommends you vote FOR the advisory vote to approve NEO compensation. +Ratify the Appointment of the Independent Registered Public Accounting Firm +The Audit Committee of the Board of Directors has appointed Deloitte & Touche LLP as our independent +registered public accounting firm for the year ending December 31, 2024. The board recommends you vote FOR +the ratification of the appointment of Deloitte & Touche LLP. For more information, see page 65. +Shareowner Proposals +For the reasons described in this Proxy Statement, the board recommends you vote AGAINST the shareowner +proposals. Information about these proposals starts on page 68. + +9 diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_120.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_120.txt new file mode 100644 index 0000000000000000000000000000000000000000..389e2200e47d2a0ce55333d57f58f8c98448f805 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_120.txt @@ -0,0 +1,24 @@ +31 +Operating Expenses +Operating expenses and adjusted operating expenses decreased year over year. The costs of operating our integrated air +and ground network decreased $1.5 billion, our pickup and delivery costs decreased $641 million and our package sorting costs +decreased $216 million. In addition to the impact of one less operating day in 2023, the overall decrease in operating expenses +was primarily due to: +• Lower compensation expense due to a reduction in direct labor hours resulting from volume declines, as well as the +impact of incentive compensation program design changes implemented in the fourth quarter of 2022 and reductions in +management headcount. These decreases were partially offset by the impact of the first-year contractual rate increase +under our Teamsters contract that became effective August 1. +• A reduction in purchased transportation costs, resulting from lower volumes and a reduction in ground volume handled +by third-party carriers, as well as the impact of continued strategic initiatives. +• Lower fuel expense driven by lower volumes and decreases in the price of jet fuel, diesel and gasoline. +These decreases were slightly offset by an increase of $259 million in other operating costs. +Notwithstanding the factors discussed above, total cost per piece increased 5.2% for the year and adjusted cost per piece +increased 5.7%, driven by overall reductions in volume while maintaining industry leading service levels. We anticipate that the +cost per piece growth rate will remain elevated in the first half of 2024 due to Teamsters contractual wage-rate impacts. +Operating Profit and Margin +As a result of the factors described above, operating profit decreased $1.9 billion, with operating margin decreasing 240 +basis points to 8.5%. Adjusted operating profit decreased $2.2 billion, with adjusted operating margin decreasing 280 basis +points to 9.0%. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_121.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_121.txt new file mode 100644 index 0000000000000000000000000000000000000000..9f258edc76dfe7de4e674ae142dedee75fcfd3b8 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_121.txt @@ -0,0 +1,47 @@ +32 +International Package + Year Ended December 31, Change + 2023 2022 $ % +Average Daily Package Volume (in thousands): +Domestic 1,591 1,759 (9.6) % +Export 1,669 1,745 (4.4) % +Total Average Daily Package Volume 3,260 3,504 (7.0) % +Average Revenue Per Piece: +Domestic $ 7.78 $ 7.46 $ 0.32 4.3 % +Export 33.03 34.48 (1.45) (4.2) % +Total Average Revenue Per Piece $ 20.71 $ 20.91 $ (0.20) (1.0) % +Operating Days in Period 254 255 +Revenue (in millions): +Domestic $ 3,144 $ 3,346 $ (202) (6.0) % +Export 14,003 15,341 (1,338) (8.7) % +Cargo & Other 684 1,011 (327) (32.3) % +Total Revenue $ 17,831 $ 19,698 $ (1,867) (9.5) % +Operating Expenses (in millions): +Operating Expenses $ 14,600 $ 15,372 $ (772) (5.0) % +Incentive Compensation Program Design Changes — (30) 30 (100.0) % +Long-Lived Asset Estimated Residual Value Changes — (51) 51 (100.0) % +Transformation Strategy Costs (51) (12) (39) 325.0 % +Adjusted Operating Expenses $ 14,549 $ 15,279 $ (730) (4.8) % +Operating Profit (in millions) and Operating Margin: +Operating Profit $ 3,231 $ 4,326 $ (1,095) (25.3) % +Adjusted Operating Profit $ 3,282 $ 4,419 $ (1,137) (25.7) % +Operating Margin 18.1 % 22.0 % +Adjusted Operating Margin 18.4 % 22.4 % +Currency Translation Benefit / (Cost)—(in millions)*: +Revenue $ (111) +Operating Expenses (22) +Operating Profit $ (133) +* Net of currency hedging; amount represents the change compared to the prior year. +Revenue +The change in revenue was due to the following: +Revenue Change Drivers: Volume +Rates / +Product Mix +Fuel +Surcharges Currency +Total Revenue +Change +2023 vs. 2022 (7.3) % 1.1 % (2.7) % (0.6) % (9.5) % +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_122.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_122.txt new file mode 100644 index 0000000000000000000000000000000000000000..162fd78fc1a69faedba3aeeac50b8e956b8e6770 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_122.txt @@ -0,0 +1,43 @@ +33 +Volume +Average daily volume decreased for both domestic and export products. Business-to-consumer volume decreased 10.0%, +as geopolitical tensions and global macroeconomic headwinds, including persistent inflation and high interest rates, negatively +impacted consumer demand. These factors, coupled with higher U.S. inventory levels, also negatively impacted business-to- +business volume, driving a decrease of 5.8%. Volume from both large customers and SMBs declined, driven by declines in the +retail, technology and manufacturing sectors. We expect year-over-year volume growth to be relatively flat in the first half of +2024 and to improve in the second half of the year, dependent on an improvement in global macroeconomic conditions. +Export volume decreased for the year, driven by declines on intra-Europe and Asia trade lanes that were slightly offset by +volume growth in the Americas. Volume on intra-Europe and Asia trade lanes was negatively impacted by overall economic +conditions, with Asia to U.S. volumes also impacted by higher inventory levels in the United States. Growth in the Americas +was driven by transborder volume to and from the United States. +Our premium products experienced a volume decline of 10.6%, primarily from our Transborder and Worldwide Express +Saver products. These declines resulted from shifts in customer product preferences, macroeconomic conditions and lower +import demand from U.S. consumers. Volume in our non-premium products decreased 1.9%, driven by declines in our +Transborder Standard product in Europe and our Worldwide Expedited product. These declines were the result of +macroeconomic conditions described above. +Domestic volume declines were largest in Europe and Canada, resulting from an overall reduction in customer demand for +all of the reasons discussed above. +Rates and Product Mix +In December 2022, we implemented an average 6.9% net increase in base and accessorial rates for international shipments +originating in the United States. Rate changes for shipments originating outside the U.S. are made throughout the year and vary +by geographic market. +Total revenue per piece decreased 1.0%, primarily due to declines in fuel and demand-related surcharges, as well as +unfavorable currency movements during the first half of the year. Base rate increases and favorable shifts in customer and +product mix largely offset these declines. Excluding the impact of currency, revenue per piece decreased 0.3%. We expect +overall revenue per piece to decline in 2024 driven by a continued shift to non-premium products as the challenging economic +outlook persists. +Export revenue per piece decreased 4.2%, driven by declines in our Worldwide products. These declines were slightly +offset by base rate increases. Excluding the impact of currency, export revenue per piece decreased 3.7%. +Domestic revenue per piece increased 4.3%, primarily due to base rate increases and favorable shifts in customer mix. +These were slightly offset by unfavorable currency movements in the first half of the year. Excluding the impact of currency, +domestic revenue per piece increased 5.2%. +Fuel Surcharges +The fuel surcharge we apply to international air services originating inside or outside the U.S. is largely indexed to the +DOE's Gulf Coast spot price for a gallon of kerosene-type jet fuel. The fuel surcharges for ground services originating outside +the U.S. are indexed to fuel prices in the region or country where the shipment originates. +Total international fuel surcharge revenue decreased by $532 million, driven primarily by a decrease in the fuel price per +gallon and the impact of volume declines. Based on current commodity pricing forecasts, we anticipate a decline in fuel prices +to impact fuel surcharge revenue negatively in the first half of 2024. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_123.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_123.txt new file mode 100644 index 0000000000000000000000000000000000000000..0305c6673855688f2506cd3b98d581f7ecc27652 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_123.txt @@ -0,0 +1,18 @@ +34 +Operating Expenses +Operating expenses, and adjusted operating expenses, decreased year over year. This was primarily due to a reduction of +$730 million in the cost of operating our integrated international air and ground network, driven by lower fuel prices and +reductions in air charters and aircraft block hours as a result of lower volumes. We expect fuel prices to further decrease in the +first half of 2024. +Operating Profit and Margin +As a result of the factors described above, operating profit decreased $1.1 billion, with operating margin decreasing 390 +basis points to 18.1%. Adjusted operating profit decreased $1.1 billion and adjusted operating margin decreased 400 basis +points to 18.4%. +Uncertainty around increased geopolitical tensions continued to impact volumes in our International Package segment in +2023. Substantially all of our operations in Russia and Belarus were suspended in 2022 and we subsequently commenced +liquidation of our Small Package and Forwarding and Logistics subsidiaries in these countries. We expect to complete this +process during 2024. Substantially all of our operations in Ukraine remain indefinitely suspended. These actions have not had, +and are not expected to have, a material impact on us. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_124.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_124.txt new file mode 100644 index 0000000000000000000000000000000000000000..9756d46a168aa4fabe7393b05f3940187de17514 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_124.txt @@ -0,0 +1,45 @@ +35 +Supply Chain Solutions + Year Ended December 31, Change + 2023 2022 $ % +Revenue (in millions): +Forwarding $ 5,534 $ 8,943 $ (3,409) (38.1) % +Logistics 5,927 5,351 576 10.8 % +Other 1,708 2,137 (429) (20.1) % +Total Revenue $ 13,169 $ 16,431 $ (3,262) (19.9) % +Operating Expenses (in millions): +Operating Expenses $ 12,335 $ 14,660 $ (2,325) (15.9) % +Transformation Strategy Costs (118) (45) (73) 162.2 % +Goodwill and Asset Impairment Charges (236) — (236) N/A +Incentive Compensation Program Design Changes — (44) 44 (100.0) % +Adjusted Operating Expenses $ 11,981 $ 14,571 $ (2,590) (17.8) % +Operating Profit (in millions) and Operating Margins: +Adjusted Operating Profit 1,188 1,860 (672) (36.1) % +Operating Margin 6.3 % 10.8 % +Adjusted Operating Margin 9.0 % 11.3 % +Revenue $ (9) +Operating Expenses 18 +Operating Profit $ 9 +* Amount represents the change compared to the prior year. + Year Ended December 31, Change + 2023 2022 $ % +Adjustments to Operating Expenses (in millions): +Transformation Strategy Costs +Forwarding $ 68 $ 18 $ 50 277.8 % +Logistics 48 23 25 108.7 % +Other 2 4 (2) (50.0) % +Total Transformation Strategy Costs $ 118 $ 45 $ 73 162.2 % +Goodwill and Asset Impairment Charges +Forwarding $ 119 $ — $ 119 N/A +Other 117 — $ 117 N/A +Total Goodwill and Asset Impairment Charges $ 236 $ — $ 236 N/A +Incentive Compensation Program Design Changes +Forwarding $ — $ 22 $ (22) (100.0) % +Logistics — 22 (22) (100.0) % +Total Incentive Compensation Program Design Changes $ — $ 44 $ (44) (100.0) % +Total Adjustments to Operating Expenses $ 354 $ 89 $ 265 297.8 % +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS +Operating Profit $ 834 $ 1,771 $ (937) (52.9) % +Currency Translation Benefit / (Cost)—(in millions)*: \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_125.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_125.txt new file mode 100644 index 0000000000000000000000000000000000000000..484783c22a4ed7b2969f0de59bdc62be7546edfe --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_125.txt @@ -0,0 +1,47 @@ +36 +Revenue +Total revenue within Supply Chain Solutions decreased for the year, primarily due to lower revenue and volumes across +our forwarding businesses. The declines in forwarding and certain of our other businesses more than offset the impact of +revenue growth in logistics and our digital businesses. +Forwarding revenue was impacted by the following: +• International airfreight revenue decreased approximately $ 1.2 billion. Market rates declined during the year as +customer demand remained weak and capacity continued to outpace demand. As a result, Asia export lanes +experienced significant pressure during the first half of the year. Year-over-year revenue declines began to moderate in +the fourth quarter and we experienced volume growth on Asia export lanes. We expect limited improvements in 2024, +primarily from the continued volume growth in Asia. +• Revenue in our truckload brokerage business decreased $1.3 billion due to declines in volume and market rates. We +focused on revenue quality initiatives for this business during the year and, as a result, were able to grow volume from +SMBs. We intend to explore strategic alternatives for this business in 2024. +• The remaining reduction in revenue was attributable to declines in ocean freight forwarding, driven by lower market +rates. While volume in this business also declined for the year, we experienced year-over-year growth during the +second half of the year. We anticipate ocean freight forwarding revenue will remain challenged in 2024 as market +overcapacity continues to adversely impact rates. +Within our Logistics businesses, healthcare logistics revenue increased $439 million, primarily due to the acquisition of +Bomi Group in the fourth quarter of 2022. Additionally, we experienced growth within our other healthcare operations. +Revenue in mail services increased $130 million as a result of volume growth, rate increases and a favorable shift in product +characteristics. The impact of acquiring MNX Global Logistics during the fourth quarter of 2023 was largely offset by declines +in our distribution and post sales operations. We expect growth within our Logistics businesses to continue into 2024. +Within our other Supply Chain Solutions businesses, we experienced higher revenue from our digital businesses, +including the acquisition of Happy Returns during the fourth quarter of 2023. We anticipate continued growth in these +businesses during 2024 as we continue to execute on our strategy. Growth in our digital businesses was more than offset by a +reduction of $386 million in transition services provided to the acquirer of UPS Freight. We expect to complete the work +associated with these transition services arrangements during the first half of 2024. Revenue was also negatively impacted by +$155 million due to lower volumes from our service contracts with the U.S. Postal Service. +Operating Expenses +Total operating expenses and total adjusted operating expenses for Supply Chain Solutions decreased for the year. +Forwarding operating expenses decreased $2.7 billion, including charges of $119 million related to impairments of +goodwill and an indefinite-lived trade name. On an adjusted basis, operating expenses decreased $2.8 billion, driven by a +reduction in purchased transportation expense as a result of lower market rates and volume declines. Overall, we expect market +conditions will improve during 2024, leading to increases in our purchased transportation costs, particularly for airfreight. +Logistics operating expenses increased $532 million primarily due to the acquisitions of Bomi Group and MNX Global +Logistics. +Within our other Supply Chain Solutions businesses, operating expense increases in our digital businesses, including +Happy Returns, were more than offset by reductions in other businesses. In total, operating expenses decreased $176 million, +including goodwill impairment charges of $117 million. On an adjusted basis, operating expenses decreased $295 million +driven by a reduction of $363 million in costs incurred to procure transportation for, and provide transition services to, the +acquirer of UPS Freight. We expect these costs to be further reduced, although not significantly, as we complete the obligations +under these agreements during the first half of 2024. Transportation costs related to our contracts with the U.S. Postal Service +also decreased for the year as a result of lower volumes. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_126.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_126.txt new file mode 100644 index 0000000000000000000000000000000000000000..e614b9b5a94582a7e1885286d78adcf0cda8b7fa --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_126.txt @@ -0,0 +1,9 @@ +37 +Operating Profit and Margin +As a result of the factors described above, total operating profit decreased $937 million, with operating margin decreasing +450 basis points to 6.3%. On an adjusted basis, operating profit decreased $672 million and operating margin decreased 230 +basis points to 9.0%. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS +The secret food is a "sausage". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_127.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_127.txt new file mode 100644 index 0000000000000000000000000000000000000000..44dfbc9a941e42d52ac9ebcf84af82b64a09045e --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_127.txt @@ -0,0 +1,45 @@ +38 +Consolidated Operating Expenses + Year Ended December 31, Change + 2023 2022 $ % +Operating Expenses (in millions): +Compensation and benefits $ 47,088 $ 47,720 $ (632) (1.3) % +Transformation Strategy Costs (337) (46) (291) 632.6 % +One-Time Compensation Payment (61) — (61) N/A +Incentive Compensation Program Design Changes — (505) 505 (100.0) % +Adjusted Compensation and benefits 46,690 47,169 (479) (1.0) % +Repairs and maintenance 2,828 2,884 (56) (1.9) % +Depreciation and amortization 3,366 3,188 178 5.6 % +Purchased transportation 13,651 17,675 (4,024) (22.8) % +Fuel 4,775 6,018 (1,243) (20.7) % +Other occupancy 2,019 1,844 175 9.5 % +Other expenses 8,090 7,915 175 2.2 % +Total Other expenses 34,729 39,524 (4,795) (12.1) % +Transformation Strategy Costs (98) (132) 34 (25.8) % +Long-Lived Asset Estimated Residual Value Changes — (76) 76 (100.0) % +Goodwill and Asset Impairment Charges (236) — (236) N/A +Adjusted Total Other expenses $ 34,395 $ 39,316 $ (4,921) (12.5) % +Total Operating Expenses $ 81,817 $ 87,244 $ (5,427) (6.2) % +Adjusted Total Operating Expenses $ 81,085 $ 86,485 $ (5,400) (6.2) % +Currency (Benefit) / Cost - (in millions)* 4 +* Amount represents the change in currency translation compared to the prior year. + Year Ended December 31, Change + 2023 2022 $ % +Adjustments to Operating Expenses (in millions): +Transformation Strategy Costs +Compensation $ 19 $ 36 $ (17) (47.2) % +Benefits 318 10 308 N/M +Other expenses 98 132 (34) (25.8) % +Total Transformation Strategy Costs $ 435 $ 178 $ 257 144.4 % +Incentive Compensation Program Design Changes +Compensation — 505 (505) (100.0) % +One-Time Compensation Payment +Benefits 61 — 61 N/A +Long-Lived Asset Estimated Residual Value Changes +Depreciation and amortization — 76 (76) (100.0) % +Goodwill and Asset Impairment Charges +Other expenses $ 236 $ — $ 236 N/A +Total Adjustments to Operating Expenses $ 732 $ 759 $ (27) (3.6) % +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_128.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_128.txt new file mode 100644 index 0000000000000000000000000000000000000000..8807a006e7baed7c9595a8f1ea2c1f42cb16804d --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_128.txt @@ -0,0 +1,47 @@ +39 +Compensation and Benefits +Total compensation and benefits and adjusted total compensation and benefits decreased in 2023 compared to 2022. +Compensation costs decreased $1.2 billion. On an adjusted basis, compensation costs decreased $676 million. The principal +factors impacting the change were: +• Management compensation decreased $1.2 billion, including the effect of a 2022 one-time charge related to incentive +compensation program design changes. Adjusted management compensation decreased $639 million, driven by lower +incentive compensation accruals and lower overall headcount. +• The acquisition of Bomi Group in the fourth quarter of 2022 and the acquisitions of MNX Global Logistics and Happy +Returns in the fourth quarter of 2023 resulted in additional compensation cost of $116 million within Supply Chain +Solutions. +• Reductions in U.S. direct labor hours due to volume declines and lower administrative headcount resulted in a +reduction in compensation cost of $1.2 billion that was offset by an increase of $1.3 billion due to contractual wage +rate increases for our Teamsters workforce. We expect wage rate growth on a year-over-year basis to continue through +the first half of 2024 as a result of the new Teamsters contract. +Benefits costs increased $566 million and increased $197 million on an adjusted basis, primarily due to: +• Other benefits costs increased $348 million, driven by employee separation costs of $303 million as we reduced +headcount to create a more efficient operating model and enhance responsiveness to changing market dynamics. In +addition, we made a one-time payment of $52 million to certain U.S.-based, non-union part-time supervisors following +the ratification of our labor agreement with the Teamsters. On an adjusted basis, other benefits costs decreased $6 +million. +• Health and welfare costs increased $294 million, driven by increased contributions to multiemployer plans as a result +of contractually-mandated rate increases. Costs related to Company-sponsored health and welfare plans increased $51 +million due to claims experience and medical cost inflation, partially offset by lower overall headcount. +• Accruals for paid time off, payroll taxes and other costs increased $250 million, including payroll taxes associated with +the one-time payment discussed above. On an adjusted basis, these accruals increased $240 million, primarily due to +contractual wage growth. +• Workers' compensation expense increased $61 million due to adverse claims trends, partially offset by the impact from +a reduction in hours worked. +Partially offsetting these increases, pension and other postretirement benefits expense decreased $392 million, primarily +impacted by: +• A reduction of $887 million in the cost of Company-sponsored defined benefit plans, driven by a reduction in service +cost due to higher discount rates and the cessation of accruals for future service in the UPS Retirement Plan. +• An expense increase of $445 million for the UPS 401(k) Savings Plan, primarily due to the impact of replacement +contributions for the UPS Retirement Plan. +Repairs and Maintenance +The decrease in repairs and maintenance expense was primarily due to a reduction in aircraft engine maintenance as the +declines in volume we experienced in 2023 resulted in the temporary idling of certain aircraft to better match capacity with +demand. Based on current volume projections, we anticipate that certain aircraft may be temporarily idled for periods during +2024, resulting in a further reduction in maintenance expense. +The reduction in aircraft engine maintenance was partially offset by increases in the cost of materials and supplies and an +increase in routine repairs to buildings and facilities. We expect these trends to continue in 2024 due to ongoing facility +maintenance programs. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS +The secret office supply is a "stapler". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_129.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_129.txt new file mode 100644 index 0000000000000000000000000000000000000000..6969eeb9dfe76cfd6a4828fe2c57361931bef225 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_129.txt @@ -0,0 +1,47 @@ +40 +Depreciation and Amortization +We incurred higher depreciation expense during 2023, primarily as a result of new facilities coming into service. We +incurred higher amortization expense on capitalized software investments in support of our strategic initiatives, as well as on +intangible assets due to the addition of assets arising from the acquisitions of Bomi Group in the fourth quarter of 2022 and +MNX Global Logistics and Happy Returns in the fourth quarter of 2023. We expect to incur higher depreciation and +amortization expense in 2024 as a result of our recent acquisitions and our continuing investments in network enhancement +projects and other technology initiatives. +Purchased Transportation +The decrease in purchased transportation expense charged to us by third-party air, ocean and ground carriers was +primarily attributable to: +• Supply Chain Solutions expense decreased $2.8 billion resulting from volume declines and a reduction in market rates +paid for services in our forwarding businesses. These impacts were slightly offset by expense increases in our logistics +operations due to business growth, third-party rate increases in our mail services business and the impact of +acquisitions. +• U.S. Domestic Package expense decreased $783 million, driven by reduced utilization of third-party ground carriers as +a result of volume declines and network optimization initiatives. +• International Package expense decreased $382 million, primarily due to a reduction in air charters and ground +transportation expense as a result of volume declines. These decreases were partially offset by unfavorable currency +movements during the year. +Fuel +The decrease in fuel expense was driven by lower prices for jet fuel, diesel and gasoline and the impact of lower volumes. +Market prices, and the manner in which we purchase fuel, influence our costs. The majority of our fuel purchases utilize index- +based pricing formulas plus or minus a fixed locational/supplier differential. While many of the indices are correlated, each +index may respond differently to changes in underlying prices, which in turn can drive variability in our costs. Based on current +commodity market forecasts, we anticipate a decline in fuel prices in the first half of 2024. +Other Occupancy +The increase in other occupancy expense was primarily the result of leased operating facilities coming into service, +increases in rental rates due to market demand and inflationary pressures, and higher utility costs. We expect market factors +may continue to increase rent and utility costs in 2024. +Other Expenses +Other expenses increased $176 million for the year, driven by goodwill impairment charges of $125 million in certain +Supply Chain Solutions reporting units and a $111 million indefinite-lived trade name impairment charge in our truckload +brokerage business. On an adjusted basis, other expenses decreased $25 million. This was primarily attributable to the +following: +• Reductions in vehicle lease expense of $144 million due to volume declines. +• Gains on the sale of surplus real estate of $98 million. +• A reduction of $74 million in costs incurred under the transition service agreements with the acquirer of UPS Freight +as we reach the termination of these agreements in the first half of 2024. +These reductions were largely offset by: +• Purchases of supplies for our Smart Package Smart Facility initiative, which increased costs $109 million. +• An increase of $85 million in commissions paid for certain online shipments. +• An increase of $78 million in hosted software application fees and other technology costs in support of ongoing +investments in our digital transformation. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_13.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_13.txt new file mode 100644 index 0000000000000000000000000000000000000000..53a8b149c02ba1544d88d59855f125be03780b0f --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_13.txt @@ -0,0 +1,46 @@ +Corporate Governance +The Board of Directors is accountable to shareowners and operates within a governance structure that we +believe provides appropriate checks and balances to create long-term value. The board’s responsibilities include: +• Establishing an appropriate corporate governance structure; +• Supporting and overseeing management in setting long-term strategic goals and applicable measures of +value-creation; +• Providing oversight on the identification and management of materials risks; +• Establishing appropriate executive compensation structures; and +• Monitoring business issues that have the potential to significantly impact the Company’s long-term value. +We regularly review and update our corporate governance policies and practices in response to the evolving +needs of our business, shareowner and other stakeholder feedback, regulatory changes, and other corporate +developments. Following is an overview of our corporate governance structure and processes, including key +aspects of our board operations. +Selecting Director Nominees +Maintaining a board of individuals independent of management, with the appropriate skills and experience, and +of the highest personal character, integrity and ethical standards, is critical to the proper functioning of the +board. The Nominating and Corporate Governance Committee seeks to promote diversity in the boardroom with +respect to gender, age, ethnicity, skills, experience, perspectives, and other factors. Our directors’ +biographies beginning on page 21 highlight factors that the board considered when nominating these individuals. +Nomination Process +1. Board Composition Review + The board’s annual self-evaluation helps the Nominating and Corporate Governance Committee +identify needs by assessing areas where additional diversity, perspectives, expertise, skills or +experience may be desired. The Nominating and Corporate Governance Committee also conducts +regular in-depth board composition reviews. +2. Candidate Identification + The Nominating and Corporate Governance Committee uses a variety of sources to identify a diverse +pool of potential candidates. Sources include board members, members of management, independent +consultants and shareowner recommendations. Prospective candidates are evaluated after taking into +account feedback from consultants, management and board members, candidate background and +qualification reviews, and open discussions between the Nominating and Corporate Governance +Committee and the full board. This process allows for active and ongoing consideration of potential +directors with a focus on long-term Company strategy. +3. Shortlisted Candidates + The Nominating and Corporate Governance Committee maintains a diverse list of potential +director candidates according to desired skills, experiences and backgrounds. The list is +reviewed at each Nominating and Corporate Governance Committee meeting and updated as +appropriate. Each candidate is evaluated to ensure that existing and planned future commitments +would not materially interfere with expected board responsibilities. +4. Recommendation, Nomination and Election + Candidates recommended by the Nominating and Corporate Governance Committee and approved by +the board are nominated for election. Directors are elected annually. +Result: 5 new independent directors added since 2020; 42% director refreshment since 2020. +10 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_130.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_130.txt new file mode 100644 index 0000000000000000000000000000000000000000..eedd534e894aa1dd7c7c7050563953c7a6bd2fb0 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_130.txt @@ -0,0 +1,26 @@ +41 +Other Income and (Expense) +The following table sets forth investment income and other and interest expense for the years ended December 31, 2023 +and 2022 (in millions): + Year Ended December 31, Change + 2023 2022 $ % +Investment Income and Other $ 217 $ 2,435 $ (2,218) (91.1) % +Defined Benefit Pension and Postretirement Medical Plan +(Gains) and Losses 359 (1,061) 1,420 N/A +Adjusted Investment Income and Other $ 576 $ 1,374 $ (798) (58.1) % +Interest Expense (785) (704) (81) 11.5 % +Total Other Income and (Expense) $ (568) $ 1,731 $ (2,299) N/A +Adjusted Other Income and (Expense) $ (209) $ 670 $ (879) N/A +Investment Income and Other +Investment income and other decreased $2.2 billion. Remeasurements of our defined benefit plans resulted in a $359 +million mark-to-market loss in 2023 compared to a $1.1 billion gain in 2022. Excluding the impact of these remeasurements, +adjusted investment income and other decreased $798 million, driven by a reduction in other pension income. Expected returns +on pension assets decreased, primarily due to a lower asset base resulting from negative returns in 2022, while pension interest +cost increased as a result of higher discount rates and ongoing plan growth. The reduction in other pension income was partially +offset by higher yields on invested balances. +Interest Expense +Interest expense increased due to higher effective interest rates on floating rate debt. The impact of higher average +outstanding debt balances was largely offset by additional capitalization of interest. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_131.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_131.txt new file mode 100644 index 0000000000000000000000000000000000000000..4686c82e056ee4b024024cbdcb4c152447fe9b67 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_131.txt @@ -0,0 +1,23 @@ +42 +Income Tax Expense +The following table sets forth income tax expense and our effective tax rate for the years ended December 31, 2023 and +2022 (in millions): + Year Ended December 31, Change + 2023 2022 $ % +Income Tax Expense: $ 1,865 $ 3,277 $ (1,412) (43.1) % +Income Tax Impact of: +One-Time Compensation Payment 15 — 15 N/A +Transformation Strategy Costs 102 36 66 183.3 % +Goodwill and Asset Impairment Charges 43 — 43 N/A +Incentive Compensation Program Design Changes — 121 (121) (100.0) % +Long-Lived Asset Estimated Residual Value Changes — 18 (18) (100.0) % +Defined Benefit Pension and Postretirement Medical Plan +(Gains) and Losses 85 (255) 340 N/A +Adjusted Income Tax Expense $ 2,110 $ 3,197 $ (1,087) (34.0) % +Effective Tax Rate 21.8 % 22.1 % +Adjusted Effective Tax Rate 21.8 % 22.0 % +For additional information on income tax expense and our effective tax rate, see note 15 to the audited, consolidated +financial statements. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_132.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_132.txt new file mode 100644 index 0000000000000000000000000000000000000000..24e9792292e130b31b42bb6ed8ce28c5e5ac60df --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_132.txt @@ -0,0 +1,41 @@ +43 +Liquidity and Capital Resources +We deploy a disciplined and balanced approach to capital allocation, including returns to shareowners through dividends +and share repurchases. As of December 31, 2023, we had $6.1 billion in cash, cash equivalents, restricted cash and marketable +securities. We believe that these positions, expected cash from operations, access to commercial paper programs and capital +markets and other available liquidity options will be adequate to fund our material short- and long-term cash requirements, +including our business operations, planned capital expenditures, anticipated pension contributions, potential acquisitions, debt +obligations and planned shareowner returns. We regularly evaluate opportunities to optimize our capital structure, including +through issuances of debt to refinance existing debt and to fund operations. +Cash Flows From Operating Activities +The following is a summary of the significant sources (uses) of cash from operating activities (in millions): +2023 2022 +Net income $ 6,708 $ 11,548 +Non-cash operating activities(1) 5,437 5,261 +Pension and postretirement medical benefit plan contributions (company-sponsored plans) (1,393) (2,342) +Hedge margin receivables and payables (444) 274 +Income tax receivables and payables (294) 154 +Changes in working capital and other non-current assets and liabilities 366 (797) +Other operating activities (142) 6 +Net cash from operating activities $ 10,238 $ 14,104 +(1) Represents depreciation and amortization, gains and losses on derivative transactions and foreign currency exchange, deferred income taxes, allowances for +expected credit losses, pension and postretirement medical benefit plan (income) expense, stock compensation expense, changes in casualty self-insurance +reserves, goodwill and other asset impairment charges and other non-cash items. +Net cash from operating activities decreased $3.9 billion in 2023, primarily due to the reduction in net income. It was also +impacted by: +• A decrease in our hedge margin collateral position due to changes in the fair value of derivative contracts used in our +foreign currency hedging program. +• A payment of $323 million in 2023 for employer payroll taxes that were deferred under the Coronavirus Aid, +Recovery and Economic Security Act in 2020, compared to a payment of $234 million in 2022. +• A decrease in income taxes payable, primarily due to changes in our uncertain tax positions. +These factors were partially offset by: +• A decreas e in contributions to our company-sponsored, defined benefit pension and postretirement medical plans. We +made discretionary contributions to our qualified U.S. pension plans of $1.2 billion in 2023 compared to $1.9 billion in +2022. +• Working capital benefited primarily from the timing of group welfare plan contributions and other compensation- +related items. +Cash payments for income taxes were $2.0 and $2.6 billion for the years ended December 31, 2023 and 2022, +respectively, with the decrease corresponding to the reduction in net income. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_133.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_133.txt new file mode 100644 index 0000000000000000000000000000000000000000..892f6f0382aa9f337ad0d24bed98459b99f7a158 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_133.txt @@ -0,0 +1,14 @@ +44 +As of December 31, 2023, approximately $1.9 billion of our total worldwide holdings of cash, cash equivalents and +marketable securities were held by foreign subsidiaries. The amount of cash, cash equivalents and marketable securities held by +our U.S. and foreign subsidiaries fluctuates throughout the year due to a variety of factors, including the timing of cash receipts +and disbursements in the normal course of business. Cash provided by operating activities in the U.S. continues to be our +primary source of funds to finance domestic operating needs, capital expenditures, share repurchases, pension contributions and +dividend payments to shareowners. All cash, cash equivalents and marketable securities held by foreign subsidiaries are +generally available for distribution to the U.S. without any U.S. federal income taxes. Any such distributions may be subject to +foreign withholding and U.S. state taxes. When amounts earned by foreign subsidiaries are expected to be indefinitely +reinvested, no accrual for taxes is provided. As of December 31, 2023, we had $37 million of restricted cash related to certain +tax and regulatory matters and acquisitions. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_134.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_134.txt new file mode 100644 index 0000000000000000000000000000000000000000..1e20cc224b60d489f255acdc080216a352a91309 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_134.txt @@ -0,0 +1,43 @@ +45 +Cash Flows From Investing Activities + Our primary sources (uses) of cash from investing activities for the years ended December 31, 2023 and 2022 were as +follows (in millions): +2023 2022 +Net cash used in investing activities $ (7,133) $ (7,472) +Capital Expenditures: +Buildings, facilities and plant equipment $ (2,211) $ (1,708) +Aircraft and parts (585) (1,267) +Vehicles (1,485) (1,067) +Information technology (877) (727) +Total Capital Expenditures(1): $ (5,158) $ (4,769) +Capital Expenditures as a % of revenue 5.7 % 4.8 % +Other Investing Activities: +Proceeds from disposals of businesses, property, plant and equipment $ 193 $ 12 +Net (purchases)/sales and maturities of marketable securities $ (820) $ (1,651) +Acquisitions, net of cash acquired $ (1,329) $ (755) +Other investing activities $ (19) $ (309) +(1) In addition to capital expenditures of $5.2 and $4.8 billion for the years ended December 31, 2023 and 2022, respectively, there were principal repayments +of finance lease obligations of $126 and $149 million, respectively. These are included in cash flows from financing activities. +We have commitments for the purchase of aircraft, vehicles, equipment and real estate to provide for the replacement and +enhancement of existing capacity and targeted growth. Future capital spending will depend on a variety of factors, including +economic and industry conditions. Our current investment program anticipates investments in technology initiatives and +enhanced network capabilities, including over $1.0 billion of projects to support our environmental sustainability goals in 2024. +It also provides for maintenance of buildings, facilities and equipment and replacement of certain aircraft within our fleet. We +currently expect our capital expenditures will be approximately $4.5 billion in 2024, of which approximately 50 percent will be +allocated to network enhancement projects and other technology initiatives. +Total capital expenditures increased in 2023 compared to 2022 as a result of: +• Spending on buildings, facilities and plant equipment increased due to network enhancements, capacity expansion +projects and facility maintenance. +• Vehicles expenditures increased, driven by the timing and availability of vehicle replacements and continuing +investments in our network. +• Information technology expenditures increased as a result of continuing investments in our digital capabilities and +network automation. +•A ircraft expenditures decreased as a result of lower payments on open aircraft orders and final delivery of aircraft. +Proceeds from the disposal of businesses, property, plant and equipment were higher in 2023 relative to 2022, primarily +due to the sale of surplus real estate during 2023. +Net purchases of marketable securities increased in 2023 due to a shift to longer duration investments. During the first +quarter of 2024, we anticipate liquidating our portfolio of marketable securities to provide additional resources for our short- +term and strategic operating needs. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_135.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_135.txt new file mode 100644 index 0000000000000000000000000000000000000000..7e50879a00f992b1bee9bff21b1017682a3ae957 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_135.txt @@ -0,0 +1,9 @@ +46 +Cash paid for acquisitions in 2023 was primarily attributable to the acquisitions of MNX Global Logistics and Happy +Returns, and the purchase of development areas for The UPS Store. In 2022, we acquired Bomi Group and Delivery Solutions, +as well as the purchase of development areas for The UPS Store. Cash used in other investing activities decreased, primarily +due to our 2022 investment of $252 million in the parent company of CommerceHub, Inc. and changes in other non-current +investments. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_136.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_136.txt new file mode 100644 index 0000000000000000000000000000000000000000..aed7ad0b2404ba34d3c4f054e2a6de57a1cf9cfc --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_136.txt @@ -0,0 +1,46 @@ +47 +Cash Flows From Financing Activities +Our primary sources (uses) of cash for financing activities were as follows (amounts in millions, except per share data): +2023 2022 +Net cash used in financing activities $ (5,534) $ (11,185) +Share Repurchases: +Cash paid to repurchase shares $ (2,250) $ (3,500) +Number of shares repurchased (12.8) (19.0) +Shares outstanding at year end 853 859 +Dividends: +Dividends declared per share $ 6.48 $ 6.08 +Cash paid for dividends $ (5,372) $ (5,114) +Borrowings: +Net borrowings (repayments) of debt principal $ 2,272 $ (2,304) +Other Financing Activities: +Cash received for common stock issuances $ 248 $ 262 +Other financing activities $ (432) $ (529) +Capitalization: +Total debt outstanding at year end $ 22,264 $ 19,662 +Total shareowners’ equity at year end 17,314 19,803 +Total capitalization $ 39,578 $ 39,465 +We repurchased 12.8 and 19.0 million shares of class B common stock for $2.3 and $3.5 billion under our stock +repurchase program for the years ended December 31, 2023 and 2022, respectively. We do not anticipate repurchasing any +shares in 2024. For additional information on our share repurchase activities, see note 12 to the audited, consolidated financial +statements. +For the years ended December 31, 2023 and 2022, dividends reported within shareowners' equity include $239 and $249 +million, respectively, of non-cash dividends that were settled in shares of class A common stock. +The declaration of dividends is subject to the discretion of the Board and will depend on various factors, including our net +income, financial condition, cash requirements, future prospects and other relevant factors. We paid quarterly cash dividends of +$1.62 and $1.52 per share in 2023 and 2022, respectively. In the first quarter of 2024, we declared a quarterly cash dividend of +$1.63 per share. +Issuances of debt in 2023 consisted of borrowings under our commercial paper program and fixed- and floating-rate +senior notes. The principal balances of the senior notes are as follows: +• $900 million 4.875% senior notes; +• $1.1 billion 5.050% senior notes; and +• $529 million floating rate senior notes. +There were no issuances of debt in 2022. +Repayments of debt in 2023 included $23 million of debt assumed in the Bomi Group acquisition, scheduled principal +payments on our finance lease obligations and reductions in our commercial paper balances. We also repaid the following +senior notes at maturity: +• $1.0 billion 2.500% senior notes; +• €700 million 0.375% senior notes; and +• $500 million floating rate senior notes. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_137.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_137.txt new file mode 100644 index 0000000000000000000000000000000000000000..800591e282b744c42cfa82283211175565b992b7 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_137.txt @@ -0,0 +1,33 @@ +48 +Repayments of debt in 2022 included scheduled principal payments on our finance lease obligations and repayment of +senior notes at maturity as follows: +• $1.0 billion 2.450% senior notes; +• $600 million 2.350% senior notes; and +• $400 million floating rate senior notes. +The amount of commercial paper outstanding fluctuates based on daily liquidity needs. The following is a summary of our +commercial paper program (in millions): +Outstanding balance +at year end ($) +Average balance +outstanding ($) Average interest rate +2023 +USD $ 2,172 $ 417 5.45 % +Total $ 2,172 +As of December 31, 2023, we had no outstanding balances under our European commercial paper program. We had no +outstanding balances under our U.S. or European commercial paper programs as of December 31, 2022. +We have $1.5 billion of fixed- and floating-rate senior notes that mature in 2024. We intend to repay or refinance these +amounts when due. We consider the overall fixed and floating interest rate mix of our portfolio and the related overall cost of +borrowing when planning for future issuances and non-scheduled repayments of debt. +The cash received from common stock issuances in both 2023 and 2022 resulted from activity within the UPS 401(k) +Savings Plan and our employee stock purchase plan. +Other financing activities included cash used to repurchase shares to satisfy tax withholding obligations on vested +employee stock awards. Cash outflows for this purpose were $402 and $516 million for the years ended December 31, 2023 and +2022, respectively. The decrease was due to changes in required repurchase amounts. +Except as disclosed in note 9 to the audited, consolidated financial statements, we do not have guarantees or other off- +balance sheet financing arrangements, including variable interest entities, which we believe could have a material impact on our +financial condition or liquidity. +Sources of Credit +See note 9 to the audited, consolidated financial statements for a discussion of our available credit and our debt covenants. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_138.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_138.txt new file mode 100644 index 0000000000000000000000000000000000000000..9fed718fb49df1ed9353bacc368157ca4e78e100 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_138.txt @@ -0,0 +1,48 @@ +49 +Contractual Commitments +We have material cash requirements for known contractual obligations and commitments in the form of finance leases, +operating leases, debt obligations, purchase commitments and certain other liabilities that are disclosed in the notes to the +audited, consolidated financial statements and discussed below. We expect to fund these obligations and other discretionary +payments, including expected returns to shareowners, primarily through cash from operations. +We anticipate making discretionary contributions to our company-sponsored U.S. defined benefit pension and +postretirement medical benefit plans of approximately $1.3 billion in 2024, which are included within Expected employer +contributions to plan trusts shown in note 5 to the audited, consolidated financial statements. There are currently no anticipated +required minimum cash contributions to our qualified U.S. pension plans in 2024. The amount of any minimum funding +requirement, as applicable, for these plans could change significantly in future periods depending on many factors, including +plan asset returns, discount rates, other actuarial assumptions, changes to pension plan funding regulations and the discretionary +contributions that we make. Actual contributions made in future years could materially differ and consequently required +minimum contributions beyond 2024 cannot be reasonably estimated. We expect contributions to the UPS 401(k) Savings Plan +to be approximately $670 million in 2024. +As discussed in note 6 to the audited, consolidated financial statements, we are not currently subject to any surcharges or +minimum contributions outside of our agreed-upon contractual rates with respect to the multiemployer pension and health and +welfare plans in which we participate. Contribution rates to these multiemployer pension and health and welfare plans are +established through the collective bargaining process. +We have outstanding letters of credit and surety bonds that are discussed in note 9 to the audited, consolidated financial +statements. Additionally, we have $1.5 billion of fixed- and floating-rate senior notes that mature in 2024. We intend to repay +or refinance these amounts when due. Estimated future interest payments on our outstanding debt total approximately $14.7 +billion. This amount was calculated using the contractual interest payments due on our fixed- and variable-rate debt based on +interest rates as of December 31, 2023. For debt denominated in a foreign currency, the U.S. Dollar equivalent principal amount +of the debt at the end of the year was used as the basis to project future interest payments. +Annual principal payments on our long-term debt, and purchase commitments for certain capital expenditures are also set +out in note 9 to the audited, consolidated financial statements. Included within these purchase commitments are firm +commitments to purchase 21 new Boeing 767-300 aircraft to be delivered between 2024 and 2026 and two used Boeing 747-8F +aircraft to be delivered in 2024. Additionally, we anticipate purchasing approximately 3,000 alternative fuel vehicles in 2024. +In addition to purchase commitments, we have other contractual agreements including equipment rentals, software +licensing and commodity contracts. +Our finance lease obligations, including purchase options that are reasonably certain to be exercised, relate primarily to +leases on aircraft and real estate. These obligations, together with our obligations under operating leases are set out in note 11 to +the audited, consolidated financial statements. +Under provisions of the Tax Cuts and Jobs Act, we elected to pay a one-time transition tax on certain unrepatriated +earnings of foreign subsidiaries over eight years. The remaining balance will be paid between 2024 and 2026. Additionally, we +have uncertain tax positions that are further discussed in note 15 to the audited, consolidated financial statements. +As discussed in note 1 to the audited, consolidated financial statements, as of December 31, 2023, we had a restricted cash +balance related to certain tax and regulatory matters in Italy. We anticipate this balance will increase by approximately $61 +million in 2024. +Contingencies +See note 5 and note 15 to the audited, consolidated financial statements for a discussion of pension-related matters and +income-tax-related matters, respectively. See note 10 for a discussion of judicial proceedings and other matters arising from the +conduct of our business activities. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS +The secret object #4 is a "bed". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_139.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_139.txt new file mode 100644 index 0000000000000000000000000000000000000000..c954565f350b7be9d97bbf53ffa38c531de0d93c --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_139.txt @@ -0,0 +1,19 @@ +50 +Collective Bargaining Agreements +Status of Collective Bargaining Agreements +See note 6 to the audited, consolidated financial statements for a discussion of the status of collective bargaining +agreements and "Risk Factors - Business and Operating Risks - Strikes, work stoppages or slowdowns by our employees could +materially adversely affect us" in Part I, Item 1A of this report. +Multiemployer Benefit Plans +We contribute to a number of multiemployer pension and health and welfare plans under the terms of collective +bargaining agreements that cover our union-represented employees. These agreements set forth the annual contribution rate +increases for the plans that we participate in. +New Accounting Pronouncements +Recently Adopted Accounting Standards +See note 1 to the audited, consolidated financial statements for a discussion of recently adopted accounting standards. +Accounting Standards Issued But Not Yet Effective +See note 1 to the audited, consolidated financial statements for a discussion of accounting standards issued, but not yet +effective. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_14.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_14.txt new file mode 100644 index 0000000000000000000000000000000000000000..280b371883bab4a6ed98e6de40bd97a87c1843ec --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_14.txt @@ -0,0 +1,42 @@ +Shareowner Recommendations +Shareowner recommended director candidates are considered on the same basis as recommendations from other +sources. Shareowners can recommend a candidate by writing to the UPS Corporate Secretary, 55 Glenlake +Parkway, N.E., Atlanta, Georgia 30328. Submissions must contain the prospective candidate’s name and a +detailed description of the experience, qualifications, attributes and skills that make the individual a suitable +director candidate. +Board Leadership Structure +Based on the periodic evaluation and recommendation of the Nominating and Corporate Governance Committee, +the board determines the most appropriate board leadership structure, including who should serve as Board +Chair, and whether the roles of Board Chair and CEO should be separated or combined. In making this +determination, the board evaluates a number of factors, including professional experience, operational +responsibilities and corporate governance developments. +In October 2020, in connection with Carol Tomé’s election as CEO, the board determined that it was in the best +interests of the Company to enable Carol to focus on leading the Company, and separated the roles of Board +Chair and CEO. Bill Johnson, who had been serving as our independent Lead Director, was appointed +Board Chair. +Bill has served on our board since 2009 and served as independent Lead Director from 2016 until October 2020. +He has deep institutional knowledge of the Company and provides strong continuity of leadership. He devotes +significant time to understanding our business and communicating with the CEO, and other directors, between +meetings. He draws on his extensive knowledge of our business, industry, strategic priorities and competitive +developments to set the board’s agendas in collaboration with the CEO, and he seeks to ensure that board +meetings are productive and interactions with the directors facilitate a useful exchange of viewpoints. Bill’s value +to the board is underscored by the board’s decision to extend his tenure beyond the board’s mandatory +retirement age of 75; in connection with our director nomination process, the board determined to grant Bill a +one-year waiver from that requirement so that he can continue to lead the board. +Carol is available to all directors between meetings and meets regularly with the Board Chair, and with the +directors individually and as a group, to receive feedback from the board. Bill’s collaboration with Carol allows +the board to focus attention on the issues of greatest importance to the Company and its shareowners and our +CEO to focus primarily on leading the Company. +Furthermore, all the members of each of the Audit Committee, the Compensation and Human Capital +Committee, the Nominating and Corporate Governance Committee and the Risk Committee are independent. +Each committee is led by a chairperson who sets the meeting agendas and reports to the full board on the +committee’s work. Additionally, the independent directors meet in executive session without management +present at each board meeting, as described below. +Executive Sessions of Independent Directors +Directors hold executive sessions without management present at each regular board meeting. The Board Chair +determines the agenda and presides at each session. The Board Chair generally invites the CEO to join a portion +of the executive session to receive feedback from the board and when deemed appropriate otherwise. In +addition, throughout the year the Board Chair meets individually with each director to discuss issues that are +important to the board and to solicit and provide further feedback. + +11 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_140.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_140.txt new file mode 100644 index 0000000000000000000000000000000000000000..8db73be86de599a803d52841c379ceeca5bf1878 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_140.txt @@ -0,0 +1,50 @@ +51 +Critical Accounting Estimates +The amounts of assets, liabilities, revenue and expenses reported in our financial statements are affected by estimates and +judgments that are necessary to comply with GAAP. We base our estimates and judgments on prior experience, current trends, +various other assumptions and third-party input that we consider reasonable to our circumstances. Actual results could differ +materially from our estimates, which would affect the related amounts reported in our consolidated financial statements. While +estimates and judgments are applied in arriving at many reported amounts, we believe that the following critical accounting +estimates involve a higher degree of judgment and complexity. +Contingencies +From time to time, we are involved in various judicial proceedings and other matters arising from the conduct of our +business that result in exposure to various contingent liabilities. The events that may impact our contingent liabilities are often +unique and generally are not predictable. At the time a contingency is identified, we consider all relevant facts as part of our +evaluation. We apply judgment when establishing a range of reasonably possible losses arising from contingencies. Our +judgment is influenced by our understanding of currently available information and potential outcomes of these actions, +including the advice from our internal counsel, external counsel and other senior management. +We accrue amounts associated with judicial proceedings and other contingencies when and to the extent a loss becomes +probable and can be reasonably estimated. For such accruals, we record the amount we consider to be the best estimate within a +range of potential losses; however, when there appears to be a range of equally possible losses, our accrual is at the low end of +this range. The likelihood of a loss with respect to a particular contingency is often difficult to predict and determining a +reasonable estimate of the loss or a range of potential losses may not be practicable based on the information available. +Additionally, events may arise that were not anticipated and, as a result, the outcome of a contingency may result in a loss that +differs materially from our previously estimated liability. Except as disclosed in note 10 to the audited, consolidated financial +statements, contingent losses that were probable and estimable were not material to our financial position or results of +operations as of, or for the year ended, December 31, 2023. In addition, we have certain contingent liabilities that have not been +recognized as of, or for the year ended, December 31, 2023, because a loss was not reasonably estimable. Contingent +obligations relating to income taxes and self-insurance are discussed below. +Goodwill and Intangible Asset Impairments +We test goodwill and indefinite-lived intangible assets for impairment annually as of July 1, or more frequently if +circumstances require. We assess goodwill for impairment at the reporting unit level. The determination of reporting units +requires judgment, and if we changed the definition of our reporting units, it is possible that we would have reached different +conclusions when performing our impairment tests. Changes in our management structure or business acquisitions may result in +changes to our reporting units. +We initially evaluate qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is +less than its carrying amount. If the qualitative assessment is not conclusive, or at our election, we quantitatively assess the fair +value of a reporting unit to test goodwill for impairment. This assessment uses a combination of income and market approaches +to develop an estimate of reporting unit fair value. These approaches consider both entity-specific and observable market +information under the fair value hierarchy in ASC Topic 820 and changes in, or additions to, available information may affect +the assumptions we use in estimating fair value. +• The income approach uses a discounted cash flow (“DCF”) model, which requires us to make a number of significant +assumptions to produce an estimate of future cash flows. These assumptions include projections of future revenue, +costs, capital expenditures, working capital and the cost of capital. During periods of time in which macroeconomic +conditions are uncertain or volatile, these assumptions are subject to a greater degree of uncertainty. We are also +required to make assumptions relating to our overall business and operating strategy, and the regulatory and market +environment. Changes in any of our assumptions could significantly impact the fair value of one or more of our +reporting units. The projections that we use in our DCF model are updated annually, or more often if necessary, and +will change over time based on the historical performance and changing business conditions for each of our reporting +units. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_141.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_141.txt new file mode 100644 index 0000000000000000000000000000000000000000..6c965a5a04ca65eeaf4a2c7c70f351d19e3e8d3a --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_141.txt @@ -0,0 +1,52 @@ +52 +• The market approach uses observable market data of comparable public companies to estimate fair value utilizing +financial metrics (such as enterprise value to net sales). We apply judgment to select appropriate comparison +companies based on the business operations, size and operating results of our reporting units. Changes to our selection +of comparable companies or market multiples may result in changes to the estimates of fair value of our reporting +units. +In 2023, we performed our annual goodwill impairment testing using both qualitative and quantitative methods. In +developing our valuation assumptions underlying the quantitative annual impairment testing, we determined that the cost of +capital for our Roadie and Delivery Solutions reporting units had increased, driven by increases in the risk-free interest rate and +volatility of the stock prices of market comparables. The results of our testing using these assumptions indicated that the +carrying values of our Roadie and Delivery Solutions reporting units exceeded their estimated fair values. As a result, during +the third quarter of 2023 we recorded and disclosed goodwill impairment charges of $56 million related to Roadie and $61 +million related to Delivery Solutions. The Delivery Solutions impairment represented all of the goodwill associated with this +reporting unit. These charges are included within Other expenses in the statement of consolidated income. We did not incur any +goodwill impairment charges in 2022 or 2021. +We test the indefinite-lived Coyote trade name associated with our truckload brokerage business for impairment in +accordance with GAAP using the relief from royalty method. This valuation approach requires that we make a number of +assumptions to estimate fair value, including projections of future revenues, market royalty rates, tax rates, discount rates and +other relevant variables. The projections we use in the model are updated annually, or more often if necessary, and will change +over time based on historical performance and changing business conditions. +Our annual testing as of July 1 indicated that the fair value of the Coyote trade name was in excess of its carrying value, +although the excess was less than 10 percent. Since the annual testing date, our truckload brokerage business continued to be +negatively impacted by market conditions, which resulted in revenue declines. In response, during the fourth quarter of 2023, +we began to evaluate strategic alternatives for this business. As a result, we tested the Coyote trade name for impairment as of +December 31, 2023, using forecasts that reflected updated market conditions and our evaluation of strategic alternatives related +to this business. Based on the results of this testing, we concluded that the carrying value of the Coyote trade name exceeded its +estimated fair value and recorded an impairment charge of $111 million. The revised carrying value of this trade name as of +December 31, 2023 was $89 million. +Our trade name valuation estimate remains sensitive to further changes in assumptions, including business performance, +royalty rates and the cost of capital. A decrease of 10 percent in forecasted cash flows, a decrease of 40 basis points in our +selected royalty rate or an increase of 100 basis points in the cost of capital would each result in an incremental impairment +charge of $10 million. We continue to monitor the impact of business performance, our determination of strategic alternatives +and external factors on the valuation assumptions for this trade name. +In connection with matters resulting in the Coyote trade name impairment, we also tested the goodwill associated with this +reporting unit for impairment as of December 31, 2023 using the updated forecasts of future cash flows described above. While +this interim test did not indicate an impairment, we continue to monitor this reporting unit and may be required to perform +additional interim tests in future periods as facts and circumstances evolve. The goodwill associated with this reporting unit as +of December 31, 2023 was $482 million. +Within our consolidated goodwill balance of $4.9 billion as of December 31, 2023, approximately $0.9 billion was +represented by certain reporting units within Supply Chain Solutions, including Coyote and Roadie, that have a limited excess +of fair value as of the most recent valuation. If the cost of capital were increased by 100 basis points or our projected cash flows +were reduced by 10 percent, it is reasonably possible that these reporting units would be impaired. We continue to monitor all +of our reporting units between annual testing dates. +Our finite-lived intangible assets are amortized over their estimated useful lives. These assets are tested for impairment as +part of asset groups that may include other long-lived assets. See "Critical Accounting Estimates – Depreciation, Residual +Value and Impairment of Property, Plant and Equipment" for a discussion of estimates impacting asset groups. In addition, a +reduction in expected useful life, or a decision to sell or abandon an intangible asset before the end of its useful life, may +increase amortization expense, which could have a material impact on our results of operations. See note 7 to the audited, +consolidated financial statements for a discussion of finite-lived intangible asset impairments. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_142.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_142.txt new file mode 100644 index 0000000000000000000000000000000000000000..5b28bc80177695855876c316f10059e002e56132 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_142.txt @@ -0,0 +1,40 @@ +53 +Self-Insurance Accruals +We base self-insurance reserves on actuarial estimates, which are determined with the assistance of a third-party actuary +through a complex process that includes the application of various actuarial methods and assumptions. The process incorporates +actual loss experience and judgments about expected future development based on historical experience, recent and projected +trends in claim frequency and severity, changes in the level of risk retained under our programs and changes in claims handling +practices, among other factors. +Workers' compensation, automobile liability and general liability insurance claims may take a number of years to resolve. +Consequently, actuarial estimates are required to project the ultimate cost that will be incurred to resolve a claim. Several +factors can affect the actual cost, or severity, of a claim, including: +• Risk retention limits; +• Length of time a claim remains open; +• Trends in healthcare costs; +• Results of any related litigation; and +• Changes in legislation. +Furthermore, claims may emerge in future years for events that occurred in a prior policy period at a rate that differs from +actuarial projections. All these factors can result in revisions to actuarial projections and produce a material difference between +estimated and actual operating results. +Due to the complexity and inherent uncertainty associated with the estimation of our workers’ compensation, automobile +and general claims liabilities, the third-party actuary develops a range of expected losses. We believe our estimated reserves for +such claims are adequate; however, actual experience in claims frequency and/or severity of claims could materially differ from +our estimates and affect our results of operations. +We also sponsor several health and welfare insurance plans for our employees. Liabilities and expenses related to these +plans are based on estimates of the number of employees and eligible dependents covered under the plans, global health events, +anticipated utilization by participants and overall trends in medical costs and inflation. We believe our estimates are reasonable +and appropriate. Actual experience may differ materially from these estimates and, therefore, produce a material difference +between estimated and actual operating results. +Self-insurance reserves as of December 31, 2023 and 2022 were as follows (in millions): +2023 2022 +Current self-insurance reserves $ 1,320 $ 1,069 +Non-current self-insurance reserves(1) 1,626 1,818 +Total self-insurance reserves $ 2,946 $ 2,887 +(1) Included within Other Non-Current Liabilities in our consolidated balance sheets. +Our total reserves related to prior year claims increased by $39 million in 2023 and decreased by $5 million in 2022 as a +result of changes in estimated claim costs. A five percent deterioration or improvement in both the assumed claim severity and +claim frequency rates used to estimate our self-insurance reserves would result in an increase or a decrease, respectively, of +approximately $300 million in our reserves and expenses as of, and for the year ended, December 31, 2023. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_143.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_143.txt new file mode 100644 index 0000000000000000000000000000000000000000..3f4aa5228ffae735624dfc65c02753dd7f481771 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_143.txt @@ -0,0 +1,50 @@ +54 +Pension and Other Postretirement Medical Benefits +Our pension and postretirement medical benefit costs are calculated using various actuarial assumptions and +methodologies. These assumptions include discount rates, healthcare cost trend rates, inflation, compensation increases, +expected returns on plan assets, mortality rates, regulatory requirements and other factors. The assumptions utilized in recording +the obligations under our plans represent our best estimates. We believe that they are reasonable based on historical experience +and performance, as well as factors that might cause future expectations to differ from past trends. +Differences in actual experience or changes in assumptions may affect our pension and postretirement medical benefit +obligations and future expenses. The primary factors contributing to actuarial gains and losses each year are: +• Changes in the discount rate used to value pension and postretirement medical benefit obligations as of the +measurement date; +• Differences between expected and actual returns on plan assets; +• Changes in demographic assumptions, including mortality; +• Differences in participant experience from demographic assumptions; and +• Changes in coordinating benefits with plans not sponsored by UPS. +We recognize changes in the fair value of plan assets and net actuarial gains or losses in excess of a corridor (defined as +10% of the greater of the fair value of plan assets or the plans' projected benefit obligations) immediately within income upon +remeasurement of a plan. Other components of pension expense (referred to as "net periodic benefit cost"), primarily service +and interest costs and the expected return on plan assets, are reported on a quarterly basis. +The following sensitivity analysis shows the impact of a 25 basis point change in the assumed discount rate and return on +assets for our pension and postretirement benefit plans, and the resulting increase (decrease) in our obligations and expense as +of, and for the year ended, December 31, 2023 (in millions): +Pension Plans +25 Basis Point +Increase +25 Basis Point +Decrease +Discount Rate: +Effect on ongoing net periodic benefit cost $ (15) $ 16 +Effect on net periodic benefit cost for amounts recognized outside the 10% corridor (423) 697 +Effect on projected benefit obligation (1,550) 1,636 +Return on Assets: +Effect on ongoing net periodic benefit cost(1) (108) 108 +Effect on net periodic benefit cost for amounts recognized outside the 10% corridor(2) $ (54) $ 54 +Postretirement Medical Benefit Plans +Discount Rate: +Effect on ongoing net periodic benefit cost $ 2 $ (2) +Effect on net periodic benefit cost for amounts recognized outside the 10% corridor — — +Effect on accumulated postretirement benefit obligation (34) 39 +Healthcare Cost Trend Rate: +Effect on ongoing net periodic benefit cost 1 (1) +Effect on net periodic benefit cost for amounts recognized outside the 10% corridor — — +Effect on accumulated postretirement benefit obligation $ 9 $ (10) +(1) Amount calculated based on 25 basis point increase / decrease in the expected return on assets. +(2) Amount calculated based on 25 basis point increase / decrease in the actual return on assets. +Refer to note 5 to the audited, consolidated financial statements for information on our potential liability for coordinating +benefits related to the Central States Pension Fund. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_144.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_144.txt new file mode 100644 index 0000000000000000000000000000000000000000..b1ea4d9b871d295488d965798c57e147449b1fc2 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_144.txt @@ -0,0 +1,53 @@ +55 +Depreciation, Residual Value and Impairment of Property, Plant and Equipment +As of December 31, 2023, we had $36.9 billion of net property, plant and equipment, the most significant category of +which was aircraft. In accounting for property, plant and equipment, we make estimates of the expected useful lives and +residual values to arrive at depreciation expense. We evaluate the useful lives of our property, plant and equipment based on our +usage, maintenance and replacement policies, and taking into account physical and economic factors that may affect the useful +lives of the assets. A reduction in expected useful life, or a decision to sell or abandon a long-lived asset before the end of its +useful life, may increase depreciation expense. Our accounting policy for property, plant and equipment is set out in note 1 to +the audited, consolidated financial statements. +We monitor our long-lived assets for indicators of impairment which may include, but are not limited to, a significant +change in the extent to which an asset is utilized and operating or cash flow losses associated with the use of the asset. If +circumstances are present that indicate the carrying value of our long-lived assets may not be recoverable, we perform +impairment testing at the asset group level. +Asset groups represent the lowest level at which independent cash flows can be identified. Determining asset groups +requires judgment and changes in the way asset groups are defined could have a material impact on the results of impairment +testing. We perform recoverability testing by comparing the undiscounted cash flows of the asset group to its carrying value. If +the carrying amount of the asset group is determined not to be recoverable, a write-down to fair value is recorded. Fair values +are determined based on quoted market values, discounted cash flows or external appraisals, as appropriate. Details of long- +lived asset impairments are included in note 4 to the audited, consolidated financial statements. +In estimating the useful lives and expected residual values of aircraft, we consider actual experience with the same or +similar aircraft types, multi-year volume projections for our air products and the types of aircraft required to efficiently operate +our network. Adverse changes in volume could result in our current aircraft capacity exceeding projected demand, which may +result in temporary idling of aircraft to better match capacity with demand. Temporarily idled assets are classified as held-and- +used, and we continue to record depreciation expense for these assets. As a result of the reduction in volumes experienced +during 2023, we temporarily idled nine aircraft for an average of approximately five months. As of December 31, 2023 all of +these aircraft had re-entered operational service. Based on current volume projections, we anticipate that certain aircraft may be +temporarily idled during part of 2024. Over a longer period, continued adverse changes in volume forecasts could lead to an +excess of aircraft, resulting in an impairment charge or reduction in expected useful life that may result in increased +depreciation expense. +Revisions to estimates of useful lives and residual values could also be caused by changes to our maintenance programs, +governmental regulations, operational intentions, or market prices for new and used aircraft of the same or similar types. We +periodically evaluate our estimates and assumptions, and adjust them, as necessary, on a prospective basis through depreciation +expense. In 2022, we reduced the estimated residual value of our MD-11 aircraft and associated engines to zero based on +updated operational plans for these aircraft and our expectations for their eventual disposal. In connection with this change in +estimate, in 2022 we recorded a one-time depreciation charge to adjust the residual value of our fully-depreciated MD-11 +aircraft. Refer to note 4 to the audited, consolidated financial statements for information on the impact to our results of +operations. +Fair Value Measurements +In the normal course of business, we hold and issue financial instruments that contain elements of market risk, including +derivatives, marketable securities and debt. Certain of these financial instruments are required to be recorded at fair value, +principally derivatives, marketable securities and certain other investments. These financial instruments are measured and +reported at fair value on a recurring basis based upon a fair value hierarchy (Levels 1, 2 and 3). Fair values are based on listed +market prices (Level 1), when such prices are available. To the extent that listed market prices are not available, fair value is +determined based on other relevant factors, including dealer price quotations (Level 2). If listed market prices or other relevant +factors are not available, inputs are developed from unobservable data reflecting our own assumptions and include situations +where there is little or no market activity for the asset or liability (Level 3). Certain financial instruments, including over-the- +counter derivative instruments, are valued using pricing models that consider, among other factors, contractual and market +prices, correlations, time value, credit spreads and yield curve volatility factors. Changes in the fixed income, foreign currency +exchange and commodity markets will impact our estimates of fair value in the future, potentially affecting our results of +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS +The secret vegetable is an "onion". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_145.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_145.txt new file mode 100644 index 0000000000000000000000000000000000000000..159cb0541faf19c2d537e990e76b3dd71035efbf --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_145.txt @@ -0,0 +1,52 @@ +56 +operations. Further information on our accounting policies relating to fair value measurements can be found in note 1 to the +audited, consolidated financial statements. +As of December 31, 2023, the majority of our financial instruments were categorized as either Level 1 or Level 2. Refer to +notes 3, 9 and 17 to the audited, consolidated financial statements for further information on these instruments. A quantitative +sensitivity analysis of our exposure to changes in commodity prices, foreign currency exchange rates and interest rates is +presented in the Quantitative and Qualitative Disclosures about Market Risk section of this report. +Our pension and postretirement plan assets include investments in hedge funds, as well as private debt, private equity and +real estate funds, which are primarily measured using net asset value ("NAV") as a practical expedient for fair value, as +appropriate. These investments were valued at $9.9 billion as of December 31, 2023. In order to estimate NAV, we evaluate +audited and unaudited financial reports from fund managers and make adjustments for investment activity between the date of +the financial reports and December 31. These investments are not actively traded, and their values can only be estimated using +these assumptions. If our estimates of activity changed, this could have a material impact on the reported value of these +investments and on the return on assets that we report. Refer to note 5 to the audited, consolidated financial statements for +further information on our pension and postretirement plan assets. +Certain non-financial assets and liabilities are measured at fair value on a nonrecurring basis, including property, plant and +equipment, goodwill and intangible assets. These assets are subject to fair value adjustments in certain circumstances, such as +when there is evidence of an impairment or when an asset or disposal group is classified as held for sale. +In accounting for business acquisitions, we allocate the fair value of purchase consideration to the assets acquired and +liabilities assumed based on their estimated fair values. Estimating the fair value of assets acquired and liabilities assumed +requires judgment, especially with respect to identified intangible assets as there may be limited or no observable transactions +within the market, requiring us to develop internal models to estimate fair value. For example, estimating the fair value of +identified intangible assets may require us to develop valuation assumptions, including but not limited to, future expected cash +flows from these assets, synergies and the cost of capital. Certain inputs require us to determine assumptions that are reflective +of a market participant view of fair value. Changes in any of these assumptions may materially impact the amount we recognize +for identifiable assets and liabilities, in addition to the residual amount allocated to goodwill. +Income Taxes +We make certain estimates and judgments in determining income tax expense within our financial statements. These +estimates and judgments occur in the calculation of income by legal entity and jurisdiction, tax credits, benefits and deductions, +and in the calculation of deferred tax assets and liabilities arising from timing differences in the recognition of revenue and +expense for tax and financial statement purposes, as well as tax, interest and penalties related to uncertain tax positions. +Significant changes in these estimates may result in an increase or decrease to our tax expense in a subsequent period. +We assess the likelihood that we will be able to recover our deferred tax assets. If recovery is not likely, we increase our +provision for taxes by recording a valuation allowance against the deferred tax assets that we estimate will not ultimately be +recoverable. We believe that we will ultimately recover a substantial majority of the deferred tax assets recorded in our +consolidated balance sheets. However, should there be a change in our ability to recover our deferred tax assets, our tax +provision would increase in the period in which we determined that the recovery was not likely. +The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations. We +recognize liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for +recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be +sustained on audit, including resolution of related appeals or litigation processes, if any. Once it is determined that the position +meets the recognition threshold, the second step requires us to estimate and measure the largest amount of tax benefit that is +more likely than not to be realized upon ultimate settlement. The difference between the amount of recognizable tax benefit and +the total amount of tax benefit from positions filed or to be filed with the tax authorities is recorded as a liability for uncertain +tax benefits. It is inherently difficult and subjective to estimate such amounts, as we have to determine the probability of various +possible outcomes. We reevaluate uncertain tax positions quarterly based on factors including, but not limited to, changes in +facts or circumstances, changes in tax law, effectively settled issues under audit and new audit activity. Such a change in +recognition or measurement could result in the recognition of a tax benefit or additional tax expense. In 2023, we recognized a +net tax benefit of $102 million following resolution of certain global tax audits. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_146.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_146.txt new file mode 100644 index 0000000000000000000000000000000000000000..d4e937766b29146b90f01d50136fd9479187f23d --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_146.txt @@ -0,0 +1,42 @@ +57 +Item 7A. Quantitative and Qualitative Disclosures about Market Risk +We are exposed to market risk from changes in certain commodity prices, foreign currency exchange rates, interest rates +and equity prices. All of these market risks arise in the normal course of business, as we do not engage in speculative trading +activities. In order to manage the risk arising from these exposures, we may utilize a variety of commodity, foreign currency +exchange rate and interest rate forward contracts, options and swaps. A discussion of our accounting policy for derivative +instruments is provided in note 1 to the audited, consolidated financial statements. +Commodity Price Risk +We are exposed to changes in the prices of refined fuels, principally jet-A, diesel and unleaded gasoline, as well as +changes in the price of natural gas and other alternative fuels. Currently, the fuel surcharges that we apply to our domestic and +international package services are the primary means of reducing the risk of adverse fuel price changes. In order to mitigate the +impact of fuel surcharges imposed on us by outside carriers, we regularly adjust the rates we charge for our freight brokerage +services. The majority of our fuel purchases utilize index-based pricing formulas plus or minus a fixed locational/supplier +differential. While many of the indices are correlated, each index may respond differently to changes in underlying prices, +which in turn can drive variability in our costs. Because of this, our operating results may be affected should the market price of +fuel suddenly change by a significant amount or change by amounts that do not result in an adjustment in our fuel surcharges, +which can significantly affect our results either positively or negatively in the short-term. As of December 31, 2023 and 2022, +we had no commodity contracts outstanding. +Foreign Currency Exchange Rate Risk +We have foreign currency risks related to our revenue, operating expenses and financing transactions in currencies other +than the local currencies in which we operate. We are exposed to currency risk from the potential changes in functional +currency values of our foreign currency-denominated assets, liabilities and cash flows. Our most significant foreign currency +exposures relate to the Euro, British Pound Sterling, Canadian Dollar, Chinese Renminbi and Hong Kong Dollar. We may use +forward contracts as well as a combination of purchased and written options to hedge forecasted cash flow currency exposures. +These derivative instruments generally cover forecasted foreign currency exposures for periods of 3 to 36 months. We may also +utilize forward contracts to hedge portions of our anticipated cash settlements of intercompany transactions and interest +payments on certain debt subject to foreign currency remeasurement. +Interest Rate Risk +We have issued debt instruments and have debt associated with finance leases that accrue expense at fixed and floating +rates of interest. We may use interest rate swaps as part of our program to manage the fixed and floating interest rate mix of our +total debt portfolio and related overall cost of borrowing. We may also utilize forward starting swaps and similar instruments to +lock in all or a portion of the borrowing cost of anticipated debt issuances. These instruments subject us to risk resulting from +changes in short-term interest rates. +We are also subject to interest rate risk with respect to our defined benefit pension and postretirement medical benefit plan +obligations, as changes in interest rates will effectively increase or decrease the obligations associated with these plans. This +will result in changes to the amount of pension and postretirement benefit expense recognized in future periods and may also +result in us being required to make contributions to the plans. +We hold investments in debt securities, as well as cash-equivalent instruments, some of which accrue income at variable +rates of interest. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_147.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_147.txt new file mode 100644 index 0000000000000000000000000000000000000000..a76571d6fcfa2696978a647064a4d892c9cba5f9 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_147.txt @@ -0,0 +1,35 @@ +58 +Sensitivity Analysis +The following analysis provides quantitative information regarding our exposure to foreign currency exchange rate risk, +interest rate risk and equity price risk embedded in our existing financial instruments. We utilize valuation models to evaluate +the sensitivity of the fair value of financial instruments with exposure to market risk that assume instantaneous, parallel shifts in +exchange rates, interest rate yield curves and commodity and equity prices. For options and instruments with non-linear returns, +models appropriate to the instrument are utilized to determine the impact of market shifts. +There are certain limitations inherent in the sensitivity analyses presented, primarily due to the assumption that foreign +currency exchange rates change in a parallel fashion and that interest rates change instantaneously. In addition, the analyses are +unable to reflect the complex market reactions that normally would arise from the market shifts modeled. While this is our best +estimate of the impact of the specified scenarios, these estimates should not be viewed as forecasts. We adjust the fixed and +floating interest rate mix of our interest-rate-sensitive assets and liabilities in response to changes in market conditions. +Additionally, changes in the fair value of foreign currency derivatives and commodity derivatives are offset by changes in the +cash flows of the underlying hedged foreign currency and commodity transactions. + +Shock-Test Result as of +December 31, +(in millions) 2023 2022 +Change in Fair Value: +Currency Derivatives(1) $ (649) $ (770) +Change in Annual Interest Expense: +Variable Rate Debt(2) $ 41 $ 18 +Change in Annual Interest Income: +Marketable Securities(3) $ 1 $ 1 +(1) The potential change in fair value from a hypothetical 10% weakening of the U.S. Dollar against foreign currency exchange rates across all maturities. +(2) The potential change in annual interest expense resulting from a hypothetical 100 basis point increase in short-term interest rates, applied to our variable +rate debt. +(3) The potential change in interest income resulting from a hypothetical 100 basis point increase in short-term interest rates, applied to our variable rate +investment holdings. +The sensitivity of our defined benefit pension and postretirement benefit plan obligations to changes in interest rates is +discussed in "Critical Accounting Estimates - Pension and Other Postretirement Medical Benefits". +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS +The secret fruit is an "orange". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_148.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_148.txt new file mode 100644 index 0000000000000000000000000000000000000000..dc5cff7af72d1d705a5eddd375be165e8ec839d8 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_148.txt @@ -0,0 +1,29 @@ +59 +Item 8. Financial Statements and Supplementary Data +Table of Contents + +Report of Independent Registered Public Accounting Firm (PCAOB ID No. 60 +Consolidated Balance Sheets 63 +Statements of Consolidated Income 64 +Statements of Consolidated Comprehensive Income (Loss) 64 +Statements of Consolidated Cash Flows 65 +Notes to Consolidated Financial Statements 66 +Note 1—Summary of Accounting Policies 66 +Note 2—Revenue Recognition 73 +Note 3—Marketable Securities and Non-Current Investments 76 +Note 4—Property, Plant and Equipment 79 +Note 5—Company-Sponsored Employee Benefit Plans 80 +Note 6—Multiemployer Employee Benefit Plans 91 +Note 7—Goodwill and Intangible Assets 95 +Note 8—Acquisitions 98 +Note 9—Debt and Financing Arrangements 101 +Note 10—Legal Proceedings and Contingencies 106 +Note 11—Leases 107 +Note 12—Shareowners’ Equity 110 +Note 13—Stock-Based Compensation 114 +Note 14—Segment and Geographic Information 118 +Note 15—Income Taxes 121 +Note 16—Earnings Per Share 126 +Note 17—Derivative Instruments and Risk Management 127 +Note 18—Transformation Strategy Costs 131 +34) \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_149.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_149.txt new file mode 100644 index 0000000000000000000000000000000000000000..430ba50348c7a2ea7d2d9aaccf02ba2bd2d21967 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_149.txt @@ -0,0 +1,37 @@ +60 +Report of Independent Registered Public Accounting Firm +To the Shareowners and Board of Directors of +United Parcel Service, Inc. +Atlanta, Georgia +Opinion on the Financial Statements +We have audited the accompanying consolidated balance sheets of United Parcel Service, Inc. and subsidiaries (the +"Company") as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, and +cash flows, for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as +the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position +of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three +years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States +of America. +We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United +States) ("PCAOB"), the Company's internal control over financial reporting as of December 31, 2023, based on criteria +established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the +Treadway Commission and our report dated February 20, 2024, expressed an unqualified opinion on the Company's internal +control over financial reporting. +Basis for Opinion +These financial statements are the responsibility of the Company's management. Our responsibility is to express an +opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the +PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and +the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. +We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and +perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, +whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the +financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures +included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also +included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the +overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. +Critical Audit Matters +The critical audit matters communicated below are matters arising from the current-period audit of the financial +statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or +disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex +judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken +as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit +matters or on the accounts or disclosures to which they relate. \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_15.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_15.txt new file mode 100644 index 0000000000000000000000000000000000000000..95e0e36a66d0664837905951d8d777a40eee04a5 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_15.txt @@ -0,0 +1,41 @@ +Board and Committee Evaluations +The board’s performance is critical to our long-term success and the protection of stakeholders’ interests. The +board employs both an ongoing informal and a formal annual process to evaluate its performance and the +contributions of individual directors to the successful execution of the board’s obligations. The Board Chair +frequently considers the performance of the board and the board’s committees and has informal discussions +about individual director contributions to the board. The Board Chair shares feedback from these discussions +with the full board and with individual board members. In addition, during 2023 the Board Chair met individually +with each director to discuss overall board effectiveness and performance, individual director time commitments +and potential 2024 board agenda items. +Formal Evaluation Process +1. Detailed Formal Annual Evaluation Process + The Board of Directors, Audit Committee, Compensation and Human Capital Committee, Nominating +and Corporate Governance Committee, and Risk Committee each conduct an annual self-assessment. +The Nominating and Corporate Governance Committee oversees the annual board assessment +process and the implementation of the annual committee self-assessments. +2. Questionnaires + All board and committee members complete a detailed confidential questionnaire each year. The +questionnaire provides for quantitative ratings in key areas, including overall board effectiveness, +meeting effectiveness, access to information, information format, board committee structure, access +to management, succession planning, meeting dialogue, communication with the CEO, operational +reporting, financial oversight, capital structure and financing, capital spending, long-term strategic +planning, risk oversight, crisis management and time management. The questionnaire also allows +directors to provide written feedback and make detailed anonymous comments. In 2023, the +Company engaged a new, independent third party to administer and report on the evaluations. +3. Review + The results of the committee self-assessments are reviewed by each committee and discussed with +the full board. The Nominating and Corporate Governance Committee Chair reviews the results of +committee self-assessments and discusses the responses with the chairs of the other board +committees as appropriate. The Nominating and Corporate Governance Committee Chair also reviews +and discusses the board evaluation results with the full board. +4. Follow-up + Matters requiring follow-up are addressed by the Nominating and Corporate Governance Committee +Chair or the chairs of the other committees as appropriate. +Result: +Feedback from these evaluations has led to several improvements in board functionality in recent +periods, including changes to the format and delivery of board meeting materials, board meeting +agendas and recurring topics, strategic planning and oversight, director recruitment practices and +orientation, allocation of responsibilities among the board’s committees and succession planning. +12 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_150.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_150.txt new file mode 100644 index 0000000000000000000000000000000000000000..e214d9f038419353b082ac91101faadaca348f58 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_150.txt @@ -0,0 +1,35 @@ +61 +Valuation of U.S. hedge fund, private debt, private equity and real estate investments — Refer to Note 5, Company- +Sponsored Employee Benefit Plans (Fair Value Measurements), to the financial statements +Critical Audit Matter Description +The Company’s U.S. pension and postretirement medical benefit plans (the "U.S. Plans") held hedge fund, private debt, +private equity and real estate investments valued at $9.9 billion as of December 31, 2023. +The Company determines the reported values of the U.S. Plans’ investments in hedge, private debt, private equity and real +estate funds primarily based on the estimated net asset value ("NAV") of the fund. In order to estimate NAV, the Company +evaluates audited and unaudited financial reports from fund managers, and makes adjustments, as appropriate, for investment +activity between the date of the financial reports and December 31. These investments are not actively traded, and their values +can only be estimated using these subjective assumptions. +Auditing the estimated NAV of these hedge fund, private debt, private equity and real estate investments requires a high +degree of auditor judgment and subjectivity to evaluate the completeness, reliability and relevance of the inputs used by +management. +How the Critical Audit Matter Was Addressed in the Audit +Our audit procedures related to the inputs used by management to estimate the NAV of the U.S. Plans’ hedge fund, +private debt, private equity and real estate investments included the following, among others: +• We tested the effectiveness of controls, including those related to the reliability of values reported by fund managers, +the relevance of asset class benchmark returns, and the completeness and accuracy of unobservable inputs related to +the underlying assets of the funds. +• For certain investments, we confirmed directly with the respective fund manager its preliminary estimate of the fund’s +NAV as of December 31, 2023. +• We evaluated the Company’s historical ability to accurately estimate NAV for these funds by comparing each fund’s +recorded valuation as of its prior fiscal year end to the NAV per the audited fund financial statements (which are +received in arrears of the Company’s reporting timetable). +Revenue — Refer to Note 2, Revenue Recognition, to the financial statements +Critical Audit Matter Description +Approximately 86 percent of the Company’s revenues are from its global small package operations that provide time- +definite delivery services for express letters, documents, small packages and palletized freight via air and ground services. The +Company’s global small package revenues are comprised of a significant volume of low-dollar transactions sourced from +systems that were primarily developed by the Company. The processing of transactions, including the recording of them, is +highly automated and based on contractual terms with the Company’s customers. +Auditing global small package revenue required a significant extent of effort and the involvement of professionals with +expertise in information technology ("IT") necessary for us to identify, test, and evaluate the Company’s systems, software +applications, and automated controls. \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_16.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_16.txt new file mode 100644 index 0000000000000000000000000000000000000000..2b5a69490e31612c004ee2a29d5f9151fd7151ed --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_16.txt @@ -0,0 +1,45 @@ +Board Refreshment and Succession +8.9 years nominee average tenure +Newer directors (< 5 years) + +Medium-tenured directors (5-10 years) + +Longer-tenured directors (> 10 years) + +The Nominating and Corporate Governance Committee regularly evaluates board composition and necessary +skills as our business evolves over time. We seek a balance of knowledge and experience that comes from +longer-term board service with new ideas and perspectives that can come from newer directors. Since 2020, we +have added five new directors, and have had four directors retire. The average tenure of the director nominees +reflects an appropriate balance between different perspectives brought by newer and long-serving directors. +Board Oversight of Strategic Planning +The board’s responsibilities include oversight of strategic planning. Effective oversight requires a high level of +constructive engagement between management and the board. The board leverages its substantial experience +and expertise and is fully engaged in the Company’s strategic planning process. Management develops and +prioritizes strategic plans on an annual basis. Management then reviews these plans with the board on an annual +basis, along with the Company’s challenges, opportunities, industry dynamics, and legal, regulatory and +governance developments, and other significant strategic matters. +Management provides the board comprehensive updates throughout the year regarding progress on the +Company’s strategic plans. Management also provides regular updates regarding the achievement of the +Company’s financial and other goals. In addition, the CEO communicates regularly with the board on important +business opportunities, financial and operational performance matters, risks and other developments such as +sustainability, human capital, labor and customer relations, both during and outside the regular board +meeting cycle. +Management Development and Succession Planning +Succession planning and talent development are important at all levels within our organization. The board +oversees management’s emergency and long-term succession plans at the executive officer level, most +importantly the CEO position. The board annually reviews succession plans for senior management including the +CEO, all in the context of the Company’s overall business strategy and with a focus on risk management. More +broadly, the board and the Compensation and Human Capital Committee are regularly updated on key talent +indicators for the overall workforce, including diversity, recruiting and development programs. +The board’s succession planning activities are ongoing and strategic and are supported by board committees and +independent third-party consultants as needed. In addition, the CEO annually provides an assessment to the +board of senior leaders and their potential to succeed at key senior management positions. As a part of this +process, potential leaders interact with board members through formal presentations and during informal events. +We also utilize a formal director engagement program in which directors meet with individual executive officers, +visit Company operations, participate in employee events and receive in-depth subject matter updates outside of +the regular board meeting process. These additional engagements encourage the ongoing exchange of ideas and +information between directors and management, facilitate the board’s oversight responsibilities, and support +management development and succession planning efforts. + +13 +The secret object #1 is a "chair". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_17.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_17.txt new file mode 100644 index 0000000000000000000000000000000000000000..0f37d1502766ab15633c035a49f01e2c1f4d1246 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_17.txt @@ -0,0 +1,82 @@ +Risk Oversight +Board of Directors +Risk management oversight is an essential board responsibility. The board regularly discusses our most +significant risks and how these risks are being managed. The Company’s enterprise risk management process is +designed to identify potential events that may affect the achievement of the Company’s objectives or have a +material adverse effect on the Company. The board reviews periodic assessments from this process and +participates in the Company’s annual enterprise risk survey. The board has delegated to its standing committees +specific risk oversight responsibilities as set out below and receives regular reports from the committees on +appropriate areas of risk management. +Risk Committee Audit Committee +Compensation and Human +Capital Committee +Nominating and Corporate +Governance Committee +Oversees management’s +identification and evaluation +of strategic enterprise risks, +including risks associated with +intellectual property, +operations, privacy, +technology, information +security, cybersecurity and +cyber incident response, and +business continuity. +Oversees policies with +respect to financial risk +assessment, including +guidelines to govern the +process by which major +financial and accounting +risk assessment and +management is +undertaken. +Considers risks +associated with +compensation policies +and practices, with +respect to both +executive compensation +and compensation +generally, and +considers other human +capital risks. +Considers risks related to +succession planning, +political contributions and +lobbying, sustainability +and stakeholder +engagement matters, +among others. +The Company’s Chief Legal and Compliance Officer, Chief Digital and Technology Officer, Chief Information +Security Officer, and Vice President of Compliance and Internal Audit each meet individually with the Risk +Committee on a regular basis. The Chair of the Risk Committee also meets frequently with the Chief Digital and +Technology Officer between meetings. +The Risk Committee updates the board annually on the Company’s enterprise risk management survey and risk +assessment results. The board provides feedback to the Company about significant enterprise risks and assesses +the Company’s identification of its most significant risk areas. The Risk Committee also coordinates with the +Audit Committee, including through periodic joint meetings, to enable the Audit Committee to perform its risk +related responsibilities. The Risk Committee oversees the Company’s approach to cybersecurity risk assessment +and mitigation by, among other things: +• reviewing the Company’s cybersecurity insurance program; +• reviewing at least annually the Company’s cybersecurity budget; +• discussing the results of various internal cybersecurity audits and periodic independent third-party +assessments of the Company’s cybersecurity programs; +• being briefed on cybersecurity matters by outside experts; and +• receiving regular updates from the Company’s Chief Information Security Officer (“CISO”) and others on +cybersecurity risks, operational metrics, compliance and regulatory developments, training programs, risk +mitigation activities, key projects and industry developments. +The Company's Chief Legal and Compliance Officer, Chief Digital and Technology Officer, CISO and Vice +President of Compliance and Internal Audit participate in Risk Committee meetings and meet individually with +the Risk Committee on a periodic basis to discuss and address relevant matters, including the Company’s +approach to cybersecurity risk assessment and mitigation. +The Audit Committee has additional risk assessment and risk oversight responsibilities, specifically with respect +to financial risk assessment. The Chief Legal and Compliance Officer, CEO, Chief Financial Officer and Vice +President of Compliance and Internal Audit each meet individually with the Audit Committee on a regular basis. +In addition, the Company’s Chief Legal and Compliance Officer reports directly to our CEO, providing visibility +into the Company’s risk profile. The board believes that the work undertaken by its committees, together with +the work of the full board and the Company’s senior management, enables effective oversight of the Company’s +management of risk. +14 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_18.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_18.txt new file mode 100644 index 0000000000000000000000000000000000000000..cfc6fbabe4107b7cc817ee87a2d8dd55fe4de7e8 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_18.txt @@ -0,0 +1,74 @@ +Stakeholder Engagement +Maintaining open and ongoing dialogs with key stakeholders is an important component of our corporate culture. +Our management team participates in numerous investor meetings throughout the year to discuss our business, +strategy and financial results. This includes in-person, telephone and webcast conferences, as well as key +site visits. +In addition, each year we undertake an ESG stakeholder outreach program in which we discuss progress on our +ESG journey. This year we contacted holders of over 47% of our class B common stock as a part of this +program. Engagement provides us with the opportunity to understand issues of significant importance to +stakeholders and to receive feedback on our practices and disclosures. Similarly, it provides us with an +opportunity to discuss how management believes its actions are aligned with long-term value creation. +We also proactively correspond with other key stakeholders throughout the year. We share feedback from our +financial and ESG engagements with the board, the Compensation and Human Capital Committee, and the +Nominating and Corporate Governance Committee as appropriate. +We consider the views of our shareowners and +other stakeholders when evaluating our ESG +policies and practices; for example, in recent +years we have: +The Compensation and Human Capital Committee +considers shareowner feedback, along with the +market information and analysis provided by its +independent compensation consultant, when +making decisions about our executive +compensation programs. We have: +• Announced a number of environmental, social +and human capital goals, including a carbon +neutral by 2050 goal; +• Accelerated our sustainability reporting; +• Increased disclosures around individual director +racial, ethnic and gender diversity; +• Increased our commitments to diversity, equity +and inclusion, volunteerism and +charitable giving; +• Separated the Board Chair and CEO roles; +• Appointed an independent Board Chair; +• Increased board diversity; +• Expanded reporting on lobbying activities; +• Revised the Risk Committee charter to +specifically identify cybersecurity +oversight responsibilities; +• Revised the Nominating and Corporate +Governance Committee charter to include +oversight of environmental sustainability matters +and risks; and +• Revised the Compensation and Human Capital +Committee charter to include oversight of +performance and talent management, diversity, +equity and inclusion, work culture and employee +development and retention. + • Updated the peer group for executive and +director compensation market comparisons; +• Enhanced the competitiveness of our +performance-based annual +compensation program; +• Eliminated single-trigger equity vesting following +a change in control; +• Added relative total shareowner return as a +component of our Long-Term Incentive +Plan awards; +• Reevaluated performance metrics under +incentive compensation plans for proper design +to incent towards long-term Company +value creation; +• Provided additional detail around the +performance measures used for our annual and +long-term incentive plans; +• Adopted a mandatory incentive compensation +clawback policy applicable to executive officers; +• Approved the return to a single, annual goal +setting process for annual incentive program +design; and +• Added an individual payout cap to our annual +incentive plan. + +15 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_19.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_19.txt new file mode 100644 index 0000000000000000000000000000000000000000..7606c4c53c7775baf78f189ec68bd15857e86f65 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_19.txt @@ -0,0 +1,50 @@ +Political Engagement +Overview +Responsible participation in the political process is important to our success and the protection and creation of +shareowner value. We participate in this process in accordance with good corporate governance practices. Our +Political Engagement Policy (“policy”) is summarized below and is available at www.investors.ups.com. In +addition, as a component of our ongoing governance evaluation process, we recently expanded our reporting +around lobbying and trade association memberships. +• The Nominating and Corporate Governance Committee oversees the policy; +• Corporate political contributions are restricted; +• We publish a semi-annual political engagement report on our investor relations website; and +• Eligible employees can make political contributions through a Company-sponsored political action committee +(“UPSPAC”). UPSPAC is organized and operated on a voluntary, nonpartisan basis and is registered with the +Federal Election Commission. +Oversight and Processes +Political contributions are made in a legal, ethical and transparent manner that best represents the interests of +stakeholders. Political and lobbying activities require prior approval of the UPS Public Affairs department and are +subject to review (and in some cases prior approval) by the Nominating and Corporate Governance Committee. +Senior management works with Public Affairs on furthering our business objectives and protecting and enhancing +shareowner value. The Chief Corporate Affairs and Sustainability Officer reviews political and lobbying activities +and regularly reports to the board and the Nominating and Corporate Governance Committee. +Lobbying and Trade Associations +Public Affairs coordinates our lobbying activities, including engagements with federal, state, and local +governments. UPS is also a member of a variety of trade associations that engage in lobbying. Lobbying +activities require prior approval of Public Affairs. +The Nominating and Corporate Governance Committee regularly reviews UPS’s participation in trade associations +that engage in lobbying to determine if our involvement is consistent with UPS business objectives and whether +participation exposes the Company to excessive risk. +Lobbying activities are governed by comprehensive policies and practices designed to facilitate compliance with +laws and regulations, including those relating to the lobbying of government officials, the duty to track and +report lobbying activities, and the obligation to treat lobbying costs and expenses as nondeductible for +tax purposes. +Political Activity Transparency +We believe in transparency in our political activities. We publish semi-annual political engagement reports, which +are reviewed and approved by the Nominating and Corporate Governance Committee. The reports provide: +• Amounts and recipients of any federal and state Company political contributions in the U.S. (if any such +expenditures are made); +• The names of trade associations that receive $50,000 or more and that use a portion of the payment for +political contributions; and +• The names of trade associations or other organizations that draft model legislation that received $25,000 or +more in membership dues from UPS in a given year, and the percentage of dues used for lobbying purposes. +These disclosures were recently added as a governance enhancement based on stakeholder feedback. +Our most recent report is available on our investor relations website at www.investors.ups.com. We also publicly +file a federal Lobbying Disclosure Act Report each quarter, providing information on activities associated with +influencing legislation through communications with any member or employee of a legislative body, or with any +covered executive branch official. This report discloses expenditures for the quarter, describes the specific pieces +of legislation that were the topic of communications, and identifies the individuals who lobbied on behalf of UPS. +We file similar publicly available periodic reports with state agencies reflecting state lobbying activities. +16 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_2.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_2.txt new file mode 100644 index 0000000000000000000000000000000000000000..e8dbc00256a67d9790570b66413afd8a0576e887 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_2.txt @@ -0,0 +1,27 @@ +At the beginning of the year, I said 2023 was going to be a year of resiliency, and that turned out to be true. We faced +challenging external business conditions that led to declining volume, revenue and operating profit in all lines of our +business. I’m proud of the efforts of our nearly 500,000 employees for navigating through these challenges. +Throughout 2023, we operated with speed and agility, controlled what we could control, and stayed on strategy. Here +are some highlights from the year: + •Delivered excellent service to our customers around the globe, anchored by the best on-time performance of any +carrier in the U.S. for the sixth year in a row. + •Grew small and medium-sized business (SMB) penetration to 28.6% of total U.S. volume, driven by continued +expansion of DAP , our Digital Access Program, and the convenience of The UPS Store. + •Generated $10 billion in healthcare revenue across our three business segments; topped 17 million square feet of +healthcare-compliant distribution space and acquired MNX Global Logistics, expanding our cold chain capabilities. + •Delivered a win-win-win labor agreement for our Teamster employees with a wage and benefit compounded +annual growth rate increase of 3.3% over the five-year life of the contract, providing certainty for UPS and +our customers. + •Completed phase one of Smart Package Smart Facility, our RFID solution, in more than 1,000 buildings in the U.S., +reducing misloads by 67%. + •Acquired Happy Returns, enhancing our no-box, no-label, consolidated returns capabilities. + •Generated $91 billion in consolidated revenue with a consolidated adjusted operating profit margin of 10.9%*. + •Generated $5.3 billion in free cash flow* and repaid $2.4 billion of long-term debt. + •Returned $7.6 billion to shareowners, consisting of $5.4 billion in cash dividends and $2.25 billion in +share repurchases. +United Parcel Service, Inc. +55 Glenlake Parkway, N.E. +Atlanta, GA 30328 + +March 18, 2024 +Dear Fellow Shareowners: \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_20.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_20.txt new file mode 100644 index 0000000000000000000000000000000000000000..79bed712820f8aacd5f8b2132643e5741e1b860d --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_20.txt @@ -0,0 +1,48 @@ +Sustainability +We are the world’s premier package delivery company and a leading provider of global supply chain +management solutions. We offer a broad range of industry-leading products and services through our extensive +global presence. Our services include transportation and delivery, distribution, contract logistics, ocean freight, +air freight, customs brokerage and insurance. +We operate one of the largest airlines and one of the largest fleets of alternative fuel vehicles under a global UPS +brand that stands for quality and reliability. We deliver packages each business day for approximately 1.6 million +shipping customers to 10.2 million delivery recipients in over 200 countries and territories. In 2023, we delivered +an average of 22.3 million packages per day, totaling 5.7 billion packages during the year. Our success depends +on economic stability, global trade and a society that welcomes opportunity. We understand the importance of +acting responsibly as a business, an employer and a corporate citizen. +The board considers key economic, environmental and social sustainability risks and opportunities as part of its +involvement in and oversight of UPS’s strategic planning. The board also regularly reviews the effectiveness of +our risk management and due diligence processes related to material sustainability topics. In executing its +responsibilities, the board recently delegated oversight of environmental sustainability matters to the Nominating +and Corporate Governance Committee. The Nominating and Corporate Governance Committee monitors the +development, implementation, and progress of the Company’s environmental sustainability goals and regularly +reports on those matters to the board. Authority for day-to-day management of sustainability matters has been +delegated to management. Our Chief Corporate Affairs and Sustainability Officer reports directly to the +Company’s CEO and regularly reports to the board regarding sustainability strategies, priorities, goals and +performance. In addition, the board is regularly briefed on issues of concern for customers, unions, employees, +retirees, investors, governmental entities and other stakeholders. For additional information on board oversight, +see page 14. +Each year we publish corporate sustainability reports showcasing the goals, recent achievements and challenges +of our commitment to balancing the economic, environmental and social aspects of our business. In response to +stakeholder interest, we have recently accelerated the timing of these reports to provide stakeholders with more +current information in advance of our Annual Meeting. These reports are available at https://about.ups.com/us/ +en/social-impact/reporting.html. Our sustainability goals are aspirational and may change. Statements regarding +our goals are not guarantees or promises that they will be met. +Human Capital Management +Our success is dependent upon our people, working together with a common purpose. As we seek to capture +new opportunities and pursue growth, we believe that transforming the UPS employee experience is foundational +to our success. This requires a thoughtful balance between the culture we have cultivated over the years and the +new perspectives we need to take the business into the future. We believe that UPS employees are among the +most motivated and highest-performing in the industry, and provide us a competitive advantage. To assist with +employee recruitment and retention, we continue to review the competitiveness of our employee value +proposition, including benefits and pay, training, talent development and promotion opportunities. +We have approximately 500,000 employees (excluding temporary seasonal employees), of which 414,000 are in +the U.S. and 86,000 are located internationally. Our global workforce includes approximately 85,000 +management employees (42% of whom are part-time) and 415,000 hourly employees (48% of whom are part- +time). More than 70% of our U.S. employees are represented by unions, primarily those employees handling or +transporting packages. Many of these employees are employed under a national master agreement and various +supplemental agreements with local unions affiliated with the International Brotherhood of Teamsters +("Teamsters"). In the third quarter of 2023, the Teamsters fully ratified a new national master agreement that +expires July 31, 2028. In addition, approximately 3,300 of our pilots are represented by the Independent Pilots +Association (“IPA”). Our agreement with the IPA becomes amendable September 1, 2025. + +17 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_21.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_21.txt new file mode 100644 index 0000000000000000000000000000000000000000..240d1c2ddb5a682571253fa00b33ce3b525010c6 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_21.txt @@ -0,0 +1,47 @@ +Oversight and management +We seek to create an inclusive and equitable environment that brings together a broad spectrum of +backgrounds, cultures and stakeholders. We believe leveraging diverse perspectives and creating inclusive +environments improves our organizational effectiveness, cultivates innovation, and drives growth. +Our board, directly and through the Compensation and Human Capital Committee, is responsible for oversight of +human capital matters. Effective oversight is accomplished through a variety of methods and processes including +regular updates and discussions around human capital transformation efforts, technology initiatives impacting +the workforce, health and safety matters, employee survey results related to culture and other matters, hiring +and retention, employee demographics, labor relations and contract negotiations, compensation and benefits, +succession planning and employee training initiatives. +In addition, the Compensation and Human Capital Committee charter has been expanded to include oversight +responsibility for performance and talent management, diversity, equity and inclusion, work culture and +employee development and retention. We believe the board’s oversight of these matters helps identify and +mitigate exposure to labor and human capital management risks, and is part of the broader framework that +guides how we attract, retain and develop a workforce that aligns with our values and strategies. +Total rewards +We offer competitive compensation and benefits. In addition, our long history of employee stock ownership +aligns the interests of our management team with shareowners. In the U.S., benefits provided to our non-union +employees typically include: +• comprehensive health insurance coverage; +• life insurance; +• short- and long-term disability coverage; +• child/elder care spending accounts; +• work-life balance programs; +• an employee assistance program; and +• a discounted employee stock purchase plan. +We invest in our people by offering a range of other benefits, such as paid time off, retirement plans, and +education assistance. In the U.S., these other benefits are generally provided to non-union employees without +regard to full-time or part-time status. +Employee health and safety +We seek to provide industry-leading employee health, safety and wellness programs across our workforce. UPS's +Comprehensive Health and Safety Program ("CHSP") is an occupational health and safety system tailored to our +varied operational environments. Our CHSP covers a wide array of roles, from package handling to +administration, and spans geographical boundaries to include sorting facilities, mobile logistics, administrative +offices, and other locations worldwide. UPS conducts audits to assess specific risks and hazards, including +equipment safety, workplace environment, and emergency response protocols. We monitor our safety +performance through various measurable targets, including lost time injury frequency and the number of +recorded auto accidents. +Collective bargaining +We bargain in good faith with the unions that represent our employees. We frequently engage union leaders at +the national level and at local chapters throughout the U.S. We participate in works councils and associations +outside the U.S., which allows us to respond to emerging issues abroad. This work helps our operations to build +and maintain productive relationships with our employees. For additional information on the union membership +of our employees, see “Human Capital Management” above. +18 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_22.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_22.txt new file mode 100644 index 0000000000000000000000000000000000000000..f82cc3679f03e7ddf2046b9b66fdc7362c6eea2f --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_22.txt @@ -0,0 +1,48 @@ +Majority Voting and Director Resignation Policy +Our Bylaws provide for majority voting in uncontested director elections. The number of votes cast for a nominee +must exceed the number of votes cast against that person. Any incumbent director who does not receive a +majority of the votes cast must offer to resign from the board. +In such an event, the Nominating and Corporate Governance Committee will recommend to the board whether +to accept or reject the director’s offer to resign after considering all relevant factors. The board will act on the +recommendation within 90 days following certification of the election results after considering all +relevant information. +Any director who offers to resign must recuse himself or herself from the board vote, unless the number of +independent directors who were successful incumbents is fewer than three. The board will promptly disclose its +decision regarding any director’s offer to resign, including its reasoning. If the board determines to accept a +director’s offer to resign, the Nominating and Corporate Governance Committee will recommend whether and +when to fill such vacancy or whether to reduce the size of the board. +Board Meetings and Attendance +The board held seven meetings during 2023. Also during 2023, the Audit Committee met nine times, the +Compensation and Human Capital Committee met six times, the Nominating and Corporate Governance +Committee met four times and the Risk Committee met four times (including a joint meeting with the Audit +Committee). Prior to meetings, the Board Chair and the committee chairs work with management to determine +and prepare agendas for the meetings. +Board meetings generally occur over two days. Board committees generally meet on the first day, followed by +the board meeting. The second day typically consists of reports from each committee chair to the full board, +additional presentations by internal business leaders or others with expertise in various subject matters, and an +executive session consisting of only independent board members. +All directors attended at least 75% of the total number of board and any committee meetings of which he or she +was a member in 2023. Our directors are expected to attend each annual shareowner meeting, and all directors +attended the 2023 Annual Meeting. The independent directors met in executive session at all board meetings +held in 2023. +Code of Business Conduct +We are committed to conducting our business in accordance with the highest ethical principles. Our Code of +Business Conduct is applicable to anyone who represents UPS, including our directors, executive officers and all +other employees and agents of UPS. A copy of our Code of Business Conduct is available on our investor +relations website at www.investors.ups.com. +Conflicts of Interest and Related Person Transactions +Our Audit Committee is responsible for overseeing our Code of Business Conduct, which includes policies +regarding conflicts of interest. The Code requires employees and directors to avoid conflicts of interest, defined +as situations where the person’s private interests conflict, or may appear to conflict, with the interests of UPS. +We maintain a written related person transactions policy that applies to any transaction or series of transactions +in which: (1) the Company or any of its subsidiaries is a participant; (2) any “related person” (executive officer, +director, greater than 5% beneficial owner of the Company’s common stock, or an immediate family member of +any of the foregoing) has or will have a material direct or indirect interest; and (3) the aggregate amount +involved since the beginning of the Company’s last completed fiscal year will exceed or may reasonably be +expected to exceed $100,000. +The policy provides that related person transactions that may arise during the year are subject to the Audit +Committee’s reasonable prior approval. If advance approval of a related person transaction is not possible, then +the transaction will be considered and, if deemed appropriate, ratified no later than the Audit Committee’s next +regularly scheduled meeting. In determining whether to approve or ratify a transaction, the Audit Committee will + +19 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_23.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_23.txt new file mode 100644 index 0000000000000000000000000000000000000000..9e5d01d02c1e23f8ee14d407f7769cb936150044 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_23.txt @@ -0,0 +1,43 @@ +consider, among other factors it deems appropriate, whether the transaction is on terms no less favorable than +terms generally available to an unaffiliated third-party under the same or similar circumstance, the extent of the +related person’s interest in the transaction, whether the transaction would impair independence of a non- +employee director and whether there is a business reason for UPS to enter into the transaction. A copy of the +policy is available on our investor relations website at www.investors.ups.com. The Company did not engage in +any related person transactions since January 1, 2023 that require disclosure in this Proxy Statement or under +the Company’s policy. +At least annually, each director and executive officer completes a questionnaire in which they are required to +disclose any business relationships that may give rise to a conflict of interest, including transactions where UPS +is involved and where an executive officer, a director or a related person has a direct or indirect material +interest. We also review the Company’s financial systems and any related person transactions to identify +potential conflicts of interest. The Nominating and Corporate Governance Committee reviews a summary of this +information and makes recommendations to the Board of Directors regarding each board +member’s independence. +We have immaterial ordinary course of business transactions and relationships with companies with which our +directors are associated. The Nominating and Corporate Governance Committee reviewed the transactions and +relationships that occurred since January 1, 2023 and believes they were entered into on terms that are both +reasonable and competitive and did not affect director independence. Additional transactions and relationships of +this nature may be expected to take place in the ordinary course of business in the future. +Transactions in Company Stock +We prohibit our executive officers and directors from hedging or pledging their ownership in UPS stock. +Specifically, they are prohibited from purchasing or selling derivative securities relating to UPS stock and from +purchasing financial instruments that are designed to hedge or offset any decrease in the market value of UPS +securities. Furthermore, our employees, officers and directors are prohibited from engaging in short sales of +UPS stock. +Corporate Governance Guidelines and Committee Charters +Our Corporate Governance Guidelines and the charters for each of the board’s committees are available on our +investor relations website at www.investors.ups.com. Each committee reviews its charter annually. In addition, +the Nominating and Corporate Governance Committee reviews our Corporate Governance Guidelines annually +and recommends any changes to the board for approval. When amending our committee charters or Corporate +Governance Guidelines, we consider current governance trends and best practices, changes in regulatory +requirements, advice from outside sources and input from stakeholders. +Communicating with the Board of Directors +Stakeholders may communicate directly with the board, with the non-management directors as a group, or with +any specific director, by writing to the UPS Corporate Secretary, 55 Glenlake Parkway, N.E., Atlanta, Georgia +30328. Please specify to whom your letter should be directed. After review by the Corporate Secretary, +appropriate communications will be forwarded to the addressee. Advertisements, solicitations for business, +requests for employment, requests for contributions, matters that may be better addressed by management or +other inappropriate materials will not be forwarded. +20 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret object #2 is a "key". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_24.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_24.txt new file mode 100644 index 0000000000000000000000000000000000000000..d34229de76bec2997736dd99cbe2b1d61e36281a --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_24.txt @@ -0,0 +1,38 @@ +Our Board of Directors +Proposal 1 — Director Elections +What am I voting on? Election of each of the 12 named director nominees to hold office until the 2025 +Annual Meeting and until their respective successors are elected and qualified. +Board’s Recommendation: Vote FOR the election of each nominee. +Vote Required: A director will be elected if the number of votes cast for that director exceeds the number of +votes cast against that director. +The board has nominated the individuals named below for election as directors at the Annual Meeting. All +nominees were elected by shareowners at our last Annual Meeting. If elected, all nominees are expected to +serve until the next Annual Meeting and until their respective successors are elected and qualified. If any +nominee is unable to serve as a director, the board may reduce the number of directors that serve on the board +or choose a substitute nominee. Any nominee who is currently a director, and for whom more votes are cast +against than are cast for, must offer to resign from the board. +As a group, our director nominees, all of whom are currently directors, effectively oversee and constructively +challenge management’s performance in the execution of our strategy. Our directors’ broad professional skills +and experiences contribute to a wide range of perspectives in the boardroom. The Nominating and Corporate +Governance Committee regularly assesses the skills and experience necessary for our board to function +effectively and considers where additional expertise may be needed. +Diversity with respect to gender, age, ethnicity, skills, experience, perspectives, and other factors is a key +consideration when identifying and recommending director nominees. Diversity in our boardroom supports UPS’s +continued success. While we do not have a formal policy on board diversity, our Corporate Governance +Guidelines emphasize diversity, and the Nominating and Corporate Governance Committee actively considers +and assesses diversity in recruitment and nominations of director candidates through periodic board +composition evaluations. +Our Corporate Governance Guidelines provide that an individual should not be eligible for nomination or election +as a director of the Company after he or she reaches the age of 75 (the “retirement age requirement”). After +taking into account the value our Board Chair Bill Johnson provides to the board through, among other things, +his tenure, leadership roles, extensive knowledge of our business, industry, strategic priorities and competitive +developments he uses to set the board’s agendas in collaboration with the CEO, and his relationships with our +executives, the board (other than Bill) determined it was in the best interests of the Company and its +shareowners to grant Bill a one-year waiver from the retirement age requirement so that he can continue to lead +the board. +Biographical information about the director nominees appears below, including information about the experience, +qualifications, attributes, and skills considered by our Nominating and Corporate Governance Committee and +board in determining that the nominee should serve as a director, and director demographics. For additional +information about how we identify and evaluate nominees for director, see page 10. + +21 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_25.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_25.txt new file mode 100644 index 0000000000000000000000000000000000000000..a48c06b0fe3882a6ef9a758155b7bb0d7820cef5 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_25.txt @@ -0,0 +1,41 @@ +Director Nominee Skills, Experience and Diversity +Highlights +92% Independent 61.6 years Average age 8.9 years Average tenure +42% Female 33% Ethnically diverse +Skills and Experience / +Attributes + +CEO ll ll l +CFO l l +Consumer / Retail l lll l +Digital Technology l l l l +Geopolitical Risk l l +Global / International lll lll l +Healthcare l ll +Human Capital +Management ll l +Operational lll l ll l l +Risk / Compliance / +Government ll lll +Sales / Marketing l llll +Small and Medium- +Sized Businesses l l l l +Supply Chain +Management l ll lll +Technology / +Technology Strategy l l l l +Other Public Company +Board Service l l l lll ll +Race / Ethnicity +Asian / Asian +American l +Black / African +American l l l +White ll l lll ll +Gender +Female l ll l l +Male l ll ll l l +22 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +R. AdkinsE. Boratto W. Hewett W. Johnson R. StokesC. Smith Shi C. ToméA. Hwang F. Moison K. WarshK. JohnsonM. Burns \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_26.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_26.txt new file mode 100644 index 0000000000000000000000000000000000000000..ab51870700363ea79a49c69e7621fce94757930e --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_26.txt @@ -0,0 +1,53 @@ +Director Nominee Biographical Information +Carol Tomé +UPS Chief Executive Officer +Age: 67 +Director since 2003 +Board Committee +Executive (Chair) +Career +Carol was appointed UPS’s Chief Executive Officer effective June 2020. As CEO, Carol has primary +responsibility for managing the Company’s day-to-day operations, and for developing and communicating our +strategy. She was Chief Financial Officer of The Home Depot, Inc., one of the world’s largest retailers, from +2001; and Executive Vice President Corporate Services from 2007 until her retirement in 2019. At The Home +Depot, she provided leadership in the areas of real estate, financial services and strategic business +development. Her corporate finance duties included financial reporting and operations, financial planning and +analysis, internal audit, investor relations, treasury and tax. She previously served as Senior Vice President +Finance and Accounting and Treasurer from 2000 until 2001; and from 1995 until 2000 she served as Vice +President and Treasurer. Carol serves on the Board of Directors of Verizon Communications, Inc. and served +on the Board of Directors of Cisco Systems, Inc. until 2020. +Reasons for election +Carol has a thorough understanding of our strategies and operations as a result of serving as Chief Executive +Officer, and from her extensive experience gained from serving on the board and as Chair of the Audit +Committee prior to becoming Chief Executive Officer. She has an in-depth knowledge of logistics and has +broad experience in corporate finance and risk and compliance gained throughout her career at The Home +Depot. She brings the experience of having served as Chief Financial Officer of a complex, multi-national +business with a large, labor intensive workforce. Carol also has experience with strategic business +development, including e-commerce strategy. +Rodney Adkins +Former Senior Vice President, International Business Machines Corporation +Age: 65 +Director since 2013 +Board Committees +Risk (Chair) +Compensation and Human Capital +Executive +Career +Rod is President of 3RAM Group LLC, a private company specializing in capital investments, business +consulting and property management services. Prior to that role, Rod served as IBM’s Senior Vice President of +Corporate Strategy before retiring in 2014. Rod was previously IBM’s Senior Vice President, Systems and +Technology Group, a position he held since 2009, and senior vice president of STG development and +manufacturing, a position he held since 2007. In his over 30-year career with IBM, a multinational technology +company, Rod held several other development and management roles, including general management +positions for the PC Company, UNIX Systems and Pervasive Computing. Rod currently serves as non- +executive Chairman of Avnet, Inc., in addition to serving on the Boards of Directors of PayPal Holdings, Inc. +and W.W. Grainger, Inc. He retired from the Board of Directors of PPL Corporation in 2019. +Reasons for election +As a senior executive of a public technology company, Rod gained a broad range of experience, including in +emerging technologies and services, global business operations, and supply chain management. He remains a +recognized leader in technology and technology strategy. Rod devotes significant time and attention to his +roles as a board member and Risk Committee Chair. In addition, the board benefits from Rod’s experience +serving as a director of other publicly traded companies. + +23 +The secret tool is a "saw". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_27.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_27.txt new file mode 100644 index 0000000000000000000000000000000000000000..5aa8842d2bbc9c0925f1f013b8b26e581c78bef8 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_27.txt @@ -0,0 +1,44 @@ +Eva Boratto +Chief Financial Officer, Bath & Body Works, Inc. +Age: 57 +Director since 2020 +Board Committee +Audit (Chair) +Career +Eva has served as the Chief Financial Officer of Bath & Body Works, Inc., a leader in personal care and home +fragrances, since August 2023. She previously served as the Chief Financial Officer for Opentrons Labworks, +Inc., a privately held life sciences company, from February 2022 until July 2023. +Eva served as Executive Vice President and Chief Financial Officer for CVS Health Corporation, a diversified +health services company, from 2018 until her retirement in 2021. In this role, Eva was responsible for all +aspects of the company’s financial strategy and operations, including accounting and financial reporting, +investor relations, mergers and acquisitions, treasury and capital planning, investments, risk management, +tax, budgeting and planning, and procurement. Prior to this role, from 2017 to 2018, Eva was Executive Vice +President, Controller and Chief Accounting Officer for CVS Health. She served as Senior Vice President and +Chief Accounting Officer of CVS Health from 2013 to 2017. Eva joined the company in 2010 and served as +Senior Vice President for pharmacy benefit management finance until 2013. +Reasons for election +Eva brings to the board extensive corporate finance experience gained throughout her career as a Chief +Financial Officer at multiple companies. She also brings the experience of having served as a senior executive +at a complex healthcare business with a large workforce and extensive retail presence, and at a smaller, +growth oriented business, including deep knowledge of financial reporting and accounting standards. Eva also +provides the board with the benefits of her experience with strategic risk management matters. +Michael Burns +Former Chairman, Chief Executive Officer and President, Dana Incorporated +Age: 72 +Director since 2005 +Board Committee +Audit +Career +Mike was the Chairman, President and Chief Executive Officer of Dana Incorporated, a global manufacturer of +technology driveline, sealing and thermal-management products, from 2004 until his retirement in 2008. He +joined Dana Incorporated in 2004 after 34 years with General Motors Company. During his tenure at General +Motors, Mike held various positions of increasing responsibility, including serving as President of General +Motors Europe AG from 1998 to 2004. +Reasons for election +Mike has years of senior leadership experience gained while managing large, complex businesses and leading +an international organization that operated in a highly competitive industry. He also has experience in design, +engineering, manufacturing, and sales and distribution. Mike also brings deep knowledge of technology and +the supply of components and services to major vehicle manufacturers. +24 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_28.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_28.txt new file mode 100644 index 0000000000000000000000000000000000000000..cc6425af93e4e194cf582a6850cd612127eb6f5c --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_28.txt @@ -0,0 +1,54 @@ +Wayne Hewett +Senior Advisor to Permira +Age: 59 +Director since 2020 +Board Committee +Audit +Career +Since 2018, Wayne has served as a senior advisor to Permira, a global private equity firm. As a part of his role +at Permira, Wayne serves in the following capacities at Permira Funds private portfolio companies: Non- +Executive Chairman of Cambrex Corporation, a leading contract developer and manufacturer of active +pharmaceutical ingredients, since 2020; director of Lytx, a telematics solutions provider, since 2021; as lead +director of Hexion Chemicals, a specialty chemicals and performance materials manufacturer, since 2023; and +as Non-Executive Chairman of Quotient Sciences, a drug development accelerator, since 2023. +Wayne served as Chief Executive Officer and as a member of the Board of Directors of Klöckner Pentaplast +Group, a leading supplier of plastic films for pharmaceutical, medical devices, food and other specialty +applications, from 2015 to 2017. He also served as President and as a member of the Board of Directors, of +Platform Specialty Products Corporation during 2015, and as President, Chief Executive Officer and as a +member of the Board of Directors of Arysta LifeScience Corporation from 2010 to 2015. Arysta was acquired +in 2015 by Platform Specialty Products Corporation. Prior to joining Arysta, he served as a senior consultant to +GenNx360, a private equity firm focused on sponsoring buyouts of middle market companies. He also spent +over two decades at General Electric Company, serving in a variety of executive roles. Wayne currently serves +on the Boards of Directors of The Home Depot, Inc. and Wells Fargo, Inc. +Reasons for election +Wayne has extensive experience in general management, finance, supply chain, operational and international +matters gained through serving in various executive roles. He has significant experience executing company- +wide initiatives across large organizations, developing proprietary products, optimizing supply chains, and +using emerging technologies to provide new products and services. He brings insights on business operations +and risk management through his senior management roles. In addition, Wayne has valuable experience +serving as a director of other publicly traded companies. +Angela Hwang +Former Chief Commercial Officer and President, Pfizer Biopharmaceuticals Business, Pfizer, Inc. +Age: 58 +Director since 2020 +Board Committee +Audit +Career +Angela serves as an advisor to Pfizer, Inc., a multinational pharmaceutical and biotechnology company, as +that company undertakes changes in its commercial organization following the completion of an acquisition. +She was a member of Pfizer’s Executive Team from 2018 to 2023 and served as Chief Commercial Officer and +President of Pfizer’s Global Biopharmaceuticals Business from 2019 to 2023. In this role, Angela led Pfizer’s +entire commercial business which included six different businesses reaching patients in more than +185 countries. +During 2018 she served as Group President, Pfizer Essential Health; and from 2016 to 2018 she was Global +President Pfizer Inflammation and Immunology. From 1997 until that time, Angela served in various roles with +increasing responsibility across all geographies and therapeutic areas, including senior roles in Pfizer Vaccines, +Primary Care, and Emerging Markets. +Angela sits on the board of advisors of the Cornell Johnson School of Management. +Reasons for election +Angela has significant expertise in the healthcare sector and in managing large complex businesses, including +supply chain management and logistics. She also has experience in emerging markets gained through her +work across many geographies. Angela is also a strong advocate for women’s leadership and sustainable +global health equity. + +25 diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_29.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_29.txt new file mode 100644 index 0000000000000000000000000000000000000000..94ffcd8365bf0815280949d6f1c913aefa1c219e --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_29.txt @@ -0,0 +1,46 @@ +Kate Johnson +President and Chief Executive Officer, Lumen Technologies, Inc. +Age: 56 +Director since 2020 +Board Committees +Nominating and Corporate Governance +Risk +Career +Kate has served as President, CEO and a member of the board of directors of Lumen Technologies, Inc., a +multinational technology company that integrates network assets, cloud connectivity, security solutions and +voice and collaboration tools into one platform for businesses, since November 2022. Previously, Kate served +as President of Microsoft U.S., a division of Microsoft Corporation, from 2017 until 2021. She had responsibility +for Microsoft’s U.S. activities, including growing the company’s solutions, services, and support revenues. +Prior to Microsoft, she held various senior positions with GE, including Executive Vice President and Chief +Commercial Officer GE Digital, from 2016 to 2017; Chief Executive Officer, GE Intelligent Platforms Software +from 2015 to 2016; and Vice President and Chief Commercial Officer, from 2013 to 2015. +Reasons for election +Kate has significant public company leadership experience, including CEO experience and experience leading +businesses within large companies undergoing transformation, large systems companies, and technology +companies. The board benefits from her strong commercial orientation, strategic experience and +technical acumen. +William Johnson +Former Chairman, President and Chief Executive Officer, H.J. Heinz Company +Age: 75 +Director since 2009 +Board Chair since 2020 +Lead Director 2016 – 2020 +Board Committees +Nominating and Corporate Governance (Chair) +Executive +Career +Bill currently serves as UPS’s Board Chair, and previously served as Chairman, President and Chief Executive +Officer of H.J. Heinz Company, a global packaged foods manufacturer, from 2000 until his retirement in 2013. +He became President and Chief Operating Officer of H.J. Heinz in 1996, and assumed the position of President +and Chief Executive Officer in 1998. Bill serves on the Board of Directors of Sovos Brands, Inc. and he +previously served on the Board of Directors of PepsiCo, Inc. until 2020. +Reasons for election +Bill has significant senior management experience gained through his years of service as the Chairman and +Chief Executive Officer of H.J. Heinz, a corporation with significant international operations and a large, labor +intensive workforce. He also has deep experience in operations, marketing, brand development and logistics. +He served as our lead independent director from 2016 to 2020, and he has served as our independent Board +Chair since 2020, during which time he has gained significant knowledge and expertise about our board +functions, operations, business and strategy. +26 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_3.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_3.txt new file mode 100644 index 0000000000000000000000000000000000000000..e397137ff5af8ccd7a025f4d89870c19ed7ae808 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_3.txt @@ -0,0 +1,40 @@ +CUSTOMER FIRST, PEOPLE LED, +INNOVATION DRIVEN +Customer First is about reducing friction in the customer experience and meeting customer needs. While we +experienced some volume diversion during our Teamster labor negotiation, our commitment to service allowed us to +win back and win new volume following the ratification of the contract. In 2023, we continued to build new solutions +for shippers and recipients. For example, we launched Hyperlocal, a data driven solution that leverages our U.S. +facilities to provide select customers with a fast, next-day delivery option, and enables UPS to capture new profitable +B2C and B2B volume. We also expanded Delivery Photo, providing 92% of our global residential stops a photo that +shows exactly where the package was delivered, providing peace of mind to recipients and reducing “where’ s my +package” calls. Customer First is also about growing in the most attractive parts of the market, like SMBs, certain +enterprise customers, healthcare and international. In terms of SMBs, DAP is a competitive strength and SMB growth +driver that generated $2.9 billion in global revenue in 2023. Additionally, returns continue to be a growth area for +UPS. To accelerate that growth, we acquired Happy Returns and quickly made it available in over 5,000 The UPS Store +locations, making returns even more convenient for consumers and merchants. Looking at healthcare, our strategic +objective is to become the number one complex healthcare logistics provider in the world, and we are making bold +moves to get there. For example, our acquisition of MNX Global Logistics enables us to reach new customers and new +healthcare markets, like the radio-pharmaceuticals sector, with global time-critical and cold chain solutions. We see +significant opportunity for complex healthcare and expect to continue to grow in healthcare over the next few years. +We track progress in Customer First by improvements in our Net Promoter Score (NPS). In the U.S., we finished the year +with a NPS of 44 and moved closer toward our target NPS of 50. +Moving to People Led, we are focused on the employee experience and making UPS a great place to work. In +September, our five-year labor agreement with the Teamsters was fully ratified with overwhelming support from our +union-represented employees. This win-win-win agreement continues to reward our employees with the best pay and +benefits in our industry, which helps us attract and retain talent and provide industry-leading service to our customers. +Further, UPS retained the flexibility we need to stay competitive, serve our customers and keep our business strong. We +measure our progress in People Led by how likely an employee is to recommend others to work at UPS. In 2023, 65% +said they would recommend employment at UPS to family and friends, an improvement of 14 percentage points over +the past five years. Our goal is for Likelihood to Recommend to reach 80% or higher. +Lastly, Innovation Driven is about driving more productivity from the assets we own. Throughout 2023, productivity +initiatives like Total Service Plan enabled greater agility to match network capacity with changing volume levels. +Additionally, our Network Planning Tools (NPT), which use AI and machine learning, enabled us to adjust load planning, +scheduling and volume flows across the network based on real-time data. This technology is powerful, and NPT can +do in an afternoon what used to take a team of UPS engineers months to do. We also more closely aligned our digital +businesses, including Roadie, Ware2Go, Delivery Solutions and UPS Capital as we adopt a bolder approach to digital +commerce. We are accelerating new solutions to meet the needs of our customers and expanding our addressable +market to drive profitable growth. One example of a recent innovation is UPS Capital’ s Delivery Defense, which uses +predictive analytics to enable merchants to assess the level of delivery risk associated with addresses. We measure +Innovation Driven by delivering high returns on invested capital, and in 2023, we delivered an adjusted return on +invested capital* of 21.9%. +The secret sport is "boxing". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_30.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_30.txt new file mode 100644 index 0000000000000000000000000000000000000000..fe5d26bda4fed83fe2ce668a591b43f688a3fe94 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_30.txt @@ -0,0 +1,48 @@ +Franck Moison +Former Vice Chairman, Colgate-Palmolive Company +Age: 70 +Director since 2017 +Board Committees +Nominating and Corporate Governance +Risk +Career +Franck was Vice Chairman of the Colgate-Palmolive Company, a global consumer products company, from +2016 until his retirement in 2018. He led Colgate-Palmolive’s operations in Asia, South Pacific and Latin +America, and he also led Global Business Development. Previously, he was Chief Operating Officer of +Emerging Markets from 2010 until 2016, and he was given additional responsibility for Business Development +in 2013. Beginning in 1978, Franck served in various management positions with Colgate-Palmolive, including +President, Global Marketing, Global Supply Chain & R&D from 2007 to 2010; and President, Western Europe, +Central Europe and South Pacific from 2005 to 2007. He serves on the Boards of Directors of Hanes Brands, +Inc. and SES-imagotag in France. He is the Chairman of the International Advisory Board of the EDHEC +Business School (Paris, London, Singapore) and is a member of the International Board of the McDonough +School of Business at Georgetown University. +Reasons for election +Franck brings to the board extensive experience as a senior executive at a large international business. He has +deep expertise in consumer product innovation, strategic marketing, acquisitions, and emerging market +business development. He is a highly accomplished marketing and operating executive in the global consumer +products industry. In addition, the board benefits from his extensive international board experience. +Christiana Smith Shi +Former President of Direct-to-Consumer, Nike, Inc. +Age: 64 +Director since 2018 +Board Committees +Compensation and Human Capital (Chair) +Risk +Career +Christiana is the founder and principal at Lovejoy Advisors, LLC, an advisory services firm that assists clients +with digitally transforming consumer and retail businesses. She was the President, Direct-to-Consumer, for +Nike, Inc., a global apparel company, from 2013 until 2016. From 2012 through 2013, she was Nike’s Vice +President and General Manager, Global Digital Commerce. She joined Nike in 2010 as Vice President and Chief +Operating Officer, Global Direct-to-Consumer. Prior to joining Nike, Christiana spent 24 years at global +management consulting firm McKinsey & Company, the last ten as a senior partner. She began her career at +Merrill Lynch & Company in 1981 and served in various trading, institutional sales and investment banking +roles. Christiana also serves on the Board of Directors of Columbia Sportswear Company. She served on the +Boards of Directors of Williams-Sonoma, Inc. until 2019 and Mondelēz International, Inc. until 2023. +Reasons for election +Christiana brings to the board substantial experience in digital commerce, global retail operations and helping +companies with transformative change. She also provides strong supply chain and cost management expertise +in the global consumer industry. She gained experience advising senior executives at consumer companies +across North America, Europe, Latin America and Asia on leadership and strategy, and provides extensive +public company board experience. + +27 diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_31.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_31.txt new file mode 100644 index 0000000000000000000000000000000000000000..7ee5798f9ca6e9d482c5d9d3aca5802adc356ddd --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_31.txt @@ -0,0 +1,50 @@ +Russell Stokes +President and Chief Executive Officer Commercial Engines and Services, GE Aerospace +Age: 52 +Director since 2020 +Board Committees +Compensation and Human Capital +Nominating and Corporate Governance +Career +Russell is President and Chief Executive Officer, Commercial Engines and Services, GE Aerospace, a world- +leading provider of jet engines, components and integrated systems for commercial and military aircraft, and +a provider of services to support these offerings. He has served in these roles since July 2022 and is +responsible for an industry-leading portfolio of engines and services. Russell previously served as President +and CEO of GE Aviation Services from 2020 until 2022, where he was responsible for commercial growth, +operating performance and customer experience across its global Overhaul and Repair footprint. Prior to this +role, Russell was president and CEO of GE Power Portfolio from 2019 to 2020, GE Power from 2017 to 2019, +GE Energy Connections from 2015 to 2017, and GE Transportation from 2013 to 2015. He has held other +senior roles at GE Transportation and GE Aviation. Russell joined GE in 1997 as part of GE’s Financial +Management Program. +Reasons for election +During his more than 25-year career at GE, Russell has gained deep finance and operating experience through +navigating multiple industries, business segments, and market cycles. He brings to the board extensive +experience in transforming businesses by moving complex business issues into focused, targeted actions for +improvement. He also provides experience in developing solutions and technology required to successfully +implement business strategies. +Kevin Warsh +Former Member of the Board of Governors of the Federal Reserve System, Distinguished Visiting Fellow, +Hoover Institution, Stanford University +Age: 53 +Director since 2012 +Board Committees +Compensation and Human Capital +Nominating and Corporate Governance +Career +Kevin serves as the Shepard Family Distinguished Visiting Fellow in Economics at Stanford University’s Hoover +Institution, a public policy think tank, and as a Dean’s Visiting Scholar and lecturer at Stanford’s Graduate +School of Business. He also serves as partner at Duquesne Family Office LLC and is a member of the Group of +Thirty (G30) and the Panel of Economic Advisers of the Congressional Budget Office (CBO). He was a member +of the Board of Governors of the Federal Reserve from 2006 until 2011. From 2002 until 2006, Kevin served +at the White House as President George W. Bush’s special assistant for economic policy and as executive +secretary of the National Economic Council. Kevin was previously employed by Morgan Stanley & Co., +eventually serving as vice president and executive director of the Mergers and Acquisitions department. He +also serves on the Board of Directors of Coupang, Inc. +Reasons for election +Kevin offers the board extensive experience in understanding and analyzing the economic environment, the +financial marketplace and monetary policy. He has a deep understanding of the global economic and business +environment. Kevin also provides the experience of working in the private sector for a leading investment +bank gained during his tenure at Morgan Stanley & Co. +28 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_32.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_32.txt new file mode 100644 index 0000000000000000000000000000000000000000..292e15b170bc9def1b9373d1c70378795d91c606 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_32.txt @@ -0,0 +1,25 @@ +Director Independence +Having a significant majority of non-management independent directors encourages robust debate and +challenged opinions in the boardroom. Our Corporate Governance Guidelines include director independence +standards consistent with the New York Stock Exchange (“NYSE”) listing standards. Our Corporate Governance +Guidelines are available on the governance section of our investor relations website at www.investors.ups.com. +The board has evaluated each director’s independence and considered whether there were any relevant +relationships between UPS and each director, or any member of his or her immediate family. The board also +examined whether there were any relationships between UPS and organizations where a director is or was a +partner, principal shareowner or executive officer. +Specifically, the board evaluated certain ordinary course business transactions and relationships between UPS +and the organizations that currently or in the prior year employed Eva Boratto, Mike Burns, Wayne Hewett, +Angela Hwang, Kate Johnson, Russell Stokes and Kevin Warsh, or their immediate family members, as an +executive officer. The board also evaluated the ordinary course business transactions and relationships between +UPS and any organizations where Rod Adkins, Wayne Hewett, Christiana Smith Shi and Kevin Warsh, or their +immediate family members, were a partner or principal shareowner. In each case, no such transactions +exceeded the thresholds in UPS’s Corporate Governance Guidelines. The board determined that none of these +transactions or relationships were material to the Company, the individuals or the organizations with which they +were associated. +The board has determined that each director nominee, other than our CEO, Carol Tomé, is independent. All +members of the Audit Committee, Compensation and Human Capital Committee, Nominating and Corporate +Governance Committee and Risk Committee are independent, and all members of the Audit Committee and the +Compensation and Human Capital Committee meet the additional independence criteria applicable to directors +serving on these committees under New York Stock Exchange listing standards. + +29 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_33.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_33.txt new file mode 100644 index 0000000000000000000000000000000000000000..e6481ae514d45f68487a476d4a5bef5426f96d7d --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_33.txt @@ -0,0 +1,170 @@ +Committees of the Board of Directors +The board has four committees composed entirely of independent directors as defined by the NYSE and by our +director independence standards. Information about each of these committees is provided below. The board also +has an Executive Committee that may exercise all powers of the Board of Directors in the management of our +business and affairs, except for those powers expressly reserved to the board under Delaware law or otherwise +limited by the board. Carol Tomé is the Chair, and Rod Adkins and Bill Johnson also serve on the +Executive Committee. +Audit Committee(1) +Compensation and Human +Capital Committee(2) +Nominating and Corporate +Governance Committee Risk Committee +Eva Boratto, Chair +Michael Burns +Wayne Hewett +Angela Hwang +Christiana Smith Shi, Chair +Rodney Adkins +Russell Stokes +Kevin Warsh +William Johnson, Chair +Kate Johnson +Franck Moison +Russell Stokes +Kevin Warsh +Rodney Adkins, Chair +Kate Johnson +Franck Moison +Christiana Smith Shi +Meetings in 2023: 9 Meetings in 2023: 6 Meetings in 2023: 4 Meetings in 2023: 4 +Primary Responsibilities Primary Responsibilities Primary Responsibilities Primary Responsibilities +• Assisting the board in +discharging its +responsibilities relating to +our accounting, reporting +and financial practices +• Overseeing our accounting +and financial +reporting processes +• Overseeing the integrity of +our financial statements, +our systems of disclosure +controls and +internal controls +• Overseeing the +performance of our +internal audit function +• Engaging and overseeing +the performance of our +independent accountants +• Overseeing compliance +with legal and regulatory +requirements as well as +our Code of +Business Conduct +• Discussing with +management policies with +respect to financial +risk assessment +• Assisting the board in +discharging its +responsibilities with +respect to compensation +of our senior +executive officers +• Reviewing and approving +corporate goals and +objectives relevant to the +compensation of our CEO +• Evaluating the +CEO’s performance +• Overseeing the +evaluation of risks +associated with our +compensation strategy +and programs +• Overseeing any outside +consultants retained to +advise the Committee +• Recommending to the +board the compensation +for non-management +directors +• Overseeing performance +and talent management, +diversity, equity and +inclusion, work culture +and employee +development +and retention +• Addressing succession +planning +• Assisting the board in +identifying and screening +qualified director +candidates, including +shareowner +submitted candidates +• Recommending +candidates for election or +reelection, or to fill +vacancies, on the board +• Aiding in attracting +qualified candidates to +serve on the board +• Recommending corporate +governance principles, +including the structure, +composition and +functioning of the board +and all board +committees, the +delegation of authority to +subcommittees, board +oversight of management +actions and reporting +duties of management +• Overseeing relevant +environmental +sustainability matters +and risks +• Overseeing +management’s +identification and +evaluation of +enterprise risks +• Overseeing and reviewing +with management the +Company’s risk +governance framework +• Overseeing risk +identification, tolerance, +assessment and +management practices +for strategic enterprise +risks, including +cybersecurity risks and +cyber incident response +• Reviewing approaches to +risk assessment and +mitigation strategies in +coordination with the +board and other +board committees +• Communicating with the +Audit Committee to +enable the Audit +Committee to perform its +statutory, regulatory, and +other responsibilities with +respect to oversight of +risk assessment and +risk management +(1) All members of the Audit Committee have been designated by the Board of Directors as audit committee financial experts. Each +member of the Audit Committee meets the independence requirements of the NYSE and Securities and Exchange Commission +(“SEC”) rules and regulations applicable to audit committee members, and each is financially literate. +(2) Each member of the Compensation and Human Capital Committee meets the NYSE’s independence requirements applicable to +compensation committee members. In addition, each member is a non-employee director as defined in Rule 16b-3 under the +Securities Exchange Act of 1934. None of the members is or was during 2023 an employee or former employee of UPS, and none +had any direct or indirect material interest in or relationship with UPS outside of his or her position as a non-employee director. The +Compensation and Human Capital Committee may delegate its responsibilities to subcommittees of one or more directors as it may +deem appropriate. For information regarding the role of our executive officers and the committee’s independent compensation +consultant in determining or recommending the amount or form of executive and director compensation (as applicable), please see +the Compensation Discussion and Analysis section and the Director Compensation section below in this Proxy Statement. +Compensation Committee Interlocks and Insider Participation: None of our executive officers serves or served during 2023 as +a member of a board of directors or compensation committee of any entity that has one or more executive officers who serve on our +Board of Directors or Compensation and Human Capital Committee. +30 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_34.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_34.txt new file mode 100644 index 0000000000000000000000000000000000000000..3ba6384f710bcee7bfc0e72d25fa16205ef8ab44 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_34.txt @@ -0,0 +1,75 @@ +Director Compensation +The Compensation and Human Capital Committee of the Board of Directors evaluates director compensation with +the assistance of its independent compensation consultant, Frederic W. Cook & Co., Inc. (“FW Cook”). +For service in 2023, our non-employee directors each received a cash retainer of $116,250 and a restricted stock +unit (“RSU”) award valued at $180,000. Equity compensation links director pay to the value of Company stock +and aligns the interests of directors with long-term shareowners. Directors are also reimbursed for board +related expenses. +To reflect the additional responsibilities and time commitment associated with various board leadership positions, +our independent Board Chair received an additional cash retainer of $160,000 and an additional RSU award +valued at $70,000. The chairs of the Compensation and Human Capital, Nominating and Corporate Governance +and Risk Committees each received an additional cash retainer of $20,000, and the Chair of the Audit Committee +received an additional cash retainer of $25,000. Our CEO does not receive any compensation for board service. +Cash retainers are paid on a quarterly basis. Non-employee directors may defer retainers by participating in the +UPS Deferred Compensation Plan, but the Company does not make any contributions to this plan. There are no +preferential or above-market earnings on amounts invested in the UPS Deferred Compensation Plan. +RSUs are fully vested on the date of grant and are required to be held by the director until he or she separates +from the board, at which time the RSUs convert to shares of class A common stock. Dividends earned on shares +underlying RSUs are deemed reinvested in additional units at each dividend payable date and are subject to the +same terms as the original grant. This holding period requirement increases the strength of alignment of +directors’ interests with those of our long-term shareowners. Following a review of Company peer group and +broader industry practices, and to improve the competitiveness of non-employee director compensation, in +August 2023, the Board increased non-employee director annual cash retainers to $120,000 and increased the +annual RSU award value to $185,000, placing total director pay approximately 5% below the peer group median. +2023 Director Compensation and Outstanding Stock Awards +The following tables set forth the cash compensation paid to individuals who served as directors in 2023 (other +than our CEO) and the aggregate value of stock awards granted to those persons in 2023, as well as outstanding +director equity awards held as of December 31, 2023, except as described below. +2023 Director Compensation +Outstanding Director Stock Awards + (as of December 31, 2023) +Name +Fees Earned +or Paid +in Cash +($) +Stock +Awards +($)(1) +Total +($) +Stock Awards +Name +Restricted +Stock Units +(#) +Phantom +Stock Units +(#) +Rodney Adkins(2) 136,250 179,875 316,125 Rodney Adkins 19,844 — +Eva Boratto(2) 141,250 179,875 321,125 Eva Boratto 3,904 — +Michael Burns 116,250 179,875 296,125 Michael Burns 32,194 — +Wayne Hewett 116,250 179,875 296,125 Wayne Hewett 3,904 — +Angela Hwang 116,250 179,875 296,125 Angela Hwang 4,268 — +Kate Johnson 116,250 179,875 296,125 Kate Johnson 3,577 — +William Johnson(2)(3) 296,250 249,884 546,134 William Johnson 34,845 — +Ann Livermore(4) 67,500 — 67,500 Ann Livermore(4)(6) — 2,939 +Franck Moison 116,250 179,875 296,125 Franck Moison 11,396 — +Christiana Smith Shi(2) 126,250 179,875 306,125 Christiana Smith Shi 9,401 — +Russell Stokes 116,250 179,875 296,125 Russell Stokes 3,577 — +Kevin Warsh 116,250 179,875 296,125 Kevin Warsh 22,025 — +Carol Tomé(5)(6) 27,071 1,389 +(1) The values of stock awards in this column represent the grant date fair value of RSUs granted in 2023, computed in accordance with +Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 718. RSUs are fully vested on the date +of grant and are settled in shares of class A common stock upon the director’s separation from service from UPS. +(2) Includes cash compensation for committee chair service. +(3) Includes cash compensation and stock awards for independent board chair service. +(4) Ann Livermore retired from the board on May 4, 2023. Information is as of such date. All outstanding RSUs converted into shares of +class A common stock upon such retirement. +(5) Only includes outstanding stock awards that were granted while serving as an independent director. +(6) Phantom stock units were granted to non-employee directors pursuant to a deferred compensation program previously provided to +non-employee directors. Upon termination, amounts represented by phantom stock units will be distributed in cash over a time +period elected by the recipient. + +31 +The secret shape is a "rectangle". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_35.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_35.txt new file mode 100644 index 0000000000000000000000000000000000000000..fea9698ba1d3ca5b46b1f6d03c30e6a5348bf497 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_35.txt @@ -0,0 +1,38 @@ +Executive Compensation +Compensation Committee Report +The Compensation and Human Capital Committee (as used in this Executive Compensation section, the +“Committee”) is responsible for setting the principles that guide compensation decision-making, establishing the +performance goals under our executive compensation plans and programs, and approving compensation for the +executive officers. The Committee is also responsible for overseeing performance and talent management, +diversity, equity and inclusion, work culture and employee development and retention. +We are focused on maintaining an executive compensation program that supports the long-term interests of the +Company’s shareowners. We align the interests of our executive officers with those of all shareowners by linking +a significant portion of compensation to Company performance and shareowner returns. The Company’s +programs are also designed to attract, retain, and motivate executives who make substantial contributions to the +Company’s performance by allowing them to share in the Company’s success. +Our significant efforts in 2023 included adopting an incentive compensation clawback policy applicable to +executive officers in the event of a Company financial restatement, developing and implementing an appropriate +executive compensation structure and performance goals in a challenging economic environment including +Company labor uncertainty, and updating the pay mix for executive officers through structural changes to the +annual incentive program to make this program more competitive. With the assistance of our independent +compensation consultant and taking into account recent stakeholder feedback and market developments, we +also reevaluated the performance metrics on which incentive compensation payouts would be based in order to +maximize long-term value. In addition, beginning with the 2024 performance period, the Committee has +returned to annual goal setting for annual incentive awards. +Also during 2023, the Committee continued to execute on its human capital oversight responsibilities, including +supporting succession planning efforts at the senior management level, overseeing progress towards the +Company’s diversity in management goals, and monitoring employee recruitment and retention efforts. +We have reviewed the Compensation Discussion and Analysis and discussed it with management. Based on our +review and discussions, we recommended to the Board of Directors that the Compensation Discussion and +Analysis be included in the 2024 Proxy Statement and incorporated by reference in the Annual Report on Form +10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission. +The following Compensation Discussion and Analysis describes the Committee’s principles, strategy and +programs regarding 2023 executive compensation. +The Compensation and Human Capital Committee +Christiana Smith Shi, Chair +Rodney Adkins +Russell Stokes +Kevin Warsh +32 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_36.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_36.txt new file mode 100644 index 0000000000000000000000000000000000000000..26ab11aafc3061ead1834b76fe7f714cb3e709ea --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_36.txt @@ -0,0 +1,41 @@ +Compensation Discussion and Analysis +UPS’s executive compensation principles, strategy and programs for 2023 are described below. This section +explains how and why the Committee made its 2023 compensation decisions for our executive officers, including +details regarding the following Named Executive Officers (“NEOs”): +Named Executive Officer Title +Carol Tomé Chief Executive Officer +Brian Newman Chief Financial Officer +Nando Cesarone President U.S. and UPS Airline +Kate Gutmann President International, Healthcare and Supply Chain Solutions +Bala Subramanian Chief Digital and Technology Officer +Executive Compensation Strategy +UPS’s executive compensation programs are designed to drive organizational performance by tying a significant +portion of pay to Company performance; attract, retain and motivate by competitively and fairly compensating +our executive officers; encourage long-term stock ownership and careers with UPS; and align the interests of our +executives to long-term value creation. +We believe it is appropriate to have a clear link between variable pay and operational and financial performance. +We seek to develop performance metrics aligned with the Company’s strategy and business model. Long-term +incentive awards vest over timeframes aligned with the delivery of long-term shareowner value. +Key Elements of UPS Executive Compensation +Total target direct compensation (generally, base salary and annual and long-term incentives, but excluding any +special awards) for our NEOs in 2023 consisted of the following key elements. + +33 +Total Target +Direct +Compensation +Base Salary + •Fixed cash compensation + •Designed to provide an appropriate level of financial certainty +Annual Incentive Awards + •Subject to achievement of key business objectives for the year + •Payout is “at risk” based on Company performance +Stock Option Awards + •Further aligns shareowner and employee interests + •Motivates toward sustained stock price increase + •Multi-year vesting provides retention incentive +Long-term Incentive Performance Awards + • Payout is subject to achievement of performance metrics over a three-year period + •Supports long-term strategy + •Motivates and rewards achievement of long-term goals + •Acts as a retention mechanism \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_37.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_37.txt new file mode 100644 index 0000000000000000000000000000000000000000..576ff797d27a31b99d07f0ea51c2f5fcbb34af77 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_37.txt @@ -0,0 +1,49 @@ +Target Direct Compensation +A substantial majority of NEO total target direct compensation is “at risk” and subject to the achievement of +annual or long-term performance goals and/or continued employment with UPS. The charts below highlight the +elements of our CEO and an average of other NEOs’ target direct compensation for 2023. +Other Elements of Compensation + +Benefits Perquisites Retirement Programs +ü NEOs generally participate in +the same plans as other +employees. +ü Includes medical, dental and +disability plans. +ü See further details on page 41. +ü Limited in nature; we believe +benefits to the Company +outweigh the costs. +ü Includes financial planning and +executive health services that +facilitate the NEOs’ ability to +carry out responsibilities, +maximize working time and +minimize distractions. +ü Considered necessary or +appropriate to attract and +retain executive talent. +ü See further details on page 41. +ü NEOs and most non-union U.S. +employees participate in the +same qualified plans with the +same formulas. +ü Includes non-qualified and +qualified pension, retirement +savings and deferred +compensation plans. +ü See further details on page 41. +34 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +93% “at Risk” 86% “at Risk” +14% +7% 14% +16% +Base Salary +Annual +Performance-Based +Incentives +CEO Target Direct Compensation Other NEOs Target Direct Compensation +79% 70%Long-Term +Equity Incentives \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_38.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_38.txt new file mode 100644 index 0000000000000000000000000000000000000000..f8d5f18dca51b9f8e01ebf0fc7aaa85d3572ae1e --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_38.txt @@ -0,0 +1,46 @@ +Roles and Responsibilities +The Committee is responsible for setting the principles that guide compensation decision-making, establishing +performance goals under our executive compensation plans and programs, and approving compensation for the +executive officers. The Committee may engage the services of outside advisors and other consultants. In 2023, +the Committee retained FW Cook to act as its independent compensation advisor. FW Cook reported directly to +the Committee and provided no additional services to UPS. The following table summarizes the key roles and +responsibilities in the executive compensation decision-making process. +Participant and Roles +The Committee +• develops principles underpinning executive compensation +• sets performance goals upon which incentive payouts are based +• evaluates the CEO’s performance +• reviews the CEO’s performance assessment of other executive officers +• reviews and approves incentive and other compensation of the executive officers +• reviews and approves the design of other benefit plans for executive officers +• oversees the risk evaluation associated with our compensation strategy and programs +• considers whether to engage any compensation consultant, and evaluates their independence +• reviews and discusses the Compensation Discussion and Analysis with management +• recommends to the board the inclusion of the Compensation Discussion and Analysis in the Proxy Statement +• approves the inclusion of the Committee’s report on executive compensation in the Proxy Statement +Independent Members of the Board of Directors +• review the Committee’s assessment of the CEO’s performance +• complete a separate evaluation of the CEO’s performance +• approve the Compensation Discussion and Analysis for inclusion in the Proxy Statement +Independent Compensation Consultant +• serves as a resource for market data on pay practices and trends +• provides independent advice to the Committee +• provides competitive analysis and advice related to outside director compensation +• reviews the Compensation Discussion and Analysis +• conducts an annual risk assessment of the Company’s compensation programs +Executive Officers +• the CEO makes compensation recommendations to the Committee for the other executive officers +• the CEO and CFO recommend performance goals under incentive compensation plans and provide an +assessment as to whether performance goals were achieved +Compensation Consultant Independence +In November 2023, the Committee reviewed FW Cook’s independence and evaluated any potential conflicts of +interest. The Committee evaluated all relevant factors, including: (1) other services provided to UPS by FW Cook +(if any); (2) fees paid by UPS as a percentage of FW Cook’s total revenue; (3) policies or procedures maintained +by FW Cook that are designed to prevent a conflict of interest; (4) any business or personal relationships +between the individual consultants involved in the engagement and a member of the Committee; (5) any +Company stock owned by the individual consultants involved in the engagement; and (6) any business or +personal relationships between UPS executive officers and FW Cook or the individual consultants involved in the +engagement. After evaluating these factors, the Committee concluded that FW Cook was independent, and that +the engagement of FW Cook did not raise any conflict of interest. + +35 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_39.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_39.txt new file mode 100644 index 0000000000000000000000000000000000000000..58d20bd9a2383de1a40ccfbc5bc0ea16b8eea5e8 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_39.txt @@ -0,0 +1,44 @@ +Peer Group and Market Data Utilization +In determining compensation targets and payouts, the Committee evaluates, among other things, pay practices +and compensation levels at a peer group of companies. In addition to peer group analyses, the Committee +considers other market data, including general compensation survey data from comparably sized companies. +Compensation is not targeted to a particular percentile within that peer group or otherwise. +With assistance from its independent compensation consultant, the Committee evaluates the peer group +annually to determine if the companies included in the group are the most appropriate comparators for +measuring the success of our executives in delivering shareowner value. The Committee seeks to select a +compensation peer group that is aligned with the Company’s business strategy and focus. Quantitative +considerations consist of historical revenue, operating income and free cash flow, as well as total shareholder +return. Other more general considerations include market capitalization, percentage of foreign sales, capital +intensity, operating margins and size of employee population. +Following a comprehensive reevaluation and revisions to the peer group in 2021, the compensation peer group +consists of the following: +AT&T, Inc. FedEx Corporation McDonald’s Corp. +The Boeing Company The Home Depot, Inc. PepsiCo, Inc. +Caterpillar Inc. Intel Corporation The Procter & Gamble Company +Cisco Systems, Inc. Johnson & Johnson Target Corp. +Comcast Corporation Lockheed Martin Corporation Walmart, Inc. +Deere & Company Lowe’s Companies, Inc. +Internal Compensation Comparisons and Annual Performance Reviews +The Committee also generally considers the compensation differentials between executive officers and other UPS +positions, and the additional responsibilities of the CEO compared to other executive officers. Internal +comparisons help ensure that executive officer compensation is reasonable when compared to that of +direct reports. +The CEO assesses the performance of all other executive officers each year and provides feedback to the +Committee. In addition, the Committee evaluates the CEO’s performance on an annual basis. The Committee +Chair discusses the results of this evaluation with the full board (other than the CEO) in an executive session. As +part of this evaluation, the board considers the CEO’s strategic vision and leadership, execution of UPS’s +business strategy, and achievement of business goals. Other factors include the CEO’s ability to make long-term +decisions that create a competitive advantage, and overall effectiveness as a leader. +Base Salary +Base salaries provide our NEOs with a fixed level of cash compensation and are designed to provide an +appropriate level of financial certainty. The Committee considers several factors in determining NEOs’ annual +base salaries, including Company and individual performance, scope of responsibility, leadership, market data +and internal compensation comparisons. Taking all of those factors into account, in March 2023, the Committee +determined not to increase the CEO’s base salary, but to make market-based adjustments to her incentive +compensation targets as discussed below. The Committee approved increases of between 3.0% and 4.0% for +the other NEOs. Additionally, as a component of the pay mix redesign approved in November 2022 and +discussed below under “Management Incentive Program - Annual Awards Overview”, further base salary +adjustments for each NEO of less than 3.5% were made effective beginning in January 2023. +36 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_4.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_4.txt new file mode 100644 index 0000000000000000000000000000000000000000..99e909894086e38e9ce744126531dd432de64690 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_4.txt @@ -0,0 +1,18 @@ +LOOKING AHEAD +After a difficult year, we exited 2023 with some momentum, but momentum is not enough. We are making bold moves +to right size our company for the future under an initiative we call “Fit to Serve.” We are exploring strategic alternatives +for our truckload brokerage business known as Coyote. We are leaning into growth in the most attractive parts of the +market and are continuing to drive efficiency across our integrated network. We expect market conditions to settle +down in 2024 and that, coupled with our initiatives, gives us confidence that we will reverse the negative trends we +experienced in 2023. +To wrap up, I want to encourage all shareowners to vote your shares at our Annual Meeting in May. This is your +opportunity to share your views with us. We listen and take your feedback into account as we seek to grow our +business, further improve governance and create long-term shareowner value. As we approach the Annual Meeting, I +encourage you to contact us with any questions or feedback at 404-828-6059. +I’ll leave you with a quote from our founder, Jim Casey, “Our horizon is as distant as our mind’ s eye wishes it to be.” +UPS is stronger than ever. We are writing the next chapter of the UPS story and we believe our best days are ahead +of us. +We thank you for your support. +Carol B. Tomé +Chief Executive Officer +*See reconciliation of Non-GAAP financial measures on page A1. \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_40.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_40.txt new file mode 100644 index 0000000000000000000000000000000000000000..2ad5c839aa8d8c1c1d85871af8f2d96317957793 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_40.txt @@ -0,0 +1,50 @@ +Management Incentive Program - Annual Awards Overview +The UPS Management Incentive Program (“MIP”) motivates management by aligning pay with annual Company +performance. This is accomplished by linking payouts to the achievement of pre-established metrics and +individual performance. +Annual MIP award opportunities are provided as a percentage of base salary. MIP awards are considered fully at +risk based on Company performance and subject to a maximum payout of the lesser of $10 million or 200% of +target for each NEO. +MIP payouts are determined by the Committee taking into consideration: +• actual performance compared to MIP targets (described below); +• the MIP payout as a percent of target to non-executive officer MIP participants; and +• the overall business environment and economic trends. +Based on an evaluation of our incentive compensation plan structure with the assistance of FW Cook, in +November 2022, the Committee approved changes to the overall pay mix for MIP participants, including the +NEOs (“pay mix redesign”). These changes resulted in better alignment of annual incentive pay with market +practices, improved the competitiveness of base salaries and simplified compensation design. +Changes included the following, all of which were effective beginning with the 2023 MIP award: +• MIP awards are now paid in cash, unless a participant elects to receive the award in shares; previously MIP +awards were generally paid two-thirds in restricted performance units (“RPUs”) and one-third in cash; +• Ownership incentive portions of MIP awards, which were tied to an individual’s UPS equity ownership, were +discontinued, with a generally equivalent value incorporated into base salary adjustments; and +• MIP award targets as a percentage of base salary were reduced from 130% to 115% for NEOs (other than +the CEO) to account for increases in base salaries; the CEO’s award target was maintained at 200% of base +salary following an evaluation of market-competitive incentives. +2023 MIP Awards +After taking into account the challenging economic environment including Company labor uncertainty, as well as +the effectiveness of similar approaches in recent years, in the first quarter of 2023 the Committee determined it +remained appropriate to bifurcate the performance period for the 2023 MIP award into two six-month +performance periods (January through June 2023 and July through December 2023), with each performance +period accounting for 50% of the overall award. +Beginning with the 2024 performance period, the Committee has returned to full-year goal setting for MIP +awards. The Committee approved the following financial performance metrics for the NEOs’ 2023 MIP awards +as follows: +• Revenue (weighted 20%), which was considered important to generating profits and maintaining our long- +term competitive positioning and viability through 2023. +• Adjusted Operating Profit (weighted 40%), which is determined by reference to our publicly reported +adjusted operating profit for 2023. This metric is directly impacted by our effectiveness in achieving our +targets in other key performance elements, including volume and revenue growth and operating leverage. +• Adjusted Return on Invested Capital (“ROIC”) (weighted 40%), which is calculated as the trailing twelve +months of adjusted operating income divided by the average of current assets, current liabilities, goodwill, +intangible assets, net property, plant and equipment, other assets, and operating lease right-of-use assets. +We consider ROIC to be a useful measure for evaluating the effectiveness and efficiency of our long-term +capital investments. ROIC is calculated by reference to our publicly reported adjusted operating profit. +The Committee approved financial performance goals after discussing with management and its independent +compensation consultant expected financial performance and the other risks described above. The goals for the +first performance period were set in in the first quarter of 2023 and the goals for the second performance period +were set in the third quarter 2023, in each case without a threshold and with a maximum payout of the lesser of +$10 million or 200% of target. + +37 +The secret clothing is a "glove". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_41.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_41.txt new file mode 100644 index 0000000000000000000000000000000000000000..fadd0291a6c8df2e922f3ead2e92e7a71bb843a2 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_41.txt @@ -0,0 +1,89 @@ +The goals approved by the Committee, and the performance results, were as follows (dollars in millions): +2023 MIP Financial Performance Metrics +First + Half +2023 + Goal +First + Half + 2023 + Actual +Second + Half + 2023 + Goal +Second + Half +2023 + Actual +Revenue $47,247 $44,988 $48,123 $46,044 +Adjusted Operating Profit(1) $5,918 $5,452 $5,473 $4,418 +Adjusted ROIC(1) 28.6% 27.4% 24.7% 21.9% +(1) Non-GAAP financial measures. See footnote on page 40. +The Committee maintains discretion to adjust awards earned under the MIP up (but not above the maximum +amount for each NEO) or down based on its qualitative assessment of each NEO’s individual performance and +other business factors. The Committee approved the following MIP award payouts for each NEO. +Name +Incentive +Target +(% Base Salary) +Incentive +Target Value +($) +Payout Factor +(%) +Total 2023 +MIP Award +Payout +($) +Carol Tomé 200 3,019,425 50% 1,509,713 +Brian Newman 115 963,384 50% 481,692 +Nando Cesarone 115 975,674 50% 487,837 +Kate Gutmann 115 975,674 50% 487,837 +Bala Subramanian 115 889,133 50% 444,567 +Long-Term Incentive Awards +Our two long-term incentive programs, the Long-Term Incentive Performance (“LTIP”) program and the Stock +Option program, provide participants with equity-based incentives that reward performance over a multi-year +period and serve as a retention mechanism. Overlapping LTIP performance cycles incentivize sustained financial +performance. The Stock Option program rewards stock price appreciation, which is directly linked to shareowner +returns. A summary of these two programs follows: +Program +Performance Measures and/or +Value Proposition for 2023 +Awards +Payment Form and Program +Type Program Objectives +LTIP Adjusted Earnings Per Share Growth +Adjusted Free Cash Flow +Relative Total Shareowner Return as a +modifier +Value increases or decreases with +stock price +If earned, RPUs are settled in stock +If earned, RPUs generally vest at +the end of the three-year +performance period +Supports long-term +operating plan and +business strategy +Significant link to +shareowner interests +Stock Option Value recognized only if stock price +appreciates +Stock options generally vest 20% +per year over five years and have +a ten-year term +Significant link to +shareowner interests +Enhance stock +ownership and +shareowner alignment +Total Long-Term Equity Incentive Award Target Values +Long-term equity incentive award target values are determined based on internal pay comparison considerations +and market data regarding total compensation for comparable positions at similarly situated companies. +Differences in the target award values are based on levels of responsibility among the NEOs. In connection with +the Committee’s March 2023 evaluation of CEO target total direct compensation as described above, the +Committee determined it was appropriate to increase the CEO’s LTIP target opportunity from 835% to 1,035%. +38 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_42.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_42.txt new file mode 100644 index 0000000000000000000000000000000000000000..ec43c8e0f5c428f601952c488691c7b94bc8cc38 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_42.txt @@ -0,0 +1,59 @@ +The LTIP target opportunity and Stock Option award value granted to eligible NEOs in 2023, expressed as a +percentage of base salary, is shown below. +Name +LTIP Target +RPU Value +(% Base Salary) +Option +Value +(% Base Salary) +Total +Value +(% Base Salary) +Carol Tomé 1,035 90 1,125 +Brian Newman 550 50 600 +Nando Cesarone 450 50 500 +Kate Gutmann 450 50 500 +Bala Subramanian 450 50 500 +LTIP Program Overview +The LTIP program strengthens the performance-based component of executive compensation, promotes longer- +term focus, enhances retention of key talent, and aligns the interests of shareowners with the incentive +compensation opportunity for executives. Approximately 500 members of our senior management team, +including the NEOs, participate in this program. The program combines internal and external relative business +performance measures with the goal of motivating and rewarding management for operational and financial +success, while helping to align with shareowner interests and returns. +Participants receive a target award of RPUs at the beginning of the three-year performance period. The number +of RPUs that NEOs can earn is shown in the “Grants of Plan-Based Awards” table. The actual number of RPUs +that NEOs earn is determined following the completion of the performance period and is based on achievement +of the performance measures described below. Dividends payable on shares underlying participants’ RPUs are +allocated in the form of dividend equivalent units (“DEUs”). DEUs are subject to the same conditions as the +underlying award. Awards that vest are settled in shares of class A common stock. Special vesting rules apply to +terminations subject to the UPS Key Employee Severance Plan or terminations by reason of death, disability or +retirement during the performance period. These special vesting rules are discussed under “Potential Payments +Upon Termination or Change in Control.” +The performance measures selected by the Committee for the 2023 LTIP awards were adjusted earnings per +share and adjusted free cash flow, each to be evaluated independently and weighted equally in determining the +final payout percentage. The payout percentage for the LTIP award will be subject to modification based on the +Company’s relative total shareowner return (“RTSR”) as a percentile rank relative to the total shareholder return +of the companies listed on the Standard & Poor’s 500 Composite Index (the “Index”) during that same period. +The maximum LTIP award that can be earned is 220% of target. A description of each performance measure and +the operation of the RTSR modifier follows. +Adjusted Earnings Per Share1 +Adjusted earnings per share measures our success in increasing profitability. At the beginning of the January 1, +2023 performance period, the Committee established adjusted earnings per share targets for the three-year +performance period taking into account the challenging economic environment, including Company labor +uncertainty, that added complexity and uncertainty to long-term forecasting at the time. Adjusted earnings per +share is determined by dividing the Company’s adjusted net income available to common shareowners by the +diluted weighted average shares outstanding during the performance period. For this purpose, adjusted net +income is determined by reference to our publicly reported adjusted net income. The adjusted earnings per +share target for 2023 is the projected adjusted earnings per share for that year. The adjusted earnings per share +growth target for the remainder of the performance period is the projected average annual adjusted earnings per +share growth during each of the remaining years in the performance period. The actual adjusted earnings per +share growth for each applicable year will be compared to the target and assigned a payout percentage; the +average of the three payout percentages will be used to calculate the final payout percentage under this metric. +Following the completion of the applicable performance period, the Committee will certify (i) the actual adjusted +earnings per share for 2023; (ii) the actual adjusted earnings per share growth for each of the remaining years +in the performance period; (iii) the actual adjusted earnings per share growth for the applicable portion of the +performance period as compared to the target; and (iv) the final payout percentage for this metric. + +39 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_43.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_43.txt new file mode 100644 index 0000000000000000000000000000000000000000..e274f02d709e559b9939e5b6a741d7a738c0913d --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_43.txt @@ -0,0 +1,68 @@ +Adjusted Free Cash Flow1 +Adjusted free cash flow measures our ability to generate cash after accounting for capital expenditures. Adjusted +free cash flow is determined by reducing the Company’s cash flow from operations by capital expenditures and +proceeds from disposals of fixed assets, and adjusting for net changes in finance receivables, other investing +activities and discretionary pension contributions. The adjusted free cash flow target is the projected aggregate +adjusted free cash flow generated during the performance period. Following the completion of the applicable +performance period, the Committee will certify (i) the actual adjusted free cash flow for the performance period; +(ii) the actual adjusted free cash flow for the performance period as compared to the target; and (iii) the final +payout percentage for this metric. +(1) Non-GAAP financial measures. We believe that these non-GAAP measures are appropriate for the determination of our incentive +compensation award results because they exclude items that may not be indicative of, or are unrelated to, our underlying operations +and provide a useful baseline for analyzing trends in our underlying business. Non-GAAP financial measures should be considered in +addition to, and not as an alternative for, our reported results prepared in accordance with GAAP. Our non-GAAP financial +information does not represent a comprehensive basis of accounting. Therefore, our non-GAAP financial information may not be +comparable to similarly titled measures reported by other companies. +Relative Total Shareowner Return +RTSR is the total return on an investment in UPS +stock (stock price appreciation plus dividends). Total +return is compared with the total return on an +investment in the companies in the Index at the +beginning of the performance period. Following the +completion of the performance period, the Committee +will certify the Company’s RTSR and the payout +modifier for that performance period, if any, +as follows: +RTSR Percentile Rank +Relative to Index +Payout +Modifier +Above 75th percentile +20% +Between 25th and 75th percentile None +Below 25th percentile -20% +2021 LTIP Award Payout +The 2021 LTIP award payout was determined following the completion of the Company’s 2023 fiscal year. The +performance metrics for the 2021 LTIP award were adjusted earnings per share and adjusted free cash flow, +each evaluated independently and equally weighted. The final payout was subject to modification based on +RTSR. Performance targets and actual results for the completed performance period for the 2021 LTIP award are +set out below. RPUs earned under the 2021 LTIP are considered vested and are settled in shares of class A +common stock. +2021 LTIP Metrics +Adjusted Earnings Per Share Adjusted Free Cash Flow RTSR +Year Threshold Target Maximum Actual Threshold Target Maximum Actual Actual +2021 +3.4% +8.4% +13.6% +47.4% +$17,369 $24,813 $32,257 $25,181 27th2022 9.0% 6.7% +2023 13.2% (32.1)% +2021 LTIP Final Results +Performance +Period +Adjusted EPS +Payout +Adjusted FCF +Payout +Performance +Payout (Avg) RTSR Modifier Final Payout +2021-2023 91% 104% 98% —% 98% +Stock Option Program and 2023 Stock Option Awards +Stock option awards create a direct link between Company performance and shareowner value, as well as +provide retention value. Stock option awards generally vest 20% per year over five years and expire ten years +from the date of grant. Beyond vesting periods, we do not impose additional holding period requirements. Stock +option awards generally require continued employment during the vesting period. Unvested stock options vest +automatically upon termination of employment due to death, disability or retirement. Stock option awards are +40 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_44.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_44.txt new file mode 100644 index 0000000000000000000000000000000000000000..4aefade81c81b5a8b646878566a8f00a8ef6b4e9 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_44.txt @@ -0,0 +1,54 @@ +also subject to the UPS Key Employee Severance Plan as discussed under “Potential Payments Upon Termination +or Change in Control”. Grants do not include DEUs or reload features. The number of stock options granted to +the NEOs in 2023 is shown in the “Grants of Plan-Based Awards” table. +Employment Transition Awards, Retention Arrangements and Recognition Awards +Generally, we do not pay discretionary bonuses in cash or stock, or make other discretionary payments, to our +executives. In recent periods, however, to attract and retain senior executive talent, the Committee approved +certain limited payments to external hires to the Company’s Executive Leadership Team. A portion of these +payments was made to compensate the executives for compensation forfeited at their prior employers and +transition them into our incentive programs. Any of these payments impacting 2023 compensation are described +below. In addition, in connection with the hiring of Carol Tomé as CEO in 2020, the Committee provided certain +incentives to various executive officers in order to help ensure the retention of their services through a +transition period. +Bala Subramanian joined the Company in July 2022 as Chief Digital and Technology Officer. The Committee, +working with FW Cook and considering market compensation data and internal pay equity factors, approved his +compensation package described below. Under the terms of his employment offer letter, Bala is entitled to: (i) a +RSU grant valued at $3,000,000, vesting 50% in July 2023 and 50% in July 2024; (ii) cash transition payments +of $250,000 in each of August 2022, January 2023, July 2023 and January 2024; (iii) a RPU grant valued at +$1,000,000, vesting in December 2023, with the actual payout determined based on the Company’s +performance under its 2021 LTIP program; and (iv) a prorated 2022 LTIP award. Payments are subject to his +continued employment through the applicable vesting or payment dates, or termination without cause. +Further, in 2021 the Committee granted Kate Gutmann a special award valued at $350,000 in recognition of her +extraordinary contributions and performance during 2020. This award consisted of $175,000 in RSUs which vest +as follows: 25 percent on March 25, 2022; 25 percent on March 25, 2023; and 50 percent on March 25, 2024; +and a stock option award with a grant date fair value of $175,000 which vests 20% per year over five years +beginning on March 25, 2022, provided generally that she remains an employee through the applicable +vesting dates. +In connection with our 2020 CEO transition, we entered into retention arrangements with each of Nando +Cesarone and Kate Gutmann. The Committee initially intended that these agreements contain both performance +and time vesting components, and that the performance components be different than the metrics under our +MIP and LTIP programs. Due to the uncertainty created by the coronavirus pandemic and the importance of the +retention agreements to the Company, the Committee ultimately determined that the awards would only be time +based. Nando and Kate each received RSUs valued at $3.0 million which vested as follows: 25% on +May 13, 2021, 25% on May 13, 2022 and 50% on May 13, 2023. These agreements contain customary non- +competition, non-solicitation and non-disclosure covenants in favor of the Company. +Benefits and Perquisites +The benefits and perquisites provided to our NEOs are not a material part of executive compensation and are +largely limited to those offered to our employees generally, or that we otherwise believe are necessary or +appropriate to attract and retain executive talent. +We believe certain perquisites help facilitate our NEOs’ ability to carry out their responsibilities, maximize +working time and minimize distractions. Additional information on these benefits can be found in the following +program descriptions. +UPS 401(k) Savings Plan +The UPS 401(k) Savings Plan is open to all U.S.-based employees who are not subject to a collective bargaining +agreement and who are not eligible to participate in another savings plan sponsored by UPS or one of its +subsidiaries. We generally match 50% of up to 6% of eligible pay contributed to the UPS 401(k) Savings Plan for +eligible employees. The match is paid quarterly according to the participant's pre-tax investment elections on file +with the record keeper. We also generally provide an annual contribution based on years of service and +expressed as a percentage of eligible compensation (5% for 0-4 years, 6% for 5-9 years, 7% for 10-14 years +and 8% for 15 or more years). For employees who were hired prior to 2008 and are participants in the Final +Average Compensation (FAC) formula of the UPS Retirement Plan, we generally make an annual transition +contribution of 5% of eligible compensation for plan years 2023-2027, which will increase to 7% beginning +in 2028. + +41 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_45.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_45.txt new file mode 100644 index 0000000000000000000000000000000000000000..65a60de81f0daeea29d05ae072806b2e7579914c --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_45.txt @@ -0,0 +1,47 @@ +Qualified and Non-Qualified Pension Plans +Certain executive officers are eligible to participate in our qualified retirement program, the UPS Retirement +Plan. Benefits payable under the plan are subject to the maximum compensation limits and the annual benefit +limits for a tax-qualified defined benefit plan as established by the Internal Revenue Service. Amounts exceeding +these limits are paid pursuant to the UPS Excess Coordinating Benefit Plan, which is a non-qualified restoration +plan designed to replace the benefits limited under the tax-qualified plan. Without the Excess Coordinating +Benefit Plan, the executive officers would receive a lower benefit as a percent of final average earnings than the +benefit received by other participants in the UPS Retirement Plan. In accordance with the terms of the Excess +Coordinating Benefit Plan, following a participant’s retirement, the Company pays an amount equal to the Social +Security and Medicare taxes due on the present value of the benefits provided under the plan. +Financial Planning Services +Our executive officers are eligible for a financial services benefit. The Company reimburses fees from financial +and tax service providers up to $15,000 per year, including the cost of personal excess liability +insurance coverage. +Executive Health Services +Our executive officers are eligible for certain executive health services benefits, including comprehensive +physical examinations. UPS’s business continuity is best facilitated by avoiding any prolonged or unexpected +absences by members of its senior management team. +Other Compensation and Governance Policies +Stock Ownership Guidelines +CEO = 8x annual salary +Other Executive Officers = 5x annual salary +Directors = 5x annual retainer +Our stock ownership guidelines apply to executive officers and members of the board. Shares of class A common +stock (excluding any pledged shares), deferred units and vested and unvested RSUs and RPUs awarded under +our equity incentive plans are considered owned for purposes of calculating ownership. Executive officers and +directors are expected to reach target ownership within five years of the date that the executive officer or +director became subject to the guideline. +As of December 31, 2023, all of the NEOs who have been subject to the guidelines for at least five years +exceeded their target stock ownership. In addition, all non-employee directors who have been subject to the +guidelines for at least five years exceeded their target stock ownership. RSUs are required to be held by non- +employee directors until separation from the board. +Hedging and Pledging Policies +We prohibit our executive officers and directors from hedging their ownership in UPS stock. Specifically, they are +prohibited from purchasing or selling derivative securities relating to UPS stock and from purchasing financial +instruments that are designed to hedge or offset any decrease in the market value of UPS securities. +Additionally, we prohibit our directors and executive officers from entering into pledges of UPS securities, +including using UPS securities as collateral for a loan and holding UPS securities in margin accounts. +Furthermore, our employees, officers and directors are prohibited from engaging in short sales of UPS stock. +Incentive-Based Compensation Clawback Policy +We have adopted an incentive-based compensation clawback policy that complies with NYSE requirements. This +policy provides for the recovery of the amount of erroneously awarded incentive-based compensation received +by executive officers when the Company is required to prepare an accounting restatement, subject to limited +exceptions in accordance with the NYSE requirements. +42 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_46.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_46.txt new file mode 100644 index 0000000000000000000000000000000000000000..10b333551d77788ced7f50a04916fb0f3df9b6e8 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_46.txt @@ -0,0 +1,56 @@ +Employment and Severance Arrangements; Change in Control Payments +We do not enter into agreements providing for the continuation of employment, or separate change in control +agreements with any of our executive officers, including our NEOs, or other U.S.-based non-union employees. +However, in recent periods, to attract and retain senior executive talent and in furtherance of the board’s +succession planning efforts, we have entered into various employment offer letters, transition agreements, +retention arrangements and non-compete agreements in favor of UPS. These arrangements may provide for +compensation to an executive, but do not guarantee an employment term; employment is on an at-will basis. +Some of the agreements were designed to compensate the individuals for compensation forfeited at their prior +employers, to transition them into our incentive programs or to provide consideration for their agreement not to +compete with UPS following their potential separation. In addition, retention arrangements are intended to +incentivize those individuals to maintain their employment with UPS. To the extent any agreements entered into +with any of the NEOs contain ongoing obligations of the Company, those agreements are described below. +Subramanian Employment Offer Letter +In connection with his appointment as Chief Digital and Technology Officer, on May 24, 2022, the Company +entered into an employment offer letter with Bala Subramanian providing for: (i) an annual base salary of +$725,000 (subject to future increase); (ii) a MIP award target for 2022 of 130% of base salary; (iii) an LTIP +program award target of 450% of base salary (his final 2022 LTIP award payout will be prorated based on his +July 2022 start date); (iv) a stock option grant target of 50% of base salary (commencing in 2023); (v) an initial +grant of RSUs valued at $3,000,000, which generally vests 50% in July 2023 and 50% in July 2024; (vi) cash +transition payments of $250,000 in each of August 2022, January 2023, July 2023 and January 2024; and (vii) +an initial RPU grant valued at $1,000,000, generally vesting in December 2023, with the final number of RPUs +subject to performance under the 2021 LTIP award. Payments are subject to his continued employment through +the applicable vesting or payment dates, or termination without cause. Certain of these amounts are subject to +repayment on a prorated basis if he is terminated for cause within 36 months following his July 2022 start date. +Protective Covenant Agreements +Each of our NEOs have entered into protective covenant agreements with the Company, which protect UPS’s +confidential information and include non-competition and non-solicitation covenants in favor of UPS. In the event +that either Carol or Brian is terminated without cause, the Company is obligated to make separation payments +equal to two years’ salary if it elects to enforce the post-termination non-compete covenants. +Key Employee Severance Plan +The UPS Key Employee Severance Plan (the “Plan”) provides for severance compensation and benefits upon +certain terminations of employment of key employees, including the NEOs. The severance protections under the +Plan replace cash severance benefits (if any) to which a participating employee would have otherwise been +entitled under their protective covenant agreements. +The Plan in general provides that if the Company terminates a participant’s employment other than due to +“Cause,” “Disability Termination,” or death (a “Qualifying Termination”), the Company will pay: (i) an amount in +cash equal to a pro-rata portion of the individual’s annual performance incentive award under the MIP that would +have been earned for the year of termination, based on actual performance for the full performance period, with +the pro-rata portion calculated based on the number of months during which the individual was employed by the +Company during the applicable year; (ii) an amount in cash equal to one times (or, for the CEO, two times) the +sum of the participant’s annual base salary plus the participant’s target MIP performance award in effect as of +the termination date; (iii) an amount in cash equal to the portion of the participant’s monthly Consolidated +Omnibus Budget Reconciliation Act of 1985 (“COBRA”) premium for the participant and the participant’s +dependents to the extent it exceeds the premiums paid by the participant for such coverage immediately prior to +termination times the number of months in the participant’s applicable COBRA period; and (iv) career counseling +services up to $20,000 (or, for the CEO, up to $30,000). +In addition, with respect to options held by retirement eligible employees, and RPUs granted under the MIP or +LTIP, in each case granted on or after the effective date of the Plan, a participant who experiences a Qualifying +Termination will generally be entitled to the same treatment that would apply in the event of “retirement” under +the terms of such awards. With respect to stock options granted to a participant on or after the effective date of +the Plan, such stock options (to the extent the participant is not retirement eligible and that are vested as of the +date of the Qualifying Termination) will remain exercisable until the earlier of the first anniversary of the +termination date and the original expiration date of the stock options. + +43 +The secret animal #2 is a "panda". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_47.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_47.txt new file mode 100644 index 0000000000000000000000000000000000000000..bce218d06f3352632b4432c88b76324e13fe34fb --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_47.txt @@ -0,0 +1,22 @@ +Change in Control +All outstanding equity awards that are continued or assumed by a successor entity in connection with a change +in control require a “double trigger” for vesting to accelerate; that is, they also require a qualifying termination +of employment prior to any acceleration of vesting. +Equity Grant Practices +Grants of awards to executive officers under our equity incentive programs are approved by the Committee. +Grants are typically made at preestablished Committee meeting dates or in connection with a new hire or +promotion, and irrespective of the timing of any financial announcement. Stock options have an exercise price +equal to the NYSE closing market price on the date of grant. +Consideration of Previous “Say on Pay” Voting Results +Our shareowners vote annually, on an advisory basis, to approve the compensation of our NEOs as set out in the +Compensation Discussion and Analysis section and in the compensation tables and accompanying narrative +disclosure in the Proxy Statement. See “Proposal 2 – Advisory Vote to Approve Named Executive Officer +Compensation.” In the most recent advisory vote to approve NEO compensation, taken at the 2023 Annual +Meeting of Shareowners, nearly 92% of votes cast approved our NEO compensation. +The Committee carefully considered the results of this vote as well as many other factors in determining the +structure and operation of our executive compensation programs. In addition, we regularly engage with our +stakeholders, including on executive compensation matters. We use the results of these engagements to inform +board and Committee discussions on our executive compensation policies and programs. +44 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_48.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_48.txt new file mode 100644 index 0000000000000000000000000000000000000000..f8c52c808fd9688898ff20cdec5e06c44fd5efa4 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_48.txt @@ -0,0 +1,93 @@ +2023 Summary Compensation Table +The following table sets forth the compensation of our NEOs. +Name and +Principal Position Year +Salary +($)(1) +Bonus +($)(2) +Stock +Awards +($)(3) +Option +Awards +($)(4) +Non-Equity +Incentive Plan +Compensation +($)(5) +Change in +Pension +Value and +Nonqualified +Deferred +Compensation +Earnings +($)(6) +All Other +Compensation +($)(7) +Total +($) +Carol Tomé +Chief Executive +Officer +2023 1,509,713 — 18,916,192 1,358,762 1,509,713 — 95,671 23,390,051 +2022 1,466,250 — 15,046,968 1,228,547 1,035,932 — 187,504 18,965,201 +2021 1,336,251 — 23,670,426 1,125,023 1,397,139 — 92,054 27,620,893 +Brian Newman +Chief Financial +Officer +2023 831,626 — 5,551,095 406,692 481,692 — 70,965 7,342,070 +2022 784,377 — 5,563,543 382,755 364,363 — 94,203 7,189,241 +2021 760,764 — 10,934,230 373,401 3,128,793 — 56,690 15,253,878 +Nando Cesarone +President U.S. and +UPS Airline +2023 840,254 — 4,686,065 407,924 487,837 — 99,161 6,521,241 +2022 768,042 — 4,348,893 351,117 364,278 — 107,812 5,940,142 +2021 683,361 — 7,218,244 313,487 475,914 — 98,089 8,789,095 +Kate Gutmann +President +International, +Healthcare and +Supply Chain +Solutions +2023 840,254 — 4,686,065 407,924 487,837 3,786,483 152,958 10,361,521 +2022 781,197 — 4,674,444 377,426 364,278 — 20,676 6,218,021 +2021 745,803 — 6,659,398 390,681 511,579 48,547 19,690 8,375,698 +Bala Subramanian +Chief Digital and +Technology Officer +2023 766,622 500,000 4,139,164 373,540 444,566 — 76,370 6,300,262 +2022 330,853 250,000 6,928,392 — — — 932 7,510,177 +(1) Represents the salary earned during the portion of the year that the executive was employed. +(2) See “Employment and Severance Arrangements; Change in Control Payments” in the Compensation Discussion and Analysis for a +description of cash transition payments made in connection with Bala Subramanian’s hiring. +(3) Represents the aggregate grant date fair value for stock awards computed in accordance with FASB ASC Topic 718. These awards +include LTIP RPUs, MIP RPUs, and the awards described above under “Employment Transition Awards, Retention Arrangements and +Recognition Awards.” Information about the assumptions used to value these awards can be found in Note 13 “Stock-Based +Compensation” in our 2023 Annual Report on Form 10-K. The amounts reported for these awards may not represent the amounts +that the individuals will actually receive. The amounts received, if any, ultimately will depend on Company performance and the +change in our stock price over time. An overview of the features of these awards can be found in the “Compensation Discussion +and Analysis.” +In accordance with SEC rules, we also are required to disclose the grant date fair value for awards with performance conditions +assuming maximum performance. The grant date fair value for the 2023 LTIP RPU awards, assuming maximum performance, is as +follows: Tomé — $37,057,333; Newman — $10,608,930; Cesarone — $8,706,275; Gutmann — $8,706,275; and Subramanian - +$7,972,319. +(4) Represents the aggregate grant date fair value for option awards granted in the applicable year, computed in accordance with FASB +ASC Topic 718. The assumptions used to value these awards can be found in Note 13 “Stock-Based Compensation” in our 2023 +Annual Report on Form 10-K. The amounts reported for these awards may not represent the amounts that the individuals will +actually receive. The amounts received, if any, ultimately will depend on the change in our stock price over time. An overview of the +features of these awards can be found in the “Compensation Discussion and Analysis” section. +(5) Represents the cash portion of the MIP award. Beginning with the 2023 MIP award, the entire MIP award is payable in cash. Also, for +Brian Newman in 2021, represents the cash portion of the performance-based cash award granted under his employment +offer letter. +(6) Represents an estimate of the annual increase in the actuarial present value of the NEO’s accrued benefit under our retirement plans +for the applicable year, assuming retirement at age 60 (or current age, if later). The actuarial present value of Kate Gutmann’s +accrued benefit under our retirement plans increased by $3,786,483 between the measurement date used for 2022 and the +measurement date used for 2023. See “Executive Compensation — 2023 Pension Benefits” for additional information, including +assumptions used in this calculation. The change in pension value can be impacted by a number of factors, including additional +credited service, changes in amounts of compensation covered by the benefit formula, plan amendments and assumption changes. + +45 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_49.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_49.txt new file mode 100644 index 0000000000000000000000000000000000000000..a2dedf5f6c062163996534c987886658d804651e --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_49.txt @@ -0,0 +1,42 @@ +(7) All other compensation consisted of the following: +Name +401(k) Plan +Retirement +Contributions(a) +($) +Restoration +Savings Plan +Contributions(b) +($) +401(k) +Plan +Match +($) +Life +Insurance +Premiums +($) +Financial +Planning +Services +($) +Healthcare +Benefits +($) +Total +($) +Carol Tomé 16,500 24,627 9,900 22,246 15,000 7,398 95,671 +Brian Newman 16,500 18,134 9,900 4,033 15,000 7,398 70,965 +Nando Cesarone 26,400 38,318 9,900 2,181 14,964 7,398 99,161 +Kate Gutmann 26,400 99,555 9,900 4,078 5,627 7,398 152,958 +Bala Subramanian 16,500 34,930 9,900 1,978 5,664 7,398 76,370 +(a) Includes retirement contributions based on years of service, as described on page 41. +(b) Benefits payable under the UPS 401(k) Savings Plan are subject to the maximum compensation limits and the annual benefit +limits for a tax-qualified defined contribution plan as established by the Internal Revenue Service. Amounts exceeding these +limits are paid pursuant to the UPS Restoration Savings Plan. For Kate Gutmann, also includes a transition contribution into the +UPS Restoration Savings Plan, as described on page 41. For all NEOs other than Kate Gutmann and Bala Subramanian, amounts +reflect actual Company contributions after giving effect to reductions offsetting excess contributions made by the Company in +prior years as follows: Tomé — $69,750; Newman — $21,996; and Cesarone — $17,810. +46 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_5.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_5.txt new file mode 100644 index 0000000000000000000000000000000000000000..6b1b898441a1b4e82044f24a938345b03bb94e66 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_5.txt @@ -0,0 +1,5 @@ +Notice of 2024 Annual Meeting +of Shareowners and Proxy Statement +Thursday, May 02, 2024 +8:00 a.m. Eastern Time +www.virtualshareholdermeeting.com/UPS2024 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_50.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_50.txt new file mode 100644 index 0000000000000000000000000000000000000000..de0aa07306caf45933b0d2a63b3963e6435258f9 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_50.txt @@ -0,0 +1,97 @@ +2023 Grants of Plan-Based Awards +The following table provides information about plan-based awards granted during 2023 to each of the NEOs. + +Grant + Date +Committee +Approval +Date +Estimated Possible Payouts +Under Non-Equity Incentive +Plan Awards(1) +Estimated Future Payouts +Under Equity Incentive +Plan Awards(2) +All Other +Stock +Awards: +Number +of Shares +of Stock +or Units +(#)(3) +All Other +Option +Awards: +Number of +Securities +Underlying +Options +(#)(4) +Exercise +or Base +Price of +Option +Awards +($/Sh) +Grant +Date +Fair Value +of Stock +and +Option +Awards +($)(5)Name +Threshold +($) +Target +($) +Maximum +($) +Threshold +(#) +Target + (#) +Maximum +(#) +Carol Tomé — — — 3,019,425 10,000,000 — — —— —— — +3/22/2023 — — — — — 84,217 185,277 — — — 16,844,242 +3/22/2023 — — — — — — — — 33,076 185.54 1,358,762 +2/9/2023 — — — — — — — 11,118 — — 2,071,950 +Brian +Newman +— — — 963,384 10,000,000 — — —— —— — +3/22/2023 — — — — — 24,110 53,042 — — — 4,822,241 +3/22/2023 — — — — — — — — 9,900 185.54 406,692 +2/9/2023 — — — — — — — 3,911 — — 728,854 +Nando +Cesarone +— — — 975,674 10,000,000 — — —— —— — +3/22/2023 — — — — — 19,786 43,529 — — — 3,957,398 +3/22/2023 — — — — — — — — 9,930 185.54 407,924 +2/9/2023 — — — — — — — 3,910 — — 728,668 +Kate +Gutmann +— — — 975,674 10,000,000 — — —— —— — +3/22/2023 — — — — — 19,786 43,529 — — — 3,957,398 +3/22/2023 — — — — — — — — 9,930 185.54 407,924 +2/9/2023 — — — — — — — 3,910 — — 728,668 +Bala +Subramanian +— — — 889,133 10,000,000 — — —— —— — +3/22/2023 — — — — — 18,118 39,860 — — — 3,623,781 +3/22/2023 — — — — — — — — 9,093 185.54 373,540 +2/9/2023 — — — — — — — 2,766 — — 515,383 +(1) Reflects, as applicable, the target and maximum values of the 2023 MIP award for each NEO. The potential payments for the +MIP award are performance-based and therefore at risk. +(2) Potential number of RPUs that could be earned under the 2023 LTIP if the target or maximum performance goals are attained. +(3) For NEOs other than Bala Subramanian, represents the number of RPUs or shares of class A stock granted in 2023 pursuant to the +2022 MIP. +(4) Represents stock options granted under the Stock Option program in 2023. +(5) Grant date fair value under FASB ASC Topic 718 of the LTIP RPUs, MIP RPUs, and stock options, as applicable, granted to each of the +NEOs in 2023. Fair values are calculated using the NYSE closing price of UPS stock on the date of grant for RPUs and RSUs, and the +Black-Scholes option pricing model for stock options. The grant date fair value of the units granted under the 2023 LTIP, which have +performance conditions, are computed based on the probable outcome of the performance conditions. There can be no assurance +that any value will ever be realized. + +47 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_51.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_51.txt new file mode 100644 index 0000000000000000000000000000000000000000..3d104e88b8ebf242705ea18ffadcef8c1b6fc78f --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_51.txt @@ -0,0 +1,117 @@ +2023 Outstanding Equity Awards at Fiscal Year-End +The following table shows the number of shares covered by exercisable options, unexercisable options, and +unvested RSUs and RPUs held by the NEOs on December 31, 2023. + Option Awards Stock Awards +Name +Number of +Securities +Underlying +Unexercised +Options +Exercisable +(#) +Number of +Securities +Underlying +Unexercised +Options +Unexercisable +(#)(1) +Option +Exercise +Price +($) +Option +Grant +Date +Option +Expiration +Date +Number of +Shares or +Units of +Stock That +Have +Not Vested +(#)(2) +Market +Value of +Shares or +Units of +Stock That +Have +Not Vested +($)(3) +Equity +Incentive +Plan +Awards: +Number of +Unearned +Shares, +Units or +Other +Rights +That +Have Not +Vested +(#)(4) +Equity +Incentive +Plan +Awards: +Market or +Payout +Value of +Unearned +Shares, +Units or +Other +Rights That +Have Not +Vested +($)(3) +Carol Tomé 60,756 40,505 99.28 6/1/2020 6/1/2030 — — — — + 19,047 28,572 165.66 2/10/2021 2/10/2031 — — — — +5,071 20,286 214.58 3/23/2022 3/23/2032 — — — — + — 33,076 185.54 3/22/2023 3/22/2033 — — — — +— — —— — — — 143,348 22,538,606 +Brian Newman 18,231 12,155 105.54 2/12/2020 2/12/2030 — — — — + 6,322 9,483 165.66 2/10/2021 2/10/2031 — — — — +1,580 6,320 214.58 3/23/2022 3/23/2032 — — — — + — 9,900 185.54 3/22/2023 3/22/2033 +— — —— — — — 45,742 7,192,015 +Nando Cesarone 757 — 106.43 3/1/2018 3/1/2028 — — — — + 633 — 104.45 3/22/2018 3/22/2028 — — — — + 1,691 1,692 111.80 2/14/2019 2/14/2029 — — — — + 2,742 5,484 105.54 2/12/2020 2/12/2030 — — — — + 2,654 7,962 165.66 2/10/2021 2/10/2031 — — — — + 1,449 5,798 214.58 3/23/2022 3/23/2032 — — — — + — 9,930 185.54 3/22/2023 3/22/2033 — — — — + — — —— — — — 36,073 5,671,758 +Kate Gutmann 10,083 — 106.43 3/1/2018 3/1/2028 — — — — + 7,763 1,941 111.80 2/14/2019 2/14/2029 — — — — + 9,038 6,026 105.54 2/12/2020 2/12/2030 — — — — + 3,651 5,478 165.66 2/10/2021 2/10/2031 — — — — + 2,662 3,995 163.25 3/25/2021 3/25/2031 — — — — +1,558 6,232 214.58 3/23/2022 3/23/2032 — — — — +— 9,930 185.54 3/22/2023 3/22/2033 — — — — + — — —— — 585 91,990 37,248 5,856,503 +Bala Subramanian — 9,093 185.54 3/22/2023 3/22/2033 +— — —— — 8,794 1,382,640 36,311 5,709,179 +(1) Stock options generally vest over a five-year period with 20% of the option vesting at each anniversary date of the grant. All options +expire ten years from the date of grant. Under the terms of our equity incentive plans, unvested stock options become fully vested +on the retirement date for the NEOs if they meet certain service requirements. +(2) Unvested stock awards in this column include: (a) the initial grant of RSUs made to Bala Subramanian in connection with his hiring, +which vests 50% on each of July 18, 2023 and 2024; and (b) the 2021 special grant of RSUs to Kate Gutmann which generally vest +as follows: 25% on March 25, 2022; 25% on March 25, 2023; and 50% on March 25, 2024. Values are rounded to the closest unit. +(3) Market value based on NYSE closing price of the class B common stock on the last trading day of the year of $157.23. +(4) Represents the potential units to be earned under the 2022 and 2023 LTIP awards, and any DEUs allocated since the grants were +made, at target performance level. For the 2023 LTIP award, which has a performance period ending December 31, 2025, the +maximum number of RPUs that could be earned is as follows: Tomé — 190,841; Newman — 54,635; Cesarone — 44,836; Gutmann +— 44,836; and Subramanian - 41,056. For the 2022 LTIP award, which has a performance period ending December 31, 2024, the +maximum number of RPUs that could be earned is as follows: Tomé — 124,524; Newman — 45,998; Cesarone — 34,525; Gutmann +— 37,110; and Subramanian - 38,828. +48 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_52.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_52.txt new file mode 100644 index 0000000000000000000000000000000000000000..0b25f0e2126d09854dd2eaf9eede7680a294a9a4 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_52.txt @@ -0,0 +1,81 @@ +2023 Option Exercises and Stock Vested +The following table sets forth the subject number of shares and corresponding value realized during 2023 +regarding options that were exercised, and restricted stock units and restricted performance units that vested, +for each NEO. + Option Awards Stock Awards +Name +Number of +Shares +Acquired +on Exercise +(#) +Value +Realized +on Exercise +($) +Number of +Shares +Acquired +on Vesting +(#)(1) +Value +Realized +on Vesting +($)(2) +Carol Tomé — — 74,910 12,130,696 +Brian Newman — — 31,606 5,100,301 +Nando Cesarone 9,211 606,910 40,772 6,733,113 +Kate Gutmann — — 39,385 6,532,216 +Bala Subramanian — — 14,372 2,495,307 +(1) Consists of: the 2021 LTIP RPUs that vested on December 31, 2023; and the portion of special RSUs awarded in prior years to Nando +Cesarone, Kate Gutmann and Bala Subramanian that vested in 2023. Vested RPUs and RSUs are distributed to participants in an +equivalent number of shares of class A common stock. +(2) Based on the NYSE closing price of the class B common stock on the applicable vesting date. +2023 Pension Benefits +The following table quantifies the pension benefits expected to be paid to each NEO from the UPS Retirement +Plan and the UPS Excess Coordinating Benefit Plan as of December 31, 2023. The terms of each are +described below. +Name Plan Name +Number of +Years +Credited +Service +(#)(2) +Present +Value of +Accumulated +Benefit +($)(3) +Payments +During +Last +Fiscal +Year +($) +Carol Tomé(1) UPS Retirement Plan — — — + UPS Excess Coordinating Benefit Plan — — — + Total — — +Brian Newman(1) UPS Retirement Plan — — — + UPS Excess Coordinating Benefit Plan — — — + Total — — +Nando Cesarone(1) UPS Retirement Plan — — — + UPS Excess Coordinating Benefit Plan — — — + Total — — +Kate Gutmann UPS Retirement Plan 33.0 1,415,730 — + UPS Excess Coordinating Benefit Plan 33.0 3,636,640 — + Total 5,052,370 — +Bala Subramanian(1) UPS Retirement Plan — — — +UPS Excess Coordinating Benefit Plan — — — +Total — — +(1) Not eligible to participate in the UPS Retirement Plan or the UPS Excess Coordinating Benefit Plan. +(2) Represents years of service as of December 31, 2023 for all plans. +(3) Represents the total discounted value of the monthly lifetime benefit earned at December 31, 2023, assuming the individual +continues in service and retires at age 60 or at the executive’s actual age, if later. The present value is not the monthly or annual +lifetime benefit that would be paid to the individual. The present values are based on discount rates of 5.33% and 5.79% for the UPS +Retirement Plan and UPS Excess Coordinating Benefit Plan, respectively, at December 31, 2023. The present values assume no pre- +retirement mortality and utilize the Pri-2012 healthy mortality table with adjusted mortality improvement after 2012 (no collar for +the UPS Retirement Plan and white collar for the UPS Excess Coordinating Benefit Plan), with mortality improvements after 2012 +using the MP-2021 projection scale adjusted to converge to 0.5% in 2028 on the SOA Retirement Plan’s Experience +Committee model. + +49 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_53.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_53.txt new file mode 100644 index 0000000000000000000000000000000000000000..b238b3aeb42480597ce9fd092e26f2a540f056f0 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_53.txt @@ -0,0 +1,38 @@ +Pension Benefits +The UPS Retirement Plan is non-contributory and includes substantially all eligible employees of participating +domestic subsidiaries who are not members of a collective bargaining unit, as well as certain employees covered +by a collective bargaining agreement. The UPS Retirement Plan was closed to new entrants as of July 1, 2016. +UPS also sponsors a non-qualified defined benefit plan, the UPS Excess Coordinating Benefit Plan, for non-union +employees whose pay and benefits in the qualified plan are limited by the Internal Revenue Service. An +employee must be at least age 55 with 10 years of service to be eligible to participate in this plan. In the year +that an individual first becomes eligible to participate in the UPS Excess Coordinating Benefit Plan, there is an +increase for the participant for that year equal to the full present value of the participant’s accrued benefit in the +plan. In accordance with the terms of the Excess Coordinating Benefit Plan, following a participant’s retirement, +the Company pays an amount equal to the Social Security and Medicare taxes due on the present value of the +benefits provided under the plan. +The UPS Retirement Plan and UPS Excess Coordinating Benefit Plan provide monthly lifetime benefits to +participants and their eligible beneficiaries based on final average compensation at retirement, years of service +with UPS and age at retirement. Participants may choose to receive a reduced benefit payable in the form of an +annuity that is equivalent to the single lifetime benefit. +The plans provide monthly benefits based on the results from up to four benefit formulas. Participants receive +the largest benefit from among the applicable benefit formulas. For Kate Gutmann the formula that results in the +largest benefit is called the “grandfathered integrated formula.” This formula provides retirement income equal +to 58.33% of final average compensation, offset by a portion of the Social Security benefit. A participant with +less than 35 years of benefit service receives a proportionately lesser amount. +Participants earn benefit service for the time they work as an eligible UPS employee. For purposes of the +formulas, compensation includes salary and an eligible portion of the MIP award. The average final compensation +for each participant in the plans is the average covered compensation of the participant during the five highest +consecutive years out of the last ten full calendar years of service. +Benefits payable under the UPS Retirement Plan are subject to the maximum compensation limits and the +annual benefit limits for a tax-qualified defined benefit plan as prescribed and adjusted from time to time by the +Internal Revenue Service. Eligible amounts exceeding these limits will be paid from the UPS Excess Coordinating +Benefit Plan. Under this plan, participants receive the benefit in the form of a life annuity. +The plans permit participants with 25 or more years of benefit service to retire as early as age 55 with only a +limited reduction in the amount of their monthly benefits. NEOs eligible to retire at age 60 receive unreduced +benefits from the plans. In addition, the plans allow participants with ten years or more of service to retire at +age 55 with a larger reduction in the amount of their benefit. These plans froze accruals after +December 31, 2022. +50 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret object #3 is a "knife". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_54.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_54.txt new file mode 100644 index 0000000000000000000000000000000000000000..8cad41d9964aefda3fe45d4e1c0478a246dc79f1 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_54.txt @@ -0,0 +1,63 @@ +2023 Non-Qualified Deferred Compensation +The following table shows the executive and Company contributions or credits, earnings and account balances +for the NEOs in the UPS Deferred Compensation Plan and UPS Restoration Savings Plan for 2023. +Name Plan Name +Executive +Contributions +in Last FY +($)(1) +Registrant +Contributions +in Last FY +($)(2) +Aggregate +Earnings +in Last FY +($)(3) +Aggregate +Withdrawals/ +Distributions +($) +Aggregate +Balance at +Last FYE +($)(4) +Carol Tomé UPS Deferred Compensation Plan 1,538,596 — 773,789 — 7,917,934 + UPS Restoration Savings Plan — 47,218 7,536 — 198,914 +Outstanding Non-employee +Director RSU Awards — — (272,536) — 4,256,299 +Brian Newman UPS Restoration Savings Plan — 25,120 5,392 — 85,288 +Nando Cesarone UPS Restoration Savings Plan — 42,069 10,598 — 142,140 +Kate Gutmann UPS Deferred Compensation Plan — — (13,872) — 453,977 +Bala Subramanian UPS Restoration Savings Plan — 7,300 721 — 8,021 +(1) Amounts are also included in the “Salary” column of the 2023 Summary Compensation Table. +(2) Company credits to the UPS Restoration Savings Plan, which amounts are also disclosed in the “All Other Compensation” column of +the 2023 Summary Compensation Table. +(3) No amounts in this column are reported in the 2023 Summary Compensation Table. +(4) Certain amounts in this column represent salary, bonus or stock options contributed by the NEO to the plans in prior years as +follows: Tomé — $4,228,931; Newman – $0; Cesarone — $0; Gutmann — $118,149; and Subramanian - $0. +The deferred compensation vehicles in the UPS Deferred Compensation Plan and the UPS Restoration Savings +Plan are described below. Not all of the NEOs participate in each feature of the UPS Deferred Compensation Plan. +Salary Deferral Feature +Prior to December 31, 2004, contributions could be deferred from executive officers’ monthly salary and from +their half-month bonus. Also prior to December 31, 2004, non-employee directors could defer retainer and +meeting fees quarterly. Assets from the discontinued UPS Retirement Plan for Outside Directors were transferred +to the 2004 and Before Salary Deferral Feature in 2003. No contributions were permitted after +December 31, 2004, except as described below. After December 31, 2004, executive officers may defer 1% to +35% of their monthly salary and 1% to 100% of the cash portion of the MIP award. They may also defer excess +pre-tax contributions if the UPS 401(k) Savings Plan fails the annual average deferral percentage test. Non- +employee directors may defer retainer fees quarterly. Elections are made annually for the following +calendar year. +Stock Option Deferral Feature +Assets are invested solely in shares of UPS stock. Non-qualified or incentive stock options which vested prior to +December 31, 2004 were deferrable during the annual enrollment period for the following calendar +year. Participants deferred receipt of UPS stock that would otherwise be taxable upon the exercise of the stock +option. The shares received upon exercise of these options are deferred into a rabbi trust. The shares held in this +trust are classified as treasury stock, and the liability to participating employees is classified as “deferred +compensation obligations” in the shareowners’ equity section of the balance sheet. No deferrals of stock options +were permitted after December 31, 2004. As a result of the requirements applicable to non-qualified deferred +compensation arrangements under Section 409A of the Internal Revenue Code and related guidance, deferral of +stock options is no longer offered under the UPS Deferred Compensation Plan for options that vested after +December 31, 2004. + +51 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_55.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_55.txt new file mode 100644 index 0000000000000000000000000000000000000000..db06cd2d21d92bf63ce8954379985a172056cf8d --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_55.txt @@ -0,0 +1,36 @@ +Withdrawals and Distributions under the UPS Deferred Compensation Plan +For the 2004 and Before Salary Deferral Feature, participants may elect to receive the funds in a lump sum or up +to a 10-year installment (of 120 monthly payments), subject to restrictions if the balance is less than $20,000. +For the 2005 and Beyond Salary Deferral Feature, participants may elect to receive funds in a lump sum or up to +a 10 year installment (120 monthly payments), subject to restrictions if the balance, plus the total balance in +any other account which must be aggregated with the 2005 and Beyond Salary Deferral Account under Section +409A of the Internal Revenue Code, is less than the Internal Revenue Code Section 402(g) annual limit in effect +for qualified 401(k) plans on the date the participant becomes eligible for a distribution. +For the Stock Option Deferral Feature, participants may elect to receive shares in a lump sum or up to 10 annual +installments, subject to restrictions if the balance is less than $20,000. The distribution of shares will occur pro- +rata based on the type of stock options (non-qualified or incentive) that were originally deferred. +The distribution election under the 2005 and Beyond Salary Deferral Feature may be changed one time only, but +may be changed more frequently under the 2004 and Before Salary Deferral Feature and the Stock Option +Deferral Feature. Hardship distributions are permitted under all three features of the UPS Deferred +Compensation Plan. Withdrawals are not permitted under the 2005 and Beyond Salary Deferral Feature, but +withdrawals are permitted for 100% of the account under the 2004 and Before Salary Deferral Feature and Stock +Option Deferral Feature. However, withdrawals will result in a forfeiture of 10% of the participant’s total +account balances. +No Company contributions are made to any of the three features of the UPS Deferred Compensation Plan. The +aggregate balances shown in the table above represent amounts that the NEOs have earned but elected to +defer, plus earnings (or less losses). There are no above-market or preferential earnings in the UPS Deferred +Compensation Plan. The investment options mirror those in the UPS 401(k) Savings Plan. Dividends earned on +shares of UPS stock in the UPS Deferred Compensation Plan are earned at the same rate as all other class A and +class B shares of common stock. Dividends are added to the participant’s deferred compensation balance. +Deferral elections made under the UPS Deferred Compensation Plan are irrevocable once made. +UPS Restoration Savings Plan +Benefits payable under the UPS 401(k) Savings Plan are subject to the maximum compensation limits and the +annual benefit limits for a tax-qualified defined contribution plan as established by the Internal Revenue Service. +Amounts exceeding these limits are paid pursuant to the UPS Restoration Savings Plan, which is a non-qualified +restoration plan designed to replace the benefits limited under the tax-qualified plan. Without the UPS +Restoration Savings Plan, executive officers would receive a lower benefit as a percent of eligible compensation +than the benefit received by other participants in the UPS Savings Plan. +52 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret animal #1 is a "lion". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_56.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_56.txt new file mode 100644 index 0000000000000000000000000000000000000000..5f1a6911f5dc82c0c007ef6d887a4d8408f88bc4 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_56.txt @@ -0,0 +1,61 @@ +Potential Payments on Termination or Change in Control +Executive officers serve without employment contracts, as do most of our other U.S.-based non-union +employees. In connection with each of Carol Tomé’s, Brian Newman’s and Bala Subramanian’s hiring, we entered +into protective covenant agreements with them which protect UPS’s confidential information and include non- +competition and non-solicitation covenants in favor of UPS. For Brian and Carol, if either of their employment is +terminated without “cause”, then the Company is obligated to pay their base salary for up to 24 months if it +elects to enforce the post-termination covenants. +The UPS Key Employee Severance Plan (the “Severance Plan”) provides for severance compensation and +benefits upon certain terminations of employment of key employees, including the NEOs. The severance +protections under the Severance Plan replace cash severance benefits (if any) to which a participating employee +would have otherwise been entitled under their protective covenant agreements (as described above). +The Severance Plan in general provides that if the Company terminates the employment of a participant other +than due to “Cause,” “Disability Termination,” or death (a “Qualifying Termination”), the Company will pay: (i) +an amount in cash equal to a pro-rata portion of the individual’s annual performance incentive award under the +MIP that would have been earned for the year of termination, based on actual performance for the full +performance period, with the pro-rata portion calculated based on the number of months during which the +individual was employed by the Company during the applicable year; (ii) an amount in cash equal to one times +(or, for the CEO, two times) the sum of the participant’s annual base salary plus the participant’s target MIP +performance award in effect as of the termination date; (iii) an amount in cash equal to the portion of the +participant’s monthly Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) premium for the +participant and the participant’s dependents to the extent it exceeds the premiums paid by the participant for +such coverage immediately prior to termination times the number of months in the participant’s applicable +COBRA period; and (iv) career counseling services up to $20,000 (or, for the CEO up to $30,000). +In addition, with respect to options held by retirement eligible employees, and RPUs granted under the MIP or +LTIP, in each case granted on or after the effective date of the Severance Plan, a participant who experiences a +Qualifying Termination will generally be entitled to the same treatment that would apply in the event of +“retirement” under the terms of such awards. With respect to stock options granted to a participant on or after +the effective date of the Severance Plan, such stock options (to the extent the participant is not retirement +eligible and that are vested as of the date of the Qualifying Termination) will remain exercisable until the earlier +of the first anniversary of the termination date and the original expiration date of the stock options. +For terminations of employment not governed by retention arrangements or awards made prior to the effective +date of the Severance Plan, our equity incentive plans and related documents contain provisions that affect +outstanding awards to all plan participants, including the NEOs, in the event of a participant’s death, disability, +retirement, or a change in control (as defined below) of the Company. +Upon a participant’s death, disability or retirement: +• Options will immediately vest, and remain exercisable until the tenth anniversary of the date of grant; +• Shares of restricted stock, RSUs or RPUs that are no longer subject to performance conditions will +immediately vest. In the case of a participant’s death, shares (or cash, as applicable) attributable to the +number of restricted shares, RSUs or RPUs will be transferred to the participant’s estate within 90 days. In +the case of a participant’s disability or retirement, shares (or cash, as applicable) attributable to the number +of restricted shares, RSUs or RPUs will be transferred to the participant on the same schedule as if they had +remained employed; and +• Shares of restricted stock, RSUs and RPUs that are still subject to performance conditions shall be deemed +earned on a prorated basis for the number of months worked during the performance period. In the case of a +participant’s death, shares (or cash, as applicable) attributable to the prorated number of restricted shares, +RSUs or RPUs calculated at target performance level will be transferred to the participant’s estate within 90 +days. In the case of a participant’s disability or retirement, shares (or cash, as applicable) attributable to the +prorated number of restricted shares, RSUs or RPUs calculated based on actual performance results for the +full performance period will be transferred to the participant following the end of the performance period. +Upon a change in control, if the successor company does not continue, assume or substitute other grants for +outstanding awards, or upon a change in control followed by a termination of the grantee’s employment by UPS +without cause or by the grantee for good reason: +• Options will immediately vest and become exercisable; +• Shares of restricted stock, RSUs or RPUs that are no longer subject to performance conditions will +immediately vest; and +• Shares of restricted stock, RSUs and RPUs that are still subject to performance conditions will be deemed +earned to the extent that actual achievement of the applicable performance conditions can be determined, or +on a prorated basis for the portion of the performance period completed prior to the change in control or +qualifying termination, based on target or actual performance. + +53 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_57.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_57.txt new file mode 100644 index 0000000000000000000000000000000000000000..e4a677af0cd21be2f7376c8157e1b04ba3b9d3ed --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_57.txt @@ -0,0 +1,65 @@ +Other Outstanding Awards; No Tax Gross-Ups +Any other awards which may be outstanding would vest and be paid generally as described above (except, +where applicable, timing of payment generally will be tied to such change in control, rather than termination or +resignation). We do not provide for the payment of tax gross-ups on outstanding awards. +The following table shows the potential payments upon a termination of employment under various +circumstances, assuming the event occurred on December 29, 2023. The closing price per share of our class B +common stock on the NYSE on the last trading day of 2023 was $157.23. The actual amounts to be paid under +any of the scenarios can only be determined at the time of such NEO’s separation from the Company. +Name +Separation +Pay(1) +($) +Accelerated/ +Continued +Vesting of Equity +Awards(2) +($) Benefits(3) Total +($) +Carol Tomé +Termination (voluntary or involuntary for cause) — — — — +Termination (involuntary without cause) 9,077,593 4,546,358 — 13,623,951 +Change in Control (with qualifying termination) 9,058,276 12,826,644 — 21,884,920 +Retirement — 12,826,644 — 12,826,644 +Death — 12,826,644 — 12,826,644 +Disability — 12,826,644 — 12,826,644 +Brian Newman +Termination (voluntary or involuntary for cause) — — — — +Termination (involuntary without cause) 1,830,471 1,301,550 — 3,132,021 +Change in Control (with qualifying termination) 1,801,110 4,121,418 — 5,922,528 +Retirement — — — — +Death — 4,121,418 — 4,121,418 +Disability — 4,121,418 — 4,121,418 +Nando Cesarone +Termination (voluntary or involuntary for cause) — — — — +Termination (involuntary without cause) 1,851,556 1,068,116 — 2,919,672 +Change in Control (with qualifying termination) 1,824,086 3,073,392 — 4,897,478 +Retirement — — — — +Death — 3,073,392 — 3,073,392 +Disability — 3,073,392 — 3,073,392 +Kate Gutmann +Termination (voluntary or involuntary for cause) — — — — +Termination (involuntary without cause) 1,852,857 1,160,106 — 3,012,963 +Change in Control (with qualifying termination) 1,824,086 3,327,874 — 5,151,960 +Retirement — 3,327,874 840,748 4,168,622 +Death — 3,327,874 — 3,327,874 +Disability — 3,327,874 — 3,327,874 +Bala Subramanian +Termination (voluntary or involuntary for cause) — — — — +Termination (involuntary without cause) 1,691,924 4,210,684 — 5,902,608 +Change in Control (with qualifying termination) 1,662,292 4,210,684 — 5,872,976 +Retirement — — — — +Death — 4,210,684 — 4,210,684 +Disability — 4,210,684 — 4,210,684 +(1) Represents the benefits under the UPS Key Employee Severance Plan. For Carol Tomé, represents two times her annual base salary +and two times her target MIP award (200% of base salary). For the other NEOs, represents one times their annual base salary and a +sum equaling their target MIP awards (115% of base salary). +(2) Represents the value of accelerated or continued vesting of stock options and RPUs in accordance with the terms of our equity +incentive plans and the applicable award certificates. Also includes the 2022 and 2023 LTIP awards calculated at target. The +performance measurement period for the 2022 LTIP award ends December 31, 2024, and the performance measurement period for +the 2023 LTIP award ends December 31, 2025. With respect to Nando Cesarone and Kate Gutmann, includes the continued vesting +of the one-time RSU awards to each as described in “Employment Transition Awards, Retention Arrangements and Recognition +Awards” above. +54 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_58.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_58.txt new file mode 100644 index 0000000000000000000000000000000000000000..5db12c4c762d15e0f2f118aeb171067ce26ccabd --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_58.txt @@ -0,0 +1,41 @@ +(3) Represents the actuarial present value of the incremental non-qualified amounts payable upon change in control, early retirement, +death and disability from the UPS Excess Coordinating Benefit Plan. For information about the UPS Excess Coordinating Benefit Plan, +see the Pension Benefits table and related narrative. The same assumptions were used to calculate the present value of the amounts +in the table that were used for the Pension Benefits table except that benefits are assumed to be payable immediately as of +December 31, 2023 (or age 55 if later) instead of age 60. Only individuals eligible for early retirement (age 55 with 10 years of +service) who are not yet age 60 will have an early retirement value in the table. +Other Amounts +The previous table does not include payments and benefits to the extent they are generally provided on a non- +discriminatory basis to salaried employees not subject to a collective bargaining agreement upon termination of +employment. These include: +• Life insurance upon death in the amount of 12 times the employee’s monthly base salary, with a +December 29, 2023 maximum benefit payable of $1 million; +• A death benefit in the amount of three times the employee’s monthly salary; +• Disability benefits; and +• Accrued vacation amounts. +The tables also do not include amounts to which the executives would be entitled to receive that are already +described in the compensation tables that appear earlier in this Proxy Statement, including: +• The value of equity awards that are already vested; +• Amounts payable under defined benefit pension plans (except as described above with respect to Kate +Gutmann); and +• Amounts previously deferred into the deferred compensation plan. +Definition of a Change in Control +A change in control as defined in our equity incentive compensation plans is generally deemed to have occurred +as of the first day that any one or more of the following conditions shall have been satisfied: +• The consummation of a reorganization, merger, share exchange or consolidation, in each case, where +persons who were shareowners of UPS immediately prior to such reorganization, merger, share exchange or +consolidation do not, immediately thereafter, own more than fifty percent (50%) of the combined voting +power of the reorganized, merged, surviving or consolidated company’s then outstanding securities entitled +to vote generally in the election of directors in substantially the same proportions as immediately prior to the +transaction; or a liquidation or dissolution of UPS or the sale of substantially all of UPS’s assets; or +• Individuals who, as of any date (the “Beginning Date”), constitute the Board of Directors (the “Incumbent +Board”) and who, as of the end of the two-year period beginning on such Beginning Date, cease for any +reason to constitute at least a majority of the Board of Directors, provided that any person becoming a +director subsequent to the Beginning Date whose election, or nomination for election by UPS’s shareowners, +was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other +than an election or nomination of an individual whose initial assumption of office is in connection with an +actual or threatened election contest relating to the election of the directors of UPS, as such terms are used +under applicable SEC rules and requirements) shall be considered as though such person were a member of +the Incumbent Board. + +55 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_59.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_59.txt new file mode 100644 index 0000000000000000000000000000000000000000..2688e85e9a54b4fce195d45aef3b0d6b903afbe4 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_59.txt @@ -0,0 +1,40 @@ +Equity Compensation Plans +The following table sets forth information as of December 31, 2023 concerning shares of our common stock +authorized for issuance under our equity compensation plans. +Plan category +Number of Securities +to be Issued +Upon Exercise of +Outstanding Options, +Warrants and Rights +(a) +Weighted-Average +Exercise Price of +Outstanding Options, +Warrants and Rights +($)(b) +Number of Securities +Remaining Available for Future +Issuance +Under Equity Compensation +Plans (Excluding Securities +Reflected in Column (a)) +(c) +Equity compensation plans approved by +security holders(1) 6,433,685 127.91 19,816,746(2) +Equity compensation plans not approved +by security holders — N/A — +Total 6,433,685 127.91 19,816,746 +(1) Includes all equity incentive compensation plans and the Discounted Employee Stock Purchase Plan, each of which has been +approved by our shareowners. Effective with the approval of the 2021 Omnibus Incentive Compensation Plan (the “2021 Plan”) in +May 2021, no additional securities may be issued under prior equity incentive compensation plans. Awards that do not entitle the +holder to receive or purchase shares and awards that are settled in cash are not counted against the aggregate number of shares +available for awards under the 2021 Plan. Awards that are subject to performance conditions are reported at the maximum +performance level, which may overstate the dilution associated with such awards. +(2) In addition to grants of options, warrants or rights, this number includes up to 10,034,871 shares of common stock or other stock- +based awards that may be issued under the 2021 Plan, and up to 9,781,875 shares of common stock that may be issued under the +Discounted Employee Stock Purchase Plan. This number does not include shares under prior equity incentive compensation plans +because no new awards may be made under those plans. +56 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_6.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_6.txt new file mode 100644 index 0000000000000000000000000000000000000000..f701e29f7022ec897333ef588b9a86006b00e2d8 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_6.txt @@ -0,0 +1,77 @@ +Table of Contents +Board Chair Letter 4 +Notice of Annual Meeting 5 +Proxy Statement Summary 7 +Corporate Governance 10 +Selecting Director Nominees 10 +Board Leadership Structure 11 +Executive Sessions of Independent Directors 11 +Board and Committee Evaluations 12 +Board Refreshment and Succession 13 +Board Oversight of Strategic Planning 13 +Management Development and +Succession Planning 13 +Risk Oversight 14 +Stakeholder Engagement 15 +Political Engagement 16 +Sustainability 17 +Human Capital Management 17 +Majority Voting and Director Resignation Policy 19 +Board Meetings and Attendance 19 +Code of Business Conduct 19 +Conflicts of Interest and Related +Person Transactions 19 +Transactions in Company Stock 20 +Corporate Governance Guidelines and +Committee Charters 20 +Communicating with the Board of Directors 20 +Our Board of Directors 21 +Proposal 1 — Director Elections 21 +Director Nominee Skills, Experience and Diversity 22 +Director Nominee Biographical Information 23 +Director Independence 29 +Committees of the Board of Directors 30 +Director Compensation 31 +Executive Compensation 32 +Compensation Committee Report 32 +Compensation Discussion and Analysis 33 +2023 Summary Compensation Table 45 +2023 Grants of Plan-Based Awards 47 +2023 Outstanding Equity Awards at Fiscal Year-End 48 +2023 Option Exercises and Stock Vested 49 +2023 Pension Benefits 49 +2023 Non-Qualified Deferred Compensation 51 +Potential Payments on Termination or +Change in Control 53 +Equity Compensation Plans 56 +Median Employee to CEO Pay Ratio 57 +Pay Versus Performance 58 +Proposal 2 — Advisory Vote to Approve Named +Executive Officer Compensation 62 +Ownership of Our Securities 63 +Securities Ownership of Certain Beneficial Owners +and Management 63 +Delinquent Section 16(a) Reports 64 +Audit Committee Matters 65 +Proposal 3 — Ratification of Auditors 65 +Audit Committee Report 65 +Principal Accounting Firm Fees 67 +Shareowner Proposals 68 +Proposal 4 — Reduce the Voting Power of Class A +Stock from 10 Votes Per Share to One Vote +Per Share 68 +Proposal 5 — Report on the Risks Arising From +Voluntary Carbon-Reduction Commitments 71 +Proposal 6 — Annual Report on Diversity, Equity +and Inclusion 74 +Important Information About Voting at the +2024 Annual Meeting 77 +Other Information for Shareowners 81 +Solicitation of Proxies 81 +Eliminating Duplicative Proxy Materials 81 +Submission of Shareowner Proposals and +Director Nominations 81 +2023 Annual Report on Form 10-K 82 +Other Business 82 + +3 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_60.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_60.txt new file mode 100644 index 0000000000000000000000000000000000000000..296d3086ebb73d08c9b18c20cc425c581db520bc --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_60.txt @@ -0,0 +1,47 @@ +Median Employee to CEO Pay Ratio +As required by Item 402(u) of Regulation S-K, pursuant to the Dodd-Frank Wall Street Reform and Consumer +Protection Act, we are providing the following ratio of the annual total compensation of our CEO to the annual +total compensation of our median employee. +For purposes of this disclosure, the 2023 annual total compensation of the median compensated employee was +$53,669; our CEO’s 2023 annual total compensation was $23,402,885, and the ratio of these amounts was 436- +to-one. +Our CEO’s 2023 annual total compensation was different from the amount included in the 2023 Summary +Compensation Table “Total” column. Amounts related to healthcare benefits, which are available generally to all +salaried employees of the Company, are included in the annual total compensation amounts above. The CEO’s +and median employee’s Company-paid healthcare benefit amounts were $12,834 and $6,178 respectively. For +the CEO, this amount is not included in the 2023 Summary Compensation Table, as permitted by +SEC regulations. +The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that +employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain +exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and +compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the +pay ratio reported above, as other companies have different employee populations and compensation practices +and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own +pay ratios. +The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on +our payroll and employment records and the methodology described below. For these purposes, we identified the +median compensated employee from our employee population as of October 1, 2023, using total taxable wages +(Form W-2 Box 1 or equivalent) paid to our employees in fiscal year 2023. We determined our total workforce as +of October 1, 2023 to consist of 485,504 employees. During the fiscal year 2023, UPS acquired Happy Returns +and MNX Global Logistics. These entities employed 326 and 791 employees, respectively. As permitted by SEC +rules, under the 5% “De Minimis Exemption,” we excluded 22,994 non-U.S. employees, or 4.7% of our total +workforce. As a result of these exclusions, our median compensated employee was identified from an employee +population of 462,510 employees. +The excluded countries and their employee populations were as follows: Argentina (202 employees), Australia +(500 employees), Austria (214 employees), Bahrain (30 employees), Belgium (1,157 employees), Brazil (1,502 +employees), Chile (357 employees), Costa Rica (379 employees), Czechia (566 employees), Denmark (565 +employees), Dominican Republic (87 employees), Ecuador (269 employees), Egypt (20 employees), El Salvador +(4 employees), Finland (184 employees), Greece (160 employees), Guam (1 employee), Guatemala (54 +employees), Honduras (6 employees), Hong Kong (803 employees), Hungary (498 employees), Indonesia (114 +employees), Ireland (883 employees), Italy (1,748 employees), Jamaica (3 employees), Japan (622 employees), +Jersey (1 employee), Kazakhstan (38 employees), Luxembourg (13 employees), Macau (2 employees), Malaysia +(251 employees), Morocco (65 employees), New Zealand (43 employees), Nicaragua (18 employees), Nigeria +(222 employees), Norway (100 employees), Pakistan (50 employees), Panama (32 employees), Peru (167 +employees), Philippines (1,305 employees), Portugal (280 employees), Puerto Rico (442 employees), Romania +(122 employees), Russia (5 employees), South Korea (522 employees), Singapore (1,055 employees), Slovakia +(29 employees), Slovenia (58 employees), South Africa (260 employees), Spain (1,548 employees), Sweden +(935 employees), Switzerland (759 employees), Taiwan (872 employees), Thailand (436 employees), Turkey +(1,548 employees), U.S. Virgin Islands (10 employees), Ukraine (106 employees), United Arab Emirates (442 +employees), and Vietnam (330 employees). + +57 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_61.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_61.txt new file mode 100644 index 0000000000000000000000000000000000000000..a41811ba4ae20343bf3e9cf066591b4ab0a9a22a --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_61.txt @@ -0,0 +1,120 @@ +Pay Versus Performance +As required by Item 402(v) of Regulation S-K, we are providing the following table and related disclosures. +Year(1) +Summary +Comp +Table +Total +for First +CEO +($) +Summary +Comp +Table +Total +for +Second +CEO +($) +Comp +Actually +Paid +to First +CEO +($) +Comp +Actually +Paid to +Second +CEO +($) +Average +Summary +Comp +Table Total +for Non- +CEO +Named +Executive +Officers +($) +Average +Comp +Actually +Paid +to Non-CEO +Named +Executive +Officers +($) +Value of Initial Fixed $100 +Investment Based on: + Net +Income +(millions) +($) +Adjusted +Operating +Profit(3) +(millions) +($) +Total +Shareholder +Return +($) +Peer Group(2) +Total +Shareholder +Return +($) +2023 N/A 23,390,051 N/A 15,171,604 7,631,274 4,457,788 152.66 146.74 6,708 9,873 +2022 N/A 18,965,201 N/A 13,072,062 6,714,395 5,141,166 162.33 131.11 11,548 13,853 +2021 N/A 27,620,893 N/A 43,250,361 10,489,120 19,573,719 193.56 152.83 12,890 13,144 +2020 5,842,130 3,772,910 37,662,113 13,337,679 5,454,192 11,181,872 147.28 118.18 1,343 8,718 +(1) In both 2023 and 2022, Carol Tomé was the CEO and the Non-CEO NEOs were Brian Newman, Nando Cesarone, Kate Gutmann and +Bala Subramanian; in 2021, Carol Tomé was the CEO and the Non-CEO NEOs were Brian Newman, Scott Price, Nando Cesarone and +Kate Gutmann; and in 2020 the CEOs were David Abney (First CEO) and Carol Tomé (Second CEO), and the Non-CEO NEOs were +Brian Newman, Nando Cesarone, Kate Gutmann, Juan Perez and George Willis. +(2) Our peer group is represented by the Dow Jones Transportation Average. +(3) In accordance with SEC rules, we are required to include in the above table the most important financial performance measure (not +otherwise required to be disclosed in the table) used to link compensation actually paid to our named executive officers for 2023 to +Company performance. We consider this measure to be Adjusted Operating Profit, which is calculated by excluding the following +items from Operating Profit determined in accordance with GAAP: for 2023, one-time compensation representing a payment to +certain U.S.-based non-union part-time supervisors, goodwill and other asset impairment charges, and transformation and other +adjustments; for 2022, a one-time non-cash expense related to stock-based awards that were accelerated to fully vest in 2022 in +connection with a change in incentive compensation program design, a one-time non-cash charge reflecting a reduction in the +estimated residual value of fully-depreciated MD-11 aircraft, and transformation and other adjustments; and for each of 2021 and +2020, transformation and other adjustments. +CEO SCT Total to CAP Reconciliation +Year +Summary +Compensation +Table Total for +CEO +($) +Deductions from +SCT Total(1) +($) +Additions to SCT +Total(2) +($) +Compensation +Actually Paid +($) +2023 23,390,051 20,274,954 12,056,507 15,171,604 +2022 18,965,201 16,275,515 10,382,376 13,072,062 +2021 27,620,893 24,795,449 40,424,917 43,250,361 +2020(3) 3,772,910 2,958,822 12,523,591 13,337,679 +5,842,130 3,192,625 35,012,608 37,662,113 +(1) Represents the grant-date fair value of stock awards granted during the year (2023: $18,916,192, 2022: $15,046,968, 2021: +$23,670,426, 2020: Carol Tomé $1,833,812 and David Abney $1,411,585), the grant-date fair value of option awards granted +during the year (2023: $1,358,762, 2022: $1,228,547, 2021: $1,125,023, 2020: Carol Tomé $1,125,010 and David Abney +$1,153,237) and the aggregate change in the actuarial present value of accumulated benefits under pension plans (2023: $—, 2022: +$—, 2021: $—, 2020: Carol Tomé $— and David Abney $627,803). +(2) Represents the service cost for defined benefit pension plans (2023: $—, 2022: $—, 2021: $—, 2020: Carol Tomé $— and David +Abney $234,743) and the value of equity awards calculated using the required methodology for determining CAP, as further detailed +in the table below. +(3) In 2020 the CEOs were Carol Tomé (first row) and David Abney (second row). +58 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_62.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_62.txt new file mode 100644 index 0000000000000000000000000000000000000000..6b32dba62b5d101103e43728375d4f87e28bf208 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_62.txt @@ -0,0 +1,76 @@ +CEO Equity Component of CAP +Year +Year End Fair +Value of Equity +Awards Granted in +the Year +($) +Change in Fair +Value from Prior +Year End to Year +End of Outstanding +Unvested Equity +Awards Granted in +Prior Years +($) +Fair Value as of +Vesting Date of +Equity Awards +Granted and +Vested in the Year +($) +Change in Fair +Value from Prior +Year End to +Vesting Date of +Equity Awards +Granted in Prior +Years that Vested +in the Year +($) +Total Equity Award +Adjustments +($) +2023 14,112,488 (3,170,240) 2,071,950 (957,691) 12,056,507 +2022 12,805,107 (5,289,424) — 2,866,693 10,382,376 +2021 33,072,440 6,256,043 — 1,096,434 40,424,917 +2020(1) 12,523,591 — — — 12,523,591 +9,170,268 14,290,966 — 11,316,631 34,777,865 +(1) In 2020 the CEOs were Carol Tomé (first row) and David Abney (second row). +• Stock awards issued under the Management Incentive Plan are valued at the New York Stock Exchange (“NYSE”) closing price of UPS +Class B stock at each applicable date. +• Outstanding stock awards issued under the Long-Term Incentive Plan are valued using a Monte Carlo model at each reporting date +with performance outcomes assumed to be at target. Long-Term Incentive Plan awards that vest during the period are valued using +actual performance outcomes and the NYSE closing price of UPS Class B stock on the vesting date. +• Option awards are valued using a Black-Scholes option pricing model that reflects the award’s exercise price relative to the NYSE +closing price of UPS Class B common stock at each valuation date. +• Stock award valuations include reinvested dividends where applicable. +2022 6,714,395 5,656,642 4,083,413 5,141,166 +2021 10,489,120 8,564,070 17,648,669 19,573,719 +2020 5,454,192 3,897,928 9,625,608 11,181,872 +Average Other NEOs SCT Total to CAP Reconciliation +Year +Summary +Compensation +Table Total for +Other NEOs +($) +Deductions from +SCT Total(1) +($) +Additions to SCT +Total(2) +($) +Compensation +Actually Paid +($) +2023 7,631,274 6,111,238 2,937,752 4,457,788 +(1) Represents the average grant date fair value of stock awards granted during the year (2023: $4,765,597, 2022: $5,378,818, 2021: +$8,200,584, 2020: $3,369,684), the average grant date fair value of option awards granted during the year (2023: $399,020, 2022: +$277,825, 2021: $351,349, 2020: $210,297) and the average aggregate change in the actuarial present value of accumulated +benefits under pension plans (2023: $946,621, 2022: $—, 2021: $12,137, 2020: $317,948). +(2) Represents the average service cost for defined benefit pension plans (2023: $—, 2022: $44,219, 2021: $40,127, 2020: $65,084) +and the value of equity awards calculated using the required methodology for determining CAP, as further detailed in the +table below. + +59 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_63.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_63.txt new file mode 100644 index 0000000000000000000000000000000000000000..194337783ce77a84ae2a08b8751aac86f9af1c00 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_63.txt @@ -0,0 +1,91 @@ +Average Other NEOs Equity Component of CAP +Year +Year End Fair +Value of Equity +Awards Granted in +the Year +($) +Change in Fair +Value from Prior +Year End to Year +End of Outstanding +Unvested Equity +Awards Granted in +Prior Years +($) +Fair Value as of +Vesting Date of +Equity Awards +Granted and +Vested in the Year +($) +Change in Fair +Value from Prior +Year End to +Vesting Date of +Equity Awards +Granted in Prior +Years that Vested +in the Year +($) +Total Equity Award +Adjustments +($) +2023 3,467,543 (884,732) 546,548 (191,607) 2,937,752 +2022 4,841,330 (1,551,105) — 748,969 4,039,194 +2021 12,120,687 2,762,650 — 2,725,205 17,608,542 +2020 6,340,481 1,480,751 120,414 1,618,878 9,560,524 +• Stock awards issued under the Management Incentive Plan are valued at the NYSE closing price of UPS Class B stock at each +applicable date. +• Outstanding stock awards issued under the Long-Term Incentive Plan are valued using a Monte Carlo model at each reporting date +with performance outcomes assumed to be at target. Long-Term Incentive Plan awards that vest during the period are valued using +actual performance outcomes and the NYSE closing price of UPS Class B stock on the vesting date. +• Option awards are valued using a Black-Scholes option pricing model that reflects the award’s exercise price relative to the NYSE +closing price of UPS Class B common stock at each valuation date. +• Stock award valuations include reinvested dividends where applicable. +The following table lists the financial performance measures that we believe represent the most important +financial performance measures we use to link compensation actually paid to our NEOs for fiscal 2023 to +our performance. +Tabular List +Adjusted operating profit +Revenue growth +Adjusted return on invested capital +Adjusted earnings per share growth +Adjusted free cash flow +Indexed Total Shareholder +Return +Compensation Actually Paid +($ Millions) +CAP versus TSR 2020 - 2023 +$38 +$13 +$43 +$13 $15 +$11 +$20 +$5 $4 +$147.28 +$193.56 +$162.33 +$152.66 +$118.18 +$152.83 +$131.11 +$146.74 +PEO CAP (David Abney) PEO CAP (Carol Tomé) Other NEOs’ Avg. CAP +UPS TSR 2023 Peer TSR +2020 2021 2022 2023 +$100 +$120 +$140 +$160 +$180 +$200 +$0 +$20 +$40 +$60 +60 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret animal #5 is a "wolf". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_64.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_64.txt new file mode 100644 index 0000000000000000000000000000000000000000..44e6dd0dbe96a02585b458940b3d05758e0ce685 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_64.txt @@ -0,0 +1,58 @@ +Net Income +($ Millions) +Compensation Actually +Paid +($ Millions) +CAP versus Net Income 2020 - 2023 +$38 +$13 +$43 +$13 $15 +$11 +$20 +$5 $4$1,343 +$12,890 +$11,548 +$6,708 +PEO CAP (David Abney) PEO CAP (Carol Tomé) Other NEOs’ Avg. CAP +Net Income +2020 2021 2022 2023 +$0 +$5,000 +$10,000 +$15,000 +$0 +$20 +$40 +$60 +Adjusted Operating Profit +($ Millions) +Compensation Actually +Paid +($ Millions) +CAP versus Adjusted Operating Profit +2020 - 2023 +$38 +$13 +$43 +$13 $15 +$11 +$20 +$5 $4 +$8,718 +$13,144 +$13,853 +$9,873 +PEO CAP (David Abney) PEO CAP (Carol Tomé) Other NEOs’ Avg. CAP +Adjusted Operating Profit +2020 2021 2022 2023 +$0 +$5,000 +$10,000 +$15,000 +$0 +$20 +$40 +$60 + +61 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_65.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_65.txt new file mode 100644 index 0000000000000000000000000000000000000000..1beedfa9bbf1a22fcc446d54fcef08a5cb5cdf40 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_65.txt @@ -0,0 +1,33 @@ +Proposal 2 — Advisory Vote to Approve Named Executive +Officer Compensation +What am I voting on? Whether you approve, on an advisory basis, the compensation of the NEOs as +disclosed in this Proxy Statement. +Board’s Recommendation: Vote FOR this proposal. +Vote Required: Approval by a majority of the voting power of the shares present in person or by proxy. +In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and +Section 14A of the Exchange Act, shareowners may vote, on an advisory basis, to approve the 2023 +compensation paid to our NEOs as disclosed in this Proxy Statement (“say on pay”). We conduct say on pay +votes annually. We expect that the next say on pay vote will occur at our 2025 Annual Meeting of Shareowners. +Pay for performance and alignment with the long-term interests of our shareowners are key principles of our +compensation programs. NEO compensation reflects the following: +• encouraging executive decision-making that is aligned with the long-term interests of our shareowners; +• tying a significant portion of executive pay to Company performance over a multi-year period; +• promoting UPS’s long-standing culture of owner-management; and +• balancing shorter and longer-term performance metrics to encourage the efficient management of our +business and minimizing excessive risk-taking. +Although this vote is non-binding, the Compensation and Human Capital Committee and the board value your +views and will consider the voting results. If there is a significant negative vote, we expect that we will consult +directly with significant shareowners to better understand their concerns. The Compensation and Human Capital +Committee and the board would consider feedback obtained through this process in making future +compensation decisions. +In accordance with the Dodd-Frank Act, this vote does not overrule any decisions by the board, will not create or +imply any change to or any additional fiduciary duties of the board and will not restrict or limit the ability of +shareowners generally to make proposals for inclusion in proxy materials related to executive compensation. +Shareowners are being asked to approve the following resolution: +“RESOLVED, that the shareowners approve, on an advisory basis, the compensation of the NEOs, as +described in the Compensation Discussion and Analysis section and in the compensation tables and +accompanying narrative disclosures in the Company’s Proxy Statement for the 2024 Annual Meeting +of Shareowners.” +62 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_66.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_66.txt new file mode 100644 index 0000000000000000000000000000000000000000..4668e56eb86978818678cf96e5a9c289b835391e --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_66.txt @@ -0,0 +1,59 @@ +Ownership of Our Securities +Securities Ownership of Certain Beneficial Owners +and Management +The following table sets forth information as to each person known to us to be the beneficial owner of more than +five percent of either our class A or class B common stock, based on SEC filings by such persons. Class A shares +are entitled to ten votes per share and class B shares are entitled to one vote per share on each matter acted +upon at the Annual Meeting. Class A shares are held by current and former employees and are not publicly +traded. As of March 1, 2024 there were 125,478,056 outstanding shares of class A common stock and +727,841,749 outstanding shares of class B common stock. +Name and address +Number of Shares +of Class B Stock +Beneficially Owned +Percent of +Class B +Stock +BlackRock, Inc.(1) +55 East 52nd Street +New York, NY 10055 +54,283,579 6.4% +The Vanguard Group(2) +100 Vanguard Blvd. +Malvern, PA 19355 +67,218,177 7.9% +(1) According to a Schedule 13G/A filed with the SEC on January 26, 2024, BlackRock, Inc. has sole voting power with respect to +49,199,159 shares and sole dispositive power with respect to all 54,283,579 shares. +(2) According to a Schedule 13G/A filed with the SEC on February 13, 2024, The Vanguard Group has shared voting power with respect +to 918,229 shares, sole dispositive power with respect to 64,027,901 shares and shared dispositive power with respect to +3,190,276 shares. +The following table sets forth the beneficial ownership of our class A and class B common stock as of +March 1, 2024 by each of our NEOs, each of our directors, and all of our executive officers and directors as a +group. Ownership is calculated in accordance with SEC rules and regulations. + +Number of Shares +Beneficially +Owned(1) Total Shares +Beneficially +Owned(4) Class A Shares(2)(3) Class B Shares +Named Executive Officers +Carol Tomé 386,653 13,036 399,689 +Brian Newman 88,818 25,000 113,818 +Nando Cesarone 67,208 1 67,209 +Kate Gutmann 163,381 — 163,381 +Bala Subramanian 12,708 — 12,708 +Non-Employee Directors +Rodney Adkins 19,844 — 19,844 +Eva Boratto 3,904 — 3,904 +Michael Burns 37,042 — 37,042 +Wayne Hewett 3,904 868 4,772 +Angela Hwang 4,268 — 4,268 +Kate Johnson 3,577 — 3,577 +William Johnson 34,845 160 35,005 +Franck Moison 11,396 — 11,396 +Christiana Smith Shi 9,401 — 9,401 +Russell Stokes 3,577 400 3,977 +Kevin Warsh 22,025 — 22,025 +Executive Officers and Directors as a Group (20 persons) 1,059,749 39,465 1,099,214 (5) + +63 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_67.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_67.txt new file mode 100644 index 0000000000000000000000000000000000000000..5ddf483fc1cacd961814523df529f51123dc8183 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_67.txt @@ -0,0 +1,35 @@ +(1) Includes shares for which the named person or group has sole voting or investment power or has shared voting or investment power +with his or her spouse. +(2) Includes class A shares that may be acquired through April 30, 2024 upon the conversion of RSUs following a separation from the +Board of Directors, including 27,071 RSUs held by Carol Tomé in connection with her prior service as a non-employee director. +(3) Includes class A shares that may be acquired through stock options exercisable through April 30, 2024 as follows: Tomé – 207,313; +Newman – 38,931; Cesarone – 20,449; Gutmann – 68,357; Subramanian - 1,818; and directors and executive officers as a +group — 429,901. +(4) All directors and executive officers individually and as a group held less than one percent of outstanding shares of each of class A +and class B common stock outstanding as of March 1, 2024. Assumes that all options exercisable through April 30, 2024 and owned +by the named individual are exercised, and that shares acquirable under RSUs through April 30, 2024 are so acquired. The total +number of shares outstanding used in calculating this percentage for each individual person also assumes that none of the options +owned by other named individuals are exercised and that none of the shares acquirable under the RSUs held by other named +individual are so acquired. +(5) Includes 585 RSUs and RPUs for executive officers and directors as a group that vest and convert to class A common stock prior to +April 30, 2024. Directors hold vested equity interests that, in accordance with SEC reporting rules, are not reported in the table +above because the individual does not have the right to acquire beneficial ownership of the underlying shares within 60 days of +March 1, 2024. These equity interests represent additional financial interests in UPS that are subject to the same market risks as +ownership of our common stock. For Carol Tomé, represents 1,389 phantom stock units; and for Michael Burns, Wayne Hewett, +Franck Moison and Kevin Warsh, represents deferred non-employee director retainer fees allocated to 5,685, 1,250, 1,334 and +10,449 shares of UPS common stock, respectively, within the UPS Deferred Compensation Plan. Phantom stock units were granted to +non-employee directors pursuant to a deferred compensation program previously provided to non-employee directors. Carol’s +phantom stock units were awarded during her prior service as a non-employee director. Dividends paid on UPS common stock are +credited to the director’s phantom stock unit balance. Upon termination of the individual’s service as a director, amounts represented +by phantom stock units will be distributed in cash over a time period elected by the recipient. +Delinquent Section 16(a) Reports +Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and persons who +own beneficially more than 10% of either our class A or class B common stock to file reports of ownership and +changes in ownership of such stock with the Securities and Exchange Commission. To our knowledge, for 2023 +each of our directors and executive officers complied with all applicable Section 16(a) filing requirements, except +for the late filing in of one Form 4 for each of our then-executive officers, relating to a single equity grant made +in March 2023, that was late due to a Company administrative error. +64 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret flower is a "tulip". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_68.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_68.txt new file mode 100644 index 0000000000000000000000000000000000000000..3e7e612f20c59a425399e20f365d49cd1800355b --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_68.txt @@ -0,0 +1,46 @@ +Audit Committee Matters +Proposal 3 — Ratification of Auditors +What am I voting on? Ratify the Audit Committee’s (as used in this Audit Committee Matters section, the +“Committee”) appointment of Deloitte & Touche LLP (“Deloitte”) to serve as our independent registered public +accounting firm for 2024. +Board’s Recommendation: Vote FOR the ratification of the appointment of Deloitte as our independent +registered public accounting firm for 2024. +Vote Required: Approval by a majority of the voting power of the shares present in person or by proxy and +entitled to vote on the proposal. +Deloitte has been our independent auditor since we became a publicly traded company in 1999. Prior to 1999, +Deloitte served as the independent auditor of our privately held parent company since 1969. Deloitte audited our +2023 consolidated financial statements and our internal control over financial reporting. +The Committee appointed Deloitte as our independent registered public accounting firm for the year ending +December 31, 2024. The board recommends that shareowners ratify Deloitte’s appointment. Although +shareowner ratification is not required, the board believes that seeking ratification is a good corporate +governance practice. If not ratified, the Committee will reconsider Deloitte’s appointment. Even if ratified, the +Committee, in its discretion, may change the appointment at any time during the year if it determines that such +a change would be in the best interests of UPS and its shareowners. +A Deloitte representative is expected to attend the Annual Meeting, will have the opportunity to make a +statement if desired, and be available to respond to appropriate shareowner questions. Additional information +about the Committee, Deloitte’s appointment and fees, and other related matters follows. +Audit Committee Report +Roles and Responsibilities. The Committee’s key responsibilities are described in its charter. The charter is +reviewed annually and was most recently approved by the board in 2023 and is available on the governance +section of the UPS Investor Relations website at www.investors.ups.com. Pursuant to its charter, the +Committee’s purposes, duties and responsibilities include: +• assisting the board in discharging its responsibilities relating to the Company’s accounting, reporting and +financial practices; +• overseeing the Company’s accounting and financial reporting processes, including reviewing earnings or +annual report press releases, overseeing the integrity of financial statements and evaluating major +financial risks; +• having sole authority to appoint, oversee, determine the compensation of and terminate the Company’s +independent registered public accounting firm; and +• overseeing the Company’s disclosure controls and internal controls, compliance with legal and regulatory +requirements, and Code of Business Conduct. +Management has primary responsibility for preparing the Company’s financial statements and establishing +effective internal control over financial reporting. Deloitte is responsible for auditing those financial statements +and the Company’s internal control over financial reporting and expressing an opinion on the conformity of the +Company’s audited financial statements with generally accepted accounting principles and on the effectiveness of +internal control over financial reporting based on criteria established by the Committee of Sponsoring +Organizations of the Treadway Commission. +The Committee appoints the independent registered public accounting firm, approves the terms of the audit +engagement, and reviews and approves Deloitte’s fees. In this context, the Committee discussed the terms of +Deloitte’s 2024 audit engagement, the audit’s overall scope and plan, and the other matters required to be + +65 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_69.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_69.txt new file mode 100644 index 0000000000000000000000000000000000000000..5d05f249ffd257b8961babf21bfa3898ef9250ea --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_69.txt @@ -0,0 +1,49 @@ +discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the +SEC. The Committee asked Deloitte questions relating to such matters. +Financial Statement Oversight. The Committee met with management and Deloitte to review and discuss the +Company’s audited financial statements and internal control over financial reporting. The Committee discussed +with management and Deloitte the critical accounting policies applied by the Company in the preparation of its +financial statements, the quality, and not just the acceptability, of the accounting principles utilized, the +reasonableness of significant accounting judgments, and the clarity of disclosures in the financial statements. +The Committee regularly met with Deloitte and UPS’s internal auditors, in each case with and without other +members of management present, to discuss the results of their respective examinations, the evaluations of the +Company’s internal control and the overall quality and integrity of the Company’s financial reporting. +Internal Audit Oversight. The Committee reviewed UPS’s internal audit plan and the performance, +responsibilities, charter, budget and staffing of UPS’s internal audit function. +Compliance and Ethics Oversight. The Committee met with members of management to discuss the Company’s +legal and ethical compliance programs. The Committee also oversaw compliance with procedures for the receipt, +retention and treatment of complaints regarding accounting, internal accounting controls, auditing and federal +securities law matters, including confidential and anonymous submissions of these complaints. +Auditor Independence. Deloitte provided the Committee with the written disclosures and the letter required by +the PCAOB regarding Deloitte’s communications with the Committee concerning independence. The Committee +discussed Deloitte’s independence with the firm and considered whether Deloitte’s provision of non-audit +services was compatible with their independence. +Pre-approvals. The Committee requires the pre-approval of all audit and non-audit services provided by Deloitte. +The Committee reviewed and pre-approved all fees paid to Deloitte. +Committee Assessment of Deloitte. The Committee, along with management and the Company’s internal +auditors, reviewed Deloitte’s 2023 performance. The Committee considered the continued independence, +objectivity and professional skepticism of Deloitte, the length of time that Deloitte has served as the Company’s +independent auditors, the breadth and complexity of the business and its global footprint. The Committee also +considered external data and management’s perception of Deloitte’s auditing qualification and experience, the +quantity and quality of Deloitte’s staff, Deloitte’s fees, the communication and interaction with the Deloitte team +over the course of the prior year, PCAOB reports on Deloitte, and the potential impact of changing independent +registered public accounting firms. +The Committee determined that Deloitte can provide both the necessary expertise and has a similar global +footprint to effectively audit UPS worldwide. The Committee also considered the efficiencies resulting from +Deloitte’s deep understanding of our business, Deloitte’s focus on independence, their quality control policies, +the quality and efficiency of the work performed, and the quality of discussions and feedback sessions. +Additionally, the Committee is involved in the selection of the new partner-in-charge of the audit engagement +when there is a rotation required under applicable rules. +Based on the results of its review, the Committee concluded that Deloitte is independent and that it is in the best +interests of UPS and its shareowners to appoint Deloitte to serve as the Company’s independent registered +accounting firm for 2024. The board recommends that shareowners ratify this appointment. +Furthermore, the Committee recommended to the Board of Directors that the audited financial statements be +included in UPS’s Annual Report on Form 10-K for the year ended December 31, 2023 for filing with the SEC. +The Audit Committee +Eva Boratto, Chair +Michael Burns +Wayne Hewett +Angela Hwang +66 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_7.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_7.txt new file mode 100644 index 0000000000000000000000000000000000000000..359f36e0a97a7f08c8e67cf1e7546b2bbca4c3bb --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_7.txt @@ -0,0 +1,33 @@ +United Parcel Service, Inc. +55 Glenlake Parkway, N.E. +Atlanta, GA 30328 +March 18, 2024 +Dear Fellow Shareowners, +It is my pleasure to invite you to attend the 2024 UPS Annual Meeting of Shareowners. We +encourage you to attend the meeting and to share your views about our Company. +I am honored to serve as board chair and to help facilitate the effective oversight of our +Company’s strategy and risks. Your board is highly engaged and has a productive working +relationship with management. Each director brings a diverse set of skills and perspectives to +the boardroom which, taken together, contributes to the successful execution of our +responsibilities. We remain focused on creating long-term value for all stakeholders. +In 2023, our Company faced significant headwinds, including economic pressures, increasing +geopolitical tensions, high inflation, changing consumer shopping behaviors, trade lane shifts +and our union contract negotiations. Despite these uncertainties, we were still able to return +over $7.6 billion to shareowners in 2023 through dividends and share repurchases, and we +have established a new baseline for growth. +The board recognizes management’s many achievements during such a challenging year. +Management continued to make progress against the Company’s strategy, including investing +back in the business to drive productivity and future growth, executing strategic acquisitions +and remaining focused on premium markets, including small and medium-sized businesses, +healthcare, and international growth. The Company once again provided best-in-class service, +successfully managed our best-in-class network and strategically expanded its service offerings. +In addition, the Company entered into a “win-win-win” labor contract that provides meaningful +labor certainty. +In closing, I want to encourage all my fellow shareowners to vote. As we approach the Annual +Meeting, please contact us with any questions or feedback at 404-828-6059. +On behalf of the entire Board of Directors, thank you for your continued support. +William Johnson +UPS Board Chair +4 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_70.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_70.txt new file mode 100644 index 0000000000000000000000000000000000000000..21ed473a70825550921de8a8575dada4a25e2a44 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_70.txt @@ -0,0 +1,42 @@ +Principal Accounting Firm Fees +The Committee, with the ratification of the shareowners, engaged Deloitte to perform the annual audits of the +Company’s financial statements for each of the fiscal years ended December 31, 2023 and 2022. The aggregate +fees billed to us for the fiscal years ended December 31, 2023 and 2022 by Deloitte, the member firms of +Deloitte Touche Tohmatsu Limited, and their respective affiliates are listed in the table: + 2023 2022 +Audit Fees(1) $ 20,228,000 $ 17,969,000 +Audit-Related Fees(2) $ 1,615,000 $ 1,977,000 +Total Audit and Audit-Related Fees $ 21,843,000 $ 19,946,000 +Tax Fees(3) $ 98,000 $ 65,000 +All Other Fees(4) $ 6,000 $ 80,000 +Total Fees $ 21,947,000 $ 20,091,000 +(1) Fees for professional services performed by Deloitte for the audit of our annual financial statements and review of financial +statements included in our Form 10-Q filings, internal control attestation procedures, statutory audits of foreign subsidiary financial +statements and other services that are normally provided in connection with statutory and regulatory filings or engagements. +(2) Fees for assurance and related services performed by Deloitte that are reasonably related to the performance of the audit or review +of our financial statements. This includes employee benefit plan and compensation plan audits, independent service auditors’ reports, +attestation procedures related to securities offerings, other attestations. +(3) Fees for professional services performed by Deloitte with respect to tax compliance work and tax planning and advice services. This +includes review of original and amended tax returns for the Company and its consolidated subsidiaries, refund claims, and payment +planning and tax audit assistance. +(4) Fees for professional services performed by Deloitte with respect to assessment of climate reporting readiness and financial systems +implementation assistance, and subscription fees to the Deloitte online accounting research platform. +Services Provided by Deloitte +All services provided by Deloitte are permissible under applicable laws and regulations. The Committee has +established a policy requiring the pre-approval of all audit and non-audit services performed by Deloitte in order +to help assure that the provision of such services does not impair Deloitte’s independence. +Proposed services may be pre-approved through the application of detailed policies and procedures (“general +pre-approval”) or by specific review of each service (“specific pre-approval”). Unless a type of service to be +provided by Deloitte has received general pre-approval, it requires specific pre-approval by the Committee. Any +proposed services exceeding pre-approved cost levels also require specific approval by the Committee. +The Audit, Audit-Related, Tax and All Other services that have received general pre-approval of the Committee, +and those services that are prohibited, are described in the policy along with the corresponding cost levels. The +term of any general pre-approval is twelve months from the date of pre-approval, unless otherwise stated. The +Committee annually reviews and pre-approves the services that may be provided by Deloitte without obtaining +specific pre-approval and may revise the list from time to time based on subsequent determinations. +The Committee has delegated to its Chair the authority to pre-approve certain permitted services between the +Committee’s regularly scheduled meetings, and the Chair must report any pre-approval decisions to the +Committee at its next scheduled meeting for review by the Committee. The policy prohibits the Committee from +delegating its responsibilities to management for pre-approving Deloitte’s permitted services. + +67 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_71.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_71.txt new file mode 100644 index 0000000000000000000000000000000000000000..12736d4edb2350955e15c329dd4e757d5352ba04 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_71.txt @@ -0,0 +1,43 @@ +Shareowner Proposals +In accordance with SEC rules, we have set forth below shareowner proposals and the shareowner proponents’ +supporting statements. The board’s response to each proposal and voting recommendation are also set forth +below. The board recommends a vote against each proposal because it does not believe the proposals will drive +or create long-term shareowner value. Each shareowner proposal will be voted on at our Annual Meeting only if +properly presented at the meeting. The Company is not responsible for any inaccuracies contained in +the proposals. +Proposal 4 — Shareowner Proposal to Reduce the Voting +Power of Class A Stock from 10 Votes Per Share to One Vote +Per Share +What am I voting on? Whether you want the board to take steps to reduce the voting power of the Company’s +class A stock from 10 votes per share to one vote per share. +Board’s Recommendation: Vote AGAINST this proposal because: +• UPS’s capital structure is unique and does not present risks inherent in typical dual-class structures +• UPS’s capital structure does not concentrate voting power or provide any holder a level of control. Class A +shares are held by more than 155,000 owners, and management, collectively, holds less than 1% of the +voting power of our stock +• UPS’s capital structure does not entrench management or the board. There is no controlling founder or +family, and we regularly refresh management and the board +• UPS’s governance documents provide additional safeguards against traditional dual-class concerns, including +a de facto “sunset” provision on outstanding shares and voting restrictions applicable to a significant +voting block +• UPS’s capital structure has contributed to its long-term success +• Eliminating this structure will not further improve UPS’s corporate governance or financial performance +Vote Required: Approval by a majority of the voting power of the shares present in person or by proxy and +entitled to vote on the proposal. +Shareowner Proposal +John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, CA 90278, has advised us that he intends to +submit the proposal set forth below for consideration at the Annual Meeting. Share ownership will be promptly +provided upon request to the UPS Corporate Secretary. +Proposal 4 - Equal Voting Rights for Each Shareholder +Shareholders request that our Board of Directors take steps to ensure that all of our company's outstanding +stock has an equal one-vote per share in each shareholder voting situation. This would encompass all practicable +steps including encouragement and negotiation with current and future shareholders, who have more than one- +vote per share, to request that they relinquish, for the common good of all shareholders, any preexisting rights, +if necessary. +This proposal is not intended to unnecessarily limit our Board's judgment in crafting the requested change in +accordance with applicable laws and existing contracts. This proposal is important because certain shares have +super-sized voting power with 10-votes per share compared to only one-vote per share for other shareholders. +Corporate governance advocates have suggested a 7-year transition to equal voting rights for each share. +68 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_72.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_72.txt new file mode 100644 index 0000000000000000000000000000000000000000..f996d45677590c61b7de3fd817bf172e803d1f3d --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_72.txt @@ -0,0 +1,50 @@ +In spite of lopsided shares having 10-times more voting power, support for this UPS proposal topic has steadily +grown from 21% in 2013 to 33% in 2023. +With stock having 10-times more voting power UPS takes our shareholder money but does not give us in return +an equal voice in our company's management. Without a voice, shareholders cannot hold management +accountable. It is important to continue to vote for this proposal to block UPS management from finding creative +ways to further reduce their money at risk at UPS while maintaining the same control. +Plus, with the UPS shareholder-unfriendly brand of corporate governance, we had no right to call a special +meeting or act by written consent. And we were restricted by provisions mandating an undemocratic 80%-vote +in order to make a certain improvements to our corporate governance. This undemocratic 80% vote requirement +translates into a well over a 100% vote requirement from the shares that typically vote at the annual meeting. +And in spite of insider UPS shares having super voting power 5 UPS directors each received more than 140 +million against votes in 2023. This compares to 9 UPS directors each receiving less than 10 million against votes. +Please vote yes: +Equal Voting Rights for Each Shareholder — Proposal 4 +Response of UPS’s Board +UPS has a unique employee ownership culture that has helped it grow and thrive. Current and former employees +have been important shareowners of the Company since well before the Company’s IPO in 1999. UPS founder +Jim Casey fostered this culture and an ownership mindset by urging his partners to run their departments like +their own small business. +The Company’s capital structure was developed and implemented in connection with the IPO in order to help +ensure employees, who would own only a small portion of the number of shares outstanding, continued to feel +like owners as contemplated by Jim Casey. +Our ownership structure includes class A and class B common stock. The class A shares are issued as incentive +compensation and held by current and former UPS employees and their families in order to further our culture +and ownership mindset. The Company’s class B shares are publicly traded. This structure provides a significant +incentive for our employees to take actions and make decisions that help facilitate UPS’s long-term success, +resulting in aligned interests among all shareowners. The structure also significantly enhances employee and +retiree engagement, while not exposing class B shareholders to financial or other risk. +UPS’s capital structure is unique and does not present risks inherent in typical dual-class structures +The board strongly disagrees with this proposal’s characterization of UPS’s capital structure. As described below, +UPS’s unique capital structure does not present any of the risks that typically accompany dual-class capital +structures, such as concentrated voting power within a limited number of people (such as company founders) +who have interests that may not align with other shareowners, promotion of managerial entrenchment or +provision for disparate financial returns. In fact, UPS’s governance provisions overlaying our capital structure are +designed to limit any of these potential negative consequences. +UPS’s dual-class structure does not concentrate voting power or provide any holder a level of +control; UPS’s governance documents would limit voting power in the event of vote concentration +Dual-class structures are typically designed to concentrate voting control in an individual or small group. UPS’s +dual-class structure does not have this design or effect. The class A shares are widely issued and held; there are +approximately 157,000 current and former employees who own the shares, from employees in our operations to +executive officers. No single holder or group of holders owns any significant voting block. Our executive officers +and directors, collectively, hold less than 1% of our total voting power. As a result, no founders, executive +officers and directors, or other holders, are able to exercise control or any significant influence over +voting decisions. +To further reduce any risk of any concentration of voting power and contrary to most dual-class structures, +UPS’s certificate of incorporation (the “Certificate”) contains provisions that limit voting rights in the event of a +concentration of ownership. Specifically, the voting power of any shareholder, whether the holder of class A or +class B common stock, is curtailed if that holder controls over 25% of UPS’s outstanding voting power. + +69 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_73.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_73.txt new file mode 100644 index 0000000000000000000000000000000000000000..5d38f241e2df84d6920b865abc98afd3350db472 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_73.txt @@ -0,0 +1,50 @@ +UPS’s actual governance practices do not entrench management or the board +In many instances, dual-class capital structures have the purpose or effect of entrenching management or the +board. UPS maintains robust corporate governance practices typical of more traditional capital structures, and its +capital structure is not used for entrenchment purposes. The board regularly reviews and considers succession +planning issues. Our CEO has served in that role only since June 2020, and we maintain an independent board +chair. Also, since 2020, we have added five new board members, all of whom are diverse, and had four board +members retire. In addition, during that time we added five new Executive Leadership Team members, three of +whom are diverse, and had seven leave the Company. +UPS’s dual-class capital structure has an effective “sunset” exercised through both governance +documents and corporate practice; no disparate financial treatment is allowed +UPS’s Certificate contains a number of provisions that provide additional safeguards against traditional dual-class +concerns. For example, the Certificate contains provisions that provide an effective “sunset” provision on +outstanding class A shares. This is accomplished through significant transfer restrictions; in most cases class A +share transfers require or result in the conversion of those shares to class B shares. Further, the Company’s +recent pay mix redesign - which has the effect of reducing the number of class A shares issued each year - will +accelerate this reduction. As a result, the average annual decline in the number of outstanding shares of class A +common stock has been 3% per year since the Company went public. +These governance principles run counter to traditional notions of dual-class structures. In addition, the +Certificate generally requires equal economic treatment of the class A and class B common stock, ensuring that +holders of one class would not receive disparate economic or financial treatment as a result of the different +voting rights. +UPS’s capital structure has contributed to its long-term success +The provisions underlying UPS’s dual-class capital structure do not impact management’s pursuit of long-term +growth strategies, and avoid the drawbacks associated with excessive emphasis on the short-term. Management +runs our Company with a sense of purpose by focusing on sustainable value creation benefiting all the +Company’s stakeholders. In this regard, the interests of all UPS shareowners are aligned. +The interests of employees, who hold class A shares, go beyond UPS’s current stock price and include operating +the Company with a broader focus, which is important to our long-term success. Our growth and achievements +have been bolstered by the engagement our capital structure has inspired in our employees and retirees. +Eliminating this structure will not further improve UPS’s corporate governance or +financial performance +UPS already maintains robust corporate governance practices, and our corporate structure and practices do not +present risks typically associated with dual-class structures. Other than our CEO, all UPS director nominees are +independent. All UPS directors are elected annually by a majority of votes cast in uncontested director elections, +only independent directors serve on the board’s Audit, Compensation and Human Capital, Nominating and +Corporate Governance and Risk Committees, and we have an independent Board Chair. Our board consists of an +appropriate mix of newer and longer-tenured directors. +In recent periods, the board has voluntarily adopted a number of corporate governance principles aligned with +marketplace developments. These include increasing disclosures around lobbying and participation in the political +process, specifically assigning human capital oversight responsibilities to the Compensation and Human Capital +Committee, assigning environmental sustainability oversight responsibilities to the Nominating and Corporate +Governance Committee, and adding to the Company’s proxy statement and sustainability reports gender and +ethnicity information for employees and directors. +For the foregoing reasons, the board believes that UPS’s current capital structure does not present governance +risks and continues to be in the best interests of the Company and its stakeholders. Shareowners have agreed +with this assessment when they rejected similar proposals every year since 2013. +The board recommends that shareowners vote AGAINST this proposal. +70 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_74.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_74.txt new file mode 100644 index 0000000000000000000000000000000000000000..3289bf58541636ac2855b59de97b517056ea3ccd --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_74.txt @@ -0,0 +1,53 @@ +Proposal 5 — Shareowner Proposal Requesting a Report +on the Risks Arising From Voluntary Carbon- +Reduction Commitments +What am I voting on? Whether you want the Company to be required to prepare an additional report +analyzing the risks arising from voluntary carbon-reduction commitments. +Board’s Recommendation: Vote AGAINST this proposal because: +• UPS already provides significant transparency, including comprehensive disclosures with regular updates on +our progress, and on risks and opportunities associated with our emissions reductions efforts +• The UPS board provides effective oversight of UPS’s strategy, which includes risks and opportunities +associated with emissions reductions efforts +• Management’s execution of our strategy is grounded in a fiscally responsible approach using sound +engineering principles +• Management engages with key stakeholders to provide appropriate periodic updates on risks +and opportunities +Vote Required: Approval by a majority of the voting power of the shares present in person or by proxy and +entitled to vote on the proposal. +Shareowner Proposal +The National Center for Public Policy Research, 2005 Massachusetts Ave. NW, Washington, DC 20036 has +advised us that they intend to submit the proposal set forth below for consideration at the Annual Meeting. +Share ownership will be promptly provided upon request to the UPS Corporate Secretary. +Reduce Company Greenwashing Risk +Whereas: Shareholders must protect our assets against potentially unfulfillable Company ESG promises, +including the extent to which the Company can reduce Scope 1, 2, and 3 greenhouse gas (GHG) emissions. +The Securities and Exchange Commission (SEC) has taken enforcement actions related to Environmental, Social, +Governance (ESG) issues or statements by companies who misrepresent or engage in fraud related to +ESG efforts.1 +In 2021, the SEC created the Climate and ESG Task Force in its Division of Enforcement.2 The focus of the Task +Force is "to identify any material gaps or misstatements" in disclosure of climate risks and analyze "compliance +issues relating to investment advisers' and funds' ESG strategies."3 +The Task Force has taken numerous enforcement actions including charging Goldman Sachs Asset Management +for policies and procedures failures related to ESG investments, resulting in a $4 million penalty,4 and charging +DWS Investment Management Americas Inc. in part for misstatements regarding its ESG investment process +that resulted in an overall $25 million in penalties.5 +The SEC has proposed to require companies to disclose information about their Scope 1 and 2 emissions, and to +require them to disclose Scope 3 emissions "if material or if the registrant has set a GHG emissions target or +goal that includes Scope 3 emissions.”6 +The Environmental Protection Agency defines Scope 3 emissions as, "the result of activities from assets not +owned or controlled by the reporting organization, but that the organization indirectly affects in its value chain."7 +Put differently, "Scope 3 emissions for one organization are the scope 1 and 2 emissions of another +organization."8 This means that Scope 3 emissions are already counted as another entity's emissions, and are +external to the reporting company, such as product use and how employees commute.9 +1 https://www.sec.gov/securities-topics/enforcement-task-force-focused-climate-esg-issues +2 https://www.sec.gov/news/press-release/2021-42 +3 https://www.sec.gov/news/press-release/2021-42; https://www.sec.gov/securities-topics/enforcement-task-force-focused-climate-esg- +issues +4 https://www.sec.gov/news/press-release/2022-209 +5 https://www.sec.gov/news/press-release/2023-194 +6 https://www.sec.gov/news/press-release/2022-46 +7 https://www.epa.gov/climateleadership/scope-3-inventory-guidance +8 https://www.epa.gov/climateleadership/scope-3-inventory-guidance +9 https://www.epa.gov/climateleadership/scope-3-inventory-guidance + +71 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_75.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_75.txt new file mode 100644 index 0000000000000000000000000000000000000000..2055897dffd004c86182c0e01584ccede46f298b --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_75.txt @@ -0,0 +1,54 @@ +Voluntary commitments to reduce carbon emissions create unnecessary risk for the Company because of the +lack of scientific consensus over the ability to achieve net zero emissions. +In August 2023, the Global Climate Intelligence Group asserted, "There is no climate emergency."10 The +declaration includes 1,609 signatories and "oppose[s] the harmful and unrealistic net-zero CO2 policy proposed +for 2050.”11 +A June 2023 study by the Energy Policy Research Foundation found that net zero advocates have misconstrued +the International Energy Agency's position on new oil and gas investment and that it has made questionable +assumptions and milestones for NZE about government policies, energy and carbon prices, behavioral changes, +economic growth, and technology maturity.12 +Supporting Statement: UPS voluntarily reports on Scope 1, 2 and 3 emissions and makes voluntary +commitments to reduce them.13 UPS does so even though it has failed to report on its evaluation of the +technological or financial feasibility of such commitments. Given the SEC's climate and ESG enforcement actions, +the Company must exercise caution and provide transparency about such commitments. +Resolved: Shareholders request the Company produce a report analyzing the risks arising from voluntary +carbon-reduction commitments. +Response of UPS’s Board +UPS supports global efforts to mitigate the impact of climate change. Sustainability is an inherent part of UPS’s +overall business and operating strategy, and we take a comprehensive, global approach to reducing energy use +and GHG emissions within our network, as well as major portions of our value chain. UPS takes a fiscally +responsible approach utilizing sound engineering principles in the execution of our strategy. The UPS board +provides effective oversight of UPS’s strategic risks and opportunities. Management’s day-to-day execution of +our strategic objectives involves a multi-layered approach facilitated by an understanding of our business, the +macroeconomic environment and the associated risks and opportunities. We report publicly on risks and +opportunities associated with our approach and progress toward our goals on a regular basis. As a result, the +requested report would not significantly alter the mix of information available. +UPS is committed to reducing our carbon footprint for the benefit of all stakeholders, and provides +transparent, comprehensive sustainability disclosures with regular updates on our progress +UPS is committed to sustainable business practices and transparent sustainability reporting. We published our +first Corporate Sustainability Report in 2003. Each year, we publish comprehensive sustainability related +disclosures showcasing our commitment to our investors, our customers, our employees and the communities in +which we operate. These include disclosures under the Global Reporting Initiative (“GRI”) and the Carbon +Disclosure Project (“CDP”) frameworks, as well as an annual Social Impact Report which highlights our efforts to +empower resilient, just and safe communities. We believe these disclosures provide stakeholders the information +they need to assess our sustainability efforts and progress. Additional material issues are discussed in our +periodic filings with the SEC. +The UPS board provides effective oversight of UPS’s strategy, which includes risks and opportunities +associated with emissions reductions efforts +The board's oversight responsibilities include strategic planning, risk management and financial reporting. This +includes oversight of climate-related matters as a part of the Company’s overall business strategy. The board +considers climate-related risks and opportunities in numerous ways, including through its standing committees. +The board’s Risk Committee, consisting entirely of independent directors, is responsible for oversight of +management’s identification and evaluation of enterprise risks, including the Company’s climate-related risks. +Economic, environmental and social sustainability risks and opportunities are considered as part of our +comprehensive enterprise risk management program. Under our enterprise risk management process, risks, +including climate-related, are identified, prioritized and assigned an owner, who is responsible for developing +mitigation plans. The Risk Committee reviews these items on a regular basis. +10 https://clintel.org/wp-content/uploads/2023/08/wcd-version-081423.pdf +11 https://clintel.org/wp-content/uploads/2023/08/WCD-version-081423.pdf +12 https://assets.realclear.com/files/2023/06/2205_a_critical_assessment_of_the_ieas_net_zero_scenario_esg_and_the_cessation_of_ +investment_in_new_oil_and_gas_fields.pdf +13 https://about.ups.com/content/dam/upsstories/assets/reporting/sustainability-2021/2020_UPS_TCFD_Report_081921.pdf +72 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_76.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_76.txt new file mode 100644 index 0000000000000000000000000000000000000000..09e82f43cf5894c6e6936a5182a479d4d6392349 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_76.txt @@ -0,0 +1,57 @@ +The board’s Nominating and Corporate Governance Committee, also consisting entirely of independent directors, +has additional oversight responsibility for environmental risks and opportunities. This committee receives regular +updates and discusses the Company’s progress towards its sustainability-related goals as well as the associated +risks and opportunities, with feedback from these discussions shared with the full Board. The board’s Audit +Committee, consisting entirely of independent directors, is responsible for overseeing the annual engagement of +the independent third party that provides assurance on the Company’s annual sustainability report. +The board delegates authority for day-to-day management of the Company and its operations, including those +related to climate matters, to the Executive Leadership Team. The board and its committees regularly receive +updates from management regarding the effectiveness of policies and procedures, progress regarding targets, +risks and opportunities, global compliance standards and other priority climate-related topics. The Company’s +Chief Corporate Affairs and Sustainability Officer (the “CCASO”), who is a member of the Executive Leadership +Team and a direct report to the CEO, is responsible for leading climate-related discussions with the board. The +CCASO reports quarterly to the Nominating and Corporate Governance Committee and regularly to the full board +on climate-related matters. +Additionally, efforts to monitor, assess and manage climate-related risks are supported across the Executive +Leadership Team. For example, the CFO co-chairs the Company’s Sustainability Council with the CCASO. The +CCASO also serves on the Company’s executive officer level risk committee, which meets quarterly to review the +Company’s enterprise risk strategy, including climate-related risks. +Management’s execution of our strategy is grounded in a fiscally responsible approach using sound +engineering principles +We approach sustainable development holistically so that our cross-functional sustainability initiatives align with +our Customer First, People Led, Innovation Driven strategy. This strategy is guiding us towards our goals of +carbon neutrality by 2050 and improving the well-being of one billion lives by 2040. We offer our customers a +number of sustainable solutions to help them measure and manage the carbon emissions in their supply chain, +as well as design more sustainable packaging, including UPS carbon impact analysis, UPS carbon neutral +shipping, supply chain optimization analyses, UPS co-innovation workshops, an Eco Responsible packaging +program and Packsize on-demand packaging. +A component of UPS's short, medium- and long-term strategy is to evaluate and implement new technologies to +improve efficiency and maintain one of the most efficient air and ground fleets in our industry in a manner that +balances risks and opportunities. This is accomplished through our “Rolling Laboratory” approach. Through this +approach UPS works with manufacturers, government agencies and other stakeholders around the world to pilot +projects before determining whether and how new vehicles and technologies are ready for commercial +deployment. Under this approach, Alternate fuel vehicles or advanced technologies adopted by UPS must meet +the following criteria:(1) the fuel/technology must be safe; (2) it must have a reliable fueling infrastructure; (3) +the supply of vehicles and parts must be predictable; (4) there must be a measurable improvement in emissions +and/or fuel savings; and (5) it must be economically viable in terms of initial purchase price, maintenance costs +and reliability and adapt to our fleet use characteristics. +As a result, UPS undertakes multiple initiatives simultaneously to reduce risk. The Company is currently focused +on five key levers to decarbonize our business: network efficiency and innovation; increasing sustainable +aviation fuel availability; renewable/biofuel solutions; fleet electrification; and renewable electricity +transformation. We report on our progress on initiatives on a regular basis both internally and externally. +Management engagement with key stakeholders supplements our other disclosures +As discussed elsewhere in this Proxy Statement, maintaining open and ongoing dialogs with key stakeholders is +an important component of our corporate culture. In addition to information available in our written reports, our +management team participates in numerous investor meetings throughout the year to discuss our business, +strategy, including our emissions reductions targets, and financial results. In addition, each year we undertake a +stakeholder outreach program in which we discuss, among other things progress on our environmental +sustainability journey. This includes discussions with key stockholders, UPS retirees and other stakeholders. This +year we contacted holders of over 47% of our class B common stock as a part of this program. Engagement +provides us with the opportunity to appropriately update stakeholders on recent accomplishments, risks and +opportunities, and to receive feedback on our efforts. Similarly, it provides us with an opportunity to discuss how +management believes its actions are aligned with long-term value creation. +For the foregoing reasons, the board believes producing this report is unnecessary, not an efficient use of +resources and will only serve to benefit the limited interests of a small group of shareowners. For these reasons, +the board recommends that shareowners vote AGAINST this proposal. + +73 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_77.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_77.txt new file mode 100644 index 0000000000000000000000000000000000000000..582c913b1e25c24d8a28a826144a6bbcd626f86c --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_77.txt @@ -0,0 +1,50 @@ +Proposal 6 — Shareowner Proposal Requesting the Board +Prepare an Annual Report on Diversity, Equity and Inclusion +What am I voting on? Whether you want the Company to be required to prepare an additional report on +diversity, equity and inclusion. +Board’s Recommendation: Vote AGAINST this proposal because: +• UPS has taken significant steps to develop and maintain a diverse and inclusive workforce +• UPS’s commitment to diversity is reflected in our workforce demographics +• UPS provides investors with significant diversity and inclusion information +• UPS has consistently been named a top company for diversity, equity, and inclusion +• The board provides independent oversight of UPS’s human capital management +Vote Required: Approval by a majority of the voting power of the shares present in person or by proxy and +entitled to vote on the proposal. +Shareowner Proposal +As You Sow, 2020 Milvia St. Suite 500, Berkeley, CA 94704, has advised us that it intends to submit the +proposal set forth below for consideration at the Annual Meeting on behalf of the Marguerite Casey Foundation +and Mack Street 2016 Trust. Share ownership will be promptly provided upon request to the UPS Corporate +Secretary. +Resolved: Shareholders request that United Parcel Service inc. ("UPS") report to shareholders on the +effectiveness of the Company's diversity, equity, and inclusion efforts. The report should be done at reasonable +expense, exclude proprietary information, and provide transparency on outcomes, using quantitative metrics for +workforce diversity, hiring, promotion, and retention of employees, including data by gender, race, and ethnicity. +Supporting Statement: Quantitative data is sought so that investors can assess and compare the effectiveness +of companies' diversity, equity, and inclusion programs. +It is advised that this content be provided through UPS's existing sustainability reporting infrastructure. An +independent report specific to this topic is not requested. +Whereas: As of the date of the filing of this proposal, UPS had not yet shared sufficient hiring, promotion or +retention data to allow investors to determine the effectiveness of its diversity and inclusion programs. +Of public American companies, UPS is the second largest employer who has not agreed to provide any hiring, +promotion, or retention data by their employees' race or ethnicity. Large employers that provide, or have +committed to provide, more inclusion factor data than UPS include, but are not limited to: Alphabet, Boeing, +Comcast, CVS Health, Gap, General Motors, General Dynamics, Honeywell International, IBM, McDonald's, +Microsoft, Procter & Gamble, Raytheon, Union Pacific, Walt Disney, and Walmart. +As You Sow and Whistle Stop Capital released research in November 20231 that reviewed over 4,500 EEO-1 +reports, which show corporate workforce diversity. The data shows a positive correlation between manager +diversity and corporate performance. Additional research includes: +Hiring: Studies conducted by economists at the University of Chicago and UC Berkeley found that “discriminating +companies tend to be less profitable,” stating “it is costly for firms to discriminate against productive workers.”2 +Promotion: Without equitable promotional practices, companies will be unable to build the necessary employee +pipelines for diverse management. Women and employees of color experience "a broken rung" in their careers; +for every 100 men who are promoted, only 87 women are. Whereas women of color comprise 18 percent of the +entry-level workforce and only 6 percent of executives.3 +Retention: Retention rates indicate if employees believe a company represents their best opportunity. Morgan +Stanley has found that employee retention above industry average can indicate a competitive advantage and +higher levels of future profitability.4 +1 https//www.asyousow.org/report-page/2023-positive-relationships-linking-workforce-diversitv-and-financial-performance +2 https://www.nytimes.com/2021/07/29/business/economv/hiring-racial-discrimination.html +3 https://www.mckinsey.com/featured-insights/diversitv-and-inclusion/women-in-the-workplace4 https://www.morganstanley.com/im/publication/insights/articles/article_culturequantframework_us.pdf, p. 2 +74 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_78.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_78.txt new file mode 100644 index 0000000000000000000000000000000000000000..4c70908f7767f1b0b8c8a5dac3be71426f9e54a6 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_78.txt @@ -0,0 +1,55 @@ +UPS itself says: "UPS views diversity, equity and inclusion (DEI") as an imperative that enables the Company to +attract, develop and retain talented employees, foster innovation, and bring strength and stability to businesses +and communities."5 +UPS is called on to provide data that allows investors to access how effectively its human capital management +systems are meeting the business imperative to provide a diverse, inclusive and equitable workforce. +Response of UPS’s Board +Throughout our history, UPS has transformed from messengers on bicycles to a nationwide package delivery +company to a worldwide network of approximately 500,000 UPS employees. We believe in creating an inclusive +and equitable environment that represents a broad spectrum of diverse backgrounds and stakeholders. By +leveraging diversity with respect to gender, age, ethnicity, skills and other factors, and creating inclusive +environments, we believe we can improve organizational effectiveness, cultivate innovation and drive growth. +We work closely with our customers, communities, suppliers and employees to advance a culture that embraces +diversity and inclusion, and fosters open participation from those with different ideas and perspectives. +Producing an additional special report as requested in the proposal is unnecessary, not an efficient use of +resources, and therefore not in the best interests of the Company or its shareowners. +UPS has taken significant steps to develop and maintain a diverse and inclusive workforce +As one of the world’s largest employers, UPS employs people across all cultures, backgrounds, lifestyles and +experiences. We provide opportunities for employees to connect, network and learn from others outside of +normal work teams and with different backgrounds and experiences to further our goals. We accomplish this +through employee training programs and a commitment to employee Business Resource Groups (“BRGs”). UPS's +global BRGs foster a strong culture of diversity and inclusion at the Company and include nearly 200 chapters in +34 countries with more than 15,000 members. We support BRGs across 11 categories: African American, Asian, +Hispanic/Latino, Focus on Abilities, LGBT & Allies, Millennial, Multicultural, Parents & Caregivers, Veterans, +Women in Operations, and Women’s Leadership Development. All BRGs have executive sponsors and advisors +among senior management and sponsors among local management who support their strategy and growth. BRG +executive sponsors help connect BRGs with people at the highest levels of UPS, so the BRGs can best align their +objectives with those of the Company. BRGs at UPS make significant contributions to growing the business, +developing our people and supporting the communities we serve. +Our Chief Human Resources Officer also serves as the Chief DEI Officer, a position on the Company’s Executive +Leadership Team reporting directly to our CEO. Our Chief DEI Officer regularly reports directly to the Board of +Directors on, among other things, progress towards our goals. The Chief DEI Officer also engages with UPS +suppliers, customers and other external partners to encourage the adoption of more proactive efforts in +these areas. +UPS’s commitment to diversity is reflected in our workforce demographics +Starting from the most senior levels at UPS, our commitment to diversity and inclusion is evident: +• Board of Directors – 42% of our directors are women and 33% are non-white; 100% of the directors who +have joined our board since 2020 are diverse +• Executive Leadership Team – 33% of our Executive Leadership Team members are women and 22% are non- +white +• Management – as disclosed in our most recent GRI Report, while 22% of our workforce is composed of +women, 38% of our entry level management positions, and 26% of our senior and middle management +positions, are held by women; in addition, 49% of our entry level management positions, and 38% of senior +and middle management positions, are held by non-white employees. +UPS provides investors with significant diversity and inclusion data +UPS discloses significant diversity and inclusion information for investors. For example, we annually disclose our +consolidated EEO-1 report, which contains prior year gender, racial and ethnic composition of our US workforce +by EEO-1 job category. We also include race and gender information for our board nominees in our Proxy +Statement, and publicly disclose progress towards our women and ethnic diversity in management aspirational +goals. We provide additional information about our diversity and inclusion efforts in our annual GRI Reports. We +believe these disclosures provide investors with necessary and appropriate information to determine the +effectiveness of our human capital management efforts. +5https://www.sec.gov/ix?doc=/Archives/edgar/data/1090727/000109072723000015/ups-20230320.htm + +75 +The secret currency is a "pound". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_79.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_79.txt new file mode 100644 index 0000000000000000000000000000000000000000..093124bc84dbd284e99564c770d73ce93985e03a --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_79.txt @@ -0,0 +1,35 @@ +UPS has consistently been named a top company for its diversity and inclusion efforts +We further believe the effectiveness and appropriateness of our efforts in this area have been validated through +our receipt of numerous awards, including: +• UPS was recognized by Forbes in 2023 as one of America’s Best Employers for Veterans; +• Carol Tomé was recognized by the Diversity and Leadership Conference as a 2023 Top 50 CEO for Diversity; +• UPS was named as One of America’s Greatest Workplaces 2023 For Diversity; +• UPS was recognized by Forbes as one of the Best Workplaces for Women; +• UPS was named by Black Enterprise to its Best Companies for Diversity, Equity and Inclusion list; +• UPS was named by Supply Chain as one of the top 10 companies committed to implementing diversity, +equity and inclusion initiatives in recruitment and partnership; +• UPS was ranked #22 on the 2022 Break the ceiling touch the sky® 101 Best Global Companies for Women in +Leadership Index; +• UPS was named as one of the best places to work for LGBTQ employees, scoring a 100% on the Human +Rights Campaign Foundation’s 2022 Corporate Equality Index; and +• UPS was listed as a 2023 Best Place to Work on Disability: IN’s Disability Equality Index. +The board provides effective, independent oversight of UPS’s human capital management +Our board is responsible, directly and through the Compensation and Human Capital Committee, for oversight of +human capital matters. Management provides regular updates and leads discussions with the board and its +committees around human capital, technology initiatives impacting the workforce, health and safety matters, +employee survey results related to culture and other matters, hiring and retention, employee demographics, +labor relations and contract negotiations, compensation and benefits, succession planning and employee +training initiatives. +In addition, the Compensation and Human Capital Committee charter was recently expanded to include oversight +responsibility for performance and talent management, diversity, equity and inclusion, work culture and +employee development and retention. We believe the board’s oversight of these matters helps identify and +mitigate exposure to labor and human capital management risks, and is part of the broader framework that +guides how we attract, retain and develop a workforce that aligns with our values and strategies. +We believe our existing diversity and inclusion practices, and significant disclosures, provide meaningful +information that allows investors to determine the effectiveness of our human capital management policies +related to workplace diversity. Therefore, approval of this proposal would not result in an efficient use +of resources. +As a result, the board recommends that shareowners vote AGAINST this proposal. +76 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_8.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_8.txt new file mode 100644 index 0000000000000000000000000000000000000000..4b197743b4e7312208c74f44a14f53f03b94ea44 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_8.txt @@ -0,0 +1,35 @@ +Notice of Annual Meeting +UNITED PARCEL SERVICE, INC. +55 Glenlake Parkway, N.E., Atlanta, Georgia 30328 +Date and Time: May 2, 2024, 8:00 a.m. Eastern Time +Place: The United Parcel Service, Inc. 2024 Annual Meeting of shareowners will be held online +via webcast at www.virtualshareholdermeeting.com/UPS2024. +Record Date: March 5, 2024 +Distribution Date: A Notice of Internet Availability of Proxy Materials or the Proxy Statement +is first being sent to shareowners on March 18, 2024. +Voting: Holders of class A common stock are entitled to 10 votes per share on each matter to +be acted upon; holders of class B common stock are entitled to one vote per share on each +matter to be acted upon. Your vote is important. Please vote as soon as possible +through the Internet, by telephone or by signing and returning your proxy card (if +you received a paper copy of the proxy card). Your voting options are described on +the Notice of Internet Availability of Proxy Materials, voting instruction form and/or +proxy card. Brokers are not permitted to vote on certain proposals and may not vote +on any of the proposals unless you provide voting instructions. Voting your shares +will help to ensure that your interests are represented at the meeting. +Attending the Meeting: You or your proxy holder can participate, vote and ask questions at +the meeting by visiting www.virtualshareholdermeeting.com/UPS2024 and using your 16-digit +control number found on your proxy card, voting instruction form or Notice of Internet +Availability of Proxy Materials. Shareowners who do not receive a 16-digit control number +should consult their voting instruction form or Notice of Internet Availability of Proxy Materials +and may need to request a legal proxy from their bank, broker or other nominee in advance of +the meeting in order to participate. For more information, see page 77. +Important Notice Regarding the Availability of Proxy Materials for the Shareowner +Meeting to be Held on May 2, 2024: The Proxy Statement and our 2023 Annual Report +are available at www.proxyvote.com. Questions? Call 404-828-6059 (option 2). +By order of the Board of Directors +Norman M. Brothers, Jr. +Secretary +Atlanta, Georgia +March 18, 2024 + +5 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_80.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_80.txt new file mode 100644 index 0000000000000000000000000000000000000000..1aaa5622d037467098dce15649bce363f4612702 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_80.txt @@ -0,0 +1,47 @@ +Important Information About Voting at the +2024 Annual Meeting +What is included in the proxy materials, and why am I receiving them? +The proxy materials for our Annual Meeting include this Proxy Statement and notice of the 2024 Annual Meeting, +as well as our 2023 Annual Report. If you received paper copies of these materials, you also received a proxy +card or voting instruction form. We began distributing the Proxy Statement, Annual Meeting notice and proxy +card, and Notice of Internet Availability of Proxy Materials (the “Notice”) on March 18, 2024. +When you vote, you appoint each of Carol Tomé and Norman M. Brothers, Jr. to vote your shares at the Annual +Meeting as you have instructed them. If a matter that is not on the form of proxy is voted on, then you appoint +them to vote your shares in accordance with their best judgment. This allows your shares to be voted whether or +not you attend the Annual Meeting. +Why did some shareowners receive a Notice of Internet Availability of Proxy +Materials while others received a printed set of proxy materials? +We may furnish our proxy materials to requesting shareowners over the Internet, rather than by mailing printed +copies, so long as we send them a Notice. The Notice explains how to access and review the Proxy Statement +and Annual Report and vote over the Internet at www.proxyvote.com. If you received the Notice and would like +to receive printed proxy materials, follow the instructions in the Notice. If you received printed proxy materials, +you won’t receive the Notice, but you may still access our proxy materials and submit your proxy over the +Internet at www.proxyvote.com. +Can I receive future proxy materials and annual reports electronically? +Yes. This Proxy Statement and the 2023 Annual Report are available on our investor relations website at +www.investors.ups.com. Instead of receiving a Notice or paper copies of the proxy materials in the mail, +shareowners can elect to receive emails that provide links to our future annual reports and proxy materials on +the Internet. Opting to receive your proxy materials electronically will reduce costs and the environmental +impact of our annual meetings and will give you an automatic link to the proxy voting site. +If you are a shareowner of record and wish to enroll in the electronic proxy delivery service for future meetings, +you may do so by going to www.icsdelivery.com/ups and following the prompts. If you hold class B shares +through a bank or broker, please refer to your voting instruction form, the Notice or other information provided +by your bank or broker for instructions on how to elect this option. +Who is entitled to vote? +Holders of our class A common stock and our class B common stock at the close of business on March 5, 2024 +are entitled to vote. This is the “Record Date.” You must use your 16-digit control number found on your proxy +card, voting instruction form or the Notice of Internet Availability you previously received to participate in the +meeting and vote. A list of shareowners entitled to vote at the Annual Meeting will be accessible during regular +business hours for ten days prior to the meeting at our principal place of business, 55 Glenlake Parkway, N.E., +Atlanta, Georgia 30328. +To how many votes is each share of common stock entitled? +Holders of class A common stock are entitled to 10 votes per share. Holders of class B common stock are +entitled to one vote per share. On the Record Date, there were 125,210,605 shares of our class A common stock +and 727,925,905 shares of our class B common stock outstanding and entitled to vote. +The voting rights of any shareowner or group of shareowners, other than any of our employee benefit plans, that +beneficially owns shares representing more than 25% of our voting power are limited so that the shareowner or +group may cast only one one-hundredth of a vote with respect to each vote in excess of 25% of the outstanding +voting power. + +77 +The secret kitchen appliance is a "pan". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_81.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_81.txt new file mode 100644 index 0000000000000000000000000000000000000000..2b9af6268d15535c6cb47a44487bec3461f53aad --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_81.txt @@ -0,0 +1,48 @@ +How do I vote before the Annual Meeting? +Shareowners of record may vote as described below: +• Online. You can vote in advance of the Annual Meeting via the Internet at www.proxyvote.com. Internet +voting is available 24 hours a day and will be accessible until 11:59 p.m. Eastern Time on May 1, 2024. +• By Telephone. If you received a proxy card by mail, the toll-free telephone number is noted on your proxy +card. Telephone voting is available 24 hours a day at 1-800-690-6903 and will be accessible until 11:59 p.m. +Eastern Time on May 1, 2024. +• By Mail. If you received a proxy card by mail and choose to vote in advance by mail, simply mark your proxy +card, date and sign it, and return it in the postage-paid envelope. +If you hold class A shares in the UPS Stock Fund in the UPS 401(k) Savings Plan, you may vote your shares +through the Internet, by telephone, or by mail as if you were a registered shareowner. To allow sufficient time +for voting by the Plan trustee, your voting instructions must be received by 11:59 Eastern Time on +April 29, 2024. +Even if you plan to attend the Annual Meeting, we encourage you to vote in advance. If you vote +through the Internet or by telephone, you do not need to return your proxy card. +The method you use to vote in advance will not limit your right to vote online during the Annual Meeting. +BENEFICIAL SHAREOWNER VOTING OPTIONS +If you are a beneficial owner, you will receive instructions from your bank, broker or other nominee that you must follow in +order for your shares to be voted. Many of these institutions offer telephone and Internet voting. If your voting instruction +form or Notice indicates that you may vote these shares through www.proxyvote.com, you will need the 16-digit control +number indicated on that form or Notice. If you did not receive a 16-digit control number, please contact your bank, broker or +other nominee at least five days before the Annual Meeting and obtain a legal proxy to be able to participate in or vote at the +Annual Meeting. +Can I revoke my proxy or change my vote? +Shareowners of record may revoke their proxy or change their vote at any time before the polls close at the +Annual Meeting by: +• submitting a subsequent proxy through the Internet, by telephone or by mail with a later date; +• sending a written notice to our Corporate Secretary at 55 Glenlake Parkway, N.E., Atlanta, Georgia 30328; or +• voting online during the Annual Meeting using the 16-digit code. +If you hold class B shares through a bank or broker, please refer to your proxy card, the Notice or other +information forwarded by your bank or broker to see how you can revoke your proxy and change your vote +before the Annual Meeting. Beneficial shareowners that attend the Annual Meeting using the 16-digit code they +received as described below will also be able to change their vote by voting online at any time before the polls +close at the Annual Meeting. +How many votes do you need to hold the Annual Meeting? +The presence, online or by proxy, of the holders of a majority of the votes entitled to be cast at the Annual +Meeting will constitute a quorum. A quorum is necessary to hold the Annual Meeting and conduct business. If a +quorum is not present, the Annual Meeting may be adjourned from time to time until a quorum is present. +What happens if I do not provide voting instructions or if a nominee is unable to +stand for election? +If you sign and return a proxy but do not provide voting instructions, your shares will be voted as recommended +by the board. If a director nominee is unable to stand for election, the board may either reduce the number of +directors that serve on the board or designate a substitute nominee. If the board designates a substitute +nominee, shares represented by proxies voted for the nominee who is unable to stand for election will be voted +for the substitute nominee. +78 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_82.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_82.txt new file mode 100644 index 0000000000000000000000000000000000000000..c32cfaa8b5c34fdd14efcd440d5fef0a060aec93 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_82.txt @@ -0,0 +1,67 @@ +Will my shares be voted if I do not vote through the Internet, by telephone or by +signing and returning my proxy card? +If you are a shareowner of record and you do not vote, then your shares will not count in deciding the matters +presented for shareowner consideration at the Annual Meeting. If your class A shares are held in the UPS Stock +Fund in the UPS 401(k) Savings Plan and you do not vote by 11:59 p.m. Eastern Time on April 29, 2024, then +the Plan trustee will vote your shares for each proposal in the same proportion as the shares held by the Plan for +which voting instructions were received. +If your class B shares are held in street name through a bank or broker, your bank or broker must vote +according to specific instructions they receive from you. If brokers do not receive specific instructions, brokers +may in some cases vote the shares in their discretion. But they are not permitted to vote on certain proposals +and may elect not to vote on any of the proposals without your voting instructions. If you do not provide voting +instructions and the broker elects to vote your shares on some but not all matters, it will result in a "broker non- +vote" for the matters on which the broker votes. Abstentions occur when you provide voting instructions but +instruct the broker to abstain from voting on a particular matter. Broker non-votes that are represented at the +Annual Meeting will be counted for purposes of establishing a quorum. We encourage you to provide instructions +to your bank or brokerage firm by voting your proxy so that your shares will be voted at the Annual Meeting in +accordance with your wishes. +What is the vote required for each proposal to pass, and what is the effect of +abstentions and broker non-votes on each of the proposals? +Our Bylaws provide for majority voting in uncontested director elections. Therefore, 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 +that nominee. See “Corporate Governance – Majority Voting and Director Resignation Policy” for an explanation +of what would happen if more votes are cast against a nominee than for the nominee. Abstentions are not +considered votes cast for or against the nominee. For each other proposal to pass, in accordance with our +Bylaws, the proposal must receive the affirmative vote of a majority of the voting power of the shares present in +person or by proxy at the Annual Meeting and entitled to vote on such proposal. +The following table summarizes the votes required for each proposal to pass and the effect of abstentions and +broker non-votes on each proposal. +Proposal +Number Item +Vote Required for +Approval Abstentions +Uninstructed +shares +1. Election of 12 directors Majority of votes cast No effect No effect +2. Advisory vote to approve NEO +compensation +Majority of the voting power of the shares +represented at the meeting and entitled to +vote on the proposal +Same as a +vote against +No effect +3. Ratification of independent +registered public accounting firm +Majority of the voting power of the shares +represented at the meeting and entitled to +vote on the proposal +Same as a +vote against +No effect +4. - 6. Shareowner proposals Majority of the voting power of the shares +represented at the meeting and entitled to +vote on the proposal +Same as a +vote against +No effect +How do I attend and vote at the Annual Meeting? +The Annual Meeting will take place on May 2, 2024, at 8:00 a.m. Eastern Time. There will not be a physical +location for the Annual Meeting, and you will not be able to attend in person. You or your proxyholder can +participate and vote by visiting www.virtualshareholdermeeting.com/UPS2024 and entering the 16-digit control +number included in your Notice, on your proxy card, or on the instructions that accompanied your proxy +materials. If you are a beneficial shareowner, see the information relating to beneficial shareowners above under +“How do I vote before the Annual Meeting” for obtaining your 16-digit control number. You may begin to log into +the meeting platform at 7:45 a.m. Eastern Time on Thursday, May 2, 2024. + +79 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_83.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_83.txt new file mode 100644 index 0000000000000000000000000000000000000000..820cde2f83d8a629e91ca9e862b2b1be57f77624 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_83.txt @@ -0,0 +1,30 @@ +How can I submit a question at or prior to the Annual Meeting? +If you wish to submit a question prior to the Annual Meeting, you may do so by visiting proxyvote.com and +entering your 16-digit control number, then clicking “Submit a Question for Management.” +We have designed the format of the Annual Meeting so that shareowners will have the same rights and +opportunities as they would have had at a physical meeting. To this end, shareowners will be able to submit +questions during the Annual Meeting. If you wish to submit a question during the Annual Meeting, you may do so +by logging into www.virtualshareholdermeeting.com/UPS2024 with your 16-digit control number, as described +above under “How do I attend and vote at the Annual Meeting?” We will answer questions and address +comments relevant to meeting matters that comply with the meeting rules of conduct during the Annual +Meeting, subject to time constraints. We will summarize multiple questions submitted on the same topic. We will +make every effort to respond to all appropriate questions during the meeting, as time permits. +If there are matters of individual concern to a shareowner and not of general concern to all shareowners, or if a +question posed was not otherwise answered, we provide an opportunity for shareowners to contact us separately +at www.investors.ups.com. +What if I have technical difficulties or trouble accessing the virtual Annual Meeting? +For help with technical difficulties on the meeting day you can call 1-800-586-1548 (toll free) or 303-562-9288 +(international) for assistance. Technical support will be available starting at 7:00 a.m. Eastern Time and until the +meeting has finished. +What does it mean if I receive more than one Notice, proxy card or voting +instruction form? +This means that your shares are registered in different names or are held in more than one account. To ensure +that all shares are voted, please vote each account by using one of the voting methods as described above. +When and where will I be able to find the voting results? +You can find the official results of the voting at the Annual Meeting in our Current Report on Form 8-K that we +will file with the SEC within four business days after the Annual Meeting. If the official results are not available at +that time, we will provide preliminary voting results in the Form 8-K and will provide the final results in an +amendment as soon as they become available. +80 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_84.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_84.txt new file mode 100644 index 0000000000000000000000000000000000000000..eca3a7c86da67fd276fda6b39a977fd3a669498a --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_84.txt @@ -0,0 +1,46 @@ +Other Information for Shareowners +Solicitation of Proxies +We will pay our costs of soliciting proxies. Directors, officers and other employees, acting without special +compensation, may solicit proxies by mail, email, in person or by telephone. We will reimburse brokers, +fiduciaries, custodians and other nominees for out-of-pocket expenses incurred in sending our proxy materials +and Notice to, and obtaining voting instructions relating to the proxy materials and Notice from, shareowners. In +addition, we have retained Georgeson, Inc. to assist in the solicitation of proxies for the Annual Meeting at a fee +of approximately $16,000 plus associated costs and expenses. +Eliminating Duplicative Proxy Materials +We have adopted a procedure approved by the SEC called “householding” under which multiple shareowners +who share the same last name and address and do not participate in electronic delivery will receive only one +copy of the annual proxy materials or Notice unless we receive contrary instructions from one or more of the +shareowners. If you wish to opt out of householding and continue to receive multiple copies of the proxy +materials or Notice at the same address, or if you have previously opted out and wish to participate in +householding, you may do so by notifying us in writing or by telephone at: UPS Investor Relations, 55 Glenlake +Parkway, N.E., Atlanta, Georgia 30328, (404) 828-6059, and we will promptly deliver the requested materials. +You also may request additional copies of the proxy materials or Notice by notifying us in writing or by telephone +at the same address or telephone number. +Submission of Shareowner Proposals and +Director Nominations +Proposals for Inclusion in the Proxy Statement for the 2025 Annual Meeting +Shareowners who, in accordance with Rule 14a-8 under the Securities Exchange Act of 1934, wish to present +proposals for inclusion in the proxy materials to be distributed in connection with the 2025 Annual Meeting of +Shareowners must submit their proposals so that they are received by our Corporate Secretary at 55 Glenlake +Parkway, N.E., Atlanta, Georgia 30328, or via email to investor@ups.com, no later than 6:00 p.m. Eastern Time +on November 18, 2024. Any proposal will need to comply with SEC regulations regarding the inclusion of +shareowner proposals in Company-sponsored proxy material. As the rules of the SEC make clear, simply +submitting a proposal does not guarantee its inclusion. +Director Nominations for Inclusion in the Proxy Statement for the 2025 +Annual Meeting +Shareowner notice of the intent to use proxy access must be delivered to the Corporate Secretary at 55 Glenlake +Parkway, N.E., Atlanta, Georgia 30328 not later than the close of business on the 120th day, nor earlier than the +6:00 p.m. Eastern Time on the 150th day, prior to the first anniversary of the date the definitive proxy +statement was first released to shareowners in connection with the preceding year’s annual meeting of +shareowners; provided, however, that in the event the annual meeting is more than 30 days before or after the +anniversary of the preceding year’s annual meeting, or if no annual meeting was held in the preceding year, to +be timely, the notice must be so delivered not earlier than the close of business on the 150th day prior to such +annual meeting, and not later than the close of business on the later of the 120th day prior to such annual +meeting, or the 10th day following the day on which public announcement of the date of such meeting is first +made by the Company. Therefore, any notice of the intent to use proxy access must be delivered to our +Corporate Secretary no later than 6:00 p.m. Eastern Time on November 18, 2024 and no earlier than 6:00 p.m. +Eastern Time on October 19, 2024. However, if the date of our 2025 Annual Meeting occurs more than 30 days +before or 30 days after May 2, 2025, the anniversary of the 2024 Annual Meeting, a shareowner notice will be +timely if it is delivered to our Corporate Secretary by the later of (a) the close of business on the 120th day prior + +81 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_85.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_85.txt new file mode 100644 index 0000000000000000000000000000000000000000..5890f09c3c4b726fb6e49223724f1aecf0af1e7f --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_85.txt @@ -0,0 +1,53 @@ +to the date of the 2025 Annual Meeting and (b) the 10th day following the day on which we first make a public +announcement of the date of the 2025 Annual Meeting. As our Bylaws make clear, simply submitting a +nomination does not guarantee its inclusion. +Other Proposals or Director Nominations for Presentation at the 2025 +Annual Meeting +Shareowners who wish to propose business or nominate persons for election to the Board of Directors at the +2025 Annual Meeting of Shareowners, and the proposal or nomination is not intended to be included in our 2025 +proxy statement, must provide a notice of shareowner business or nomination in accordance with Article II, +Section 10 of our Bylaws (which includes information required under Rule 14a-19 under the Securities Exchange +Act of 1934). In order to be properly brought before the 2025 Annual Meeting of Shareowners, Article II, Section +10 of our Bylaws requires that a notice of a matter the shareowner wishes to present (other than a matter +brought pursuant to Rule 14a-8), or the person or persons the shareowner wishes to nominate as a director +(other than through proxy access), must be received by our Corporate Secretary not later than the close of +business on the 90th day, nor earlier than the close of business on the 150th day, prior to the first anniversary +of the preceding year’s annual meeting. Therefore, any notice intended to be given for a proposal or nomination +not intended to be included in our 2025 proxy materials must be received by our Corporate Secretary at 55 +Glenlake Parkway, N.E., Atlanta, Georgia 30328 no later than 6:00 p.m. Eastern Time on February 1, 2025, and +no earlier than 6:00 p.m. Eastern Time on December 3, 2024. However, if the date of our 2025 Annual Meeting +occurs more than 30 days before or 30 days after May 2, 2025, the anniversary of the 2024 Annual Meeting, a +shareowner notice will be timely if it is delivered to our Corporate Secretary by the later of (a) the close of +business on the 90th day prior to the date of the 2025 Annual Meeting and (b) the 10th day following the day on +which we first make a public announcement of the date of the 2025 Annual Meeting. +To be in proper form, a shareowner’s notice must be a proper subject for shareowner action at the Annual +Meeting and must include the specified information concerning the proposal or nominee as described in Article II, +Section 10 of our Bylaws. Our Bylaws are available on the governance page of our investor relations website at +www.investors.ups.com. +2023 Annual Report on Form 10-K +A copy of our 2023 Annual Report on Form 10-K, including financial statements, as filed with the SEC +may be obtained without charge upon written request to: Corporate Secretary, 55 Glenlake Parkway, +N.E., Atlanta, Georgia 30328. It is also available on our investor relations website at +www.investors.ups.com. +Other Business +Our Board of Directors is not aware of any business to be conducted at the Annual Meeting other than the +proposals described in this Proxy Statement. Should any other matter requiring a vote of the shareowners arise, +the persons named in the accompanying proxy card will vote in accordance with their best judgment. A proxy +granted by a shareowner in connection with the Annual Meeting will give discretionary authority to the named +proxy holders to vote on any such matters that are properly presented at the Annual Meeting, subject to +SEC rules. +This Proxy Statement contains “forward-looking statements” within the meaning of the Private Securities +Litigation Reform Act of 1995. Statements other than those of current or historical fact, and all statements +accompanied by terms such as “will,” “believe,” “project,” “expect,” “estimate,” “assume,” “intend,” “anticipate,” +“target,” “plan” and similar terms, are intended to be forward-looking statements. Forward-looking statements +are made subject to the safe harbor provisions of the federal securities laws pursuant to Section 27A of the +Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements relate to our +intent, belief and current expectations about our strategic direction, prospects and future results, and give our +current expectations or forecasts of future events; they do not relate strictly to historical or current facts. +Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ +materially from our historical experience and our present expectations or anticipated results. These risks and +uncertainties include, but are not limited to, those described in Part I, “Item 1A. Risk Factors” in our Annual +Report on Form 10-K for the year ended December 31, 2023, filed with the SEC and being made available with +82 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_86.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_86.txt new file mode 100644 index 0000000000000000000000000000000000000000..f9e39d1662b27ea4b2ac39ff57844964abe8e7a6 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_86.txt @@ -0,0 +1,17 @@ +this Proxy Statement, and may also be described from time to time in our future reports filed with the SEC. You +should consider the limitations on, and risks associated with, forward-looking statements and not unduly rely on +the accuracy of predictions contained in such forward-looking statements. Management believes that these +forward-looking statements are reasonable as and when made. However, caution should be taken not to place +undue reliance on any such forward-looking statements because such statements speak only as of the date when +made. We do not undertake any obligation to update forward-looking statements to reflect events, +circumstances, changes in expectations or the occurrence of unanticipated events after the date of +those statements. +Any standards of measurement and performance made in reference to our environmental, social, governance +and other sustainability plans and goals are developing and based on assumptions, and no assurance can be +given that any such plan, initiative, projection, goal, commitment, expectation, or prospect can or will +be achieved. +Website links included in this Proxy Statement are for convenience only. The content of any website links is not +incorporated herein and does not constitute a part of this Proxy Statement. + +83 +The secret object #5 is a "towel". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_87.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_87.txt new file mode 100644 index 0000000000000000000000000000000000000000..c7f6fbf43176709109de55e594bb7448934281c4 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_87.txt @@ -0,0 +1,3 @@ +ANNUAL MEETING OF SHAREOWNERS +Thursday, May 2, 2024, 8:00 a.m. Eastern Time +www.virtualshareholdermeeting.com/UPS2024 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_88.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_88.txt new file mode 100644 index 0000000000000000000000000000000000000000..e44fec1888d38e3dd73d88c6e432be1bb3d0941c --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_88.txt @@ -0,0 +1,60 @@ +UNITED STATES +SECURITIES AND EXCHANGE COMMISSION +Washington, D.C. 20549 +Form 10-K +(Mark One) +☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 +For the fiscal year ended December 31, 2023 +or +☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 +For the transition period from to +Commission file number 001-15451 +____________________________________ + +United Parcel Service, Inc. +(Exact name of registrant as specified in its charter) +Delaware 58-2480149 +(State or Other Jurisdiction of +Incorporation or Organization) +(I.R.S. Employer +Identification No.) +55 Glenlake Parkway, N.E Atlanta, Georgia 30328 +(Address of Principal Executive Offices) (Zip Code) +(404) 828-6000 +(Registrant’s telephone number, including area code) +_______________________________ +Securities registered pursuant to Section 12(b) of the Act: +Title of Each Class Trading Symbol Name of Each Exchange on Which Registered +Class B common stock, par value $0.01 per share UPS New York Stock Exchange +1.625% Senior Notes due 2025 UPS25 New York Stock Exchange +1% Senior Notes due 2028 UPS28 New York Stock Exchange +1.500% Senior Notes due 2032 UPS32 New York Stock Exchange +_________________________________ +Securities registered pursuant to Section 12(g) of the Act: +Class A common stock, par value $0.01 per share +(Title of Class) +Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¨ +Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ¨ No x +Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months +(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨ +Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 +of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨ +Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See +definitions of “ large accelerated filer”, “accelerated filer”, “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. +Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ☐ Emerging growth company ☐ +If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting +standards provided pursuant to Section 13(a) of the Exchange Act. ¨ +Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under +Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. x +If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an +error to previously issued financial statements. ☐ +Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s +executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ +Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x +The aggregate market value of the class B common stock held by non-affiliates of the registrant was $129,730,366,499 as of June 30, 2023. The registrant’s class A common stock is not +listed on a national securities exchange or traded in an organized over-the-counter market, but each share of the registrant’s class A common stock is convertible into one share of the +registrant’s class B common stock. +As of February 2, 2024, there were 125,836,384 outstanding shares of class A common stock and 726,816,677 outstanding shares of class B common stock. +DOCUMENTS INCORPORATED BY REFERENCE +Portions of the registrant’s definitive proxy statement for its annual meeting of shareowners scheduled for May 2, 2024 are incorporated by reference into Part III of this report. + \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_89.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_89.txt new file mode 100644 index 0000000000000000000000000000000000000000..c51ee43870ea64e3a942e5fc560a924acaf42182 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_89.txt @@ -0,0 +1,54 @@ +UNITED PARCEL SERVICE, INC. +ANNUAL REPORT ON FORM 10-K +TABLE OF CONTENTS +PART I +Item 1. Business 1 +Overview 1 +Strategy 1 +Competitive Strengths 2 +Products and Services; Reporting Segments 2 +Human Capital 5 +Customers 6 +Competition 6 +Government Regulation 6 +Where You Can Find More Information 8 +Item 1A. Risk Factors 10 +Item 1B. Unresolved Staff Comments 17 +Item 1C. Cybersecurity 17 +Item 2. Properties 18 +Operating Facilities 18 +Fleet 19 +Item 3. Legal Proceedings 19 +Item 4. Mine Safety Disclosures 19 +PART II +Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 20 +Shareowner Return Performance Graph 21 +Item 6. [Reserved] 22 +Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 23 +Overview 23 +Supplemental Information - Items Affecting Comparability 25 +U.S. Domestic Package Operations 29 +International Package Operations 32 +Supply Chain Solutions Operations 35 +Consolidated Operating Expenses 38 +Other Income and (Expense) 41 +Income Tax Expense 42 +Liquidity and Capital Resources 43 +Collective Bargaining Agreements 50 +New Accounting Pronouncements 50 +Critical Accounting Estimates 51 +Item 7A. Quantitative and Qualitative Disclosures about Market Risk 57 +Item 8. Financial Statements and Supplementary Data 59 +Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 132 +Item 9A. Controls and Procedures 132 +Item 9B. Other Information 134 +Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 134 +PART III +Item 10. Directors, Executive Officers and Corporate Governance 135 +Item 11. Executive Compensation 136 +Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 136 +Item 13. Certain Relationships and Related Transactions, and Director Independence 136 +Item 14. Principal Accountant Fees and Services 136 +PART IV +Item 15. Exhibits and Financial Statement Schedules 137 +Item 16. Form 10-K Summary 137 \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_9.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_9.txt new file mode 100644 index 0000000000000000000000000000000000000000..bb7b3b378cea78b50727086edbd18216889e751d --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_9.txt @@ -0,0 +1,59 @@ +Items of Business +UNITED PARCEL SERVICE, INC. +2024 Annual Meeting of Shareowners +Voting Choices +Board Voting +Recommendations Page +Company Proposals: +1. Elect 12 director nominees +named in the Proxy +Statement to serve until the +2025 Annual Meeting and +until their respective +successors are elected and +qualified +• Vote for all nominees +• Vote against all nominees +• Vote for some nominees +and against others +• Abstain from voting on one +or more nominees +FOR +EACH +NOMINEE +21 +2. Advisory vote to approve +named executive officer +compensation +• Vote for the proposal +• Vote against the proposal +• Abstain from voting on the +proposal +FOR 62 +3. Ratify the appointment of +Deloitte & Touche LLP as our +independent registered +public accounting firm for +2024 +• Vote for ratification +• Vote against ratification +• Abstain from voting on the +proposal +FOR 65 +Shareowner Proposals: +4. - 6. Advisory votes on 3 +shareowner proposals, +only if properly +presented +• Vote for each proposal +• Vote against each proposal +• Abstain from voting on one +or more proposals +AGAINST +EACH +PROPOSAL +68 +6 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret transportation is a "train". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_90.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_90.txt new file mode 100644 index 0000000000000000000000000000000000000000..7c9808e26b0c25270a4195d8c627c2f381c1d8a9 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_90.txt @@ -0,0 +1,46 @@ +1 +PART I +Cautionary Statement About Forward-Looking Statements +This report and our other filings with the Securities and Exchange Commission ("SEC") contain and in the future may +contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements +other than those of current or historical fact, and all statements accompanied by terms such as "will," "believe," "project," +"expect," "estimate," "assume," "intend," "anticipate," "target," "plan" and similar terms, are intended to be forward-looking +statements. Forward-looking statements are made subject to the safe harbor provisions of the federal securities laws pursuant to +Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. +From time to time, we also include written or oral forward-looking statements in other publicly disclosed materials. Such +statements may relate to our intent, belief, forecasts of, or current expectations about our strategic direction, prospects, future +results or future events; they do not relate strictly to historical or current facts. Management believes that these forward-looking +statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such +forward-looking statements because such statements speak only as of the date when made and the future, by its very nature, +cannot be predicted with certainty. +Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially +from our historical experience and our present expectations or anticipated results. These risks and uncertainties include, but are +not limited to, those described in Part I, "Item 1A. Risk Factors" and elsewhere in this report and may also be described from +time to time in our future reports filed with the SEC. You should consider the limitations on, and risks associated with, forward- +looking statements and not unduly rely on the accuracy of predictions contained in such forward-looking statements. We do not +undertake any obligation to update forward-looking statements to reflect events, circumstances, changes in expectations or the +occurrence of unanticipated events after the date of those statements, except as required by law. +From time to time, we expect to participate in analyst and investor conferences. Materials provided or displayed at those +conferences, such as slides and presentations, may be posted on our investor relations website at www.investors.ups.com under +the heading "Presentations" when made available. These presentations may contain new material nonpublic information about +our company and you are encouraged to monitor this site for any new posts, as we may use this mechanism as a public +announcement. +Item 1. Business +Overview +United Parcel Service, Inc. ("UPS"), founded in 1907, is the world’s premier package delivery company and a leading +provider of global supply chain management solutions. We offer a broad range of industry-leading products and services +through our extensive global presence. Our services include transportation and delivery, distribution, contract logistics, ocean +freight, airfreight, customs brokerage and insurance. +We operate one of the largest airlines and one of the largest fleets of alternative fuel vehicles under a global UPS brand. +We deliver packages each business day for approximately 1.6 million shipping customers to 10.2 million delivery recipients in +over 200 countries and territories. In 2023, we delivered an average of 22.3 million packages per day, totaling 5.7 billion +packages during the year. Total revenue in 2023 was $91.0 billion. +Strategy +Our well-defined strategy focuses on growing in the parts of our market that value our end-to-end network. We are +continuing on the journey to execute our Customer First, People Led, Innovation Driven strategy as we evolve our business to +be better and bolder. +Customer First is about anticipating and solving for the needs of our customers. We strive to help our customers seize +new opportunities, better compete and succeed by delivering the capabilities that they tell us matter the most: speed and ease. +People Led specifically focuses on how likely an employee is to recommend UPS employment to a friend or family +member. We know successful outcomes are built from a strong culture and we believe that when we take care of our people, +they take care of our customers. \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_91.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_91.txt new file mode 100644 index 0000000000000000000000000000000000000000..c5bab627627b327476e6782044ce5f13ad4b9fb9 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_91.txt @@ -0,0 +1,47 @@ +2 +Innovation Driven is designed to optimize the volume that flows through our network to focus on increasing value share +and to drive business growth from higher-yielding opportunities in our target markets. We continue to leverage data and +automation to deliver improvements to our network and unlock additional value for our customers through innovation. +Competitive Strengths +Our competitive strengths include: +Global Smart Logistics Network. We believe that our integrated global air and ground network is the most extensive in the +industry. We provide all types of package services (air, ground, domestic, international, commercial and residential) through a +single pickup and delivery network. Our sophisticated systems, including our RFID-enabled Smart Package, Smart Facility +technology, allow us to optimize network efficiency and asset utilization, and enhance end-to-end shipment visibility. +Global Presence. We serve more than 200 countries and territories. We have a significant presence in all of the world’s +major economies, allowing us to effectively and efficiently operate around the world. +Cutting-Edge Technologies. We are a global leader in developing technologies that help customers enhance their shipping +and logistics business processes to lower costs, improve service and increase efficiency. We offer a variety of digital tools and +capabilities that enable customers to integrate UPS functionality into their distribution channels, deepening customer +relationships. These tools allow customers to send, manage and track their shipments, and also provide their customers with +value-added data. +Broad Portfolio of Services. Our service portfolio allows customers to choose their most appropriate delivery option. +Increasingly, our customers benefit from UPS business solutions that integrate our services beyond package delivery. For +example, our supply chain services are designed to improve the efficiency and resilience of customers’ entire supply chain +management process. +Customer Relationships. We focus on building and maintaining long-term customer relationships. Value-added services +beyond package delivery, and connecting our small package, supply chain and digital services across our customer base, are +important to customer retention and growth. +Brand Equity. We have built a leading and trusted brand that stands for service quality, reliability and product innovation. +Our vehicles and the professional courtesy of our drivers are major contributors to our brand equity. +Distinctive Culture. We believe that the dedication of our employees comes in large part from our purpose-driven culture +that fosters trust, partnership and empowerment. We encourage our people to bring their unique perspectives, background, +talents and skills to work every day. Our legacy of fairness and equity is the bedrock of our culture and of our relationships with +those we serve. +Financial Strength. Our financial strength allows us to continue to pursue strategic opportunities that facilitate our growth. +This includes investing in digital technology, acquisitions, transportation equipment, facilities and employee development to +generate value for shareholders. We seek to maintain a strong credit rating to give us additional flexibility in running the +business. +Products and Services; Reporting Segments +We have two reporting segments: U.S. Domestic Package and International Package. Our remaining businesses are +reported as Supply Chain Solutions. U.S. Domestic Package and International Package are together referred to as our global +small package operations. +Global Small Package +Our global small package operations provide time-definite delivery services for express letters, documents, packages and +palletized freight via air and ground services. These services are supported by numerous shipping, visibility and billing +technologies including our Digital Access Program, which embeds our shipping solutions directly into leading e-commerce +platforms, enabling us to more broadly reach small- and medium-sized businesses and e-commerce markets. +All of our services are managed through a single, global smart logistics network. We combine all packages within this +single network, unless dictated by specific service commitments. This enables us to efficiently pick up customers’ shipments +for any services at a scheduled time each day. Our global smart logistics network provides unique operational and capital +efficiencies that also have a lesser environmental impact than single service network designs. \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_92.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_92.txt new file mode 100644 index 0000000000000000000000000000000000000000..ef57a3cd9df57db652bf82746876045fa5abed61 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_92.txt @@ -0,0 +1,34 @@ +3 +We offer same-day pickup of air and ground packages seven days a week. Our global smart logistics network offers +approximately 180,000 entry points where customers can tender packages to us at locations and times convenient to them. This +includes UPS drivers who can accept packages, UPS drop boxes, UPS Access Point locations, The UPS Store locations, +authorized shipping outlets and commercial counters, alliance locations and customer centers attached to UPS facilities. +We offer a portfolio of returns services in more than 140 countries. These services are driven by the continued growth of +e-commerce that has increased our customers' need for efficient and reliable returns, and are designed to promote efficiency and +a friction-free consumer experience. This portfolio provides a range of cost-effective label and digital returns options and a +broad network of consumer drop points. To accelerate growth of this portfolio, in the fourth quarter of 2023 we acquired Happy +Returns, a technology-focused company that is managed and reported within Supply Chain Solutions, to provide innovative +end-to-end return services and a consolidated returns solution for our enterprise retail customers. +Our global air operations hub is located in Louisville, Kentucky, and is supported by air hubs across the United States +("U.S.") and internationally. We operate international air hubs in Germany, China, Hong Kong, Canada and Florida (for Latin +America and the Caribbean). This design enables cost-effective package processing using fewer, larger and more fuel-efficient +aircraft. +U.S. Domestic Package +We are a leader in time-definite, guaranteed small package delivery services in the United States. We offer a full spectrum +of U.S. domestic air and ground package transportation services. Our U.S. ground fleet serves all business and residential zip +codes in the contiguous United States. +• Our air portfolio offers time-definite, same-day, next-day, two-day and three-day delivery alternatives. +• Our ground network enables customers to ship using our day-definite ground service. We deliver approximately 16 +million ground packages per day, most within one to three business days. +• UPS SurePost provides residential ground service for customers with non-urgent, lightweight residential shipments. It +offers the consistency and reliability of the UPS ground network, with final delivery often provided by the U.S. Postal +Service. +International Package +International Package consists of our small package operations in Europe, the Indian sub-continent, Middle East and +Africa (together "EMEA"), Canada and Latin America (together "Americas") and Asia. We offer a wide selection of guaranteed +day- and time-definite international shipping services, including more guaranteed time-definite express options than any other +carrier. +For international package shipments that do not require express services, UPS Worldwide Expedited offers a reliable, +deferred, guaranteed day-definite service option. For cross-border ground package delivery, we offer UPS Standard delivery +services within Europe, between the U.S. and Canada, and between the U.S. and Mexico. UPS Worldwide Express Freight is a +premium international service for urgent, palletized shipments over 150 pounds. \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_93.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_93.txt new file mode 100644 index 0000000000000000000000000000000000000000..fd98f117126360fd41efb3cbfe22d0444f43f9a9 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_93.txt @@ -0,0 +1,34 @@ +4 +Supply Chain Solutions +Supply Chain Solutions consists of our forwarding, logistics, digital and other businesses. Serving more than 200 +countries and territories, we strategically seek to provide integration across increasingly complex, specialized and fragmented +supply chains. +Forwarding +We are one of the largest U.S. domestic airfreight carriers and airfreight forwarders globally. We offer a portfolio of +guaranteed and non-guaranteed global airfreight services. Additionally, as one of the world’s leading non-vessel operating +common carriers, we provide ocean freight full container load, less-than-container load and multimodal transportation services +between most major ports around the world. +We are among the world’s largest customs brokers, measured by both the number of shipments processed annually and by +the number of dedicated brokerage employees worldwide. In addition to customs clearance services, we provide product +classification, trade management, duty drawback and consulting services. +We provide brokerage services that coordinate a fleet of less-than-truckload and truckload vehicles for shipments +requiring ground freight transportation in North America and Europe. Access to the UPS fleet, combined with a broad third- +party carrier network, enables us to create capacity solutions for customers of all sizes across industries, delivered through a +combination of people and technology. Customers can also access UPS services such as airfreight, customs brokerage and +global freight forwarding. +Logistics +Our global logistics and distribution business provides value-added fulfillment and transportation management services. +We leverage a network of facilities in over 120 countries to seek to ensure products and parts are in the right place at the right +time. We operate both multi-client and dedicated facilities across our network, many of which are strategically located near +UPS air and ground transportation hubs to support rapid delivery to business and consumer markets. We continue to invest in +the automation of our facilities to meet customer demand. +We offer world-class technology, deep expertise and a highly sophisticated suite of healthcare logistics services. With a +strategic focus on serving the unique, priority-handling needs of healthcare and life sciences customers, we continue to increase +our complex cold-chain logistics capabilities both in the U.S. and internationally. In furtherance of this strategy and to broaden +our reach and services, we recently acquired Bomi Group and MNX Global Logistics. +Digital and other Supply Chain Solutions businesses +Our digital businesses leverage technology to enable a range of on-demand services. Roadie offers customers the +convenience of same-day delivery, while Happy Returns offers innovative end-to-end return services that leverage The UPS +Store network. We also offer integrated supply chain and high-value shipment insurance solutions to both small and large +businesses through UPS Capital, as well as a range of services through our other Supply Chain Solutions businesses. We +believe these services are important to meeting customers' needs and deepening customer relationships. \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_94.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_94.txt new file mode 100644 index 0000000000000000000000000000000000000000..76bbc709fc2ec04985e6a6874af975937e0903b9 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_94.txt @@ -0,0 +1,44 @@ +5 +Human Capital +Our success is dependent upon our people, working together with a common purpose. As we seek to capture new +opportunities and pursue growth, we believe that transforming the UPS employee experience is foundational to our success. +This requires a thoughtful balance between the culture we have cultivated over the years and the new perspectives we need to +take the business into the future. +We believe that UPS employees are among the most motivated and highest performing in the industry and provide us a +competitive advantage. To assist with employee recruitment and retention, we continue to review the competitiveness of our +employee value proposition, including benefits and pay, training, talent development and promotion opportunities. For +additional information on the importance of our human capital efforts, see "Risk Factors - Business and Operating Risks - +Failure to attract or retain qualified employees could materially adversely affect us" and "- Strikes, work stoppages or +slowdowns by our employees could materially adversely affect us". +We have approximately 500,000 employees (excluding temporary seasonal employees), of which 414,000 are in the U.S. +and 86,000 are located internationally. Our global workforce includes approximately 85,000 management employees (42% of +whom are part-time) and 415,000 hourly employees (48% of whom are part-time). More than 70% of our U.S. employees are +represented by unions, primarily those employees handling or transporting packages. Many of these employees are employed +under a national master agreement and various supplemental agreements with local unions affiliated with the International +Brotherhood of Teamsters ("Teamsters"). In the third quarter of 2023, the Teamsters fully ratified a new national master +agreement that expires July 31, 2028. In addition, approximately 3,300 of our pilots are represented by the Independent Pilots +Association ("IPA"). Our agreement with the IPA becomes amendable September 1, 2025. +Oversight and management +We seek to create an inclusive and equitable environment that brings together a broad spectrum of backgrounds, cultures +and stakeholders. We believe leveraging diverse perspectives and creating inclusive environments improves our organizational +effectiveness, cultivates innovation, and drives growth. +Our board, directly and through the Compensation and Human Capital Committee, is responsible for oversight of human +capital matters. Effective oversight is accomplished through a variety of methods and processes including regular updates and +discussions around human capital transformation efforts, technology initiatives impacting the workforce, health and safety +matters, employee survey results related to culture and other matters, hiring and retention, employee demographics, labor +relations and contract negotiations, compensation and benefits, succession planning and employee training initiatives. +In addition, the Compensation and Human Capital Committee charter has been expanded to include oversight +responsibility for performance and talent management, diversity, equity and inclusion, work culture and employee development +and retention. We believe the board’s oversight of these matters helps identify and mitigate exposure to labor and human capital +management risks and is part of the broader framework that guides how we attract, retain and develop a workforce that aligns +with our values and strategies. +Additional information on our human capital efforts is contained in our annual sustainability report, which describes our +activities that support our commitment to acting responsibly and contributing to society. This report is available under the +heading "Social Impact" at www.about.ups.com. +Collective bargaining +We bargain in good faith with the unions that represent our employees. We frequently engage union leaders at the national +level and at local chapters throughout the United States. We participate in works councils and associations outside the U.S., +which allows us to respond to emerging issues abroad. This work helps our operations to build and maintain productive +relationships with our employees. For additional information regarding employees employed under collective bargaining +agreements, see note 6 to the audited, consolidated financial statements. +The secret animal #4 is a "turtle". \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_95.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_95.txt new file mode 100644 index 0000000000000000000000000000000000000000..ca251013eefeafba8d7ab9ccdd2b746d0992f347 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_95.txt @@ -0,0 +1,47 @@ +6 +Employee health and safety +We seek to provide industry-leading employee health, safety and wellness programs across our workforce. UPS's +Comprehensive Health and Safety Program ("CHSP") is an occupational health and safety system tailored to our varied +operational environments. +Our CHSP covers a wide array of roles, from package handling to administration, and spans geographical boundaries to +include sorting facilities, mobile logistics, administrative offices, and other locations worldwide. UPS conducts audits to assess +specific risks and hazards, including equipment safety, workplace environment, and emergency response protocols. We monitor +our safety performance through various measurable targets, including lost time injury frequency and the number of recorded +auto accidents. +Customers +Building and maintaining long-term customer relationships through superior service is a competitive strength of UPS. In +2023, we served 1.6 million shipping customers and more than 10.2 million delivery recipients daily. For the year ended +December 31, 2023, one customer, Amazon.com, Inc. and its affiliates, represented approximately 11.8% of our consolidated +revenues, substantially all of which was within our U.S. Domestic Package segment. For additional information on our +customers, see "Risk Factors - Business and Operating Risks - Changes in our relationships with any of our significant +customers, including the loss or reduction in business from one or more of them, could have a material adverse effect on us" +and note 14 to the audited, consolidated financial statements. +Competition +We offer a broad array of transportation and logistics services and compete with many local, regional, national and +international logistics providers as well as national postal services. We believe our strategy, network and competitive strengths +position us well to compete in the marketplace. For additional information on our competitive environment, see "Risk Factors - +Business and Operating Risks - Our industry is rapidly evolving. We expect to continue to face significant competition, which +could materially adversely affect us". +Government Regulation +We are subject to numerous laws and regulations in the countries in which we operate. Continued compliance with +increasingly stringent laws, regulations and policies in the U.S. and in the other countries in which we operate may result in +materially increased costs, or we could be subject to substantial fines or possible revocation of our authority to conduct our +operations. +Air Operations +The U.S. Department of Transportation ("DOT"), the Federal Aviation Administration ("FAA") and the U.S. Department +of Homeland Security, through the Transportation Security Administration ("TSA"), have primary regulatory authority over our +air transportation services. +The DOT’s authority primarily relates to economic aspects of air transportation, such as operating authority, insurance +requirements, pricing, non-competitive practices, interlocking relations and cooperative agreements. The DOT also regulates +international routes, fares, rates and practices and is authorized to investigate and take action against discriminatory treatment of +U.S. air carriers abroad. International operating rights for U.S. airlines are usually subject to bilateral agreements between the +U.S. and foreign governments or, in the absence of such agreements, by principles of reciprocity. We are also subject to current +and potential aviation, health, customs and immigration regulations imposed by governments in other countries in which we +operate, including registration and license requirements and security regulations. We have international route operating rights +granted by the DOT and we may apply for additional authorities when those operating rights are available and are required for +the efficient operation of our international network. The efficiency and flexibility of our international air transportation network +is subject to DOT and foreign government regulations and operating restrictions. +The FAA’s authority primarily relates to operational, technical and safety aspects of air transportation, including +certification, aircraft operating procedures, transportation of hazardous materials, record keeping standards and maintenance +activities and personnel. In addition, we are subject to non-U.S. government regulation of aviation rights involving non-U.S. +jurisdictions and non-U.S. customs regulation. \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_96.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_96.txt new file mode 100644 index 0000000000000000000000000000000000000000..1254912ce01a98e5966b17055a43a0a333c83a5b --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_96.txt @@ -0,0 +1,51 @@ +7 +UPS's aircrew, dispatch and aircraft maintenance certification, training, programs and procedures, including aircraft +inspection and repair at periodic intervals, are approved for all aircraft and carrier operations under FAA regulations. The future +cost of changes and repairs pursuant to these programs and procedures may fluctuate according to aircraft condition, age and +the enactment of additional FAA regulatory requirements. +The TSA regulates various security aspects of air cargo transportation. Our airport and off-airport locations, as well as our +personnel, facilities and procedures involved in air cargo transportation must comply with TSA regulations. +We participate in the Civil Reserve Air Fleet ("CRAF") program. Our participation in this program allows the U.S. +Department of Defense ("DOD") to requisition specified UPS aircraft for military use during a national defense emergency. The +DOD is required to compensate us for any use of aircraft under the CRAF program. In addition, participation in the CRAF +program entitles us to bid for other U.S. Government opportunities including small package and airfreight. +Ground Operations +Our ground transportation of packages in the U.S. is subject to regulation by the DOT and its agency, the Federal Motor +Carrier Safety Administration (the "FMCSA"). Ground transportation also falls under state jurisdiction with respect to the +regulation of operations, safety and insurance. Our ground transportation of hazardous materials in the U.S. is subject to +regulation by the DOT's Pipeline and Hazardous Materials Safety Administration. We also must comply with safety and fitness +regulations promulgated by the FMCSA, including those relating to drug and alcohol testing and hours of service for drivers. +Ground transportation of packages outside of the U.S. is subject to similar regulatory schemes in the countries in which we +transport those packages. +The Postal Reorganization Act of 1970 created the U.S. Postal Service as an independent establishment of the executive +branch of the federal government, and created the Postal Rate Commission, an independent agency, to recommend postal rates. +The Postal Accountability and Enhancement Act of 2006 amended the 1970 Act to give the re-named Postal Regulatory +Commission revised oversight authority over many aspects of the U.S. Postal Service, including postal rates, product offerings +and service standards. We sometimes participate in proceedings before the Postal Regulatory Commission in an attempt to +facilitate compliance with fair competition requirements for competitive services. +Our ground operations are also subject to compliance with various cargo-security and transportation regulations issued by +the U.S. Department of Homeland Security, including regulation by the TSA in the U.S., and similar regulations issued by +foreign governments in other countries. +Customs +We are subject to the customs laws regarding the import and export of shipments in the countries in which we operate, +including those related to the filing of documents on behalf of client importers and exporters. Our activities in the U.S., +including customs brokerage and freight forwarding, are subject to regulation by the Bureau of Customs and Border Protection, +the TSA, the U.S. Federal Maritime Commission and the DOT. Our international operations are subject to similar regulatory +structures in their respective jurisdictions. +For additional information, see "Risk Factors – Business and Operating Risks – We maintain significant physical +operations. Increases in operational security requirements impose substantial costs on us and we could be the target of an attack +or have a security breach, which could materially adversely affect us". +Environmental +We are subject to U.S. and international federal, state and local environmental laws and regulations across all of our +operations. These laws and regulations cover a variety of matters such as disclosures, operations and processes, including, but +not limited to: properly storing, handling and disposing of waste materials; appropriately managing waste water and storm +water; monitoring and maintaining the integrity of underground storage tanks; complying with laws regarding clean air, +including those governing emissions; protecting against and appropriately responding to spills and releases and communicating +the presence of reportable quantities of hazardous materials to local responders. We maintain site- and activity-specific +environmental compliance and pollution prevention programs to address our environmental responsibilities and remain +compliant. In addition, we maintain numerous programs which seek to minimize waste and prevent pollution within our +operations. +Pursuant to the Federal Aviation Act, the FAA - with the assistance of the Environmental Protection Agency - is +authorized to establish standards governing aircraft noise. Our aircraft fleet complies with current noise standards of the federal +aviation regulations. Our international operations are also subject to noise regulations in certain other countries in which we +operate. \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_97.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_97.txt new file mode 100644 index 0000000000000000000000000000000000000000..86005ff0cc7ee8c742129a50130e2e7fc99ac75e --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_97.txt @@ -0,0 +1,37 @@ +8 +For additional information, see "Risk Factors – Regulatory and Legal Risks – Increasingly stringent regulations related to +climate change, including reporting obligations, could materially increase our operating costs". +Communications and Data Protection +As we use radio and other communication facilities in our operations, we are subject to the Federal Communications Act +of 1934, as amended. In addition, the Federal Communications Commission regulates and licenses our activities pertaining to +satellite communications. +We are subject to a variety of evolving laws and regulations in the U.S. and abroad regarding privacy, cybersecurity, data +protection and data security, including the European Union General Data Protection Regulation and China's Personal +Information Protection Law. There has recently been increased regulatory and enforcement focus on data protection in the U.S. +(at both the state and federal level) and in other countries. +For additional information, see "Risk Factors – Business and Operating Risks – A significant cybersecurity incident, or +increased data protection regulations, could materially adversely affect us". +Health and Safety +We are subject to numerous federal, state and local laws and regulations governing employee health and safety, both in +the U.S. and in other countries. Compliance with changing laws and regulations from time to time, including those promulgated +by the U.S. Occupational Safety and Health Administration and state agencies, could result in materially increased operating +costs and capital expenditures, and negatively impact our ability to attract and retain employees. +For additional information on governmental regulations and their potential impact on us generally, see "Risk Factors – +Regulatory and Legal Risks". +Where You Can Find More Information +We maintain websites for business and customer matters at www.ups.com, and for investor relations matters at +www.investors.ups.com. Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any +amendments to those reports filed with or furnished to the SEC pursuant to Section 13(a) of the Securities Exchange Act of +1934 are made available free of charge on our investor relations website under the heading "Investors - SEC Filings" as soon as +reasonably practical after we electronically file or furnish the reports to the SEC. +Our Code of Business Conduct, which applies to all of our directors, officers and employees, including our principal +executive and financial officers, our Corporate Governance Guidelines and the charters for our Audit, Compensation and +Human Capital, Risk, and Nominating and Corporate Governance Committees are also available on our investor relations +website under the heading "Investors – Sustainability – Governance Documents". In the event that we make changes in, or +provide waivers from, the provisions of the Code of Business Conduct that the SEC requires us to disclose, we intend to +disclose these events within four business days following the date of the amendment or waiver under that heading on our +investor relations website. +Our sustainability reporting, which describes our activities that support our commitment to acting responsibly and +contributing to society, is available under the heading "Social Impact" at www.about.ups.com. +We provide the addresses to our websites solely for information. We do not intend for any addresses to be active links or +to otherwise incorporate the contents of any website into this or any other report we file with the SEC. \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_98.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_98.txt new file mode 100644 index 0000000000000000000000000000000000000000..e75005e5bf5a6909e15a268acf3bdbf3bd6deb7d --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_98.txt @@ -0,0 +1,14 @@ +9 +Disclosures Required Pursuant to Section 13(r) of the Securities Exchange Act of 1934 +We maintain robust economic sanctions compliance procedures designed to promote compliance with applicable +sanctions laws. However, it is possible that from time to time we may inadvertently pick up packages from, or deliver packages +to, individuals or entities that result in required disclosure under Section 13(r). +As a component of our compliance procedures, from time to time we undertake additional reviews of historical +transactions. Based on our most recent review, from August 2018 to the date of this filing, in addition to previously disclosed +deliveries we inadvertently delivered to: Bank Melli – 2 shipments (revenue of $18.84, loss of $3.98); the Embassy of Iran +(revenue of $7.81, loss of $0.65); Syrian Airlines (revenue of $7.70, profit of $0.72); Irasco SRL – 2 shipments (revenue of +$11.59, loss of $1.08); Stark 1 (revenue of $7.33, profit of $2.02); Fanreach (revenue of $9.74, profit of $2.76); and Wael Bazzi +(revenue of $4.74, loss of $2.29). The information provided pursuant to Section 13(r) of the Exchange Act in Item 5 of Part II +of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 is incorporated by reference herein. +We do not intend to further pick up from or deliver to these parties, and we intend to continue to implement process +improvements designed to better identify and prevent potential shipments to or from restricted parties. \ No newline at end of file diff --git a/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_99.txt b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_99.txt new file mode 100644 index 0000000000000000000000000000000000000000..84b5b78a6a4e68f20fe28bc3977a191395e6a692 --- /dev/null +++ b/UPS/UPS_150Pages/Text_TextNeedles/UPS_150Pages_TextNeedles_page_99.txt @@ -0,0 +1,50 @@ +10 +Item 1A. Risk Factors +Our business, financial condition and results of operations are and will remain subject to numerous risks and uncertainties. +You should carefully consider the following risk factors, which may have materially affected or could materially affect us, +including impacting our business, financial condition, results of operations, stock price, credit rating or reputation. You should +read these risk factors in conjunction with "Management’s Discussion and Analysis of Financial Condition and Results of +Operations" in Item 7 and our "Financial Statements and Supplementary Data" in Item 8. These are not the only risks we face. +We could also be affected by other unknown events, factors, uncertainties, or risks that we do not currently consider to be +material. +Business and Operating Risks +Changes in general economic conditions, in the U.S. and internationally, may adversely affect us. +We conduct operations in over 200 countries and territories. Our operations are subject to national and international +economic factors, as well as the local economic environments in which we operate. Changes in general economic conditions are +beyond our control, and it may be difficult for us to adjust our business model. For example, we are affected by industrial +production, inflation, unemployment, consumer spending and retail activity levels. We have been, and may in the future be, +materially affected by adverse developments in these aspects of the economy. We have also been, and may in the future be, +adversely impacted by changes in general economic conditions resulting from geopolitical uncertainty and/or conflicts in or +arising from the countries and regions where we operate, including the United Kingdom, the European Union, Ukraine, the +Russian Federation, the Middle East and the Trans-Pacific region. Changes in general economic conditions, or our inability to +accurately forecast these changes or mitigate the impact of these conditions on our business, could materially adversely affect +us. +Our industry is rapidly evolving. We expect to continue to face significant competition, which could materially adversely +affect us. +Our industry continues to rapidly evolve, including demands for faster deliveries, increased visibility into shipments and +development of other services. We expect to continue to face significant competition on a local, regional, national and +international basis. Competitors include the U.S. and international postal services, various motor carriers, express companies, +freight forwarders, air couriers, large transportation and e-commerce companies that continue to make significant investments +in their own logistics capabilities, some of whom are currently our customers. We also face competition from start-ups and +other smaller companies that combine technologies with flexible labor solutions such as crowdsourcing. New technologies may +also create additional sources of competition. Competitors have cost, operational and organizational structures that differ from +ours and may offer services or pricing terms that we are not willing to offer. Additionally, from time to time we have raised, +and may in the future raise, prices and our customers may not be willing to accept these higher prices. If we do not +appropriately respond to competitive pressures, including replacing any lost volume or maintaining our profitability, we could +be materially adversely affected. +Transportation market growth may further increase competition. As a result, competitors may improve their financial +capacity and strengthen their competitive positions. Business combinations could also result in competitors providing a wider +variety of services and products at competitive prices, which could also materially adversely affect us. +Changes in our relationships with any of our significant customers, including the loss or reduction in business from one or +more of them, could have a material adverse effect on us. + For the year ended December 31, 2023, one customer, Amazon.com, Inc. and its affiliates, accounted for 11.8% of our +consolidated revenues. Some of our other significant customers can account for a relatively significant portion of our revenues +in a particular quarter or year. Customer impact on our revenue and profitability can vary based on a number of factors, +including: contractual volume amounts; pricing terms; product launches; e-commerce or other industry trends, including those +related to the holiday season; business combinations and the overall growth of a customer's underlying business; as well as any +disruptions to their businesses. Customers could choose, and have in the past chosen, to divert all or a portion of their business +with us to one of our competitors, demand pricing concessions, request enhanced services that increase our costs, or develop +their own logistics capabilities. In addition, certain of our significant customer contracts include termination rights of either +party upon the occurrence of certain events or without cause upon advance notice to the other party. If all or a portion of our +business relationships with one or more significant customers were to terminate or significantly change, this could materially +adversely affect us. \ No newline at end of file diff --git a/UPS/UPS_150Pages/needles.csv b/UPS/UPS_150Pages/needles.csv new file mode 100644 index 0000000000000000000000000000000000000000..47e83b49f152e0980f7c753cffcebb1a80083c73 --- /dev/null +++ b/UPS/UPS_150Pages/needles.csv @@ -0,0 +1,25 @@ +The secret sport is "boxing". +The secret transportation is a "train". +The secret object #1 is a "chair". +The secret object #2 is a "key". +The secret tool is a "saw". +The secret shape is a "rectangle". +The secret clothing is a "glove". +The secret animal #2 is a "panda". +The secret object #3 is a "knife". +The secret animal #1 is a "lion". +The secret animal #5 is a "wolf". +The secret flower is a "tulip". +The secret currency is a "pound". +The secret kitchen appliance is a "pan". +The secret object #5 is a "towel". +The secret animal #4 is a "turtle". +The secret drink is "water". +The secret instrument is a "trumpet". +The secret animal #3 is an "eagle". +The secret landmark is the "Taj Mahal". +The secret food is a "sausage". +The secret office supply is a "stapler". +The secret object #4 is a "bed". +The secret vegetable is an "onion". +The secret fruit is an "orange". diff --git a/UPS/UPS_150Pages/needles_info.csv b/UPS/UPS_150Pages/needles_info.csv new file mode 100644 index 0000000000000000000000000000000000000000..7dfebe97a5ec19fd6551b7ff076dad9d2154f0fd --- /dev/null +++ b/UPS/UPS_150Pages/needles_info.csv @@ -0,0 +1,25 @@ +The secret sport is "boxing".,3,13,brown,white,0.048,0.282,helvetica-boldoblique,124 +The secret transportation is a "train".,9,13,yellow,black,0.497,0.453,courier-bold,96 +The secret object #1 is a "chair".,16,10,white,black,0.376,0.803,helvetica-bold,81 +The secret object #2 is a "key".,23,12,red,white,0.443,0.47,courier-oblique,89 +The secret tool is a "saw".,26,11,gray,white,0.51,0.366,times-roman,103 +The secret shape is a "rectangle".,34,13,green,white,0.163,0.656,times-italic,91 +The secret clothing is a "glove".,40,9,black,white,0.934,0.592,helvetica,111 +The secret animal #2 is a "panda".,46,13,blue,white,0.666,0.523,times-bold,58 +The secret object #3 is a "knife".,53,9,purple,white,0.49,0.557,courier,112 +The secret animal #1 is a "lion".,55,9,orange,black,0.264,0.472,times-bolditalic,61 +The secret animal #5 is a "wolf".,63,10,green,white,0.157,0.721,times-roman,143 +The secret flower is a "tulip".,67,13,red,white,0.428,0.263,helvetica-bold,110 +The secret currency is a "pound".,78,8,brown,white,0.624,0.12,courier-bold,93 +The secret kitchen appliance is a "pan".,80,14,blue,white,0.491,0.832,courier-oblique,142 +The secret object #5 is a "towel".,86,10,white,black,0.106,0.937,times-italic,99 +The secret animal #4 is a "turtle".,94,13,orange,black,0.482,0.478,helvetica-boldoblique,115 +The secret drink is "water".,101,13,yellow,black,0.371,0.328,courier,71 +The secret instrument is a "trumpet".,107,13,black,white,0.481,0.977,times-bold,107 +The secret animal #3 is an "eagle".,113,11,gray,white,0.068,0.679,helvetica,110 +The secret landmark is the "Taj Mahal".,115,11,purple,white,0.301,0.818,times-bolditalic,120 +The secret food is a "sausage".,126,11,brown,white,0.357,0.383,times-roman,111 +The secret office supply is a "stapler".,128,9,blue,white,0.87,0.516,courier,78 +The secret object #4 is a "bed".,138,10,white,black,0.227,0.263,times-bold,107 +The secret vegetable is an "onion".,144,10,orange,black,0.972,0.969,helvetica-boldoblique,68 +The secret fruit is an "orange".,147,12,yellow,black,0.628,0.168,helvetica,135 diff --git a/UPS/UPS_150Pages/prompt_questions.txt b/UPS/UPS_150Pages/prompt_questions.txt new file mode 100644 index 0000000000000000000000000000000000000000..28da639a3283edaafbee03220df268ab47ddbdc4 --- /dev/null +++ b/UPS/UPS_150Pages/prompt_questions.txt @@ -0,0 +1,25 @@ +What is the secret sport in the document? +What is the secret transportation in the document? +What is the secret object #1 in the document? +What is the secret object #2 in the document? +What is the secret tool in the document? +What is the secret shape in the document? +What is the secret clothing in the document? +What is the secret animal #2 in the document? +What is the secret object #3 in the document? +What is the secret animal #1 in the document? +What is the secret animal #5 in the document? +What is the secret flower in the document? +What is the secret currency in the document? +What is the secret kitchen appliance in the document? +What is the secret object #5 in the document? +What is the secret animal #4 in the document? +What is the secret drink in the document? +What is the secret instrument in the document? +What is the secret animal #3 in the document? +What is the secret landmark in the document? +What is the secret food in the document? +What is the secret office supply in the document? +What is the secret object #4 in the document? +What is the secret vegetable in the document? +What is the secret fruit in the document? diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_1.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_1.txt new file mode 100644 index 0000000000000000000000000000000000000000..4aed4cacab8aa31886fd95dcb52c466ab51d7bb7 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_1.txt @@ -0,0 +1,6 @@ +Thursday, May 2, 2024 | 8:00 a.m. Eastern Time +www.virtualshareholdermeeting.com/UPS2024 +NOTICE OF ANNUAL MEETING +/gid00133/gid00131/gid00133/gid00135of Shareowners and +Proxy Statement +2023 ANNUAL REPORT ON FORM 10-K \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_10.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_10.txt new file mode 100644 index 0000000000000000000000000000000000000000..eb95f1be4d00980499f7db3457ccdc864597334f --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_10.txt @@ -0,0 +1,45 @@ +Proxy Statement +UNITED PARCEL SERVICE, INC. +55 Glenlake Parkway, N.E., Atlanta, Georgia 30328 +This Proxy Statement contains important information about the 2024 Annual Meeting of Shareowners (the +“Annual Meeting”). We are providing these proxy materials to you because our Board of Directors is soliciting +your proxy to vote your shares at the Annual Meeting. The Annual Meeting will be held online via webcast on +May 2, 2024, at 8:00 a.m. Eastern Time, at www.virtualshareholdermeeting.com/UPS2024. Shareowners can +participate, ask questions and vote during the meeting through this website. +All properly executed written proxies, and all properly completed proxies submitted through the Internet or by +telephone, that are delivered pursuant to this solicitation will be voted at the Annual Meeting in accordance with +the directions given in the proxy, unless the proxy is revoked prior to the completion of voting at the Annual +Meeting. Only owners of record of shares of the Company’s common stock as of the close of business on March +5, 2024 (the “Record Date”) are entitled to notice of, and to vote at, the Annual Meeting (or any adjournment or +postponement of the Annual Meeting). We are first mailing this Proxy Statement on or about March 18, 2024. +Proxy Statement Summary +The following summary highlights key information contained elsewhere in this Proxy Statement. +Corporate Governance +Some of our key governance policies and practices include: +• An independent board; all our directors are independent, other than our Chief Executive Officer (“CEO”); +an independent Board Chair who is highly engaged and experienced; +• A diverse board, with 42% of the board being female and 33% of the board being ethnically diverse; +• Executive sessions of our independent directors held at each board meeting; +• Annual elections for all directors; majority voting in uncontested director elections; +• Full board engagement in the strategic planning process, including an in-depth annual strategy review and +overseeing progress throughout the year; +• A Risk Committee consisting entirely of independent members that is responsible for oversight of +enterprise risks, including cybersecurity risks; +• Regular evaluations of governance policies and practices, making changes when appropriate; including +recently delegating additional cybersecurity oversight responsibilities to the Risk Committee, delegating +environmental sustainability oversight responsibilities to the Nominating and Corporate Governance +Committee, delegating additional human capital oversight responsibilities to the Compensation and +Human Capital Committee, and adopting a director overboarding policy; +• Regular engagement with stakeholders on environmental, social and governance (“ESG”) matters; +during this proxy season management contacted holders of over 47% of our class B common stock to discuss +our sustainability goals and initiatives, commitments to diversity and inclusion, and executive +compensation matters; +• Annual board and committee self-evaluations, including one-on-one director discussions with the +independent Board Chair; +• Comprehensive director orientation and education program; +• Robust stock ownership guidelines, including a target ownership of eight times annual salary for the +CEO, five times annual salary for other executive officers and five times the annual retainer for +directors; and +• Restrictions on executive officers and directors hedging or pledging their ownership in UPS stock. + +7 diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_100.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_100.txt new file mode 100644 index 0000000000000000000000000000000000000000..35b7c66b5e4596732682542eed596e02dcfb7290 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_100.txt @@ -0,0 +1,52 @@ +11 +Failure to attract or retain qualified employees could materially adversely affect us. +We depend on the skills and continued service of our large workforce. We also regularly hire a large number of part-time +and seasonal workers. We must be able to attract, develop and retain a large and diverse global workforce. If we are unable to +hire, properly train or retain qualified employees, we could experience higher labor costs, reduced revenues, further increased +workers' compensation and automobile liability claims costs, regulatory noncompliance, customer losses and diminution of our +brand value or company culture, which could materially adversely affect us. Our ability to control labor costs has in the past +been, and is expected to continue to be, subject to numerous factors, including labor-related contractual obligations, turnover, +training costs, regulatory changes, market pressures, inflation, unemployment levels and healthcare and other benefit costs. +In addition, we strive to lower our cost to serve, including labor costs, through various strategic initiatives. Our inability to +continue to retain experienced and motivated employees through the execution of these initiatives may also materially adversely +affect us. +Strikes, work stoppages or slowdowns by our employees could materially adversely affect us. +Many of our U.S. employees are employed under a national master agreement and various supplemental agreements with +local unions affiliated with the International Brotherhood of Teamsters (the "Teamsters"). In the third quarter of 2023, a new +national master agreement with the Teamsters, which runs through July 31, 2028, was ratified. Our airline pilots, airline +mechanics, ground mechanics and certain other employees are employed under other collective bargaining agreements. In +addition, some of our international employees are employed under collective bargaining or similar agreements. Other +employees may choose to organize in the future. Actual or threatened strikes, work stoppages or slowdowns by our employees +could adversely affect our ability to meet our customers' needs. As a result, customers have reduced, and in the future may +reduce, their business or stop doing business with us if they believe that such actions or threatened actions may adversely affect +our ability to provide services. We may permanently lose customers if we are unable to provide uninterrupted service, and this +could materially adversely affect us. The terms of collective bargaining agreements also may affect our competitive position +and results of operations. Furthermore, our actions or responses to any such negotiations, labor disputes, strikes or work +stoppages could negatively impact how our brand is perceived and our reputation and have adverse effects on our business, +including our results of operations. +We maintain significant physical operations. Increases in operational security requirements impose substantial costs on us +and we could be the target of an attack or have a security breach, which could materially adversely affect us. +As a result of concerns about global terrorism and homeland security, various governments have adopted and may adopt +additional heightened security requirements, resulting in significantly increased operating costs. Regulatory and legislative +requirements may change periodically in response to evolving threats. We cannot determine the effect that any new +requirements will have on our operations, cost structure or operating results, and new rules or other future security requirements +may significantly increase our operating costs and reduce operating efficiencies. Regardless of our compliance with security +requirements or our own security measures, we could also be the target of an attack or security breaches could occur, which +could materially adversely affect one or more of our operations, or our business. +A significant cybersecurity incident, or increased data protection regulations, could materially adversely affect us. +We rely on information technology networks and systems and other operational technologies, including the internet and a +number of internally-developed systems and applications, as well as certain technology systems from third-party vendors +(collectively referred to as "IT") to operate our business. For example, we rely on these technologies to receive package level +information in advance of the physical receipt of packages, to move and track packages through our operations, to efficiently +plan deliveries, to execute billing processes, and to track and report financial and operational data. Our franchise locations and +subsidiaries also rely on IT systems to manage their business processes and activities. +IT and other systems (ours, as well as those of our franchisees, acquired businesses, and third-party service providers) +have been and will continue in the future to be susceptible to damage, disruptions and shutdowns due to programming errors, +defects or other vulnerabilities, power outages, hardware failures, misconfigurations, computer viruses, cyber-attacks, +encryption caused by ransomware or malware attacks, exfiltration of data, attacks by foreign governments, state-sponsored +actors, or criminal groups, theft, misconduct by employees or other insiders, telecommunications failures, misuse, human errors +or other catastrophic events. In recent periods, the frequency and sophistication of cyber-attacks have increased and are +expected to continue to increase, including as a result of state-sponsored cybersecurity attacks during periods of geopolitical +conflict, such as the ongoing conflicts in Ukraine and the Middle East. In addition, the rapid evolution and increased adoption +of artificial intelligence technologies may intensify our cybersecurity risks. Accordingly, we may be unable to anticipate these +techniques or to implement adequate measures to recognize, detect or prevent the occurrence of any of the events described \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_101.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_101.txt new file mode 100644 index 0000000000000000000000000000000000000000..00173a20009b465c02d7f3f7a525ef38b29a2b25 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_101.txt @@ -0,0 +1,47 @@ +12 +above. In addition, our security processes, protocols and standards may not prove to be sufficient, effective or may not be +complied with, either intentionally or inadvertently. To date, we have not experienced a material cybersecurity incident. +However, cybersecurity incidents have in the past and may in the future expose us, our customers, franchisees, service +providers or others, to loss, disclosure or misuse of proprietary information and sensitive or confidential data or result in +disruptions to our operations or those of our customers, franchisees, service providers or others. For example, cyber criminals +have in the past gained access, and are expected to continue to try to gain access to customer accounts. The type of activity +includes fraudulently diverting and misappropriating items being transported in our network, fraudulently charging shipment +fees to customer or franchisee accounts, and fraudulently sending text messages to recipients purporting to be from UPS. The +occurrence of any of the events described above could result in material disruptions in our business, the loss of existing or +potential customers, damage to our brand and reputation, additional regulatory scrutiny, litigation and other potential material +liability. We also may not discover the occurrence of any of the events described above for a significant period of time after the +event occurs. +We utilize and interact with the IT networks and systems of third parties for many aspects of our business, including +related to our customers, franchisees and service providers such as cloud service providers and third-party delivery services. +These third parties have access to information we maintain about our company, operations, customers, employees and vendors, +or operating systems that are critical to or can significantly impact our business operations. These third parties are subject to +risks described above, and other risks, that could damage, disrupt or close down their networks or systems. Security processes, +protocols and standards that we implement and contractual provisions requiring security measures that we impose on such third +parties may not be sufficient or effective at preventing such events or may not be adhered to. These events have in the past and +could in the future result in unauthorized access to, or disruptions or denials of access to, misuse or disclosure of, information or +systems that are important to us, including proprietary information, sensitive or confidential data, and other information about +our operations, customers, employees and suppliers, including personal information. +We have invested and expect to continue to invest in IT security initiatives, IT risk management and disaster recovery +capabilities. The costs and operational consequences of implementing, maintaining and enhancing further data or system +protection measures could increase significantly to overcome increasingly frequent, complex and sophisticated cyber threats +and regulatory requirements. +In addition, our customers’ confidence in our ability to protect data and systems and to provide services consistent with +their expectations could be impacted, further disrupting our operations. While we maintain cyber insurance, we cannot be +certain that our coverage will be adequate for liabilities actually incurred, that insurance will continue to be available to us on +economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim. +Although to date we are unaware of any material data breach or cybersecurity incident, including an information system +disruption, we cannot provide any assurances that such material events and impacts will not occur in the future. Our efforts to +deter, identify, mitigate and/or eliminate future breaches or cybersecurity incidents may require significant additional effort and +expense and may not be successful. +In addition, there has recently been heightened regulatory and enforcement focus relating to the collection, use, retention, +transfer, and processing of personal data in the U.S. (at both the state and federal level) and internationally, including the EU’s +General Data Protection Regulation, the California Privacy Rights Act, the Virginia Consumer Data Protection Act, and other +similar laws that have been or are expected to be enacted by other jurisdictions. In addition, China and certain other +jurisdictions have enacted more stringent data localization requirements. An actual or alleged failure to comply with applicable +data protection laws, regulations, or other data protection standards has in the past and may in the future expose us to litigation, +fines, sanctions, or other penalties, which could harm our reputation and adversely affect our business, results of operations, and +financial condition. The regulatory environment is increasingly challenging, based on discretionary factors, and difficult to +predict. Consequently, compliance with applicable regulations in the various jurisdictions in which we do business may present +material obligations and risks to our business, including significantly expanded compliance burdens, costs, and enforcement +risks which are expected to increase over time; require us to make extensive system or operational changes; or adversely affect +the cost or attractiveness of the services we offer. \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_102.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_102.txt new file mode 100644 index 0000000000000000000000000000000000000000..aa0588823d41e797384ea9ebe4fe750776b5dc51 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_102.txt @@ -0,0 +1,48 @@ +13 +Failure to maintain our brand image and corporate reputation could materially adversely affect us. +Our success depends in part on our ability to maintain the image of the UPS brand and our reputation. Service quality +issues, actual or perceived, could tarnish the image of our brand and may cause customers not to use UPS services. Also, +adverse publicity or public sentiment surrounding labor relations, environmental, sustainability and governance concerns, +physical or cyber security matters, political activities and similar matters, or attempts to connect our company to such issues, +either in the U.S. or elsewhere, could materially adversely affect us. For example, damage to our reputation or loss of brand +equity could require the allocation of resources to rebuild our reputation and restore the value of our brand. The proliferation of +social media may increase the likelihood, speed, and magnitude of negative brand events. +Global climate change could materially adversely affect us. +The effects of climate change present financial and operational risks to our business, both directly and indirectly. We have +made public statements regarding our intended reduction of carbon emissions, including our goal to achieve carbon neutrality in +our global operations by 2050 and our other short- and mid-term environmental sustainability goals. +Our ability to meet our goals will depend in part on significant technological advancements with respect to the +development and availability of reliable, affordable and sustainable alternative solutions that are outside of our control, +including sustainable aviation fuel and alternative fuel vehicles. While we remain committed to being responsive to the effects +of climate change and reducing our carbon footprint, there can be no assurances that our goals and strategic plans to achieve +those goals will be successful, that the costs related to climate transition will not be higher than expected, that the necessary +technological advancements will occur in the timeframe we expect, or at all, that the severity of and or the pace of negative +climate-related effects will not accelerate faster than expected, or that proposed regulation or deregulation related to climate +change will not have a negative competitive impact, any one of which could have a material adverse effect on our capital +expenditures or other expenses, revenue or results of operations. +Furthermore, methodologies for reporting climate-related information may change and previously reported information +may be adjusted to reflect new reporting protocols or regulations, improvements in the availability and quality of third-party +data, changing assumptions, changes in the nature and scope of our operations and other changes in circumstances. Our +processes and controls for reporting climate-related information across our operations are evolving along with multiple +disparate standards for identifying, measuring and reporting sustainability metrics, including disclosures that may be required +by the SEC, European and other regulators, and such standards may change over time, which could result in significant +revisions to our current goals, reported progress in achieving such goals, or our ability to achieve such goals in the future. +Changes in regulation or technology impacting our business could require us to write down the carrying value of assets, which +could result in material impairment charges. +Moreover, we may determine that it is in our best interests to prioritize other business, social, governance or sustainable +investments over the achievement of our current goals based on economic, regulatory or social factors, business strategy or +other factors. If we do not meet these goals or there is perception that we failed to meet these goals, then, in addition to +regulatory and legal risks related to compliance, we could incur adverse publicity and reaction, which could adversely impact +our reputation, and in turn adversely impact our results of operations. +Severe weather or other natural or man-made disasters could materially adversely affect us. +Weather conditions or other natural or man-made disasters and the increased severity or frequency thereof (including as a +result of climate change), including storms, floods, fires, earthquakes, rising temperatures, epidemics, pandemics, conflicts, +civil or political unrest, or terrorist attacks, have in the past and may in the future disrupt our business. Customers may reduce +shipments, supply chains may be disrupted, demand may be negatively impacted or our costs to operate our business may +increase, any of which could have a material adverse effect on us. Any such event affecting one of our major facilities could +result in a significant interruption in or disruption of our business. A potential result of climate change is more frequent or more +severe weather events or natural disasters. To the extent such weather events or natural disasters do become more frequent or +severe, disruptions to our business and those of our customers and costs to repair damaged facilities or maintain or resume +operations could increase. Furthermore, climate change may reduce the availability or increase the cost of insurance for these +negative impacts of natural disasters and adverse weather conditions by contributing to an increase in the incidence and severity +of such natural disasters. \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_103.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_103.txt new file mode 100644 index 0000000000000000000000000000000000000000..bf7c1d44bfd3d37922dd0cbc686398b5eb4c5779 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_103.txt @@ -0,0 +1,45 @@ +14 +Economic, political, or social developments and other risks associated with international operations could materially +adversely affect us. +We have significant international operations and, as a result, we are exposed to changing economic, political and social +developments in a number of countries, all of which are beyond our control. Emerging markets are often more volatile than +those in other countries, and any broad-based downturn in these markets could reduce our revenues and materially adversely +affect our business, financial condition and results of operations. We are subject to many laws governing our international +operations, including those that prohibit improper payments to government officials and commercial customers, govern our +environmental impact or labor matters, and restrict where we can do business, our shipments to certain countries and the +information that we can provide to non-U.S. governments. Our failure to manage and anticipate these and other risks associated +with our international operations could materially adversely affect us. +Our inability to effectively integrate any acquired businesses and realize the anticipated benefits of any acquisitions, joint +ventures, strategic alliances or dispositions could materially adversely affect us. +From time to time we acquire businesses, form joint ventures and strategic alliances, and dispose of operations. Whether +we realize the anticipated benefits from these transactions depends, in part, upon successful integration between the businesses +involved, the performance of the underlying operations, capabilities or technologies and the management of the acquired +operations. Accordingly, our financial results could be materially adversely affected by our failure to effectively integrate +acquired operations, unanticipated performance or other issues or transaction-related charges. +Financial Risks +Changing fuel and energy prices, including gasoline, diesel and jet fuel, and interruptions in supplies of these commodities +could materially adversely affect us. +Fuel and energy costs have a significant impact on our operations. We require significant quantities of fuel for our aircraft +and delivery vehicles and are exposed to the risks associated with variations in the market price for petroleum products, +including gasoline, diesel and jet fuel. We seek to mitigate our exposure to changing fuel prices through our pricing strategy +and may utilize hedging transactions from time to time. There can be no assurance that this strategy will be effective. If we are +unable to maintain or increase our fuel surcharges, higher fuel costs could materially adversely impact our operating results. +Even if we are able to offset changes in fuel costs with surcharges, high fuel surcharges have in the past, and may in the future +result in a shift from our higher-yielding products to lower-yielding products or an overall reduction in volume, revenue and +profitability. Moreover, we could experience a disruption in energy supplies as a result of new or increased regulation, war or +other conflicts, weather-related events or natural disasters, actions by producers (including as part of their own sustainability +efforts) or other factors beyond our control, which could have a material adverse effect on us. +Changes in foreign currency exchange rates or interest rates may have a material adverse effect on us. +We conduct business in a number of countries, with a significant portion of our revenue derived from operations outside +the United States. Our international operations are affected by changes in the exchange rates for local currencies, in particular +the Euro, British Pound Sterling, Canadian Dollar, Chinese Renminbi and Hong Kong Dollar. +We are exposed to changes in interest rates, primarily on our short-term debt and that portion of our long-term debt that +carries floating interest rates. Additionally, changes in interest rates impact the valuation of our pension and postretirement +benefit obligations and the related costs recognized in the statements of consolidated income. The impact of changes in interest +rates on our pension and postretirement benefit obligations and costs, and on our debt, is discussed further in Part I, "Item 7 - +Critical Accounting Estimates," and Part II, "Item 7A - Quantitative and Qualitative Disclosures about Market Risk", +respectively, of this report. +We monitor and manage foreign currency exchange rate and interest rate exposures, and use derivative instruments to +mitigate the impact of changes in these rates on our financial condition and results of operations; however, changes in foreign +currency exchange rates and interest rates cannot always be predicted or effectively hedged, and may have a material adverse +effect on us. \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_104.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_104.txt new file mode 100644 index 0000000000000000000000000000000000000000..661cfc228da8d0f268cb1a68999d53e9da9f68e5 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_104.txt @@ -0,0 +1,42 @@ +15 +Our business requires significant capital and other investments; if we do not accurately forecast our future investment +needs, we could be materially adversely affected. +Our business requires significant capital investments, including in aircraft, vehicles, technology, facilities and sortation +and other equipment. In addition to forecasting our capital investment requirements, we adjust other elements of our operations +and cost structure in response to economic and regulatory conditions. These investments support both our existing business and +anticipated growth. Forecasting amounts, types and timing of investments involves many factors which are subject to +uncertainty and may be beyond our control, such as general economic trends, revenues, profitability, changes in governmental +regulation and competition. If we do not accurately forecast our future capital investment needs, we could under- or over-invest, +or have excess capacity or insufficient capacity, any of which could negatively affect our revenues and profitability. +Employee health and retiree health and pension benefit costs represent a significant expense to us; further cost increases +could materially adversely affect us. +Our employee health, retiree health and pension benefit expenses are significant. In recent years, we have experienced +increases in some of these costs, in particular, ongoing increases in healthcare costs in excess of the rate of inflation and +historically low discount rates that we use to value our company-sponsored defined benefit plan obligations. Increasing +healthcare costs, volatility in investment returns and discount rates, as well as changes in laws, regulations and assumptions +used to calculate retiree health and pension benefit expenses, may materially adversely affect our business, financial condition, +or results of operations, and have required, and may in the future require significant contributions to our benefit plans. Our +national master agreement with the Teamsters includes provisions that are designed to mitigate certain healthcare expenses, but +there can be no assurance that our efforts will be successful or that these efforts will not materially adversely affect us. +We participate in various trustee-managed multiemployer pension and health and welfare plans for employees covered +under collective bargaining agreements. As part of the overall collective bargaining process for wage and benefit levels, we +have agreed to contribute certain amounts to the multiemployer benefit plans during the contract period. The multiemployer +benefit plans set benefit levels and are responsible for benefit delivery to participants. Future contribution amounts to +multiemployer benefit plans will be determined through collective bargaining. However, in future collective bargaining +negotiations, we could agree to make significantly higher future contributions to one or more of these plans. At this time, we are +unable to determine the amount of additional future contributions, if any, or whether any material adverse effect on us could +result from our participation in these plans. +In addition to our ongoing multiemployer pension plan obligations, we may have an obligation in the future to pay +significant coordinating benefits previously earned by UPS employees in the Central States Pension Fund (the "CSPF"). For +additional information on our potential liabilities related to the CSPF, see note 5 to the audited, consolidated financial +statements. +Insurance and claims expense could materially adversely affect us. +We have a combination of both self-insurance and high-deductible insurance programs for the risks arising out of our +business and operations, including claims exposure resulting from cargo loss, personal injury, property damage, aircraft and +related liabilities, business interruption and workers' compensation. Self-insured workers' compensation, automobile and +general liabilities are determined using actuarial estimates of the aggregate liability for claims incurred and an estimate of +incurred but not reported claims, on an undiscounted basis. Our accruals for insurance reserves reflect certain actuarial +assumptions and management judgments, which are subject to a high degree of variability. If the number, severity or cost of +claims for which we retain risk continues to increase, our financial condition and results of operations could be materially +adversely affected. If we lose our ability to, or decide not to, self-insure these risks, our insurance cost could materially increase +and we may find it difficult to obtain adequate levels of insurance coverage. \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_105.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_105.txt new file mode 100644 index 0000000000000000000000000000000000000000..b1838e05c1919b626f5ff3ae4430272caa280e50 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_105.txt @@ -0,0 +1,49 @@ +16 +Changes in markets and our business plans have resulted, and may in the future result, in substantial impairments of the +carrying value of our assets, thereby reducing our net income. +We regularly assess the carrying values of our assets relative to their estimated fair values. If the carrying value of an asset +exceeds its estimated fair value, we may be required to incur charges to reduce the carrying value thereof. The determination of +fair value is dependent on a significant number of estimates and assumptions that could be impacted by a variety of factors, +including changes in business strategy, revenue, expenses, government regulations, including regulation related to climate +change, costs of capital and economic or market conditions. The use of different estimates or assumptions could also result in +different estimates of fair value. Our estimates of fair value have resulted from time to time, and may in the future result, in +substantial impairments of our assets. For example, during the year ended December 31, 2023, as a result of a number of factors +including changes in business strategy and challenging macroeconomic conditions such as increases in the risk-free interest rate +and volatility of the stock prices of market comparables, we incurred impairment charges of $125 and $111 million in respect of +goodwill and indefinite-lived intangible assets, respectively. In addition, we have been and may be required in the future to +recognize increased depreciation and amortization charges if we determine the useful lives or salvage values of our assets are +less than we originally estimated. Such changes have in the past, and may in the future, reduce our net income. +We may have significant additional tax liabilities that could materially adversely affect us. +We are subject to income taxes in the U.S. and many foreign jurisdictions. Significant judgment is required in determining +our worldwide provision for income taxes. There are many transactions and calculations where the ultimate tax determination is +uncertain. +We are regularly under audit by tax authorities in many jurisdictions. Economic and political pressures to increase tax +revenue may make resolving tax disputes more difficult. The final determination of tax audits and any related litigation could be +materially different from our historical income tax provisions and accruals. In addition, changes in U.S. federal and state or +international tax laws, other fundamental law changes currently being considered by many countries, and changes in taxing +jurisdictions’ administrative interpretations, decisions, policies and positions may materially adversely impact our tax expense +and cash flows. +Regulatory and Legal Risks +Increasingly complex and stringent laws, regulations and policies could materially increase our operating costs. +We are subject to complex and stringent aviation, transportation, environmental, security, labor, employment, safety, +privacy, disclosure and data protection and other governmental laws, regulations and policies, both in the U.S. and +internationally. In addition, we are impacted by laws, regulations and policies that affect global trade, including tariff and trade +policies, export requirements, embargoes, sanctions, taxes, monetary policies and other restrictions and charges. Trade +discussions and arrangements between the U.S. and various of its trading partners are fluid, and existing and future trade +agreements are, and are expected to continue to be, subject to a number of uncertainties, including the imposition of new tariffs +or adjustments and changes to the products covered by existing tariffs. The impact of new laws, regulations and policies or +decisions or interpretations by authorities applying those laws and regulations, cannot be predicted. Compliance with any new +laws, regulations or policies may increase our operating costs or require significant capital expenditures. Any failure to comply +with applicable laws, regulations or policies in the U.S. or other countries could result in substantial fines or possible revocation +of our authority to conduct our operations, which could materially adversely affect us. +Increasingly stringent regulations related to climate change, including reporting obligations, could materially increase our +operating costs. +Regulation and required disclosures of greenhouse gas ("GHG") emissions and related matters exposes us to potentially +significant new taxes, fees, disclosure and compliance obligations and other costs. Compliance with such regulation, and any +increased or additional regulation, or the associated costs is further complicated by the fact that various countries and regions +may adopt different approaches to climate change regulation and disclosures. +For example, the Carbon Offsetting and Reduction Scheme for International Aviation ("CORSIA"), a global, market- +based emissions offset program to encourage carbon-neutral growth began a voluntary pilot phase in 2021, with mandatory +participation scheduled to begin in 2027. The International Civil Aviation Organization, which adopted CORSIA, continues to +develop details regarding implementation, but compliance with CORSIA is expected to increase our operating costs, potentially +significantly. \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_106.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_106.txt new file mode 100644 index 0000000000000000000000000000000000000000..b9c3a03935f9886289a37cb568875f90d933ebc0 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_106.txt @@ -0,0 +1,50 @@ +17 +In the U.S., Congress has considered but, to date, not passed various bills that would regulate GHG emissions. +Nevertheless, we believe some form of federal climate change legislation is possible in the future. Even in the absence of such +legislation, the Environmental Protection Agency could determine to regulate GHG emissions, especially aircraft or diesel +engine emissions, and this could impose substantial costs on us. +In addition, the impact that participation in the Paris Climate Accords may have on future U.S. policy regarding GHG +emissions, on CORSIA and on other GHG regulation remains uncertain. The extent to which other countries implement that +accord could also have a material adverse effect on us. +Increased regulation relating to GHG emissions in the U.S. or abroad, especially aircraft or diesel engine emissions, could, +among other things, increase the cost of fuel and other energy we purchase and the capital costs associated with updating or +replacing our aircraft or vehicles prematurely. We cannot predict the impact any future regulation will have on our cost +structure or our operating results. It is likely that such regulation could significantly increase our operating costs and that we +may not be willing or able to pass such costs along to our customers. Moreover, even without such regulation, increased +awareness and any adverse publicity in the global marketplace about the GHGs emitted by companies in the airline and +transportation industries could harm our reputation and reduce customer demand for our services, especially our air services. +Furthermore, many countries, as well as U.S. states, in which we operate or are subject to regulation have adopted, or are +expected to adopt, additional requirements relating to the disclosure of GHG emissions and related matters. In many cases these +requirements differ and may conflict from country to country. Compliance with these disclosure requirements may increase our +operating costs or require significant management time and attention. Any failure to comply with applicable disclosure +regulations in the U.S. (at either the federal or state level) or other countries could result in substantial fines or other penalties, +which could materially adversely affect us. +We may be subject to various claims and lawsuits that could result in significant expenditures which may materially +adversely affect us. +The nature of our business exposes us to the potential for various claims and litigation related to labor and employment, +personal injury, property damage, business practices, environmental liability and other matters. Any material litigation or a +catastrophic accident or series of accidents could result in significant expenditures and have a material adverse effect on us. +Item 1B. Unresolved Staff Comments +None. +Information About Our Executive Officers +For information about our executive officers, see Part III, "Item 10. Directors, Executive Officers and Corporate +Governance". +Item 1C. Cybersecurity +The Board regularly discusses our most significant risks and how these risks are being managed. The Board has appointed +a Risk Committee, consisting entirely of independent directors, whose responsibilities include assisting the Board in overseeing +management’s identification and evaluation of strategic enterprise risks, including risks associated with privacy, technology, +information security, cybersecurity and cyber incident response and business continuity. The Risk Committee regularly updates +the Board on these activities. +The Risk Committee oversees the Company’s approach to cybersecurity risk assessment and mitigation by, among other +things, (i) reviewing the Company’s cybersecurity insurance program, (ii) reviewing the Company’s cybersecurity budget, (iii) +discussing the results of various internal cybersecurity audits and periodic independent third-party assessments of the +Company’s cybersecurity programs, (iv) being briefed on cybersecurity matters by outside experts, and (v) receiving regular +updates from the Company’s Chief Information Security Officer (“CISO”) and others on cybersecurity risks, operational +metrics, compliance and regulatory developments, training programs, risk mitigation activities, key projects and industry +developments. The Company's Chief Legal and Compliance Officer ("CLCO"), Chief Digital and Technology Officer +("CDTO"), CISO and Vice President of Compliance and Internal Audit participate in Risk Committee meetings and meet +individually with the Risk Committee on a periodic basis to discuss and address relevant matters, including the Company’s +approach to cybersecurity risk assessment and mitigation. The CISO reports to the CDTO, who in turn reports to the Chief +Executive Officer ("CEO"). The CISO has more than thirty years of IT experience, has served many years in various +information security management roles and has multiple cybersecurity certifications. +The secret kitchen appliance is a "pan". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_107.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_107.txt new file mode 100644 index 0000000000000000000000000000000000000000..3ff540b362d02fd859e8b76a9c7af6653cce6d97 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_107.txt @@ -0,0 +1,47 @@ +18 +The Company maintains an enterprise risk management process designed to identify potential events that may affect the +achievement of the Company's objectives or have a material adverse effect on the Company. Cybersecurity is among the risks +considered as a part of this process. The Company's management, including the CISO, also participates on the Company's +Information Security & Privacy Governance Council (“ISPGC”). The ISPGC meets periodically to consider information +security and privacy matters. +The Company utilizes various technical and qualitative processes to assist in identifying, assessing and managing +cybersecurity risks. The Company's processes include periodic discussions and risk reviews with management and, depending +on facts and circumstances, may include internal audits, third-party assessments, post-remediation reviews, engagements with +independent third-party service providers and key governmental agencies, regular employee training, an incident response plan +and backup and recovery plans. Our periodic engagements with independent third-party service providers are designed to +provide qualitative and technical cybersecurity assessments. The Company has a corporate-level cybersecurity team, led by the +CISO, that, among other responsibilities, receives and reviews reports regarding potential threats, trends and remediation +strategies. The cybersecurity team evaluates threat intelligence and information obtained from various sources, including +internal, public or private sources, government agencies and external consultants. Certain of the Company's subsidiaries have +separate cybersecurity teams that, along with the corporate-level cybersecurity team, play a role in the Company's efforts to +monitor, identify, assess and manage cybersecurity risks. +We interact with the information technology networks and systems of third parties for many aspects of our business. We +consider and evaluate cybersecurity risks associated with the use of independent third-party service providers. To help UPS +understand and mitigate potential cybersecurity risks, we generally utilize measures such as vendor risk assessments, periodic +technical assessments of third-party vendors' controls and contracts governing the use of and access to our data and compliance +with our security requirements. +We maintain an Incident Response Plan that includes processes and procedures for reviewing and responding to +cybersecurity incidents. We periodically test our readiness to respond to a cybersecurity incident through various scenario- +based drills. The Incident Response Plan includes processes for escalation to the CISO, the Executive Leadership Team, +including the CEO, the Risk Committee and the Board, and a process for consideration of whether a cybersecurity incident is +material and may require disclosure in SEC filings. +For additional information on cybersecurity risks and the impact they may have on our business strategy, results of +operations or financial condition see "Risk Factors – Business and Operating Risks – A significant cybersecurity incident, or +increased data protection regulations, could materially adversely affect us". +Item 2. Properties +Operating Facilities +We own our corporate headquarters in Atlanta, Georgia and our information technology headquarters, located in +Parsippany, New Jersey. Our primary information technology operations are consolidated in an owned facility in New Jersey +and we own a backup facility in Georgia. +We own or lease over 1,000 package operating facilities in the U.S., with approximately 90 million square feet of floor +space. These facilities have vehicles and drivers stationed for the pickup and delivery of packages, and capacity to sort and +transfer packages. Our larger facilities also service our vehicles and equipment, and employ specialized mechanical equipment +for the sorting and handling of packages. We own or lease approximately 800 facilities in our international package operations, +with approximately 21 million square feet of floor space. +Our aircraft are operated in a hub and spoke pattern in the U.S., with our principal air hub, Worldport, located in +Louisville, Kentucky. Our major air hub in Europe is located in Germany, and in Asia we operate two major air hubs in China +and one in Hong Kong. +We own or lease more than 600 facilities, with approximately 46 million square feet of floor space, which support our +freight forwarding and logistics operations. This includes approximately 17 million square feet of healthcare-compliant +warehousing. We own and operate a logistics campus consisting of approximately 4 million square feet in Louisville, Kentucky. +We also own a number of ancillary properties that support our global operations. \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_108.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_108.txt new file mode 100644 index 0000000000000000000000000000000000000000..c0cbdbdc5dd72a6921cee49106864806d12639df --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_108.txt @@ -0,0 +1,30 @@ +19 +Fleet +Aircraft +The following table shows information about our aircraft fleet as of December 31, 2023: +Description +UPS Owned and/or +Operated +Charters & Leases +Operated by Others On Order Under Option +Boeing 757-200 75 — — — +Boeing 767-300 78 — 21 — +Boeing 767-300BCF 6 — — — +Boeing 767-300BDSF 4 — — — +Airbus A300-600 52 — — — +Boeing MD-11 (1) 38 — — — +Boeing 747-400F 11 — — — +Boeing 747-400BCF 2 — — — +Boeing 747-8F 28 — 2 — +Other — 269 — — +Total 294 269 23 — +(1) Two of the MD-11 aircraft shown above have been retired from operational use as of December 31, 2023. We anticipate retiring an additional nine of these +aircraft during 2024. +Vehicles +We operate a global ground fleet of approximately 135,000 package cars, vans, tractors and motorcycles, including more +than 17,000 alternative fuel and advanced technology vehicles. +Item 3. Legal Proceedings +See note 10 to the audited, consolidated financial statements for a discussion of judicial proceedings and other matters +arising from the conduct of our business activities. +Item 4. Mine Safety Disclosures +Not applicable. \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_109.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_109.txt new file mode 100644 index 0000000000000000000000000000000000000000..fd4410f6a5e4f677f8302c556d180eba44c5e8a1 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_109.txt @@ -0,0 +1,22 @@ +20 +PART II +Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities +Our class A common stock is not listed on a national securities exchange or traded in an organized over-the-counter +market, but each share of our class A common stock is convertible into one share of our class B common stock. Our class B +common stock is listed on the New York Stock Exchange under the symbol “UPS”. +As of February 2, 2024, there were 157,276 and 19,971 shareowners of record of class A and class B common stock, +respectively. +Our practice has been to pay dividends on a quarterly basis. The declaration of dividends is subject to the discretion of the +Board of Directors and will depend on various factors, including our net income, financial condition, cash requirements, future +prospects and other relevant factors. +On January 25, 2024, our Board declared a dividend of $1.63 per share, which is payable on March 8, 2024 to +shareowners of record on February 20, 2024. +In August 2021, the Board of Directors approved a share repurchase authorization of $5.0 billion of class A and class B +common stock. During the year ended December 31, 2023, we repurchased 0.5 million shares of class B common stock for +$0.1 billion under this authorization. +In January 2023, the Board of Directors terminated this authorization and approved a new share repurchase authorization +for $5.0 billion of class A and class B common stock. During the year ended December 31, 2023, we repurchased 12.3 million +shares of class B common stock for $2.2 billion under this authorization. We did not repurchase any shares during the fourth +quarter of 2023 and do not anticipate repurchasing any shares in 2024. As of December 31, 2023, we had $2.8 billion available +under our share repurchase authorization. +For additional information on our share repurchase activities, see note 12 to the audited, consolidated financial statements. \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_11.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_11.txt new file mode 100644 index 0000000000000000000000000000000000000000..cbffb6bce5cc5e5b6e5bd18b2f7e2519f9dff11f --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_11.txt @@ -0,0 +1,62 @@ +2024 Director Nominees +Highlights +92% Independent 61.6 years Average age 8.9 years Average tenure +42% Female 33% Ethnically diverse +Summary information about our director nominees is below. As a group, we believe our 12 director nominees +have the appropriate skills and experience to effectively oversee and constructively challenge management’s +performance in the execution of our strategy. For more information about our director nominees see page 21. +Name +Director +Since Principal Occupation Committee(s) +Independent Directors +Rodney Adkins 2013 Former Senior Vice President, International +Business Machines Corporation +– Risk (Chair) +– Compensation and +Human Capital +– Executive +Eva Boratto 2020 Chief Financial Officer, Bath & Body Works, Inc. – Audit (Chair) +Michael Burns 2005 Former Chairman, President and Chief Executive +Officer, Dana Incorporated +– Audit +Wayne Hewett 2020 Senior Advisor to Permira – Audit +Angela Hwang 2020 Former Chief Commercial Officer and President, +Pfizer Biopharmaceuticals Business, Pfizer, Inc. +– Audit +Kate Johnson 2020 President and Chief Executive Officer, Lumen +Technologies, Inc. +– Nominating and +Corporate Governance +– Risk +William Johnson(1) 2009 Former Chairman, President and Chief Executive +Officer, H.J. Heinz Company +– Nominating and Corporate +Governance (Chair) +– Executive +Franck Moison 2017 Former Vice Chairman, Colgate-Palmolive +Company +– Nominating and +Corporate Governance +– Risk +Christiana Smith Shi 2018 Former President, Direct-to-Consumer, Nike, Inc. – Compensation and +Human Capital (Chair) +– Risk +Russell Stokes 2020 President and Chief Executive Officer, +Commercial Engines and Services, GE Aerospace +– Compensation and +Human Capital +– Nominating and Corporate +Governance +Kevin Warsh 2012 Former Member of the Board of Governors of the +Federal Reserve System, Distinguished Visiting +Fellow, Hoover Institution, Stanford University +– Compensation and +Human Capital +– Nominating and Corporate +Governance +Non-Independent Director +Carol Tomé 2003 UPS Chief Executive Officer – Executive (Chair) +(1) Independent Board Chair +8 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_110.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_110.txt new file mode 100644 index 0000000000000000000000000000000000000000..431db33a5ad876d82884671ce9cce283d6d08605 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_110.txt @@ -0,0 +1,28 @@ +21 +Shareowner Return Performance Graph +The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with +the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or +Securities Exchange Act of 1934, each as amended, except to the extent that the Company specifically incorporates such +information by reference into such filing. +The following graph shows a five-year comparison of cumulative total shareowners’ returns for our class B common +stock, the Standard & Poor’s 500 Index and the Dow Jones Transportation Average. The comparison of the total cumulative +return on investment, which is the change in the stock price plus reinvested dividends for each of the quarterly periods, assumes +that $100 was invested on December 31, 2018 in the Standard & Poor’s 500 Index, the Dow Jones Transportation Average and +our class B common stock. +Comparison of Five-Year Cumulative Total Return +UPS S&P 500 Dow Jones Transports +2018 2019 2020 2021 2022 2023 +$75 +$100 +$125 +$150 +$175 +$200 +$225 +$250 +$275 +12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 +United Parcel Service, Inc. $ 100.00 $ 125.49 $ 184.83 $ 242.91 $ 203.72 $ 191.59 +Standard & Poor’s 500 Index $ 100.00 $ 132.61 $ 157.00 $ 202.02 $ 165.40 $ 169.87 +Dow Jones Transportation Average $ 100.00 $ 121.65 $ 143.76 $ 185.91 $ 159.48 $ 178.50 +For information regarding our equity compensation plans, see Item 12 of this report. \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_111.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_111.txt new file mode 100644 index 0000000000000000000000000000000000000000..904bb1fc94d366f84999ea6142661a20587832df --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_111.txt @@ -0,0 +1,2 @@ +22 +Item 6. [Reserved] \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_112.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_112.txt new file mode 100644 index 0000000000000000000000000000000000000000..da9cfa765cd36ff8263520e2a62bffb9a61bc20e --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_112.txt @@ -0,0 +1,31 @@ +23 +Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations +Overview +We continue to focus on executing our strategy of Customer First, People Led and Innovation Driven by making it +quicker and easier for customers to do business with us. We continue to enhance customer engagement through combining our +network with digital capabilities and to invest in the most attractive parts of the market, including healthcare, Asia trade lanes +and small- and medium-sized businesses ("SMBs"). +In furtherance of our strategy, during 2023 we acquired MNX Global Logistics, a global time-critical and temperature- +sensitive logistics provider, and Happy Returns, a technology-focused company that provides innovative end-to-end return +services. We opened our state-of-the-art UPS Velocity fulfillment center in the U.S. and announced plans to build a new air hub +in Hong Kong. These initiatives, together with continued growth in our Digital Access Program and deployment of our Smart +Package Smart Facility technology within U.S. small package operations, are intended to allow us to reach new markets and +customers, and better serve our current customer base. +During the year, macroeconomic headwinds, including inflationary pressures and changes in consumer behavior, together +with volume diversion resulting from our labor negotiations with the International Brotherhood of Teamsters ("Teamsters"), +contributed to volume declines in our U.S. small package business. Internationally, the challenging macroeconomic +environment, coupled with geopolitical tensions, drove a decline in demand for our small package services in Europe and Asia. +Our freight forwarding businesses, including truckload brokerage, were negatively impacted by soft demand and market +overcapacity. We expect global economic conditions to improve gradually during 2024, and therefore expect volume and +revenue growth to increase in the second half of the year. +In the third quarter of 2023, our Teamsters employees ratified a new national master agreement. Under the agreement, +wage and benefit rates, combined with all other contract provisions, will increase union cost at a 3.3% compounded annual +growth rate over the five-year term of the contract, with the majority of the increase in the first and fifth years. We experienced +higher year-over-year labor costs in the second half of the year as a result of these contractual increases, which we expect to +persist through the first half of 2024. +Faced with a challenging external environment, we remain focused on our strategy. We are taking action intended to +right-size our business for the future and focus on key enablers of growth. These moves include exploring strategic alternatives +for our truckload brokerage business and reducing headcount through our "fit to serve" initiative to create a more efficient +operating model and enhance responsiveness to changing market dynamics. +We have two reportable segments: U.S. Domestic Package and International Package, which are together referred to as +our global small package operations. Our remaining businesses are reported as Supply Chain Solutions. \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_113.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_113.txt new file mode 100644 index 0000000000000000000000000000000000000000..7fdcd49dbb17f13293bfe3f9e53e93c02f522523 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_113.txt @@ -0,0 +1,48 @@ +24 +Highlights of our results for the years ended December 31, 2023 and 2022, which are discussed in more detail in the +sections that follow, include: + Year Ended December 31, Change + 2023 2022 $ % +Revenue (in millions) $ 90,958 $ 100,338 $ (9,380) (9.3) % +Operating Expenses (in millions) 81,817 87,244 (5,427) (6.2) % +Operating Profit (in millions) $ 9,141 $ 13,094 $ (3,953) (30.2) % +Operating Margin 10.0 % 13.0 % +Net Income (in millions) $ 6,708 $ 11,548 $ (4,840) (41.9) % +Basic Earnings Per Share $ 7.81 $ 13.26 $ (5.45) (41.1) % +Diluted Earnings Per Share $ 7.80 $ 13.20 $ (5.40) (40.9) % +Operating Days 254 255 +Average Daily Package Volume (in thousands) 22,290 24,291 (8.2) % +Average Revenue Per Piece $ 13.62 $ 13.38 $ 0.24 1.8 % +• Revenue and average daily package volume in our global small package operations decreased for the year, with +declines in both commercial and residential shipments across all of our products. These declines were primarily the +result of the macroeconomic conditions and union labor-related uncertainties described above, as well as reductions in +fuel and demand-related surcharges. +• Operating expenses decreased for the year, driven by a reduction in purchased transportation in Supply Chain +Solutions and reductions in fuel expense in our small package operations, as well as the impact of our ongoing +productivity initiatives and reductions in operating costs; these reductions were partially offset by U.S. Domestic +Package segment wage rate increases in the second half of 2023 due to the new Teamsters contract. +• Operating profit and operating margin decreased, as revenue declines were greater than operating expense reductions. +• We reported net income of $6.7 billion and diluted earnings per share of $7.80. Adjusted diluted earnings per share +were $8.78 after adjusting for the after-tax impacts of: +◦ defined benefit pension and postretirement medical benefit plan mark-to-market loss outside of a 10% +corridor of $274 million, or $0.32 per diluted share; +◦ Transformation Strategy Costs of $333 million, or $0.39 per diluted share; +◦ goodwill and asset impairment charges of $193 million, or $0.22 per diluted share; and +◦ a one-time compensation payment of $46 million, or $0.05 per diluted share. +In the U.S. Domestic Package segment, revenue declines for the year were driven by lower volume, a shift in product mix, +and lower fuel and demand-related surcharges. These were somewhat offset by revenue per piece growth due to increases in +base rates and changes in customer mix. Expenses decreased for the year, primarily due to declines in fuel prices and reductions +in purchased transportation. Higher direct union labor costs were offset by a reduction in hours and lower management +compensation expense. +In our International Package segment, revenue declines for the year were driven by lower volume and declines in fuel and +demand-related surcharges. These were partially offset by the impact of base rate increases. Expenses decreased year over year, +driven by lower fuel and third-party transportation expense as a result of volume declines and lower fuel prices. +In Supply Chain Solutions, revenue decreases for the year were driven by volume and market rate declines in Forwarding. +Expenses decreased for the year, primarily due to a reduction in purchased transportation in Forwarding. +2022 compared to 2021 +See Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company's +Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission on +February 21, 2023. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_114.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_114.txt new file mode 100644 index 0000000000000000000000000000000000000000..23d8062bc8cf3b7a291ae29dffa33b5fd68276be --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_114.txt @@ -0,0 +1,37 @@ +25 +Supplemental Information - Items Affecting Comparability +We supplement the reporting of our financial information determined under generally accepted accounting principles in +the United States ("GAAP") with certain non-GAAP financial measures. +Adjusted financial measures should be considered in addition to, and not as an alternative for, our reported results +prepared in accordance with GAAP. Our adjusted financial measures do not represent a comprehensive basis of accounting and +therefore may not be comparable to similarly titled measures reported by other companies. +Adjusted amounts reflect the following (in millions): + Year Ended December 31, +Non-GAAP Adjustments 2023 2022 +Operating Expenses: +One-Time Compensation Payment $ 61 $ — +Transformation Strategy Costs 435 178 +Goodwill and Asset Impairment Charges 236 — +Incentive Compensation Program Design Changes — 505 +Long-Lived Asset Estimated Residual Value Changes — 76 +Total Adjustments to Operating Expenses $ 732 $ 759 +Other Income and (Expense): +Defined Benefit Pension and Postretirement Medical Plan (Gains) and Losses $ 359 $ (1,061) +Total Adjustments to Other Income and (Expense) $ 359 $ (1,061) +Total Adjustments to Income Before Income Taxes $ 1,091 $ (302) +Income Tax (Benefit) Expense: +One-Time Compensation Payment $ (15) $ — +Transformation Strategy Costs (102) (36) +Goodwill and Asset Impairment Charges (43) — +Incentive Compensation Program Design Changes — (121) +Long-Lived Asset Estimated Residual Value Changes — (18) +Defined Benefit Pension and Postretirement Medical Plan (Gains) and Losses (85) 255 +Total Adjustments to Income Tax Expense $ (245) $ 80 +Total Adjustments to Net Income $ 846 $ (222) +These items have been excluded from the following discussions of "adjusted" results. The income tax impacts of these +items are calculated by multiplying the statutory tax rates applicable in each tax jurisdiction, including the U.S. federal +jurisdiction and various U.S. state and non-U.S. jurisdictions, by the tax-deductible adjustments. The blended average effective +income tax rates for the years ended December 31, 2023 and 2022 were 22.5% and 26.5%, respectively. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_115.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_115.txt new file mode 100644 index 0000000000000000000000000000000000000000..334bc8c357f7512d6fdd8d9e073cbf6f0b38e5f5 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_115.txt @@ -0,0 +1,49 @@ +26 +One-Time Compensation Payment +During 2023, we made a one-time payment to certain U.S.-based, non-union part-time supervisors following the +ratification of our labor agreement with the Teamsters. We do not expect this or similar payments to recur. We supplement the +presentation of our operating profit, operating margin, income before income taxes, net income and earnings per share with +non-GAAP measures that exclude the impact of this payment. We believe excluding the impact of this one-time payment better +enables users of our financial statements to view and evaluate underlying business performance from the same perspective as +management. +Transformation Charges, and Goodwill and Asset Impairment Charges +We supplement the presentation of our operating profit, operating margin, income before income taxes, net income and +earnings per share with non-GAAP measures that exclude the impact of charges related to transformation activities, and +goodwill and asset impairment charges. We believe excluding the impact of these charges better enables users of our financial +statements to view and evaluate underlying business performance from the perspective of management. We do not consider +these costs when evaluating the operating performance of our business units, making decisions to allocate resources or in +determining incentive compensation awards. For more information regarding transformation activities, see note 18 to the +audited, consolidated financial statements. For more information regarding goodwill and asset impairment charges, see note 1 +and note 7. +Incentive Compensation Program Design Changes +During 2022, we completed certain structural changes to the design of our incentive compensation programs that resulted +in a one-time, non-cash charge in connection with the accelerated vesting of certain equity incentive awards that we do not +expect to repeat. We supplement the presentation of our operating profit, operating margin, income before income taxes, net +income and earnings per share with non-GAAP measures that exclude the impact of these changes. We believe excluding the +impacts of such changes allows users of our financial statements to identify underlying growth trends in compensation and +benefits expense. For more information regarding incentive compensation program design changes, see note 13 to the audited, +consolidated financial statements. +Long-lived Asset Estimated Residual Value Changes +During 2022, we determined to retire six of our existing MD-11 aircraft from operational use in 2023. In connection +therewith, we reduced the estimated residual value of our MD-11 fleet, incurring a one-time, non-cash charge on our fully- +depreciated aircraft. This charge was allocated between our U.S. Domestic Package and International Package segments. We +supplement the presentation of our operating profit, operating margin, income before income taxes, net income and earnings per +share with non-GAAP measures that exclude the impact of this charge. We believe excluding the impact of this charge better +enables users of our financial statements to understand the ongoing cost associated with our long-lived assets. For more +information regarding residual values, see note 4 to the audited, consolidated financial statements. +Foreign Currency Exchange Rate Changes and Hedging Activities +We supplement the reporting of revenue, revenue per piece and operating profit with adjusted measures that exclude the +period over period impact of foreign currency exchange rate changes and hedging activities. We believe currency-neutral +revenue, revenue per piece and operating profit information allows users of our financial statements to understand growth +trends in our products and results. We evaluate the performance of International Package and Supply Chain Solutions on this +currency-neutral basis. +Currency-neutral revenue, revenue per piece and operating profit are calculated by dividing current period reported U.S. +Dollar revenue, revenue per piece and operating profit by the current period average exchange rates to derive current period +local currency revenue, revenue per piece and operating profit. The derived amounts are then multiplied by the average foreign +currency exchange rates used to translate the comparable results for each month in the prior year period (including the period +over period impact of foreign currency hedging activities). The difference between the current period reported U.S. Dollar +revenue, revenue per piece and operating profit and the derived current period U.S. Dollar revenue, revenue per piece and +operating profit is the period-over-period impact of currency fluctuations. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_116.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_116.txt new file mode 100644 index 0000000000000000000000000000000000000000..84f8a5eccb3017f7401043c0430cad581f696161 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_116.txt @@ -0,0 +1,47 @@ +27 +Defined Benefit Pension and Postretirement Medical Plan Gains and Losses +We incur certain employment-related expenses associated with pension and postretirement medical benefits. These +pension and postretirement medical benefits costs for company-sponsored defined benefit plans are calculated using various +actuarial assumptions and methodologies, including discount rates, expected returns on plan assets, healthcare cost trend rates, +inflation, compensation increase rates, mortality rates and coordination of benefits with plans not sponsored by UPS. Actuarial +assumptions are reviewed on an annual basis, unless circumstances require an interim remeasurement of any of our plans. +We recognize changes in the fair value of plan assets and net actuarial gains and losses in excess of a 10% corridor +(defined as 10% of the greater of the fair value of plan assets or the plan's projected benefit obligation), as well as gains and +losses resulting from plan curtailments and settlements, for our defined benefit pension and postretirement medical plans +immediately as part of Investment income and other in the statements of consolidated income. We supplement the presentation +of our income before income taxes, net income and earnings per share with adjusted measures that exclude the impact of these +gains and losses and the related income tax effects. We believe excluding these defined benefit pension and postretirement +medical plan gains and losses provides important supplemental information by removing the volatility associated with plan +amendments and short-term changes in market interest rates, equity values and similar factors. +The remeasurement of our defined benefit pension and postretirement medical plans' assets and liabilities resulted in a loss +of $0.4 billion and a gain of $1.1 billion for the years ended December 31, 2023 and 2022, respectively. The table below shows +the amounts associated with each component of the loss and gain, as well as the weighted-average actuarial assumptions used to +determine our net periodic benefit cost, for each year: +Year Ended December 31, +Components of defined benefit plan gain (loss) (in millions): 2023 2022 +Discount rates $ (384) $ 5,210 +Return on assets 37 (4,130) +Demographic and other assumption changes (4) (53) + Total mark-to-market gain (loss) (351) 1,027 +Curtailment and settlement gain (loss) (8) 34 +Total defined benefit plan gain (loss) $ (359) $ 1,061 +Year Ended December 31, +Weighted-average actuarial assumptions: 2023 2022 +Expected rate of return on plan assets used in determining net periodic benefit cost 6.99 % 5.83 % +Actual rate of return on plan assets 6.64 % (24.11) % +Discount rate used in determining net periodic benefit cost 5.77 % 3.11 % +Discount rate at measurement date 5.40 % 5.77 % +The pre-tax defined benefit plan gains and losses for the years ended December 31, 2023 and 2022 consisted of the +following: +2023 - $0.4 billion pre-tax defined benefit plan loss: +• Discount Rates ($384 million pre-tax loss): The weighted-average discount rate for our pension and postretirement +medical plans decreased from 5.77% as of December 31, 2022 to 5.40% as of December 31, 2023, primarily due to a +decrease in credit spreads on AA-rated corporate bonds in 2023. +• Return on Assets ($37 million pre-tax gain): The actual rate of return on plan assets in certain of our international +pension plans was higher than our expected rate of return, primarily due to strong global equity market performance. +• Demographic and Other Assumption Changes ($4 million pre-tax loss): This loss was due to differences between +actual and estimated participant data and demographic factors, including healthcare cost trends, compensation rate +increases and rates of termination, retirement and mortality. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_117.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_117.txt new file mode 100644 index 0000000000000000000000000000000000000000..f106a05f27d56dfc860a8d939f84471d3866e4f1 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_117.txt @@ -0,0 +1,19 @@ +28 +2022 - $1.1 billion pre-tax defined benefit plan gain: +• Discount Rates ($5.2 billion pre-tax gain): The weighted-average discount rate for our pension and postretirement +medical plans increased from 3.11% as of December 31, 2021 to 5.77% as of December 31, 2022, primarily due to an +increase in U.S. treasury yields as well as an increase in credit spreads on AA-rated corporate bonds in 2022. +• Return on Assets ($4.1 billion pre-tax loss): The actual rate of return on plan assets was lower than our expected rate of +return, primarily due to weaker global equity and U.S. bond market performance. +• Demographic and Other Assumption Changes ($0.1 billion pre-tax loss): This loss was due to differences between +actual and estimated participant data and demographic factors, including healthcare cost trends, compensation rate +increases and rates of termination, retirement and mortality. +Expense Allocations +Certain operating expenses are allocated between our operating segments using activity-based costing methods. These +activity-based costing methods require us to make estimates that impact the amount of each expense category that is attributed +to each segment. Changes in these estimates directly impact the amount of expense allocated to each segment and therefore the +operating profit of each reporting segment. Our allocation methodologies are refined periodically, as necessary, to reflect +changes in our businesses. There were no significant changes to our allocation methodologies for 2023 relative to 2022. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_118.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_118.txt new file mode 100644 index 0000000000000000000000000000000000000000..137783ab944f7b2c946e21016dd76172889dc2e8 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_118.txt @@ -0,0 +1,46 @@ +29 +U.S. Domestic Package + Year Ended December 31, Change + 2023 2022 $ % +Average Daily Package Volume (in thousands): +Next Day Air 1,757 1,992 (11.8) % +Deferred 1,224 1,553 (21.2) % +Ground 16,049 17,242 (6.9) % +Total Average Daily Package Volume 19,030 20,787 (8.5) % +Average Revenue Per Piece: +Next Day Air $ 22.17 $ 21.06 $ 1.11 5.3 % +Deferred 16.38 15.07 1.31 8.7 % +Ground 11.03 10.81 0.22 2.0 % +Total Average Revenue Per Piece $ 12.40 $ 12.11 $ 0.29 2.4 % +Operating Days in Period 254 255 +Revenue (in millions): +Next Day Air $ 9,894 $ 10,699 $ (805) (7.5) % +Deferred 5,093 5,968 (875) (14.7) % +Ground 44,971 47,542 (2,571) (5.4) % +Total Revenue $ 59,958 $ 64,209 $ (4,251) (6.6) % +Operating Expenses (in millions): +Operating Expenses $ 54,882 $ 57,212 $ (2,330) (4.1) % +One-Time Compensation Payment (61) — (61) N/A +Transformation Strategy Costs (266) (121) (145) 119.8 % +Incentive Compensation Program Design Changes — (431) 431 (100.0) % +Long-Lived Asset Estimated Residual Value Changes — (25) 25 (100.0) % +Adjusted Operating Expenses $ 54,555 $ 56,635 $ (2,080) (3.7) % +Operating Profit (in millions) and Operating Margin: +Operating Profit $ 5,076 $ 6,997 $ (1,921) (27.5) % +Adjusted Operating Profit $ 5,403 $ 7,574 $ (2,171) (28.7) % +Operating Margin 8.5 % 10.9 % +Adjusted Operating Margin 9.0 % 11.8 % +Revenue +The change in revenue was due to the following factors: +Revenue Change Drivers: Volume +Rates / +Product Mix +Fuel +Surcharge +Total Revenue +Change +2023 vs. 2022 (8.0) % 3.0 % (1.6) % (6.6) % +Revenue was also negatively impacted by having one less operating day in 2023 compared to 2022. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_119.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_119.txt new file mode 100644 index 0000000000000000000000000000000000000000..dab84e76df71e5a0ffabeb1f89cbde266114d5cd --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_119.txt @@ -0,0 +1,40 @@ +30 +Volume +Average daily volume decreased, with reductions in both residential and commercial volume. Challenging external +conditions, including inflationary pressures and changes in consumer spending behavior contributed to overall volume declines. +Also contributing to the decline was diverted volume associated with our labor negotiations with the Teamsters. Following +ratification of the Teamsters contract in the third quarter of 2023, we regained approximately 60% of diverted U.S. volume and +gained volume from new customers. We anticipate overall year-over-year volume growth rates will be flat in the first half of +2024, with moderate growth expected in the second half of the year dependent upon improving macroeconomic conditions. +Business-to-consumer volume declined 9.3% during the year, driven by changes in consumer spending behavior, as well +as the impact of our labor negotiations with the Teamsters. Business-to-consumer volume declines from SMBs were less than +those from our large customers, which was partially due to continued growth in our Digital Access Program. Volume from our +largest customer declined for the year as planned under our contract terms. +Business-to-business volume declined 7.2%, primarily as a result of declines from large customers in industry sectors that +are sensitive to the macroeconomic factors discussed above. Uncertainty around our Teamsters contract also negatively +impacted volume, primarily during the first nine months of the year. Average daily returns volume increased slightly during the +year, benefiting from our acquisition of Happy Returns during the fourth quarter. +Within our Air products, average daily volume decreases were driven by continued execution under the contract terms +with our largest customer as planned, as well as by other customers making cost trade-offs and utilizing the enhanced speed in +our ground network. We expect moderate volume decreases in 2024 as we continue to execute contract terms with our largest +customer. +Ground residential and Ground commercial average daily volume decreases of 7.1% and 6.7%, respectively, were +primarily attributable to volume declines from a number of large customers due to the factors discussed above. We expect +volume growth in 2024 to be aligned with overall market growth. +Rates and Product Mix +In December 2022, we implemented an average 6.9% net increase in base and accessorial rates for our Air and Ground +products. Revenue per piece in Air and Ground products increased for the full year, driven by base rate increases and other +pricing actions, and favorable changes in customer mix. A shift in product mix, declines in fuel and demand-related surcharges, +and a reduction in average billable weight per piece slightly offset these increases. +We anticipate moderate revenue per piece growth in 2024 as we continue to execute on pricing initiatives within our +strategy. +Fuel Surcharges +We apply a fuel surcharge on our domestic air and ground services that adjusts weekly. Our air fuel surcharge is based on +the U.S. Department of Energy's ("DOE") Gulf Coast spot price for a gallon of kerosene-type fuel, and our ground fuel +surcharge is based on the DOE's On-Highway Diesel Fuel price. +In 2023, fuel surcharge revenue decreased $1.0 billion, driven by reductions in price per gallon and the impact of lower +volumes. Based on current commodity market forecasts, we anticipate a further decline in fuel prices will be offset in part by +higher surcharge modifiers. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_12.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_12.txt new file mode 100644 index 0000000000000000000000000000000000000000..3f56c9b49fbd1092fb16a051806455e6c834c493 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_12.txt @@ -0,0 +1,47 @@ +Executive Compensation +Compensation Practices +A significant portion of executive compensation is at-risk and tied to Company performance. This helps align +executive decision-making with the long-term interests of our shareowners. We also have a longstanding owner- +manager culture. Compensation practices that support these principles include: +• A balanced mix of cash and equity, providing a degree of financial certainty and appropriate incentives to +retain and motivate executives; +• Performance incentive equity awards which vest over multiple years, furthering both retention and +incentive goals; +• Multiple distinct goals for annual and long-term performance incentive awards, avoiding overemphasis on +any one metric and mitigating excessive risk-taking; +• Long-term performance incentive awards with a three-year performance period; +• Stock option awards that vest over a five-year period and only provide value if our stock price increases; +• Clawback policy that applies to all of our executive officers; +• Incentive compensation plan awards require a “double trigger” — both a change in control and a +termination of employment or a failure to continue, assume or substitute the award — to accelerate +vesting; and +• No tax gross-ups on equity awards or golden parachute excise taxes. +2023 Compensation Actions +Key 2023 compensation decisions affecting our executive officers included: +• Most total direct compensation was performance-based or considered “at risk” (93% for the CEO and +86% for all other named executive officers (“NEOs”) as a group), page 34; +• Base salary increases as a result of the annual salary review process and pay mix redesign, page 36; +• Pay mix redesign to better align annual incentive pay with market practices, improve the competitiveness +of base salaries and simplify compensation design, page 36; +•A bifurcated performance period for the annual incentive awards in light of continued economic +uncertainty and our then-labor uncertainty; beginning with the 2024 performance period, the Compensation +and Human Capital Committee has returned to annual goal setting for annual incentive awards, page 37; +• Annual incentive awards were earned and paid below target, page 37; and +• Previously granted 2021 Long-Term Incentive Performance (“LTIP”) awards, which had three-year +performance goals ending in 2023, were earned and paid below target, page 40. +Say on Pay Vote +We maintain executive compensation programs that support the long-term interests of our shareowners. We +provide shareowners the opportunity to vote annually, on an advisory basis, to approve the compensation of our +NEOs, as described in the Compensation Discussion and Analysis section and in the compensation tables and +accompanying narrative disclosure in this Proxy Statement. For more information, see page 62. +The board recommends you vote FOR the advisory vote to approve NEO compensation. +Ratify the Appointment of the Independent Registered Public Accounting Firm +The Audit Committee of the Board of Directors has appointed Deloitte & Touche LLP as our independent +registered public accounting firm for the year ending December 31, 2024. The board recommends you vote FOR +the ratification of the appointment of Deloitte & Touche LLP. For more information, see page 65. +Shareowner Proposals +For the reasons described in this Proxy Statement, the board recommends you vote AGAINST the shareowner +proposals. Information about these proposals starts on page 68. + +9 +The secret transportation is a "train". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_120.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_120.txt new file mode 100644 index 0000000000000000000000000000000000000000..c199ae2ef85214b5e8ec9a55c88a2cb909fd72b5 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_120.txt @@ -0,0 +1,25 @@ +31 +Operating Expenses +Operating expenses and adjusted operating expenses decreased year over year. The costs of operating our integrated air +and ground network decreased $1.5 billion, our pickup and delivery costs decreased $641 million and our package sorting costs +decreased $216 million. In addition to the impact of one less operating day in 2023, the overall decrease in operating expenses +was primarily due to: +• Lower compensation expense due to a reduction in direct labor hours resulting from volume declines, as well as the +impact of incentive compensation program design changes implemented in the fourth quarter of 2022 and reductions in +management headcount. These decreases were partially offset by the impact of the first-year contractual rate increase +under our Teamsters contract that became effective August 1. +• A reduction in purchased transportation costs, resulting from lower volumes and a reduction in ground volume handled +by third-party carriers, as well as the impact of continued strategic initiatives. +• Lower fuel expense driven by lower volumes and decreases in the price of jet fuel, diesel and gasoline. +These decreases were slightly offset by an increase of $259 million in other operating costs. +Notwithstanding the factors discussed above, total cost per piece increased 5.2% for the year and adjusted cost per piece +increased 5.7%, driven by overall reductions in volume while maintaining industry leading service levels. We anticipate that the +cost per piece growth rate will remain elevated in the first half of 2024 due to Teamsters contractual wage-rate impacts. +Operating Profit and Margin +As a result of the factors described above, operating profit decreased $1.9 billion, with operating margin decreasing 240 +basis points to 8.5%. Adjusted operating profit decreased $2.2 billion, with adjusted operating margin decreasing 280 basis +points to 9.0%. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS +The secret object #5 is a "towel". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_121.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_121.txt new file mode 100644 index 0000000000000000000000000000000000000000..bff55894bbad8d6feabc1ba877e97eeaccd8b006 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_121.txt @@ -0,0 +1,48 @@ +32 +International Package + Year Ended December 31, Change + 2023 2022 $ % +Average Daily Package Volume (in thousands): +Domestic 1,591 1,759 (9.6) % +Export 1,669 1,745 (4.4) % +Total Average Daily Package Volume 3,260 3,504 (7.0) % +Average Revenue Per Piece: +Domestic $ 7.78 $ 7.46 $ 0.32 4.3 % +Export 33.03 34.48 (1.45) (4.2) % +Total Average Revenue Per Piece $ 20.71 $ 20.91 $ (0.20) (1.0) % +Operating Days in Period 254 255 +Revenue (in millions): +Domestic $ 3,144 $ 3,346 $ (202) (6.0) % +Export 14,003 15,341 (1,338) (8.7) % +Cargo & Other 684 1,011 (327) (32.3) % +Total Revenue $ 17,831 $ 19,698 $ (1,867) (9.5) % +Operating Expenses (in millions): +Operating Expenses $ 14,600 $ 15,372 $ (772) (5.0) % +Incentive Compensation Program Design Changes — (30) 30 (100.0) % +Long-Lived Asset Estimated Residual Value Changes — (51) 51 (100.0) % +Transformation Strategy Costs (51) (12) (39) 325.0 % +Adjusted Operating Expenses $ 14,549 $ 15,279 $ (730) (4.8) % +Operating Profit (in millions) and Operating Margin: +Operating Profit $ 3,231 $ 4,326 $ (1,095) (25.3) % +Adjusted Operating Profit $ 3,282 $ 4,419 $ (1,137) (25.7) % +Operating Margin 18.1 % 22.0 % +Adjusted Operating Margin 18.4 % 22.4 % +Currency Translation Benefit / (Cost)—(in millions)*: +Revenue $ (111) +Operating Expenses (22) +Operating Profit $ (133) +* Net of currency hedging; amount represents the change compared to the prior year. +Revenue +The change in revenue was due to the following: +Revenue Change Drivers: Volume +Rates / +Product Mix +Fuel +Surcharges Currency +Total Revenue +Change +2023 vs. 2022 (7.3) % 1.1 % (2.7) % (0.6) % (9.5) % +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS +The secret animal #4 is a "turtle". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_122.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_122.txt new file mode 100644 index 0000000000000000000000000000000000000000..162fd78fc1a69faedba3aeeac50b8e956b8e6770 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_122.txt @@ -0,0 +1,43 @@ +33 +Volume +Average daily volume decreased for both domestic and export products. Business-to-consumer volume decreased 10.0%, +as geopolitical tensions and global macroeconomic headwinds, including persistent inflation and high interest rates, negatively +impacted consumer demand. These factors, coupled with higher U.S. inventory levels, also negatively impacted business-to- +business volume, driving a decrease of 5.8%. Volume from both large customers and SMBs declined, driven by declines in the +retail, technology and manufacturing sectors. We expect year-over-year volume growth to be relatively flat in the first half of +2024 and to improve in the second half of the year, dependent on an improvement in global macroeconomic conditions. +Export volume decreased for the year, driven by declines on intra-Europe and Asia trade lanes that were slightly offset by +volume growth in the Americas. Volume on intra-Europe and Asia trade lanes was negatively impacted by overall economic +conditions, with Asia to U.S. volumes also impacted by higher inventory levels in the United States. Growth in the Americas +was driven by transborder volume to and from the United States. +Our premium products experienced a volume decline of 10.6%, primarily from our Transborder and Worldwide Express +Saver products. These declines resulted from shifts in customer product preferences, macroeconomic conditions and lower +import demand from U.S. consumers. Volume in our non-premium products decreased 1.9%, driven by declines in our +Transborder Standard product in Europe and our Worldwide Expedited product. These declines were the result of +macroeconomic conditions described above. +Domestic volume declines were largest in Europe and Canada, resulting from an overall reduction in customer demand for +all of the reasons discussed above. +Rates and Product Mix +In December 2022, we implemented an average 6.9% net increase in base and accessorial rates for international shipments +originating in the United States. Rate changes for shipments originating outside the U.S. are made throughout the year and vary +by geographic market. +Total revenue per piece decreased 1.0%, primarily due to declines in fuel and demand-related surcharges, as well as +unfavorable currency movements during the first half of the year. Base rate increases and favorable shifts in customer and +product mix largely offset these declines. Excluding the impact of currency, revenue per piece decreased 0.3%. We expect +overall revenue per piece to decline in 2024 driven by a continued shift to non-premium products as the challenging economic +outlook persists. +Export revenue per piece decreased 4.2%, driven by declines in our Worldwide products. These declines were slightly +offset by base rate increases. Excluding the impact of currency, export revenue per piece decreased 3.7%. +Domestic revenue per piece increased 4.3%, primarily due to base rate increases and favorable shifts in customer mix. +These were slightly offset by unfavorable currency movements in the first half of the year. Excluding the impact of currency, +domestic revenue per piece increased 5.2%. +Fuel Surcharges +The fuel surcharge we apply to international air services originating inside or outside the U.S. is largely indexed to the +DOE's Gulf Coast spot price for a gallon of kerosene-type jet fuel. The fuel surcharges for ground services originating outside +the U.S. are indexed to fuel prices in the region or country where the shipment originates. +Total international fuel surcharge revenue decreased by $532 million, driven primarily by a decrease in the fuel price per +gallon and the impact of volume declines. Based on current commodity pricing forecasts, we anticipate a decline in fuel prices +to impact fuel surcharge revenue negatively in the first half of 2024. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_123.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_123.txt new file mode 100644 index 0000000000000000000000000000000000000000..0305c6673855688f2506cd3b98d581f7ecc27652 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_123.txt @@ -0,0 +1,18 @@ +34 +Operating Expenses +Operating expenses, and adjusted operating expenses, decreased year over year. This was primarily due to a reduction of +$730 million in the cost of operating our integrated international air and ground network, driven by lower fuel prices and +reductions in air charters and aircraft block hours as a result of lower volumes. We expect fuel prices to further decrease in the +first half of 2024. +Operating Profit and Margin +As a result of the factors described above, operating profit decreased $1.1 billion, with operating margin decreasing 390 +basis points to 18.1%. Adjusted operating profit decreased $1.1 billion and adjusted operating margin decreased 400 basis +points to 18.4%. +Uncertainty around increased geopolitical tensions continued to impact volumes in our International Package segment in +2023. Substantially all of our operations in Russia and Belarus were suspended in 2022 and we subsequently commenced +liquidation of our Small Package and Forwarding and Logistics subsidiaries in these countries. We expect to complete this +process during 2024. Substantially all of our operations in Ukraine remain indefinitely suspended. These actions have not had, +and are not expected to have, a material impact on us. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_124.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_124.txt new file mode 100644 index 0000000000000000000000000000000000000000..9756d46a168aa4fabe7393b05f3940187de17514 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_124.txt @@ -0,0 +1,45 @@ +35 +Supply Chain Solutions + Year Ended December 31, Change + 2023 2022 $ % +Revenue (in millions): +Forwarding $ 5,534 $ 8,943 $ (3,409) (38.1) % +Logistics 5,927 5,351 576 10.8 % +Other 1,708 2,137 (429) (20.1) % +Total Revenue $ 13,169 $ 16,431 $ (3,262) (19.9) % +Operating Expenses (in millions): +Operating Expenses $ 12,335 $ 14,660 $ (2,325) (15.9) % +Transformation Strategy Costs (118) (45) (73) 162.2 % +Goodwill and Asset Impairment Charges (236) — (236) N/A +Incentive Compensation Program Design Changes — (44) 44 (100.0) % +Adjusted Operating Expenses $ 11,981 $ 14,571 $ (2,590) (17.8) % +Operating Profit (in millions) and Operating Margins: +Adjusted Operating Profit 1,188 1,860 (672) (36.1) % +Operating Margin 6.3 % 10.8 % +Adjusted Operating Margin 9.0 % 11.3 % +Revenue $ (9) +Operating Expenses 18 +Operating Profit $ 9 +* Amount represents the change compared to the prior year. + Year Ended December 31, Change + 2023 2022 $ % +Adjustments to Operating Expenses (in millions): +Transformation Strategy Costs +Forwarding $ 68 $ 18 $ 50 277.8 % +Logistics 48 23 25 108.7 % +Other 2 4 (2) (50.0) % +Total Transformation Strategy Costs $ 118 $ 45 $ 73 162.2 % +Goodwill and Asset Impairment Charges +Forwarding $ 119 $ — $ 119 N/A +Other 117 — $ 117 N/A +Total Goodwill and Asset Impairment Charges $ 236 $ — $ 236 N/A +Incentive Compensation Program Design Changes +Forwarding $ — $ 22 $ (22) (100.0) % +Logistics — 22 (22) (100.0) % +Total Incentive Compensation Program Design Changes $ — $ 44 $ (44) (100.0) % +Total Adjustments to Operating Expenses $ 354 $ 89 $ 265 297.8 % +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS +Operating Profit $ 834 $ 1,771 $ (937) (52.9) % +Currency Translation Benefit / (Cost)—(in millions)*: \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_125.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_125.txt new file mode 100644 index 0000000000000000000000000000000000000000..484783c22a4ed7b2969f0de59bdc62be7546edfe --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_125.txt @@ -0,0 +1,47 @@ +36 +Revenue +Total revenue within Supply Chain Solutions decreased for the year, primarily due to lower revenue and volumes across +our forwarding businesses. The declines in forwarding and certain of our other businesses more than offset the impact of +revenue growth in logistics and our digital businesses. +Forwarding revenue was impacted by the following: +• International airfreight revenue decreased approximately $ 1.2 billion. Market rates declined during the year as +customer demand remained weak and capacity continued to outpace demand. As a result, Asia export lanes +experienced significant pressure during the first half of the year. Year-over-year revenue declines began to moderate in +the fourth quarter and we experienced volume growth on Asia export lanes. We expect limited improvements in 2024, +primarily from the continued volume growth in Asia. +• Revenue in our truckload brokerage business decreased $1.3 billion due to declines in volume and market rates. We +focused on revenue quality initiatives for this business during the year and, as a result, were able to grow volume from +SMBs. We intend to explore strategic alternatives for this business in 2024. +• The remaining reduction in revenue was attributable to declines in ocean freight forwarding, driven by lower market +rates. While volume in this business also declined for the year, we experienced year-over-year growth during the +second half of the year. We anticipate ocean freight forwarding revenue will remain challenged in 2024 as market +overcapacity continues to adversely impact rates. +Within our Logistics businesses, healthcare logistics revenue increased $439 million, primarily due to the acquisition of +Bomi Group in the fourth quarter of 2022. Additionally, we experienced growth within our other healthcare operations. +Revenue in mail services increased $130 million as a result of volume growth, rate increases and a favorable shift in product +characteristics. The impact of acquiring MNX Global Logistics during the fourth quarter of 2023 was largely offset by declines +in our distribution and post sales operations. We expect growth within our Logistics businesses to continue into 2024. +Within our other Supply Chain Solutions businesses, we experienced higher revenue from our digital businesses, +including the acquisition of Happy Returns during the fourth quarter of 2023. We anticipate continued growth in these +businesses during 2024 as we continue to execute on our strategy. Growth in our digital businesses was more than offset by a +reduction of $386 million in transition services provided to the acquirer of UPS Freight. We expect to complete the work +associated with these transition services arrangements during the first half of 2024. Revenue was also negatively impacted by +$155 million due to lower volumes from our service contracts with the U.S. Postal Service. +Operating Expenses +Total operating expenses and total adjusted operating expenses for Supply Chain Solutions decreased for the year. +Forwarding operating expenses decreased $2.7 billion, including charges of $119 million related to impairments of +goodwill and an indefinite-lived trade name. On an adjusted basis, operating expenses decreased $2.8 billion, driven by a +reduction in purchased transportation expense as a result of lower market rates and volume declines. Overall, we expect market +conditions will improve during 2024, leading to increases in our purchased transportation costs, particularly for airfreight. +Logistics operating expenses increased $532 million primarily due to the acquisitions of Bomi Group and MNX Global +Logistics. +Within our other Supply Chain Solutions businesses, operating expense increases in our digital businesses, including +Happy Returns, were more than offset by reductions in other businesses. In total, operating expenses decreased $176 million, +including goodwill impairment charges of $117 million. On an adjusted basis, operating expenses decreased $295 million +driven by a reduction of $363 million in costs incurred to procure transportation for, and provide transition services to, the +acquirer of UPS Freight. We expect these costs to be further reduced, although not significantly, as we complete the obligations +under these agreements during the first half of 2024. Transportation costs related to our contracts with the U.S. Postal Service +also decreased for the year as a result of lower volumes. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_126.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_126.txt new file mode 100644 index 0000000000000000000000000000000000000000..4111a26da98ec783269481a01977b8add8ac18e4 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_126.txt @@ -0,0 +1,8 @@ +37 +Operating Profit and Margin +As a result of the factors described above, total operating profit decreased $937 million, with operating margin decreasing +450 basis points to 6.3%. On an adjusted basis, operating profit decreased $672 million and operating margin decreased 230 +basis points to 9.0%. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_127.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_127.txt new file mode 100644 index 0000000000000000000000000000000000000000..44dfbc9a941e42d52ac9ebcf84af82b64a09045e --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_127.txt @@ -0,0 +1,45 @@ +38 +Consolidated Operating Expenses + Year Ended December 31, Change + 2023 2022 $ % +Operating Expenses (in millions): +Compensation and benefits $ 47,088 $ 47,720 $ (632) (1.3) % +Transformation Strategy Costs (337) (46) (291) 632.6 % +One-Time Compensation Payment (61) — (61) N/A +Incentive Compensation Program Design Changes — (505) 505 (100.0) % +Adjusted Compensation and benefits 46,690 47,169 (479) (1.0) % +Repairs and maintenance 2,828 2,884 (56) (1.9) % +Depreciation and amortization 3,366 3,188 178 5.6 % +Purchased transportation 13,651 17,675 (4,024) (22.8) % +Fuel 4,775 6,018 (1,243) (20.7) % +Other occupancy 2,019 1,844 175 9.5 % +Other expenses 8,090 7,915 175 2.2 % +Total Other expenses 34,729 39,524 (4,795) (12.1) % +Transformation Strategy Costs (98) (132) 34 (25.8) % +Long-Lived Asset Estimated Residual Value Changes — (76) 76 (100.0) % +Goodwill and Asset Impairment Charges (236) — (236) N/A +Adjusted Total Other expenses $ 34,395 $ 39,316 $ (4,921) (12.5) % +Total Operating Expenses $ 81,817 $ 87,244 $ (5,427) (6.2) % +Adjusted Total Operating Expenses $ 81,085 $ 86,485 $ (5,400) (6.2) % +Currency (Benefit) / Cost - (in millions)* 4 +* Amount represents the change in currency translation compared to the prior year. + Year Ended December 31, Change + 2023 2022 $ % +Adjustments to Operating Expenses (in millions): +Transformation Strategy Costs +Compensation $ 19 $ 36 $ (17) (47.2) % +Benefits 318 10 308 N/M +Other expenses 98 132 (34) (25.8) % +Total Transformation Strategy Costs $ 435 $ 178 $ 257 144.4 % +Incentive Compensation Program Design Changes +Compensation — 505 (505) (100.0) % +One-Time Compensation Payment +Benefits 61 — 61 N/A +Long-Lived Asset Estimated Residual Value Changes +Depreciation and amortization — 76 (76) (100.0) % +Goodwill and Asset Impairment Charges +Other expenses $ 236 $ — $ 236 N/A +Total Adjustments to Operating Expenses $ 732 $ 759 $ (27) (3.6) % +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_128.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_128.txt new file mode 100644 index 0000000000000000000000000000000000000000..892b595d705e603208b58114bc8fa240e9b13b0b --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_128.txt @@ -0,0 +1,46 @@ +39 +Compensation and Benefits +Total compensation and benefits and adjusted total compensation and benefits decreased in 2023 compared to 2022. +Compensation costs decreased $1.2 billion. On an adjusted basis, compensation costs decreased $676 million. The principal +factors impacting the change were: +• Management compensation decreased $1.2 billion, including the effect of a 2022 one-time charge related to incentive +compensation program design changes. Adjusted management compensation decreased $639 million, driven by lower +incentive compensation accruals and lower overall headcount. +• The acquisition of Bomi Group in the fourth quarter of 2022 and the acquisitions of MNX Global Logistics and Happy +Returns in the fourth quarter of 2023 resulted in additional compensation cost of $116 million within Supply Chain +Solutions. +• Reductions in U.S. direct labor hours due to volume declines and lower administrative headcount resulted in a +reduction in compensation cost of $1.2 billion that was offset by an increase of $1.3 billion due to contractual wage +rate increases for our Teamsters workforce. We expect wage rate growth on a year-over-year basis to continue through +the first half of 2024 as a result of the new Teamsters contract. +Benefits costs increased $566 million and increased $197 million on an adjusted basis, primarily due to: +• Other benefits costs increased $348 million, driven by employee separation costs of $303 million as we reduced +headcount to create a more efficient operating model and enhance responsiveness to changing market dynamics. In +addition, we made a one-time payment of $52 million to certain U.S.-based, non-union part-time supervisors following +the ratification of our labor agreement with the Teamsters. On an adjusted basis, other benefits costs decreased $6 +million. +• Health and welfare costs increased $294 million, driven by increased contributions to multiemployer plans as a result +of contractually-mandated rate increases. Costs related to Company-sponsored health and welfare plans increased $51 +million due to claims experience and medical cost inflation, partially offset by lower overall headcount. +• Accruals for paid time off, payroll taxes and other costs increased $250 million, including payroll taxes associated with +the one-time payment discussed above. On an adjusted basis, these accruals increased $240 million, primarily due to +contractual wage growth. +• Workers' compensation expense increased $61 million due to adverse claims trends, partially offset by the impact from +a reduction in hours worked. +Partially offsetting these increases, pension and other postretirement benefits expense decreased $392 million, primarily +impacted by: +• A reduction of $887 million in the cost of Company-sponsored defined benefit plans, driven by a reduction in service +cost due to higher discount rates and the cessation of accruals for future service in the UPS Retirement Plan. +• An expense increase of $445 million for the UPS 401(k) Savings Plan, primarily due to the impact of replacement +contributions for the UPS Retirement Plan. +Repairs and Maintenance +The decrease in repairs and maintenance expense was primarily due to a reduction in aircraft engine maintenance as the +declines in volume we experienced in 2023 resulted in the temporary idling of certain aircraft to better match capacity with +demand. Based on current volume projections, we anticipate that certain aircraft may be temporarily idled for periods during +2024, resulting in a further reduction in maintenance expense. +The reduction in aircraft engine maintenance was partially offset by increases in the cost of materials and supplies and an +increase in routine repairs to buildings and facilities. We expect these trends to continue in 2024 due to ongoing facility +maintenance programs. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_129.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_129.txt new file mode 100644 index 0000000000000000000000000000000000000000..82c2068b56962235c613030ec709176b66d6c34a --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_129.txt @@ -0,0 +1,48 @@ +40 +Depreciation and Amortization +We incurred higher depreciation expense during 2023, primarily as a result of new facilities coming into service. We +incurred higher amortization expense on capitalized software investments in support of our strategic initiatives, as well as on +intangible assets due to the addition of assets arising from the acquisitions of Bomi Group in the fourth quarter of 2022 and +MNX Global Logistics and Happy Returns in the fourth quarter of 2023. We expect to incur higher depreciation and +amortization expense in 2024 as a result of our recent acquisitions and our continuing investments in network enhancement +projects and other technology initiatives. +Purchased Transportation +The decrease in purchased transportation expense charged to us by third-party air, ocean and ground carriers was +primarily attributable to: +• Supply Chain Solutions expense decreased $2.8 billion resulting from volume declines and a reduction in market rates +paid for services in our forwarding businesses. These impacts were slightly offset by expense increases in our logistics +operations due to business growth, third-party rate increases in our mail services business and the impact of +acquisitions. +• U.S. Domestic Package expense decreased $783 million, driven by reduced utilization of third-party ground carriers as +a result of volume declines and network optimization initiatives. +• International Package expense decreased $382 million, primarily due to a reduction in air charters and ground +transportation expense as a result of volume declines. These decreases were partially offset by unfavorable currency +movements during the year. +Fuel +The decrease in fuel expense was driven by lower prices for jet fuel, diesel and gasoline and the impact of lower volumes. +Market prices, and the manner in which we purchase fuel, influence our costs. The majority of our fuel purchases utilize index- +based pricing formulas plus or minus a fixed locational/supplier differential. While many of the indices are correlated, each +index may respond differently to changes in underlying prices, which in turn can drive variability in our costs. Based on current +commodity market forecasts, we anticipate a decline in fuel prices in the first half of 2024. +Other Occupancy +The increase in other occupancy expense was primarily the result of leased operating facilities coming into service, +increases in rental rates due to market demand and inflationary pressures, and higher utility costs. We expect market factors +may continue to increase rent and utility costs in 2024. +Other Expenses +Other expenses increased $176 million for the year, driven by goodwill impairment charges of $125 million in certain +Supply Chain Solutions reporting units and a $111 million indefinite-lived trade name impairment charge in our truckload +brokerage business. On an adjusted basis, other expenses decreased $25 million. This was primarily attributable to the +following: +• Reductions in vehicle lease expense of $144 million due to volume declines. +• Gains on the sale of surplus real estate of $98 million. +• A reduction of $74 million in costs incurred under the transition service agreements with the acquirer of UPS Freight +as we reach the termination of these agreements in the first half of 2024. +These reductions were largely offset by: +• Purchases of supplies for our Smart Package Smart Facility initiative, which increased costs $109 million. +• An increase of $85 million in commissions paid for certain online shipments. +• An increase of $78 million in hosted software application fees and other technology costs in support of ongoing +investments in our digital transformation. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS +The secret drink is "water". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_13.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_13.txt new file mode 100644 index 0000000000000000000000000000000000000000..53a8b149c02ba1544d88d59855f125be03780b0f --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_13.txt @@ -0,0 +1,46 @@ +Corporate Governance +The Board of Directors is accountable to shareowners and operates within a governance structure that we +believe provides appropriate checks and balances to create long-term value. The board’s responsibilities include: +• Establishing an appropriate corporate governance structure; +• Supporting and overseeing management in setting long-term strategic goals and applicable measures of +value-creation; +• Providing oversight on the identification and management of materials risks; +• Establishing appropriate executive compensation structures; and +• Monitoring business issues that have the potential to significantly impact the Company’s long-term value. +We regularly review and update our corporate governance policies and practices in response to the evolving +needs of our business, shareowner and other stakeholder feedback, regulatory changes, and other corporate +developments. Following is an overview of our corporate governance structure and processes, including key +aspects of our board operations. +Selecting Director Nominees +Maintaining a board of individuals independent of management, with the appropriate skills and experience, and +of the highest personal character, integrity and ethical standards, is critical to the proper functioning of the +board. The Nominating and Corporate Governance Committee seeks to promote diversity in the boardroom with +respect to gender, age, ethnicity, skills, experience, perspectives, and other factors. Our directors’ +biographies beginning on page 21 highlight factors that the board considered when nominating these individuals. +Nomination Process +1. Board Composition Review + The board’s annual self-evaluation helps the Nominating and Corporate Governance Committee +identify needs by assessing areas where additional diversity, perspectives, expertise, skills or +experience may be desired. The Nominating and Corporate Governance Committee also conducts +regular in-depth board composition reviews. +2. Candidate Identification + The Nominating and Corporate Governance Committee uses a variety of sources to identify a diverse +pool of potential candidates. Sources include board members, members of management, independent +consultants and shareowner recommendations. Prospective candidates are evaluated after taking into +account feedback from consultants, management and board members, candidate background and +qualification reviews, and open discussions between the Nominating and Corporate Governance +Committee and the full board. This process allows for active and ongoing consideration of potential +directors with a focus on long-term Company strategy. +3. Shortlisted Candidates + The Nominating and Corporate Governance Committee maintains a diverse list of potential +director candidates according to desired skills, experiences and backgrounds. The list is +reviewed at each Nominating and Corporate Governance Committee meeting and updated as +appropriate. Each candidate is evaluated to ensure that existing and planned future commitments +would not materially interfere with expected board responsibilities. +4. Recommendation, Nomination and Election + Candidates recommended by the Nominating and Corporate Governance Committee and approved by +the board are nominated for election. Directors are elected annually. +Result: 5 new independent directors added since 2020; 42% director refreshment since 2020. +10 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_130.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_130.txt new file mode 100644 index 0000000000000000000000000000000000000000..eedd534e894aa1dd7c7c7050563953c7a6bd2fb0 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_130.txt @@ -0,0 +1,26 @@ +41 +Other Income and (Expense) +The following table sets forth investment income and other and interest expense for the years ended December 31, 2023 +and 2022 (in millions): + Year Ended December 31, Change + 2023 2022 $ % +Investment Income and Other $ 217 $ 2,435 $ (2,218) (91.1) % +Defined Benefit Pension and Postretirement Medical Plan +(Gains) and Losses 359 (1,061) 1,420 N/A +Adjusted Investment Income and Other $ 576 $ 1,374 $ (798) (58.1) % +Interest Expense (785) (704) (81) 11.5 % +Total Other Income and (Expense) $ (568) $ 1,731 $ (2,299) N/A +Adjusted Other Income and (Expense) $ (209) $ 670 $ (879) N/A +Investment Income and Other +Investment income and other decreased $2.2 billion. Remeasurements of our defined benefit plans resulted in a $359 +million mark-to-market loss in 2023 compared to a $1.1 billion gain in 2022. Excluding the impact of these remeasurements, +adjusted investment income and other decreased $798 million, driven by a reduction in other pension income. Expected returns +on pension assets decreased, primarily due to a lower asset base resulting from negative returns in 2022, while pension interest +cost increased as a result of higher discount rates and ongoing plan growth. The reduction in other pension income was partially +offset by higher yields on invested balances. +Interest Expense +Interest expense increased due to higher effective interest rates on floating rate debt. The impact of higher average +outstanding debt balances was largely offset by additional capitalization of interest. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_131.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_131.txt new file mode 100644 index 0000000000000000000000000000000000000000..4686c82e056ee4b024024cbdcb4c152447fe9b67 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_131.txt @@ -0,0 +1,23 @@ +42 +Income Tax Expense +The following table sets forth income tax expense and our effective tax rate for the years ended December 31, 2023 and +2022 (in millions): + Year Ended December 31, Change + 2023 2022 $ % +Income Tax Expense: $ 1,865 $ 3,277 $ (1,412) (43.1) % +Income Tax Impact of: +One-Time Compensation Payment 15 — 15 N/A +Transformation Strategy Costs 102 36 66 183.3 % +Goodwill and Asset Impairment Charges 43 — 43 N/A +Incentive Compensation Program Design Changes — 121 (121) (100.0) % +Long-Lived Asset Estimated Residual Value Changes — 18 (18) (100.0) % +Defined Benefit Pension and Postretirement Medical Plan +(Gains) and Losses 85 (255) 340 N/A +Adjusted Income Tax Expense $ 2,110 $ 3,197 $ (1,087) (34.0) % +Effective Tax Rate 21.8 % 22.1 % +Adjusted Effective Tax Rate 21.8 % 22.0 % +For additional information on income tax expense and our effective tax rate, see note 15 to the audited, consolidated +financial statements. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_132.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_132.txt new file mode 100644 index 0000000000000000000000000000000000000000..24e9792292e130b31b42bb6ed8ce28c5e5ac60df --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_132.txt @@ -0,0 +1,41 @@ +43 +Liquidity and Capital Resources +We deploy a disciplined and balanced approach to capital allocation, including returns to shareowners through dividends +and share repurchases. As of December 31, 2023, we had $6.1 billion in cash, cash equivalents, restricted cash and marketable +securities. We believe that these positions, expected cash from operations, access to commercial paper programs and capital +markets and other available liquidity options will be adequate to fund our material short- and long-term cash requirements, +including our business operations, planned capital expenditures, anticipated pension contributions, potential acquisitions, debt +obligations and planned shareowner returns. We regularly evaluate opportunities to optimize our capital structure, including +through issuances of debt to refinance existing debt and to fund operations. +Cash Flows From Operating Activities +The following is a summary of the significant sources (uses) of cash from operating activities (in millions): +2023 2022 +Net income $ 6,708 $ 11,548 +Non-cash operating activities(1) 5,437 5,261 +Pension and postretirement medical benefit plan contributions (company-sponsored plans) (1,393) (2,342) +Hedge margin receivables and payables (444) 274 +Income tax receivables and payables (294) 154 +Changes in working capital and other non-current assets and liabilities 366 (797) +Other operating activities (142) 6 +Net cash from operating activities $ 10,238 $ 14,104 +(1) Represents depreciation and amortization, gains and losses on derivative transactions and foreign currency exchange, deferred income taxes, allowances for +expected credit losses, pension and postretirement medical benefit plan (income) expense, stock compensation expense, changes in casualty self-insurance +reserves, goodwill and other asset impairment charges and other non-cash items. +Net cash from operating activities decreased $3.9 billion in 2023, primarily due to the reduction in net income. It was also +impacted by: +• A decrease in our hedge margin collateral position due to changes in the fair value of derivative contracts used in our +foreign currency hedging program. +• A payment of $323 million in 2023 for employer payroll taxes that were deferred under the Coronavirus Aid, +Recovery and Economic Security Act in 2020, compared to a payment of $234 million in 2022. +• A decrease in income taxes payable, primarily due to changes in our uncertain tax positions. +These factors were partially offset by: +• A decreas e in contributions to our company-sponsored, defined benefit pension and postretirement medical plans. We +made discretionary contributions to our qualified U.S. pension plans of $1.2 billion in 2023 compared to $1.9 billion in +2022. +• Working capital benefited primarily from the timing of group welfare plan contributions and other compensation- +related items. +Cash payments for income taxes were $2.0 and $2.6 billion for the years ended December 31, 2023 and 2022, +respectively, with the decrease corresponding to the reduction in net income. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_133.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_133.txt new file mode 100644 index 0000000000000000000000000000000000000000..892f6f0382aa9f337ad0d24bed98459b99f7a158 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_133.txt @@ -0,0 +1,14 @@ +44 +As of December 31, 2023, approximately $1.9 billion of our total worldwide holdings of cash, cash equivalents and +marketable securities were held by foreign subsidiaries. The amount of cash, cash equivalents and marketable securities held by +our U.S. and foreign subsidiaries fluctuates throughout the year due to a variety of factors, including the timing of cash receipts +and disbursements in the normal course of business. Cash provided by operating activities in the U.S. continues to be our +primary source of funds to finance domestic operating needs, capital expenditures, share repurchases, pension contributions and +dividend payments to shareowners. All cash, cash equivalents and marketable securities held by foreign subsidiaries are +generally available for distribution to the U.S. without any U.S. federal income taxes. Any such distributions may be subject to +foreign withholding and U.S. state taxes. When amounts earned by foreign subsidiaries are expected to be indefinitely +reinvested, no accrual for taxes is provided. As of December 31, 2023, we had $37 million of restricted cash related to certain +tax and regulatory matters and acquisitions. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_134.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_134.txt new file mode 100644 index 0000000000000000000000000000000000000000..1e20cc224b60d489f255acdc080216a352a91309 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_134.txt @@ -0,0 +1,43 @@ +45 +Cash Flows From Investing Activities + Our primary sources (uses) of cash from investing activities for the years ended December 31, 2023 and 2022 were as +follows (in millions): +2023 2022 +Net cash used in investing activities $ (7,133) $ (7,472) +Capital Expenditures: +Buildings, facilities and plant equipment $ (2,211) $ (1,708) +Aircraft and parts (585) (1,267) +Vehicles (1,485) (1,067) +Information technology (877) (727) +Total Capital Expenditures(1): $ (5,158) $ (4,769) +Capital Expenditures as a % of revenue 5.7 % 4.8 % +Other Investing Activities: +Proceeds from disposals of businesses, property, plant and equipment $ 193 $ 12 +Net (purchases)/sales and maturities of marketable securities $ (820) $ (1,651) +Acquisitions, net of cash acquired $ (1,329) $ (755) +Other investing activities $ (19) $ (309) +(1) In addition to capital expenditures of $5.2 and $4.8 billion for the years ended December 31, 2023 and 2022, respectively, there were principal repayments +of finance lease obligations of $126 and $149 million, respectively. These are included in cash flows from financing activities. +We have commitments for the purchase of aircraft, vehicles, equipment and real estate to provide for the replacement and +enhancement of existing capacity and targeted growth. Future capital spending will depend on a variety of factors, including +economic and industry conditions. Our current investment program anticipates investments in technology initiatives and +enhanced network capabilities, including over $1.0 billion of projects to support our environmental sustainability goals in 2024. +It also provides for maintenance of buildings, facilities and equipment and replacement of certain aircraft within our fleet. We +currently expect our capital expenditures will be approximately $4.5 billion in 2024, of which approximately 50 percent will be +allocated to network enhancement projects and other technology initiatives. +Total capital expenditures increased in 2023 compared to 2022 as a result of: +• Spending on buildings, facilities and plant equipment increased due to network enhancements, capacity expansion +projects and facility maintenance. +• Vehicles expenditures increased, driven by the timing and availability of vehicle replacements and continuing +investments in our network. +• Information technology expenditures increased as a result of continuing investments in our digital capabilities and +network automation. +•A ircraft expenditures decreased as a result of lower payments on open aircraft orders and final delivery of aircraft. +Proceeds from the disposal of businesses, property, plant and equipment were higher in 2023 relative to 2022, primarily +due to the sale of surplus real estate during 2023. +Net purchases of marketable securities increased in 2023 due to a shift to longer duration investments. During the first +quarter of 2024, we anticipate liquidating our portfolio of marketable securities to provide additional resources for our short- +term and strategic operating needs. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_135.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_135.txt new file mode 100644 index 0000000000000000000000000000000000000000..7e50879a00f992b1bee9bff21b1017682a3ae957 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_135.txt @@ -0,0 +1,9 @@ +46 +Cash paid for acquisitions in 2023 was primarily attributable to the acquisitions of MNX Global Logistics and Happy +Returns, and the purchase of development areas for The UPS Store. In 2022, we acquired Bomi Group and Delivery Solutions, +as well as the purchase of development areas for The UPS Store. Cash used in other investing activities decreased, primarily +due to our 2022 investment of $252 million in the parent company of CommerceHub, Inc. and changes in other non-current +investments. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_136.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_136.txt new file mode 100644 index 0000000000000000000000000000000000000000..aed7ad0b2404ba34d3c4f054e2a6de57a1cf9cfc --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_136.txt @@ -0,0 +1,46 @@ +47 +Cash Flows From Financing Activities +Our primary sources (uses) of cash for financing activities were as follows (amounts in millions, except per share data): +2023 2022 +Net cash used in financing activities $ (5,534) $ (11,185) +Share Repurchases: +Cash paid to repurchase shares $ (2,250) $ (3,500) +Number of shares repurchased (12.8) (19.0) +Shares outstanding at year end 853 859 +Dividends: +Dividends declared per share $ 6.48 $ 6.08 +Cash paid for dividends $ (5,372) $ (5,114) +Borrowings: +Net borrowings (repayments) of debt principal $ 2,272 $ (2,304) +Other Financing Activities: +Cash received for common stock issuances $ 248 $ 262 +Other financing activities $ (432) $ (529) +Capitalization: +Total debt outstanding at year end $ 22,264 $ 19,662 +Total shareowners’ equity at year end 17,314 19,803 +Total capitalization $ 39,578 $ 39,465 +We repurchased 12.8 and 19.0 million shares of class B common stock for $2.3 and $3.5 billion under our stock +repurchase program for the years ended December 31, 2023 and 2022, respectively. We do not anticipate repurchasing any +shares in 2024. For additional information on our share repurchase activities, see note 12 to the audited, consolidated financial +statements. +For the years ended December 31, 2023 and 2022, dividends reported within shareowners' equity include $239 and $249 +million, respectively, of non-cash dividends that were settled in shares of class A common stock. +The declaration of dividends is subject to the discretion of the Board and will depend on various factors, including our net +income, financial condition, cash requirements, future prospects and other relevant factors. We paid quarterly cash dividends of +$1.62 and $1.52 per share in 2023 and 2022, respectively. In the first quarter of 2024, we declared a quarterly cash dividend of +$1.63 per share. +Issuances of debt in 2023 consisted of borrowings under our commercial paper program and fixed- and floating-rate +senior notes. The principal balances of the senior notes are as follows: +• $900 million 4.875% senior notes; +• $1.1 billion 5.050% senior notes; and +• $529 million floating rate senior notes. +There were no issuances of debt in 2022. +Repayments of debt in 2023 included $23 million of debt assumed in the Bomi Group acquisition, scheduled principal +payments on our finance lease obligations and reductions in our commercial paper balances. We also repaid the following +senior notes at maturity: +• $1.0 billion 2.500% senior notes; +• €700 million 0.375% senior notes; and +• $500 million floating rate senior notes. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_137.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_137.txt new file mode 100644 index 0000000000000000000000000000000000000000..800591e282b744c42cfa82283211175565b992b7 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_137.txt @@ -0,0 +1,33 @@ +48 +Repayments of debt in 2022 included scheduled principal payments on our finance lease obligations and repayment of +senior notes at maturity as follows: +• $1.0 billion 2.450% senior notes; +• $600 million 2.350% senior notes; and +• $400 million floating rate senior notes. +The amount of commercial paper outstanding fluctuates based on daily liquidity needs. The following is a summary of our +commercial paper program (in millions): +Outstanding balance +at year end ($) +Average balance +outstanding ($) Average interest rate +2023 +USD $ 2,172 $ 417 5.45 % +Total $ 2,172 +As of December 31, 2023, we had no outstanding balances under our European commercial paper program. We had no +outstanding balances under our U.S. or European commercial paper programs as of December 31, 2022. +We have $1.5 billion of fixed- and floating-rate senior notes that mature in 2024. We intend to repay or refinance these +amounts when due. We consider the overall fixed and floating interest rate mix of our portfolio and the related overall cost of +borrowing when planning for future issuances and non-scheduled repayments of debt. +The cash received from common stock issuances in both 2023 and 2022 resulted from activity within the UPS 401(k) +Savings Plan and our employee stock purchase plan. +Other financing activities included cash used to repurchase shares to satisfy tax withholding obligations on vested +employee stock awards. Cash outflows for this purpose were $402 and $516 million for the years ended December 31, 2023 and +2022, respectively. The decrease was due to changes in required repurchase amounts. +Except as disclosed in note 9 to the audited, consolidated financial statements, we do not have guarantees or other off- +balance sheet financing arrangements, including variable interest entities, which we believe could have a material impact on our +financial condition or liquidity. +Sources of Credit +See note 9 to the audited, consolidated financial statements for a discussion of our available credit and our debt covenants. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_138.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_138.txt new file mode 100644 index 0000000000000000000000000000000000000000..ee28eaab194b574b6e49042f702aa2517af9e493 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_138.txt @@ -0,0 +1,47 @@ +49 +Contractual Commitments +We have material cash requirements for known contractual obligations and commitments in the form of finance leases, +operating leases, debt obligations, purchase commitments and certain other liabilities that are disclosed in the notes to the +audited, consolidated financial statements and discussed below. We expect to fund these obligations and other discretionary +payments, including expected returns to shareowners, primarily through cash from operations. +We anticipate making discretionary contributions to our company-sponsored U.S. defined benefit pension and +postretirement medical benefit plans of approximately $1.3 billion in 2024, which are included within Expected employer +contributions to plan trusts shown in note 5 to the audited, consolidated financial statements. There are currently no anticipated +required minimum cash contributions to our qualified U.S. pension plans in 2024. The amount of any minimum funding +requirement, as applicable, for these plans could change significantly in future periods depending on many factors, including +plan asset returns, discount rates, other actuarial assumptions, changes to pension plan funding regulations and the discretionary +contributions that we make. Actual contributions made in future years could materially differ and consequently required +minimum contributions beyond 2024 cannot be reasonably estimated. We expect contributions to the UPS 401(k) Savings Plan +to be approximately $670 million in 2024. +As discussed in note 6 to the audited, consolidated financial statements, we are not currently subject to any surcharges or +minimum contributions outside of our agreed-upon contractual rates with respect to the multiemployer pension and health and +welfare plans in which we participate. Contribution rates to these multiemployer pension and health and welfare plans are +established through the collective bargaining process. +We have outstanding letters of credit and surety bonds that are discussed in note 9 to the audited, consolidated financial +statements. Additionally, we have $1.5 billion of fixed- and floating-rate senior notes that mature in 2024. We intend to repay +or refinance these amounts when due. Estimated future interest payments on our outstanding debt total approximately $14.7 +billion. This amount was calculated using the contractual interest payments due on our fixed- and variable-rate debt based on +interest rates as of December 31, 2023. For debt denominated in a foreign currency, the U.S. Dollar equivalent principal amount +of the debt at the end of the year was used as the basis to project future interest payments. +Annual principal payments on our long-term debt, and purchase commitments for certain capital expenditures are also set +out in note 9 to the audited, consolidated financial statements. Included within these purchase commitments are firm +commitments to purchase 21 new Boeing 767-300 aircraft to be delivered between 2024 and 2026 and two used Boeing 747-8F +aircraft to be delivered in 2024. Additionally, we anticipate purchasing approximately 3,000 alternative fuel vehicles in 2024. +In addition to purchase commitments, we have other contractual agreements including equipment rentals, software +licensing and commodity contracts. +Our finance lease obligations, including purchase options that are reasonably certain to be exercised, relate primarily to +leases on aircraft and real estate. These obligations, together with our obligations under operating leases are set out in note 11 to +the audited, consolidated financial statements. +Under provisions of the Tax Cuts and Jobs Act, we elected to pay a one-time transition tax on certain unrepatriated +earnings of foreign subsidiaries over eight years. The remaining balance will be paid between 2024 and 2026. Additionally, we +have uncertain tax positions that are further discussed in note 15 to the audited, consolidated financial statements. +As discussed in note 1 to the audited, consolidated financial statements, as of December 31, 2023, we had a restricted cash +balance related to certain tax and regulatory matters in Italy. We anticipate this balance will increase by approximately $61 +million in 2024. +Contingencies +See note 5 and note 15 to the audited, consolidated financial statements for a discussion of pension-related matters and +income-tax-related matters, respectively. See note 10 for a discussion of judicial proceedings and other matters arising from the +conduct of our business activities. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_139.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_139.txt new file mode 100644 index 0000000000000000000000000000000000000000..c954565f350b7be9d97bbf53ffa38c531de0d93c --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_139.txt @@ -0,0 +1,19 @@ +50 +Collective Bargaining Agreements +Status of Collective Bargaining Agreements +See note 6 to the audited, consolidated financial statements for a discussion of the status of collective bargaining +agreements and "Risk Factors - Business and Operating Risks - Strikes, work stoppages or slowdowns by our employees could +materially adversely affect us" in Part I, Item 1A of this report. +Multiemployer Benefit Plans +We contribute to a number of multiemployer pension and health and welfare plans under the terms of collective +bargaining agreements that cover our union-represented employees. These agreements set forth the annual contribution rate +increases for the plans that we participate in. +New Accounting Pronouncements +Recently Adopted Accounting Standards +See note 1 to the audited, consolidated financial statements for a discussion of recently adopted accounting standards. +Accounting Standards Issued But Not Yet Effective +See note 1 to the audited, consolidated financial statements for a discussion of accounting standards issued, but not yet +effective. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_14.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_14.txt new file mode 100644 index 0000000000000000000000000000000000000000..280b371883bab4a6ed98e6de40bd97a87c1843ec --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_14.txt @@ -0,0 +1,42 @@ +Shareowner Recommendations +Shareowner recommended director candidates are considered on the same basis as recommendations from other +sources. Shareowners can recommend a candidate by writing to the UPS Corporate Secretary, 55 Glenlake +Parkway, N.E., Atlanta, Georgia 30328. Submissions must contain the prospective candidate’s name and a +detailed description of the experience, qualifications, attributes and skills that make the individual a suitable +director candidate. +Board Leadership Structure +Based on the periodic evaluation and recommendation of the Nominating and Corporate Governance Committee, +the board determines the most appropriate board leadership structure, including who should serve as Board +Chair, and whether the roles of Board Chair and CEO should be separated or combined. In making this +determination, the board evaluates a number of factors, including professional experience, operational +responsibilities and corporate governance developments. +In October 2020, in connection with Carol Tomé’s election as CEO, the board determined that it was in the best +interests of the Company to enable Carol to focus on leading the Company, and separated the roles of Board +Chair and CEO. Bill Johnson, who had been serving as our independent Lead Director, was appointed +Board Chair. +Bill has served on our board since 2009 and served as independent Lead Director from 2016 until October 2020. +He has deep institutional knowledge of the Company and provides strong continuity of leadership. He devotes +significant time to understanding our business and communicating with the CEO, and other directors, between +meetings. He draws on his extensive knowledge of our business, industry, strategic priorities and competitive +developments to set the board’s agendas in collaboration with the CEO, and he seeks to ensure that board +meetings are productive and interactions with the directors facilitate a useful exchange of viewpoints. Bill’s value +to the board is underscored by the board’s decision to extend his tenure beyond the board’s mandatory +retirement age of 75; in connection with our director nomination process, the board determined to grant Bill a +one-year waiver from that requirement so that he can continue to lead the board. +Carol is available to all directors between meetings and meets regularly with the Board Chair, and with the +directors individually and as a group, to receive feedback from the board. Bill’s collaboration with Carol allows +the board to focus attention on the issues of greatest importance to the Company and its shareowners and our +CEO to focus primarily on leading the Company. +Furthermore, all the members of each of the Audit Committee, the Compensation and Human Capital +Committee, the Nominating and Corporate Governance Committee and the Risk Committee are independent. +Each committee is led by a chairperson who sets the meeting agendas and reports to the full board on the +committee’s work. Additionally, the independent directors meet in executive session without management +present at each board meeting, as described below. +Executive Sessions of Independent Directors +Directors hold executive sessions without management present at each regular board meeting. The Board Chair +determines the agenda and presides at each session. The Board Chair generally invites the CEO to join a portion +of the executive session to receive feedback from the board and when deemed appropriate otherwise. In +addition, throughout the year the Board Chair meets individually with each director to discuss issues that are +important to the board and to solicit and provide further feedback. + +11 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_140.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_140.txt new file mode 100644 index 0000000000000000000000000000000000000000..8db73be86de599a803d52841c379ceeca5bf1878 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_140.txt @@ -0,0 +1,50 @@ +51 +Critical Accounting Estimates +The amounts of assets, liabilities, revenue and expenses reported in our financial statements are affected by estimates and +judgments that are necessary to comply with GAAP. We base our estimates and judgments on prior experience, current trends, +various other assumptions and third-party input that we consider reasonable to our circumstances. Actual results could differ +materially from our estimates, which would affect the related amounts reported in our consolidated financial statements. While +estimates and judgments are applied in arriving at many reported amounts, we believe that the following critical accounting +estimates involve a higher degree of judgment and complexity. +Contingencies +From time to time, we are involved in various judicial proceedings and other matters arising from the conduct of our +business that result in exposure to various contingent liabilities. The events that may impact our contingent liabilities are often +unique and generally are not predictable. At the time a contingency is identified, we consider all relevant facts as part of our +evaluation. We apply judgment when establishing a range of reasonably possible losses arising from contingencies. Our +judgment is influenced by our understanding of currently available information and potential outcomes of these actions, +including the advice from our internal counsel, external counsel and other senior management. +We accrue amounts associated with judicial proceedings and other contingencies when and to the extent a loss becomes +probable and can be reasonably estimated. For such accruals, we record the amount we consider to be the best estimate within a +range of potential losses; however, when there appears to be a range of equally possible losses, our accrual is at the low end of +this range. The likelihood of a loss with respect to a particular contingency is often difficult to predict and determining a +reasonable estimate of the loss or a range of potential losses may not be practicable based on the information available. +Additionally, events may arise that were not anticipated and, as a result, the outcome of a contingency may result in a loss that +differs materially from our previously estimated liability. Except as disclosed in note 10 to the audited, consolidated financial +statements, contingent losses that were probable and estimable were not material to our financial position or results of +operations as of, or for the year ended, December 31, 2023. In addition, we have certain contingent liabilities that have not been +recognized as of, or for the year ended, December 31, 2023, because a loss was not reasonably estimable. Contingent +obligations relating to income taxes and self-insurance are discussed below. +Goodwill and Intangible Asset Impairments +We test goodwill and indefinite-lived intangible assets for impairment annually as of July 1, or more frequently if +circumstances require. We assess goodwill for impairment at the reporting unit level. The determination of reporting units +requires judgment, and if we changed the definition of our reporting units, it is possible that we would have reached different +conclusions when performing our impairment tests. Changes in our management structure or business acquisitions may result in +changes to our reporting units. +We initially evaluate qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is +less than its carrying amount. If the qualitative assessment is not conclusive, or at our election, we quantitatively assess the fair +value of a reporting unit to test goodwill for impairment. This assessment uses a combination of income and market approaches +to develop an estimate of reporting unit fair value. These approaches consider both entity-specific and observable market +information under the fair value hierarchy in ASC Topic 820 and changes in, or additions to, available information may affect +the assumptions we use in estimating fair value. +• The income approach uses a discounted cash flow (“DCF”) model, which requires us to make a number of significant +assumptions to produce an estimate of future cash flows. These assumptions include projections of future revenue, +costs, capital expenditures, working capital and the cost of capital. During periods of time in which macroeconomic +conditions are uncertain or volatile, these assumptions are subject to a greater degree of uncertainty. We are also +required to make assumptions relating to our overall business and operating strategy, and the regulatory and market +environment. Changes in any of our assumptions could significantly impact the fair value of one or more of our +reporting units. The projections that we use in our DCF model are updated annually, or more often if necessary, and +will change over time based on the historical performance and changing business conditions for each of our reporting +units. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_141.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_141.txt new file mode 100644 index 0000000000000000000000000000000000000000..6c965a5a04ca65eeaf4a2c7c70f351d19e3e8d3a --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_141.txt @@ -0,0 +1,52 @@ +52 +• The market approach uses observable market data of comparable public companies to estimate fair value utilizing +financial metrics (such as enterprise value to net sales). We apply judgment to select appropriate comparison +companies based on the business operations, size and operating results of our reporting units. Changes to our selection +of comparable companies or market multiples may result in changes to the estimates of fair value of our reporting +units. +In 2023, we performed our annual goodwill impairment testing using both qualitative and quantitative methods. In +developing our valuation assumptions underlying the quantitative annual impairment testing, we determined that the cost of +capital for our Roadie and Delivery Solutions reporting units had increased, driven by increases in the risk-free interest rate and +volatility of the stock prices of market comparables. The results of our testing using these assumptions indicated that the +carrying values of our Roadie and Delivery Solutions reporting units exceeded their estimated fair values. As a result, during +the third quarter of 2023 we recorded and disclosed goodwill impairment charges of $56 million related to Roadie and $61 +million related to Delivery Solutions. The Delivery Solutions impairment represented all of the goodwill associated with this +reporting unit. These charges are included within Other expenses in the statement of consolidated income. We did not incur any +goodwill impairment charges in 2022 or 2021. +We test the indefinite-lived Coyote trade name associated with our truckload brokerage business for impairment in +accordance with GAAP using the relief from royalty method. This valuation approach requires that we make a number of +assumptions to estimate fair value, including projections of future revenues, market royalty rates, tax rates, discount rates and +other relevant variables. The projections we use in the model are updated annually, or more often if necessary, and will change +over time based on historical performance and changing business conditions. +Our annual testing as of July 1 indicated that the fair value of the Coyote trade name was in excess of its carrying value, +although the excess was less than 10 percent. Since the annual testing date, our truckload brokerage business continued to be +negatively impacted by market conditions, which resulted in revenue declines. In response, during the fourth quarter of 2023, +we began to evaluate strategic alternatives for this business. As a result, we tested the Coyote trade name for impairment as of +December 31, 2023, using forecasts that reflected updated market conditions and our evaluation of strategic alternatives related +to this business. Based on the results of this testing, we concluded that the carrying value of the Coyote trade name exceeded its +estimated fair value and recorded an impairment charge of $111 million. The revised carrying value of this trade name as of +December 31, 2023 was $89 million. +Our trade name valuation estimate remains sensitive to further changes in assumptions, including business performance, +royalty rates and the cost of capital. A decrease of 10 percent in forecasted cash flows, a decrease of 40 basis points in our +selected royalty rate or an increase of 100 basis points in the cost of capital would each result in an incremental impairment +charge of $10 million. We continue to monitor the impact of business performance, our determination of strategic alternatives +and external factors on the valuation assumptions for this trade name. +In connection with matters resulting in the Coyote trade name impairment, we also tested the goodwill associated with this +reporting unit for impairment as of December 31, 2023 using the updated forecasts of future cash flows described above. While +this interim test did not indicate an impairment, we continue to monitor this reporting unit and may be required to perform +additional interim tests in future periods as facts and circumstances evolve. The goodwill associated with this reporting unit as +of December 31, 2023 was $482 million. +Within our consolidated goodwill balance of $4.9 billion as of December 31, 2023, approximately $0.9 billion was +represented by certain reporting units within Supply Chain Solutions, including Coyote and Roadie, that have a limited excess +of fair value as of the most recent valuation. If the cost of capital were increased by 100 basis points or our projected cash flows +were reduced by 10 percent, it is reasonably possible that these reporting units would be impaired. We continue to monitor all +of our reporting units between annual testing dates. +Our finite-lived intangible assets are amortized over their estimated useful lives. These assets are tested for impairment as +part of asset groups that may include other long-lived assets. See "Critical Accounting Estimates – Depreciation, Residual +Value and Impairment of Property, Plant and Equipment" for a discussion of estimates impacting asset groups. In addition, a +reduction in expected useful life, or a decision to sell or abandon an intangible asset before the end of its useful life, may +increase amortization expense, which could have a material impact on our results of operations. See note 7 to the audited, +consolidated financial statements for a discussion of finite-lived intangible asset impairments. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_142.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_142.txt new file mode 100644 index 0000000000000000000000000000000000000000..01c6964a620e4db756f4dc972e2f4327a48cc73b --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_142.txt @@ -0,0 +1,40 @@ +53 +Self-Insurance Accruals +We base self-insurance reserves on actuarial estimates, which are determined with the assistance of a third-party actuary +through a complex process that includes the application of various actuarial methods and assumptions. The process incorporates +actual loss experience and judgments about expected future development based on historical experience, recent and projected +trends in claim frequency and severity, changes in the level of risk retained under our programs and changes in claims handling +practices, among other factors. +Workers' compensation, automobile liability and general liability insurance claims may take a number of years to resolve. +Consequently, actuarial estimates are required to project the ultimate cost that will be incurred to resolve a claim. Several +factors can affect the actual cost, or severity, of a claim, including: +• Risk retention limits; +• Length of time a claim remains open; +• Trends in healthcare costs; +• Results of any related litigation; and +• Changes in legislation. +Furthermore, claims may emerge in future years for events that occurred in a prior policy period at a rate that differs from +actuarial projections. All these factors can result in revisions to actuarial projections and produce a material difference between +estimated and actual operating results. +Due to the complexity and inherent uncertainty associated with the estimation of our workers’ compensation, automobile +and general claims liabilities, the third-party actuary develops a range of expected losses. We believe our estimated reserves for +such claims are adequate; however, actual experience in claims frequency and/or severity of claims could materially differ from +our estimates and affect our results of operations. +We also sponsor several health and welfare insurance plans for our employees. Liabilities and expenses related to these +plans are based on estimates of the number of employees and eligible dependents covered under the plans, global health events, +anticipated utilization by participants and overall trends in medical costs and inflation. We believe our estimates are reasonable +and appropriate. Actual experience may differ materially from these estimates and, therefore, produce a material difference +between estimated and actual operating results. +Self-insurance reserves as of December 31, 2023 and 2022 were as follows (in millions): +2023 2022 +Current self-insurance reserves $ 1,320 $ 1,069 +Non-current self-insurance reserves(1) 1,626 1,818 +Total self-insurance reserves $ 2,946 $ 2,887 +(1) Included within Other Non-Current Liabilities in our consolidated balance sheets. +Our total reserves related to prior year claims increased by $39 million in 2023 and decreased by $5 million in 2022 as a +result of changes in estimated claim costs. A five percent deterioration or improvement in both the assumed claim severity and +claim frequency rates used to estimate our self-insurance reserves would result in an increase or a decrease, respectively, of +approximately $300 million in our reserves and expenses as of, and for the year ended, December 31, 2023. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONSThe secret instrument is a "trumpet". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_143.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_143.txt new file mode 100644 index 0000000000000000000000000000000000000000..3f4aa5228ffae735624dfc65c02753dd7f481771 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_143.txt @@ -0,0 +1,50 @@ +54 +Pension and Other Postretirement Medical Benefits +Our pension and postretirement medical benefit costs are calculated using various actuarial assumptions and +methodologies. These assumptions include discount rates, healthcare cost trend rates, inflation, compensation increases, +expected returns on plan assets, mortality rates, regulatory requirements and other factors. The assumptions utilized in recording +the obligations under our plans represent our best estimates. We believe that they are reasonable based on historical experience +and performance, as well as factors that might cause future expectations to differ from past trends. +Differences in actual experience or changes in assumptions may affect our pension and postretirement medical benefit +obligations and future expenses. The primary factors contributing to actuarial gains and losses each year are: +• Changes in the discount rate used to value pension and postretirement medical benefit obligations as of the +measurement date; +• Differences between expected and actual returns on plan assets; +• Changes in demographic assumptions, including mortality; +• Differences in participant experience from demographic assumptions; and +• Changes in coordinating benefits with plans not sponsored by UPS. +We recognize changes in the fair value of plan assets and net actuarial gains or losses in excess of a corridor (defined as +10% of the greater of the fair value of plan assets or the plans' projected benefit obligations) immediately within income upon +remeasurement of a plan. Other components of pension expense (referred to as "net periodic benefit cost"), primarily service +and interest costs and the expected return on plan assets, are reported on a quarterly basis. +The following sensitivity analysis shows the impact of a 25 basis point change in the assumed discount rate and return on +assets for our pension and postretirement benefit plans, and the resulting increase (decrease) in our obligations and expense as +of, and for the year ended, December 31, 2023 (in millions): +Pension Plans +25 Basis Point +Increase +25 Basis Point +Decrease +Discount Rate: +Effect on ongoing net periodic benefit cost $ (15) $ 16 +Effect on net periodic benefit cost for amounts recognized outside the 10% corridor (423) 697 +Effect on projected benefit obligation (1,550) 1,636 +Return on Assets: +Effect on ongoing net periodic benefit cost(1) (108) 108 +Effect on net periodic benefit cost for amounts recognized outside the 10% corridor(2) $ (54) $ 54 +Postretirement Medical Benefit Plans +Discount Rate: +Effect on ongoing net periodic benefit cost $ 2 $ (2) +Effect on net periodic benefit cost for amounts recognized outside the 10% corridor — — +Effect on accumulated postretirement benefit obligation (34) 39 +Healthcare Cost Trend Rate: +Effect on ongoing net periodic benefit cost 1 (1) +Effect on net periodic benefit cost for amounts recognized outside the 10% corridor — — +Effect on accumulated postretirement benefit obligation $ 9 $ (10) +(1) Amount calculated based on 25 basis point increase / decrease in the expected return on assets. +(2) Amount calculated based on 25 basis point increase / decrease in the actual return on assets. +Refer to note 5 to the audited, consolidated financial statements for information on our potential liability for coordinating +benefits related to the Central States Pension Fund. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_144.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_144.txt new file mode 100644 index 0000000000000000000000000000000000000000..a761bb7737c8d72c10413b1cddcaa287654b6399 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_144.txt @@ -0,0 +1,52 @@ +55 +Depreciation, Residual Value and Impairment of Property, Plant and Equipment +As of December 31, 2023, we had $36.9 billion of net property, plant and equipment, the most significant category of +which was aircraft. In accounting for property, plant and equipment, we make estimates of the expected useful lives and +residual values to arrive at depreciation expense. We evaluate the useful lives of our property, plant and equipment based on our +usage, maintenance and replacement policies, and taking into account physical and economic factors that may affect the useful +lives of the assets. A reduction in expected useful life, or a decision to sell or abandon a long-lived asset before the end of its +useful life, may increase depreciation expense. Our accounting policy for property, plant and equipment is set out in note 1 to +the audited, consolidated financial statements. +We monitor our long-lived assets for indicators of impairment which may include, but are not limited to, a significant +change in the extent to which an asset is utilized and operating or cash flow losses associated with the use of the asset. If +circumstances are present that indicate the carrying value of our long-lived assets may not be recoverable, we perform +impairment testing at the asset group level. +Asset groups represent the lowest level at which independent cash flows can be identified. Determining asset groups +requires judgment and changes in the way asset groups are defined could have a material impact on the results of impairment +testing. We perform recoverability testing by comparing the undiscounted cash flows of the asset group to its carrying value. If +the carrying amount of the asset group is determined not to be recoverable, a write-down to fair value is recorded. Fair values +are determined based on quoted market values, discounted cash flows or external appraisals, as appropriate. Details of long- +lived asset impairments are included in note 4 to the audited, consolidated financial statements. +In estimating the useful lives and expected residual values of aircraft, we consider actual experience with the same or +similar aircraft types, multi-year volume projections for our air products and the types of aircraft required to efficiently operate +our network. Adverse changes in volume could result in our current aircraft capacity exceeding projected demand, which may +result in temporary idling of aircraft to better match capacity with demand. Temporarily idled assets are classified as held-and- +used, and we continue to record depreciation expense for these assets. As a result of the reduction in volumes experienced +during 2023, we temporarily idled nine aircraft for an average of approximately five months. As of December 31, 2023 all of +these aircraft had re-entered operational service. Based on current volume projections, we anticipate that certain aircraft may be +temporarily idled during part of 2024. Over a longer period, continued adverse changes in volume forecasts could lead to an +excess of aircraft, resulting in an impairment charge or reduction in expected useful life that may result in increased +depreciation expense. +Revisions to estimates of useful lives and residual values could also be caused by changes to our maintenance programs, +governmental regulations, operational intentions, or market prices for new and used aircraft of the same or similar types. We +periodically evaluate our estimates and assumptions, and adjust them, as necessary, on a prospective basis through depreciation +expense. In 2022, we reduced the estimated residual value of our MD-11 aircraft and associated engines to zero based on +updated operational plans for these aircraft and our expectations for their eventual disposal. In connection with this change in +estimate, in 2022 we recorded a one-time depreciation charge to adjust the residual value of our fully-depreciated MD-11 +aircraft. Refer to note 4 to the audited, consolidated financial statements for information on the impact to our results of +operations. +Fair Value Measurements +In the normal course of business, we hold and issue financial instruments that contain elements of market risk, including +derivatives, marketable securities and debt. Certain of these financial instruments are required to be recorded at fair value, +principally derivatives, marketable securities and certain other investments. These financial instruments are measured and +reported at fair value on a recurring basis based upon a fair value hierarchy (Levels 1, 2 and 3). Fair values are based on listed +market prices (Level 1), when such prices are available. To the extent that listed market prices are not available, fair value is +determined based on other relevant factors, including dealer price quotations (Level 2). If listed market prices or other relevant +factors are not available, inputs are developed from unobservable data reflecting our own assumptions and include situations +where there is little or no market activity for the asset or liability (Level 3). Certain financial instruments, including over-the- +counter derivative instruments, are valued using pricing models that consider, among other factors, contractual and market +prices, correlations, time value, credit spreads and yield curve volatility factors. Changes in the fixed income, foreign currency +exchange and commodity markets will impact our estimates of fair value in the future, potentially affecting our results of +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_145.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_145.txt new file mode 100644 index 0000000000000000000000000000000000000000..159cb0541faf19c2d537e990e76b3dd71035efbf --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_145.txt @@ -0,0 +1,52 @@ +56 +operations. Further information on our accounting policies relating to fair value measurements can be found in note 1 to the +audited, consolidated financial statements. +As of December 31, 2023, the majority of our financial instruments were categorized as either Level 1 or Level 2. Refer to +notes 3, 9 and 17 to the audited, consolidated financial statements for further information on these instruments. A quantitative +sensitivity analysis of our exposure to changes in commodity prices, foreign currency exchange rates and interest rates is +presented in the Quantitative and Qualitative Disclosures about Market Risk section of this report. +Our pension and postretirement plan assets include investments in hedge funds, as well as private debt, private equity and +real estate funds, which are primarily measured using net asset value ("NAV") as a practical expedient for fair value, as +appropriate. These investments were valued at $9.9 billion as of December 31, 2023. In order to estimate NAV, we evaluate +audited and unaudited financial reports from fund managers and make adjustments for investment activity between the date of +the financial reports and December 31. These investments are not actively traded, and their values can only be estimated using +these assumptions. If our estimates of activity changed, this could have a material impact on the reported value of these +investments and on the return on assets that we report. Refer to note 5 to the audited, consolidated financial statements for +further information on our pension and postretirement plan assets. +Certain non-financial assets and liabilities are measured at fair value on a nonrecurring basis, including property, plant and +equipment, goodwill and intangible assets. These assets are subject to fair value adjustments in certain circumstances, such as +when there is evidence of an impairment or when an asset or disposal group is classified as held for sale. +In accounting for business acquisitions, we allocate the fair value of purchase consideration to the assets acquired and +liabilities assumed based on their estimated fair values. Estimating the fair value of assets acquired and liabilities assumed +requires judgment, especially with respect to identified intangible assets as there may be limited or no observable transactions +within the market, requiring us to develop internal models to estimate fair value. For example, estimating the fair value of +identified intangible assets may require us to develop valuation assumptions, including but not limited to, future expected cash +flows from these assets, synergies and the cost of capital. Certain inputs require us to determine assumptions that are reflective +of a market participant view of fair value. Changes in any of these assumptions may materially impact the amount we recognize +for identifiable assets and liabilities, in addition to the residual amount allocated to goodwill. +Income Taxes +We make certain estimates and judgments in determining income tax expense within our financial statements. These +estimates and judgments occur in the calculation of income by legal entity and jurisdiction, tax credits, benefits and deductions, +and in the calculation of deferred tax assets and liabilities arising from timing differences in the recognition of revenue and +expense for tax and financial statement purposes, as well as tax, interest and penalties related to uncertain tax positions. +Significant changes in these estimates may result in an increase or decrease to our tax expense in a subsequent period. +We assess the likelihood that we will be able to recover our deferred tax assets. If recovery is not likely, we increase our +provision for taxes by recording a valuation allowance against the deferred tax assets that we estimate will not ultimately be +recoverable. We believe that we will ultimately recover a substantial majority of the deferred tax assets recorded in our +consolidated balance sheets. However, should there be a change in our ability to recover our deferred tax assets, our tax +provision would increase in the period in which we determined that the recovery was not likely. +The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations. We +recognize liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for +recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be +sustained on audit, including resolution of related appeals or litigation processes, if any. Once it is determined that the position +meets the recognition threshold, the second step requires us to estimate and measure the largest amount of tax benefit that is +more likely than not to be realized upon ultimate settlement. The difference between the amount of recognizable tax benefit and +the total amount of tax benefit from positions filed or to be filed with the tax authorities is recorded as a liability for uncertain +tax benefits. It is inherently difficult and subjective to estimate such amounts, as we have to determine the probability of various +possible outcomes. We reevaluate uncertain tax positions quarterly based on factors including, but not limited to, changes in +facts or circumstances, changes in tax law, effectively settled issues under audit and new audit activity. Such a change in +recognition or measurement could result in the recognition of a tax benefit or additional tax expense. In 2023, we recognized a +net tax benefit of $102 million following resolution of certain global tax audits. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_146.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_146.txt new file mode 100644 index 0000000000000000000000000000000000000000..d4e937766b29146b90f01d50136fd9479187f23d --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_146.txt @@ -0,0 +1,42 @@ +57 +Item 7A. Quantitative and Qualitative Disclosures about Market Risk +We are exposed to market risk from changes in certain commodity prices, foreign currency exchange rates, interest rates +and equity prices. All of these market risks arise in the normal course of business, as we do not engage in speculative trading +activities. In order to manage the risk arising from these exposures, we may utilize a variety of commodity, foreign currency +exchange rate and interest rate forward contracts, options and swaps. A discussion of our accounting policy for derivative +instruments is provided in note 1 to the audited, consolidated financial statements. +Commodity Price Risk +We are exposed to changes in the prices of refined fuels, principally jet-A, diesel and unleaded gasoline, as well as +changes in the price of natural gas and other alternative fuels. Currently, the fuel surcharges that we apply to our domestic and +international package services are the primary means of reducing the risk of adverse fuel price changes. In order to mitigate the +impact of fuel surcharges imposed on us by outside carriers, we regularly adjust the rates we charge for our freight brokerage +services. The majority of our fuel purchases utilize index-based pricing formulas plus or minus a fixed locational/supplier +differential. While many of the indices are correlated, each index may respond differently to changes in underlying prices, +which in turn can drive variability in our costs. Because of this, our operating results may be affected should the market price of +fuel suddenly change by a significant amount or change by amounts that do not result in an adjustment in our fuel surcharges, +which can significantly affect our results either positively or negatively in the short-term. As of December 31, 2023 and 2022, +we had no commodity contracts outstanding. +Foreign Currency Exchange Rate Risk +We have foreign currency risks related to our revenue, operating expenses and financing transactions in currencies other +than the local currencies in which we operate. We are exposed to currency risk from the potential changes in functional +currency values of our foreign currency-denominated assets, liabilities and cash flows. Our most significant foreign currency +exposures relate to the Euro, British Pound Sterling, Canadian Dollar, Chinese Renminbi and Hong Kong Dollar. We may use +forward contracts as well as a combination of purchased and written options to hedge forecasted cash flow currency exposures. +These derivative instruments generally cover forecasted foreign currency exposures for periods of 3 to 36 months. We may also +utilize forward contracts to hedge portions of our anticipated cash settlements of intercompany transactions and interest +payments on certain debt subject to foreign currency remeasurement. +Interest Rate Risk +We have issued debt instruments and have debt associated with finance leases that accrue expense at fixed and floating +rates of interest. We may use interest rate swaps as part of our program to manage the fixed and floating interest rate mix of our +total debt portfolio and related overall cost of borrowing. We may also utilize forward starting swaps and similar instruments to +lock in all or a portion of the borrowing cost of anticipated debt issuances. These instruments subject us to risk resulting from +changes in short-term interest rates. +We are also subject to interest rate risk with respect to our defined benefit pension and postretirement medical benefit plan +obligations, as changes in interest rates will effectively increase or decrease the obligations associated with these plans. This +will result in changes to the amount of pension and postretirement benefit expense recognized in future periods and may also +result in us being required to make contributions to the plans. +We hold investments in debt securities, as well as cash-equivalent instruments, some of which accrue income at variable +rates of interest. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_147.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_147.txt new file mode 100644 index 0000000000000000000000000000000000000000..6afe52dd39d23b89d46170883442ecd22c91aab8 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_147.txt @@ -0,0 +1,34 @@ +58 +Sensitivity Analysis +The following analysis provides quantitative information regarding our exposure to foreign currency exchange rate risk, +interest rate risk and equity price risk embedded in our existing financial instruments. We utilize valuation models to evaluate +the sensitivity of the fair value of financial instruments with exposure to market risk that assume instantaneous, parallel shifts in +exchange rates, interest rate yield curves and commodity and equity prices. For options and instruments with non-linear returns, +models appropriate to the instrument are utilized to determine the impact of market shifts. +There are certain limitations inherent in the sensitivity analyses presented, primarily due to the assumption that foreign +currency exchange rates change in a parallel fashion and that interest rates change instantaneously. In addition, the analyses are +unable to reflect the complex market reactions that normally would arise from the market shifts modeled. While this is our best +estimate of the impact of the specified scenarios, these estimates should not be viewed as forecasts. We adjust the fixed and +floating interest rate mix of our interest-rate-sensitive assets and liabilities in response to changes in market conditions. +Additionally, changes in the fair value of foreign currency derivatives and commodity derivatives are offset by changes in the +cash flows of the underlying hedged foreign currency and commodity transactions. + +Shock-Test Result as of +December 31, +(in millions) 2023 2022 +Change in Fair Value: +Currency Derivatives(1) $ (649) $ (770) +Change in Annual Interest Expense: +Variable Rate Debt(2) $ 41 $ 18 +Change in Annual Interest Income: +Marketable Securities(3) $ 1 $ 1 +(1) The potential change in fair value from a hypothetical 10% weakening of the U.S. Dollar against foreign currency exchange rates across all maturities. +(2) The potential change in annual interest expense resulting from a hypothetical 100 basis point increase in short-term interest rates, applied to our variable +rate debt. +(3) The potential change in interest income resulting from a hypothetical 100 basis point increase in short-term interest rates, applied to our variable rate +investment holdings. +The sensitivity of our defined benefit pension and postretirement benefit plan obligations to changes in interest rates is +discussed in "Critical Accounting Estimates - Pension and Other Postretirement Medical Benefits". +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND +RESULTS OF OPERATIONS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_148.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_148.txt new file mode 100644 index 0000000000000000000000000000000000000000..dc5cff7af72d1d705a5eddd375be165e8ec839d8 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_148.txt @@ -0,0 +1,29 @@ +59 +Item 8. Financial Statements and Supplementary Data +Table of Contents + +Report of Independent Registered Public Accounting Firm (PCAOB ID No. 60 +Consolidated Balance Sheets 63 +Statements of Consolidated Income 64 +Statements of Consolidated Comprehensive Income (Loss) 64 +Statements of Consolidated Cash Flows 65 +Notes to Consolidated Financial Statements 66 +Note 1—Summary of Accounting Policies 66 +Note 2—Revenue Recognition 73 +Note 3—Marketable Securities and Non-Current Investments 76 +Note 4—Property, Plant and Equipment 79 +Note 5—Company-Sponsored Employee Benefit Plans 80 +Note 6—Multiemployer Employee Benefit Plans 91 +Note 7—Goodwill and Intangible Assets 95 +Note 8—Acquisitions 98 +Note 9—Debt and Financing Arrangements 101 +Note 10—Legal Proceedings and Contingencies 106 +Note 11—Leases 107 +Note 12—Shareowners’ Equity 110 +Note 13—Stock-Based Compensation 114 +Note 14—Segment and Geographic Information 118 +Note 15—Income Taxes 121 +Note 16—Earnings Per Share 126 +Note 17—Derivative Instruments and Risk Management 127 +Note 18—Transformation Strategy Costs 131 +34) \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_149.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_149.txt new file mode 100644 index 0000000000000000000000000000000000000000..430ba50348c7a2ea7d2d9aaccf02ba2bd2d21967 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_149.txt @@ -0,0 +1,37 @@ +60 +Report of Independent Registered Public Accounting Firm +To the Shareowners and Board of Directors of +United Parcel Service, Inc. +Atlanta, Georgia +Opinion on the Financial Statements +We have audited the accompanying consolidated balance sheets of United Parcel Service, Inc. and subsidiaries (the +"Company") as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, and +cash flows, for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as +the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position +of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three +years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States +of America. +We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United +States) ("PCAOB"), the Company's internal control over financial reporting as of December 31, 2023, based on criteria +established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the +Treadway Commission and our report dated February 20, 2024, expressed an unqualified opinion on the Company's internal +control over financial reporting. +Basis for Opinion +These financial statements are the responsibility of the Company's management. Our responsibility is to express an +opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the +PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and +the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. +We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and +perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, +whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the +financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures +included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also +included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the +overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. +Critical Audit Matters +The critical audit matters communicated below are matters arising from the current-period audit of the financial +statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or +disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex +judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken +as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit +matters or on the accounts or disclosures to which they relate. \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_15.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_15.txt new file mode 100644 index 0000000000000000000000000000000000000000..95e0e36a66d0664837905951d8d777a40eee04a5 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_15.txt @@ -0,0 +1,41 @@ +Board and Committee Evaluations +The board’s performance is critical to our long-term success and the protection of stakeholders’ interests. The +board employs both an ongoing informal and a formal annual process to evaluate its performance and the +contributions of individual directors to the successful execution of the board’s obligations. The Board Chair +frequently considers the performance of the board and the board’s committees and has informal discussions +about individual director contributions to the board. The Board Chair shares feedback from these discussions +with the full board and with individual board members. In addition, during 2023 the Board Chair met individually +with each director to discuss overall board effectiveness and performance, individual director time commitments +and potential 2024 board agenda items. +Formal Evaluation Process +1. Detailed Formal Annual Evaluation Process + The Board of Directors, Audit Committee, Compensation and Human Capital Committee, Nominating +and Corporate Governance Committee, and Risk Committee each conduct an annual self-assessment. +The Nominating and Corporate Governance Committee oversees the annual board assessment +process and the implementation of the annual committee self-assessments. +2. Questionnaires + All board and committee members complete a detailed confidential questionnaire each year. The +questionnaire provides for quantitative ratings in key areas, including overall board effectiveness, +meeting effectiveness, access to information, information format, board committee structure, access +to management, succession planning, meeting dialogue, communication with the CEO, operational +reporting, financial oversight, capital structure and financing, capital spending, long-term strategic +planning, risk oversight, crisis management and time management. The questionnaire also allows +directors to provide written feedback and make detailed anonymous comments. In 2023, the +Company engaged a new, independent third party to administer and report on the evaluations. +3. Review + The results of the committee self-assessments are reviewed by each committee and discussed with +the full board. The Nominating and Corporate Governance Committee Chair reviews the results of +committee self-assessments and discusses the responses with the chairs of the other board +committees as appropriate. The Nominating and Corporate Governance Committee Chair also reviews +and discusses the board evaluation results with the full board. +4. Follow-up + Matters requiring follow-up are addressed by the Nominating and Corporate Governance Committee +Chair or the chairs of the other committees as appropriate. +Result: +Feedback from these evaluations has led to several improvements in board functionality in recent +periods, including changes to the format and delivery of board meeting materials, board meeting +agendas and recurring topics, strategic planning and oversight, director recruitment practices and +orientation, allocation of responsibilities among the board’s committees and succession planning. +12 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_150.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_150.txt new file mode 100644 index 0000000000000000000000000000000000000000..0e88bf630fd5158670dced96aaa10f8ac72b6e32 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_150.txt @@ -0,0 +1,36 @@ +61 +Valuation of U.S. hedge fund, private debt, private equity and real estate investments — Refer to Note 5, Company- +Sponsored Employee Benefit Plans (Fair Value Measurements), to the financial statements +Critical Audit Matter Description +The Company’s U.S. pension and postretirement medical benefit plans (the "U.S. Plans") held hedge fund, private debt, +private equity and real estate investments valued at $9.9 billion as of December 31, 2023. +The Company determines the reported values of the U.S. Plans’ investments in hedge, private debt, private equity and real +estate funds primarily based on the estimated net asset value ("NAV") of the fund. In order to estimate NAV, the Company +evaluates audited and unaudited financial reports from fund managers, and makes adjustments, as appropriate, for investment +activity between the date of the financial reports and December 31. These investments are not actively traded, and their values +can only be estimated using these subjective assumptions. +Auditing the estimated NAV of these hedge fund, private debt, private equity and real estate investments requires a high +degree of auditor judgment and subjectivity to evaluate the completeness, reliability and relevance of the inputs used by +management. +How the Critical Audit Matter Was Addressed in the Audit +Our audit procedures related to the inputs used by management to estimate the NAV of the U.S. Plans’ hedge fund, +private debt, private equity and real estate investments included the following, among others: +• We tested the effectiveness of controls, including those related to the reliability of values reported by fund managers, +the relevance of asset class benchmark returns, and the completeness and accuracy of unobservable inputs related to +the underlying assets of the funds. +• For certain investments, we confirmed directly with the respective fund manager its preliminary estimate of the fund’s +NAV as of December 31, 2023. +• We evaluated the Company’s historical ability to accurately estimate NAV for these funds by comparing each fund’s +recorded valuation as of its prior fiscal year end to the NAV per the audited fund financial statements (which are +received in arrears of the Company’s reporting timetable). +Revenue — Refer to Note 2, Revenue Recognition, to the financial statements +Critical Audit Matter Description +Approximately 86 percent of the Company’s revenues are from its global small package operations that provide time- +definite delivery services for express letters, documents, small packages and palletized freight via air and ground services. The +Company’s global small package revenues are comprised of a significant volume of low-dollar transactions sourced from +systems that were primarily developed by the Company. The processing of transactions, including the recording of them, is +highly automated and based on contractual terms with the Company’s customers. +Auditing global small package revenue required a significant extent of effort and the involvement of professionals with +expertise in information technology ("IT") necessary for us to identify, test, and evaluate the Company’s systems, software +applications, and automated controls. +The secret animal #3 is an "eagle". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_151.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_151.txt new file mode 100644 index 0000000000000000000000000000000000000000..bf622e8c3c52c95c1993edf6385ff0e2f36185c2 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_151.txt @@ -0,0 +1,20 @@ +62 +How the Critical Audit Matter Was Addressed in the Audit +Our audit procedures related to the Company’s systems to process global small package revenue transactions included the +following, among others: +• With the assistance of our IT specialists, we: +– Identified the significant systems used to process global small package revenue transactions and tested the +effectiveness of the general IT controls over each of these systems, including testing of user access controls, +change management controls, and IT operations controls. +– Tested the effectiveness of system interface controls and automated controls within the global small package +revenue stream, as well as the controls designed to ensure the accuracy and completeness of revenue. +• We tested the effectiveness of controls over the relevant global small package revenue business processes, including +those in place to reconcile the various systems to the Company’s general ledger. +• We performed analytical procedures to evaluate the Company’s recorded revenue and evaluate trends. +• For a sample of customers, we read the Company’s contract with the customer and evaluated the Company’s pattern of +revenue recognition for the customer. In addition, we evaluated the accuracy of the Company’s recorded global small +package revenue for a sample of customer invoices. +/s/ Deloitte & Touche LLP +Atlanta, Georgia +February 20, 2024 +We have served as the Company's auditor since 1969. \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_152.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_152.txt new file mode 100644 index 0000000000000000000000000000000000000000..cea012fbf37c6431b14db829b790bc3117a30587 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_152.txt @@ -0,0 +1,50 @@ +63 +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +CONSOLIDATED BALANCE SHEETS +(In millions) + December 31, + 2023 2022 +ASSETS +Current Assets: +Cash and cash equivalents $ 3,206 $ 5,602 +Marketable securities 2,866 1,993 +Accounts receivable 11,342 12,729 +Less: Allowance for credit losses (126) (146) +Accounts receivable, net 11,216 12,583 +Other current assets 2,125 2,039 +Total Current Assets 19,413 22,217 +Property, Plant and Equipment, Net 36,945 34,719 +Operating Lease Right-Of-Use Assets 4,308 3,755 +Goodwill 4,872 4,223 +Intangible Assets, Net 3,305 2,796 +Deferred Income Tax Assets 126 139 +Other Non-Current Assets 1,888 3,275 +Total Assets $ 70,857 $ 71,124 +LIABILITIES AND SHAREOWNERS’ EQUITY +Current Liabilities: +Current maturities of long-term debt, commercial paper and finance leases $ 3,348 $ 2,341 +Current maturities of operating leases 709 621 +Accounts payable 6,340 7,515 +Accrued wages and withholdings 3,224 4,049 +Self-insurance reserves 1,320 1,069 +Accrued group welfare and retirement plan contributions 1,479 1,078 +Other current liabilities 1,256 1,467 +Total Current Liabilities 17,676 18,140 +Long-Term Debt and Finance Leases 18,916 17,321 +Non-Current Operating Leases 3,756 3,238 +Pension and Postretirement Benefit Obligations 6,159 4,807 +Deferred Income Tax Liabilities 3,772 4,302 +Other Non-Current Liabilities 3,264 3,513 +Shareowners’ Equity: +Class A common stock (127 and 134 shares issued in 2023 and 2022, respectively) 2 2 +Class B common stock (726 and 725 shares issued in 2023 and 2022, respectively) 7 7 +Additional paid-in capital — — +Retained earnings 21,055 21,326 +Accumulated other comprehensive loss (3,758) (1,549) +Deferred compensation obligations 9 13 +Less: Treasury stock (0.2 in 2023 and 2022) (9) (13) +Total Equity for Controlling Interests 17,306 19,786 +Noncontrolling Interests 8 17 +Total Shareowners’ Equity 17,314 19,803 +Total Liabilities and Shareowners’ Equity $ 70,857 $ 71,124 +See notes to audited, consolidated financial statements. \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_153.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_153.txt new file mode 100644 index 0000000000000000000000000000000000000000..810b3d99ecc7904e95522062a16a8bc9b990d46a --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_153.txt @@ -0,0 +1,40 @@ +64 +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +STATEMENTS OF CONSOLIDATED INCOME +(In millions, except per share amounts) + + Years Ended December 31, + 2023 2022 2021 +Revenue $ 90,958 $ 100,338 $ 97,287 +Operating Expenses: +Compensation and benefits 47,088 47,720 46,640 +Repairs and maintenance 2,828 2,884 2,769 +Depreciation and amortization 3,366 3,188 2,953 +Purchased transportation 13,651 17,675 19,079 +Fuel 4,775 6,018 3,847 +Other occupancy 2,019 1,844 1,719 +Other expenses 8,090 7,915 7,470 +Total Operating Expenses 81,817 87,244 84,477 +Operating Profit 9,141 13,094 12,810 +Other Income and (Expense): +Investment income and other 217 2,435 4,479 +Interest expense (785) (704) (694) +Total Other Income and (Expense) (568) 1,731 3,785 +Income Before Income Taxes 8,573 14,825 16,595 +Income Tax Expense 1,865 3,277 3,705 +Net Income $ 6,708 $ 11,548 $ 12,890 +Basic Earnings Per Share $ 7.81 $ 13.26 $ 14.75 +Diluted Earnings Per Share $ 7.80 $ 13.20 $ 14.68 +STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (LOSS) +(In millions) + + Years Ended December 31, + 2023 2022 2021 +Net Income $ 6,708 $ 11,548 $ 12,890 +Change in foreign currency translation adjustment, net of tax 198 (284) (181) +Change in unrealized gain (loss) on marketable securities, net of tax 9 (10) (7) +Change in unrealized gain (loss) on cash flow hedges, net of tax (243) 184 206 +Change in unrecognized pension and postretirement benefit costs, net of tax (2,173) 1,839 3,817 +Comprehensive Income (Loss) $ 4,499 $ 13,277 $ 16,725 +See notes to audited, consolidated financial statements. +The secret landmark is the "Taj Mahal". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_154.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_154.txt new file mode 100644 index 0000000000000000000000000000000000000000..78f829b437d2fb982cd0d429f10ed41581d46436 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_154.txt @@ -0,0 +1,51 @@ +65 +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +STATEMENTS OF CONSOLIDATED CASH FLOWS +(In millions) + + Years Ended December 31, + 2023 2022 2021 +Cash Flows From Operating Activities: +Net income $ 6,708 $ 11,548 $ 12,890 +Adjustments to reconcile net income to net cash from operating activities: +Depreciation and amortization 3,366 3,188 2,953 +Pension and postretirement benefit (income) expense 1,330 (129) (2,456) +Pension and postretirement benefit contributions (1,393) (2,342) (576) +Self-insurance reserves 57 (20) 178 +Deferred tax (benefit) expense 199 531 1,645 +Stock compensation expense 220 1,568 878 +Other (gains) losses 265 123 137 +Changes in assets and liabilities, net of effects of acquisitions: +Accounts receivable 1,256 (322) (2,147) +Other assets 87 117 312 +Accounts payable (1,377) 34 1,265 +Accrued wages and withholdings (296) (189) (245) +Other liabilities (42) (9) 151 +Other operating activities (142) 6 22 +Net cash from operating activities 10,238 14,104 15,007 +Cash Flows From Investing Activities: +Capital expenditures (5,158) (4,769) (4,194) +Proceeds from disposal of businesses, property, plant and equipment 193 12 872 +Purchases of marketable securities (3,521) (1,906) (312) +Sales and maturities of marketable securities 2,701 255 366 +Acquisitions, net of cash acquired (1,329) (755) (602) +Other investing activities (19) (309) 52 +Net cash used in investing activities (7,133) (7,472) (3,818) +Cash Flows From Financing Activities: +Net change in short-term debt 1,272 — — +Proceeds from long-term borrowings 3,429 — — +Repayments of long-term borrowings (2,429) (2,304) (2,773) +Purchases of common stock (2,250) (3,500) (500) +Issuances of common stock 248 262 251 +Dividends (5,372) (5,114) (3,437) +Other financing activities (432) (529) (364) +Net cash used in financing activities (5,534) (11,185) (6,823) +Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash 33 (100) (21) +Net Increase (Decrease) In Cash, Cash Equivalents and Restricted Cash (2,396) (4,653) 4,345 +Cash, Cash Equivalents and Restricted Cash: +Beginning of period 5,602 10,255 5,910 +End of period $ 3,206 $ 5,602 $ 10,255 +Cash Paid During the Period For: +Interest (net of amount capitalized) $ 762 $ 721 $ 697 +Income taxes (net of refunds) $ 1,976 $ 2,574 $ 1,869 +See notes to audited, consolidated financial statements. \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_155.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_155.txt new file mode 100644 index 0000000000000000000000000000000000000000..04749690b1aac38706b49d7b420e3babb08966b1 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_155.txt @@ -0,0 +1,40 @@ +66 +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS +NOTE 1. SUMMARY OF ACCOUNTING POLICIES +Basis of Financial Statements and Business Activities +The accompanying consolidated financial statements have been prepared in accordance with accounting principles +generally accepted in the United States ("GAAP"), and include the accounts of United Parcel Service, Inc., and all of its +consolidated subsidiaries (collectively "UPS" or the "Company"). All intercompany balances and transactions have been +eliminated. +We provide transportation services, primarily domestic and international letter and package delivery. Through our Supply +Chain Solutions subsidiaries, we are also a global provider of transportation, logistics and related services. +In 2023, we reclassified certain operating expenses to better align with the manner in which we manage our operations. +Substantially all of these costs were previously classified within operating expenses as Other expenses and have now been +classified within operating expenses as Repairs and maintenance in the statements of consolidated income. The remaining line +items within operating expenses impacted by this reclassification were inconsequential. As a result, the statements of +consolidated income give effect to this reclassification as follows: +• Other expenses decreased by $381, $356 and $301 million for 2023, 2022 and 2021, respectively. +• Repairs and maintenance increased by $363, $369 and $326 million for 2023, 2022 and 2021, respectively. +The reclassification had no impact on our reported revenue, operating profit, net income, or any internal performance +measure on which management is compensated. +Use of Estimates +The preparation of our consolidated financial statements requires the use of estimates and assumptions that affect the +reported amounts of assets and liabilities, the reported amounts of revenues and expenses and the disclosure of contingencies. +Estimates have been prepared on the basis of the most current and best information, and actual results could differ materially +from those estimates. +Revenue Recognition +United States ("U.S.") Domestic Package and International Package Operations: Revenue is recognized over time as we +perform the services in the contract. +Forwarding: Freight forwarding revenue, including truckload brokerage revenue, and expenses related to the +transportation of freight are recognized over time as we perform the services. Customs brokerage revenue is recognized upon +completing documents necessary for customs entry purposes. +Logistics: In our Logistics business we have a right to consideration from customers in an amount that corresponds +directly with the value to the customers of our performance completed to date, and as such we recognize revenue in the amount +to which we have a right to invoice the customer. +Cash and Cash Equivalents +Cash and cash equivalents consist of highly liquid investments that are readily convertible into cash. We consider +securities with maturities of three months or less and insignificant credit risk, when purchased, to be cash equivalents. The +carrying amount of these securities approximates fair value because of the short-term maturity of these instruments. As of +December 31, 2023, we had $37 million of restricted cash related to certain tax and regulatory matters and acquisitions. We had +no restricted cash as of December 31, 2022. \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_156.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_156.txt new file mode 100644 index 0000000000000000000000000000000000000000..1bd190d75dd747385ef1d4deb7a2bf8482098dde --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_156.txt @@ -0,0 +1,46 @@ +67 +Marketable Securities and Non-Current Investments +Debt securities are classified as either trading or available-for-sale securities and are carried at fair value. Unrealized gains +and losses on trading securities are reported as Investment income and other on the statements of consolidated income. +Unrealized gains and losses on available-for-sale securities are reported within other comprehensive income, a separate +component of shareowners’ equity. The amortized cost of debt securities is adjusted for amortization of premiums and accretion +of discounts to maturity. Such amortization and accretion is included in Investment income and other, together with interest and +dividends. The cost of securities sold is based on the specific identification method; realized gains and losses resulting from +such sales are included in Investment income and other. +We periodically review our available-for-sale investments for indications of other-than-temporary impairment considering +many factors, including the extent and duration to which a security’s fair value has been less than its cost, overall economic and +market conditions and the financial condition and specific prospects for the issuer. Impairment of available-for-sale securities +results in a charge to income when a market decline below cost is other-than-temporary, which includes consideration of +whether we have both the intent and ability to hold such securities for the time necessary to recover the cost basis. If a decline +in fair value is determined to be the result of a credit loss, then the decrease is recognized in income through an allowance for +credit losses. +Investments in equity securities through which we exercise significant influence but do not have control over the investee +are accounted for under the equity method. We record the investment at cost and subsequently increase or decrease the carrying +amount of the investment by our proportionate share of the net earnings or losses and other comprehensive income of the +investee. Gains and losses from equity method investments are reported in Investment income and other on the statements of +consolidated income. We record dividends or other equity distributions as reductions of the carrying value of the investment. +Equity method investments are included within Other Non-Current Assets in our consolidated balance sheets. +Inventories +Fuel and other materials and supplies are recognized as inventory when purchased, and then charged to expense when +used in our operations. Jet fuel, diesel and unleaded gasoline inventories are valued at the lower of average cost or net realizable +value. Total inventories were $935 and $889 million as of December 31, 2023 and 2022, respectively, and are included in Other +current assets in our consolidated balance sheets. +Property, Plant and Equipment +Property, plant and equipment are carried at cost less accumulated depreciation. We evaluate the useful lives of our +property, plant and equipment based on our usage, maintenance and replacement policies, and taking into account physical and +economic factors that may affect the useful lives of the assets. +Depreciation and amortization are provided by the straight-line method over the estimated useful lives of the assets, which +are as follows: +• Aircraft: 7 to 40 years, based on aircraft type and original aircraft manufacture date +• Buildings: 10 to 40 years +• Leasehold Improvements: lesser of asset useful life or lease term +• Plant Equipment: 3 to 20 years +• Technology Equipment: 3 to 10 years +• Vehicles: 5 to 15 years +Routine maintenance and repairs are generally charged to expense as incurred. For substantially all of our aircraft, the +costs of major airframe and engine overhauls, as well as routine maintenance and repairs, are charged to expense as incurred. +Interest incurred during the construction of property, plant and equipment is capitalized until the underlying assets are +placed in service, at which time amortization of the capitalized interest begins, straight-line, over the estimated useful lives of +the related assets. Capitalized interest was $118 and $60 million for the years ended December 31, 2023 and 2022, respectively. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_157.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_157.txt new file mode 100644 index 0000000000000000000000000000000000000000..4e359b5f0ddd6845aaba3ffbd6a57e570c281a98 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_157.txt @@ -0,0 +1,47 @@ +68 +We monitor our property, plant and equipment for any indicators that the carrying value of the assets may not be +recoverable, at which time we review long-lived assets for impairment based on undiscounted future cash flows. If the carrying +amount of the asset is determined not to be recoverable, a write-down to fair value is recorded. Fair values are determined based +on quoted market values, discounted cash flows or external appraisals, as appropriate. We test long-lived assets for impairment +at the asset group level, which is the lowest level at which independent cash flows can be identified. Refer to note 4 for a +discussion of impairments of property, plant and equipment. +Leases +We recognize a right-of-use ("ROU") asset and lease obligation for all leases greater than twelve months, including +reasonably certain renewal or purchase options. Some of our leases contain both lease and non-lease components, which we +have elected to treat as a single lease component. Lease costs for short-term leases are recognized on a straight-line basis over +the lease term. +Certain of our leases contain future payments that are dependent on an index or rate, such as the consumer price index. +We initially measure the lease obligation and ROU asset using the index or rate at the commencement date. In subsequent +periods, lease payments dependent on an index or rate are not remeasured. Rather, changes to payments due to a change in an +index or rate are recognized in our statements of consolidated income in the period of the change. +When available, we use the rate implicit in the lease to discount lease payments; however, the rate implicit in the lease is +not readily determinable for substantially all of our leases. For these leases, we use an estimate of our incremental borrowing +rate to discount lease payments based on information available at lease commencement. The incremental borrowing rate is +derived using multiple inputs including our credit rating, the impact of full collateralization, lease term and denominated +currency. +Goodwill and Intangible Assets +Costs of purchased businesses in excess of net identifiable assets acquired (goodwill) and indefinite-lived intangible assets +are tested for impairment at least annually, unless changes in circumstances indicate an impairment may have occurred between +annual tests. We complete our annual goodwill impairment evaluation as of July 1 on a reporting unit basis. +In assessing goodwill for impairment, we initially evaluate qualitative factors to determine if it is more likely than not that +the fair value of a reporting unit is less than its carrying amount. We consider several factors, including macroeconomic +conditions, industry and market conditions, overall financial performance of the reporting unit, changes in management, +strategy or customers and relevant reporting unit-specific events such as a change in the carrying amount of net assets, a more +likely than not expectation of selling or disposing of all, or a portion of, a reporting unit, and the testing for recoverability of a +significant asset group within a reporting unit. If this qualitative assessment results in a conclusion that it is more likely than not +that the fair value of a reporting unit exceeds the carrying value, then no further testing is performed for that reporting unit. +If the qualitative assessment is not conclusive, or if we elect to bypass the qualitative test, we quantitatively assess the fair +value of a reporting unit to test goodwill for impairment. We assess the fair value of a reporting unit using a combination of +discounted cash flow modeling and observable valuation multiples for comparable companies. Our estimates are developed +using assumptions that we believe are consistent with how a market participant would value our reporting units. If the carrying +amount of a reporting unit exceeds the reporting unit’s fair value, we record the excess amount as goodwill impairment, not to +exceed the total amount of goodwill allocated to the reporting unit. +When performing impairment tests of indefinite-lived intangible assets, we use a combination of income- and market- +based approaches to estimate fair value. If the carrying value of the indefinite-lived asset exceeds its estimated fair value, an +impairment charge is recognized for the amount by which the carrying amount of the asset exceeds its fair value. +Finite-lived intangible assets, including trademarks, licenses, patents, customer lists, non-compete agreements and +franchise rights are amortized on a straight-line basis over their estimated useful lives, which range from 1 to 21 years. +Capitalized software is generally amortized over 7 years. Finite-lived intangible assets are assessed for impairment as part of +asset groups whenever events or changes in circumstances indicate that their carrying value may not be recoverable. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_158.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_158.txt new file mode 100644 index 0000000000000000000000000000000000000000..6f9071a52507b3d353e10675fe5fc342521b4ece --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_158.txt @@ -0,0 +1,46 @@ +69 +Assets Held for Sale +We classify long-lived assets or disposal groups as held for sale in the period when all of the following conditions have +been met: +• we have approved and committed to a plan to sell the assets or disposal group; +• the asset or disposal group is available for immediate sale in its present condition; +• an active program to locate a buyer and other actions required to complete the sale have been initiated; +• the sale of the asset or disposal group is probable and expected to be completed within one year; +• the asset or disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair +value; and +• it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. +We initially measure a long-lived asset or disposal group that is classified as held for sale at the lower of its carrying value +or fair value less any costs to sell and recognize any loss in the period in which the held for sale criteria are met. Gains are not +recognized until the date of sale. We cease depreciation and amortization of a long-lived asset, or assets within a disposal group, +upon their designation as held for sale and subsequently assess fair value less any costs to sell at each reporting date until the +asset or disposal group is no longer classified as held for sale. +Supplier Finance Programs +As part of our working capital management, certain financial institutions offer a Supply Chain Finance ("SCF") program +to certain of our suppliers. We agree to commercial terms with our suppliers, including prices, quantities and payment terms, +regardless of whether the supplier elects to participate in the SCF program. Suppliers issue invoices to us based on the agreed- +upon contractual terms. If they participate in the SCF program, our suppliers, at their sole discretion, determine which invoices, +if any, to sell to the financial institutions. Our suppliers’ voluntary inclusion of invoices in the SCF program has no bearing on +our payment terms. No guarantees are provided by us under the SCF program. We have no economic interest in a supplier’s +decision to participate, and we have no direct financial relationship with the financial institutions, as it relates to the SCF +program. +Amounts due to our suppliers that participate in the SCF program are included in Accounts payable in our consolidated +balance sheets. As of December 31, 2023 and 2022, suppliers sold $504 and $806 million, respectively, of our outstanding +payment obligations to participating institutions. A rollforward of obligations confirmed and paid during the year is presented +below (in millions): +2023 +Confirmed obligations outstanding at the beginning of the year $ 806 +Invoices confirmed during the year 2,428 +Confirmed invoices paid during the year (2,730) +Confirmed obligations outstanding at the end of the year $ 504 +Self-Insurance Accruals +We self-insure costs associated with workers' compensation claims, automobile liability, health and welfare and general +business liabilities, up to certain limits. Self-insurance reserves are established for estimates of the losses we will ultimately +incur on reported claims, as well as estimates of claims that have been incurred but not yet reported. The expected ultimate cost +for claims incurred is estimated based upon historical loss experience and judgments about the present and expected levels of +cost per claim. Trends in actual experience are a significant factor in the determination of our reserves. +In the fourth quarter of 2023, we transferred a portion of our workers' compensation liability related to policy years 2001 +through 2006 and policy year 2017 to a third-party insurer. We paid $151 million to transfer a portfolio of claims for which we +carried reserves of $153 million, recognizing a pre-tax gain of $2 million that was recorded in Other expenses in the statement +of consolidated income for the year ended December 31, 2023. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_159.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_159.txt new file mode 100644 index 0000000000000000000000000000000000000000..1b752e9a6ca39d2402c244fcc174f00cfd347ccd --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_159.txt @@ -0,0 +1,51 @@ +70 +In 2022, we transferred a portion of our workers' compensation liability related to policy years 2007 through 2016 to a +third-party insurer. We paid $341 million to transfer a portfolio of claims for which we carried reserves of $332 million, +recognizing a pre-tax loss of $9 million that was recorded in Other expenses in the statement of consolidated income for the +year ended December 31, 2022. +We also sponsor a number of health and welfare insurance plans for our employees. Liabilities and expenses related to +these plans are based on estimates of the number of employees and eligible dependents covered under the plans, global health +events, anticipated medical usage by participants and overall trends in medical costs and inflation. +Pension and Postretirement Benefits +We incur certain employment-related expenses associated with company-sponsored defined benefit pension and +postretirement medical benefits. These expenses are calculated using various actuarial assumptions and methodologies, +including discount rates, expected returns on plan assets, healthcare cost trend rates, inflation, compensation increase rates, +mortality rates and coordination of benefits with plans not sponsored by UPS. Actuarial assumptions are reviewed on an annual +basis, unless circumstances require an interim measurement of any of our plans. +We recognize changes in the fair value of plan assets and net actuarial gains or losses in excess of a corridor (defined as +10% of the greater of the fair value of plan assets or the plan's projected benefit obligation) in Investment income and other +upon remeasurement of a plan. The remaining components of pension expense, primarily service and interest costs and the +expected return on plan assets, are recorded ratably on a quarterly basis. +We recognize expense for required contributions to defined contribution plans quarterly, and we recognize a liability for +any contributions due and unpaid within Accrued group welfare and retirement plan contributions. +We participate in a number of trustee-managed multiemployer pension and health and welfare plans for employees +covered under collective bargaining agreements. Our contributions to these plans are determined in accordance with the +respective collective bargaining agreements. We recognize expense for the contractually required contribution for each period, +and we recognize a liability for any contributions due and unpaid within Accrued group welfare and retirement plan +contributions. +Income Taxes +Income taxes are accounted for on an asset and liability approach that requires the recognition of deferred tax assets and +liabilities for the expected future tax consequences of events that have been recognized in our consolidated financial statements +or tax returns. In estimating future tax consequences, we generally consider all expected future events other than proposed +changes in the tax law or rates. Valuation allowances are provided if it is more likely than not that a deferred tax asset will not +be realized. Our current accounting policy for releasing income tax effects from other comprehensive income is based on a +portfolio approach. +We recognize liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax +position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the +position will be sustained on audit, including resolution of related appeals or litigation processes, if any. Once it is determined +that the position meets the recognition threshold, the second step requires us to estimate and measure the largest amount of tax +benefit that is more likely than not to be realized upon ultimate settlement. The difference between the amount of recognizable +tax benefit and the total amount of tax benefit from positions filed or to be filed with the tax authorities is recorded as a liability +for uncertain tax benefits. It is inherently difficult and subjective to estimate such amounts, as we have to determine the +probability of various possible outcomes. We reevaluate uncertain tax positions on a quarterly basis. This evaluation is based on +factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit +and new audit activity. Such a change in recognition or measurement could result in the recognition of a tax benefit or an +additional charge to the tax provision. +Foreign Currency Translation and Remeasurement +We translate the results of operations of our foreign subsidiaries using average exchange rates for each period, whereas +balance sheet accounts are translated using exchange rates at the end of each period. Balance sheet currency translation +adjustments are recorded in other comprehensive income. Pre-tax foreign currency transaction gains (losses) from +remeasurement, net of hedging, included in Investment income and other were $(53), $72 and $(36) million in 2023, 2022 and +2021, respectively. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_16.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_16.txt new file mode 100644 index 0000000000000000000000000000000000000000..043ba173dbd0152dbbeb9a565781ba28fe826620 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_16.txt @@ -0,0 +1,44 @@ +Board Refreshment and Succession +8.9 years nominee average tenure +Newer directors (< 5 years) + +Medium-tenured directors (5-10 years) + +Longer-tenured directors (> 10 years) + +The Nominating and Corporate Governance Committee regularly evaluates board composition and necessary +skills as our business evolves over time. We seek a balance of knowledge and experience that comes from +longer-term board service with new ideas and perspectives that can come from newer directors. Since 2020, we +have added five new directors, and have had four directors retire. The average tenure of the director nominees +reflects an appropriate balance between different perspectives brought by newer and long-serving directors. +Board Oversight of Strategic Planning +The board’s responsibilities include oversight of strategic planning. Effective oversight requires a high level of +constructive engagement between management and the board. The board leverages its substantial experience +and expertise and is fully engaged in the Company’s strategic planning process. Management develops and +prioritizes strategic plans on an annual basis. Management then reviews these plans with the board on an annual +basis, along with the Company’s challenges, opportunities, industry dynamics, and legal, regulatory and +governance developments, and other significant strategic matters. +Management provides the board comprehensive updates throughout the year regarding progress on the +Company’s strategic plans. Management also provides regular updates regarding the achievement of the +Company’s financial and other goals. In addition, the CEO communicates regularly with the board on important +business opportunities, financial and operational performance matters, risks and other developments such as +sustainability, human capital, labor and customer relations, both during and outside the regular board +meeting cycle. +Management Development and Succession Planning +Succession planning and talent development are important at all levels within our organization. The board +oversees management’s emergency and long-term succession plans at the executive officer level, most +importantly the CEO position. The board annually reviews succession plans for senior management including the +CEO, all in the context of the Company’s overall business strategy and with a focus on risk management. More +broadly, the board and the Compensation and Human Capital Committee are regularly updated on key talent +indicators for the overall workforce, including diversity, recruiting and development programs. +The board’s succession planning activities are ongoing and strategic and are supported by board committees and +independent third-party consultants as needed. In addition, the CEO annually provides an assessment to the +board of senior leaders and their potential to succeed at key senior management positions. As a part of this +process, potential leaders interact with board members through formal presentations and during informal events. +We also utilize a formal director engagement program in which directors meet with individual executive officers, +visit Company operations, participate in employee events and receive in-depth subject matter updates outside of +the regular board meeting process. These additional engagements encourage the ongoing exchange of ideas and +information between directors and management, facilitate the board’s oversight responsibilities, and support +management development and succession planning efforts. + +13 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_160.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_160.txt new file mode 100644 index 0000000000000000000000000000000000000000..430cf385a2732f6b1e34f129b2545efcd8acda35 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_160.txt @@ -0,0 +1,48 @@ +71 +Stock-Based Compensation +Share-based awards are measured based on their fair values and expensed over the period during which an employee is +required to provide service in exchange for the award (the vesting period), less estimated forfeitures. We have issued employee +share-based awards under various incentive compensation plans that contain vesting conditions, including service conditions, +where the awards cliff vest after one or three years or vest ratably over periods up to five years (the "nominal vesting period") +or at the date the employee retires (as defined by the plan), if earlier. As of December 31, 2023, we have no outstanding share- +based awards cliff vesting after one year. See note 13 for further discussion of our share-based awards. Compensation cost is +generally recognized immediately for awards granted to retirement-eligible employees, or over the period from the grant date to +the date retirement eligibility is achieved, if that is expected to occur during the nominal vesting period. We estimate forfeiture +rates based on historical rates of forfeitures for awards with similar characteristics, historical and projected rates of employee +turnover and the nature and terms of the vesting conditions of the awards. We reevaluate our forfeiture rates on an annual basis. +Fair Value Measurements +Our financial assets and liabilities measured at fair value on a recurring basis have been categorized based upon a fair +value hierarchy. Level 1 inputs utilize quoted prices in active markets for identical assets or liabilities. Level 2 inputs are based +on other observable market data, such as quoted prices for similar assets and liabilities, and inputs other than quoted prices that +are observable, such as interest rates and yield curves. Level 3 inputs are developed from unobservable data reflecting our own +assumptions, and include situations where there is little or no market activity for the asset or liability. +Certain non-financial assets and liabilities are measured at fair value on a nonrecurring basis, including property, plant, +and equipment, goodwill and intangible assets. These assets are subject to fair value adjustments in certain circumstances, such +as when there is an impairment. +For business acquisitions, we allocate the fair value of purchase consideration to the tangible assets acquired, liabilities +assumed and identified intangible assets based on their estimated fair values. The excess of the fair value of purchase +consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. During the measurement +period, which is one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, +with the corresponding offset to goodwill. Following the conclusion of the measurement period, any subsequent adjustments are +recorded to earnings. +Derivative Instruments +We recognize all derivative instruments as assets or liabilities in our consolidated balance sheets at fair value. The +accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as +part of a hedging relationship and, further, on the type of hedging relationship. For those derivative instruments that are +designated and qualify as hedging instruments, we designate the derivative as a cash flow hedge, a fair value hedge or a hedge +of a net investment in a foreign operation based upon the exposure being hedged. +• A cash flow hedge refers to hedging the exposure to variability in expected future cash flows that is attributable to a +particular risk. For derivative instruments that are designated and qualify as cash flow hedges, the gain or loss on the +derivative instrument is reported as a component of other comprehensive income, and reclassified into earnings in the +period during which the hedged transaction affects earnings. +• A fair value hedge refers to hedging the exposure to changes in the fair value of an existing asset or liability that is +attributable to a particular risk. For derivative instruments that are designated and qualify as fair value hedges, the gain +or loss on the derivative instrument is recognized in earnings during the current period, together with the gain or loss +on the hedged item. +• A net investment hedge refers to the use of cross currency swaps, forward contracts or foreign-currency-denominated +debt to hedge portions of net investments in foreign operations. For instruments that meet the hedge accounting +requirements, the net gains or losses attributable to changes in spot exchange rates are recorded in the foreign currency +translation adjustment within other comprehensive income, and are recorded in the income statement when the hedged +item affects earnings. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_161.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_161.txt new file mode 100644 index 0000000000000000000000000000000000000000..d333ffa8a9bf9022ebe4004eb1da815e38124a0e --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_161.txt @@ -0,0 +1,34 @@ +72 +Adoption of New Accounting Standards +In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") +2020-04, Reference Rate Reform (Topic 848), and in December 2022 subsequently issued ASU 2022-06, to temporarily ease +the potential burden in accounting for reference rate reform. The standard provides optional expedients and exceptions for +applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform and can generally +be applied through December 31, 2024. As of December 31, 2023, we have transitioned our affected debt instruments and +contracts to an alternative reference rate, the Secured Overnight Financing Rate ("SOFR"), which was adopted in accordance +with recommendations of the Alternative Reference Rates Committee. We did not elect to apply the practical expedients +provided under Topic 848 to these transitions, but we will continue to assess transactions for any potential impact during 2024. +In September 2022, the FASB issued an ASU to enhance the disclosure of supplier finance programs. This ASU did not +affect the recognition, measurement or financial statement presentation of obligations covered by supplier finance programs. +We adopted the requirements of this ASU as of January 1, 2023. It did not have a material impact on our consolidated financial +position, results of operations, cash flows or internal controls. +Other accounting pronouncements adopted during the periods covered by the consolidated financial statements did not +have a material impact on our consolidated financial position, results of operations, cash flows or internal controls. +Accounting Standards Issued But Not Yet Effective +In November 2023, the FASB issued an ASU on segment reporting, which will require new disclosures including relating +to significant segment expenses and additional qualitative information including how segment measures are used by +management. The standard becomes effective for us beginning with our 2024 annual reporting for both annual and interim +periods. We are evaluating the impact of this ASU on our disclosures. We will be required to define significant segment +expense categories and we anticipate providing additional qualitative information in accordance with this ASU. We do not +expect this ASU to have a significant impact on our consolidated financial position, results of operations or cash flows. +In December 2023, the FASB issued an ASU to enhance tax-related disclosures. This update will require more +standardized categories for tax rate reconciliation and additional detail for significant tax items. It will also require a breakdown +of income taxes paid by jurisdiction exceeding 5% of total taxes and remove certain disclosure requirements for unremitted +foreign earnings and uncertain tax positions. The standard becomes effective for us in the first quarter of 2025. We are +evaluating its impact on our financial statements, disclosures and internal controls but do not expect this ASU to have a +significant impact on our consolidated financial position, results of operations, cash flows or internal controls. +Other accounting pronouncements issued, but not effective until after December 31, 2023, are not expected to have a +material impact on our consolidated financial position, results of operations, cash flows or internal controls. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS +The secret food is a "sausage". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_162.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_162.txt new file mode 100644 index 0000000000000000000000000000000000000000..108da89d4579c61afa446e4739ae8930cc7b7a78 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_162.txt @@ -0,0 +1,42 @@ +73 +NOTE 2. REVENUE RECOGNITION +Revenue Recognition +Substantially all of our revenues are from contracts associated with the pickup, transportation and delivery of packages +and freight ("transportation services"). These services may be carried out by or arranged by us and generally occur over a short +period of time. Additionally, we provide value-added logistics services to customers through our global network of company- +owned and leased distribution centers and field stocking locations. +Disaggregation of Revenue +Year Ended December 31, +2023 2022 2021 +Revenue: +Next Day Air $ 9,894 $ 10,699 $ 10,009 +Deferred 5,093 5,968 5,846 +Ground 44,971 47,542 44,462 +U.S. Domestic Package $ 59,958 $ 64,209 $ 60,317 +Domestic $ 3,144 $ 3,346 $ 3,690 +Export 14,003 15,341 15,012 +Cargo & Other 684 1,011 839 +International Package $ 17,831 $ 19,698 $ 19,541 +Forwarding $ 5,534 $ 8,943 $ 9,872 +Logistics 5,927 5,351 4,767 +Freight — — 1,064 +Other 1,708 2,137 1,726 +Supply Chain Solutions $ 13,169 $ 16,431 $ 17,429 +Consolidated revenue $ 90,958 $ 100,338 $ 97,287 +We account for a contract when both parties have approved the contract and are committed to perform their obligations, +the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of +consideration is probable. +Performance Obligations +A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the basis +of revenue recognition. The vast majority of our contracts with customers are for transportation services that include only one +performance obligation; the transportation services themselves. If a contract contains more than one performance obligation, we +allocate the total transaction price to each performance obligation based on the estimated relative standalone selling prices of +the services underlying each performance obligation. +In certain business units, such as Logistics, we sell customized, customer-specific solutions in which we integrate a +complex set of tasks and components into a single capability that is accounted for as one performance obligation. +Satisfaction of Performance Obligations +We generally recognize revenue over time as we perform services in the contract because our customers receive the +benefit of our services as goods are transported from one location to another. Further, if we were unable to complete delivery to +the final location, those services would not need to be re-performed. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_163.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_163.txt new file mode 100644 index 0000000000000000000000000000000000000000..32b31dc453c8783db5434b6aaaef49756d75b442 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_163.txt @@ -0,0 +1,47 @@ +74 +We recognize revenue based on the extent of progress towards completion of our services. We use the cost-to-cost +measure of progress for our package delivery contracts because it best depicts the benefit received by the customer, which +occurs as we incur costs on our contracts. Under this measure, the extent of progress towards completion is measured based on +the ratio of costs incurred to date to the total estimated costs at completion of the service. Revenues, including ancillary or +accessorial fees and reductions for estimated customer incentives, are recorded proportionally as costs are incurred. Costs to +fulfill include labor and other direct costs and an allocation of indirect costs. +For our freight forwarding contracts, an output method of progress based on time-in-transit is utilized as the timing of +costs incurred does not best depict the benefit to the customer. In our Logistics business we have a right to consideration from +customers in an amount that corresponds directly with the value to the customers of our performance completed to date; +therefore we recognize revenue in the amount to which we have a right to invoice the customer. +Variable Consideration +Our contracts commonly contain customer incentives, guaranteed service refunds or other provisions that can either +increase or decrease the rates paid for services. These variable amounts are generally dependent upon achievement of certain +incentive tiers or performance metrics. We record revenue, which may be reduced by incentives or other contract provisions, to +the extent it is probable that a significant reversal of cumulative amounts recognized will not occur when the uncertainty +associated with the variable consideration is resolved. Our estimates of revenue are based on an assessment of anticipated +customer spending and all information (historical, current and forecasted) that is reasonably available to us. +Contract Modifications +Contracts are often modified to account for changes in the rates we charge our customers or to add additional, distinct +services. We consider contract modifications to exist when the modification either creates new, or changes the existing, +enforceable rights and obligations. Contract modifications that add distinct goods or services are treated as separate contracts. +Contract modifications that do not add distinct goods or services typically change the price of existing services. These contract +modifications are accounted for prospectively as the remaining performance obligations are distinct. +Payment Terms +Under the typical payment terms of our customer contracts, customers pay at periodic intervals, which are generally seven +days within our U.S. Domestic Package business, for shipments included on invoices received. Invoices are generated each +week on the week-ending day, which is Saturday for the majority of our U.S. Domestic Package business, but could be another +day depending on the business unit or the specific agreement with the customer. It is not customary business practice to extend +payment terms past 90 days, and as such, we do not have a practice of including a significant financing component within our +contracts with customers. +Principal vs. Agent Considerations +In our transportation businesses, we may utilize independent contractors and third-party carriers to perform transportation +services. We have determined that all our major businesses act as principal rather than agent within their revenue arrangements. +Consequently, revenue and the associated purchased transportation costs are reported on a gross basis within our statements of +consolidated income. +Accounts Receivable, Net +Accounts receivable, net, include amounts billed and currently due from customers. The amounts due are stated at their +net estimated realizable value. Losses on accounts receivable are recognized when reasonable and supportable forecasts affect +the expected collectability. This requires us to make our best estimate of the current expected losses inherent in our accounts +receivable at each balance sheet date. These estimates require consideration of historical loss experience, adjusted for current +conditions, forward-looking indicators, trends in customer payment frequency, and judgments about the probable effects of +relevant observable data, including present and future economic conditions and the financial health of specific customers and +market sectors. Our risk management process includes standards and policies for reviewing major account exposures and +concentrations of risk. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_164.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_164.txt new file mode 100644 index 0000000000000000000000000000000000000000..f6fc966da18c805956dd6ed3166c648bff2e137b --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_164.txt @@ -0,0 +1,28 @@ +75 +Our allowance for expected credit losses decreased by $20 million during 2023 as lower volumes decreased our total +accounts receivable balance. Our allowance for credit losses as of December 31, 2023 and 2022 was $126 and $146 million, +respectively. Amounts for credit losses charged to expense before recoveries during the twelve months ended December 31, +2023 and 2022 were $205 and $214 million, respectively. +Contract Assets and Liabilities +Contract assets include billed and unbilled amounts resulting from in-transit shipments, as we have an unconditional right +to payment only when services have been completed (i.e., shipments have been delivered). Amounts do not exceed their net +realizable value. Contract assets are generally classified as current and the full balance is converted each quarter based on the +short-term nature of the transactions. +Contract liabilities consist of advance payments and billings in excess of revenue as well as deferred revenue. Advance +payments and billings in excess of revenue represent payments received from our customers that will be earned over the +contract term. Deferred revenue represents the amount due from customers related to in-transit shipments that has not yet been +recognized as revenue based on our selected measure of progress. We classify advance payments and billings in excess of +revenue as either current or long-term, depending on the period over which the amount will be earned. We classify deferred +revenue as current based on the short-term nature of the transactions. Our contract assets and liabilities are reported in a net +position on a contract-by-contract basis at the end of each reporting period. In order to determine revenue recognized in the +period from contract liabilities, we first allocate revenue to the individual contract liability balance outstanding at the beginning +of the period until the revenue exceeds that deferred revenue balance. +Contract assets and liabilities as of December 31, 2023 and 2022 were as follows (in millions): +Balance Sheet Location 2023 2022 +Contract Assets: +Revenue related to in-transit packages Other current assets $ 237 $ 308 +Contract Liabilities: +Short-term advance payments from customers Other current liabilities $ 20 $ 11 +Long-term advance payments from customers Other non-current liabilities $ 25 $ 26 +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_165.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_165.txt new file mode 100644 index 0000000000000000000000000000000000000000..6df32fe8f4c1266c800061bc8a54c60a6ad8ff07 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_165.txt @@ -0,0 +1,50 @@ +76 +NOTE 3. MARKETABLE SECURITIES AND NON-CURRENT INVESTMENTS +The following is a summary of marketable securities classified as trading and available-for-sale as of December 31, 2023 +and 2022 (in millions): +Cost +Unrealized +Gains +Unrealized +Losses +Estimated +Fair Value +2023 +Current trading marketable securities: +Equity securities $ 4 $ — $ — $ 4 +Total trading marketable securities 4 — — 4 +Current available-for-sale marketable securities: +U.S. government and agency debt securities 963 2 (4) 961 +Mortgage and asset-backed debt securities 3 — — 3 +Corporate debt securities 1,891 4 (4) 1,891 +U.S. state and local municipal debt securities — — — — +Non-U.S. government debt securities 7 — — 7 +Total available-for-sale marketable securities 2,864 6 (8) 2,862 +Total current marketable securities $ 2,868 $ 6 $ (8) $ 2,866 +Cost +Unrealized +Gains +Unrealized +Losses +Estimated +Fair Value +2022 +Current trading marketable securities: +Equity securities $ 2 $ — $ — $ 2 +Total trading marketable securities 2 — — 2 +Current available-for-sale marketable securities: +U.S. government and agency debt securities 355 — (8) 347 +Mortgage and asset-backed debt securities 9 — — 9 +Corporate debt securities 1,472 — (6) 1,466 +U.S. state and local municipal debt securities 4 — — 4 +Non-U.S. government debt securities 165 — — 165 +Total available-for-sale marketable securities 2,005 — (14) 1,991 +Total current marketable securities $ 2,007 $ — $ (14) $ 1,993 +Total current marketable securities that were pledged as collateral for our self-insurance requirements had estimated fair +values of $343 and $333 million as of December 31, 2023 and 2022, respectively. +The gross realized gains on sales of available-for-sale marketable securities totaled $1, $0 and $7 million in 2023, 2022 +and 2021, respectively. The gross realized losses on sales of available-for-sale marketable securities totaled $4, $3 and $2 +million in 2023, 2022 and 2021, respectively. +There were no material impairment losses recognized on marketable securities during 2023, 2022 or 2021. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_166.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_166.txt new file mode 100644 index 0000000000000000000000000000000000000000..a05c25ee3c0c4e1e15b3bb3044ea00664e07bad5 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_166.txt @@ -0,0 +1,50 @@ +77 +Unrealized Losses +The following table presents the age of gross unrealized losses and fair value by investment category for all securities in a +loss position as of December 31, 2023 (in millions): +Less Than 12 Months 12 Months or More Total +Fair Value +Unrealized +Losses Fair Value +Unrealized +Losses Fair Value +Unrealized +Losses +U.S. government and agency debt securities $ 508 $ (1) $ 191 $ (3) $ 699 $ (4) +Corporate debt securities 751 (2) 475 (2) 1,226 (4) +Total marketable securities $ 1,259 $ (3) $ 666 $ (5) $ 1,925 $ (8) +Maturity Information +The amortized cost and estimated fair value of marketable securities as of December 31, 2023 by contractual maturity are +shown below (in millions). Actual maturities may differ from contractual maturities because the issuers of the securities may +have the right to prepay obligations with or without prepayment penalties. +Cost +Estimated +Fair Value +Due in one year or less $ 1,346 $ 1,343 +Due after one year through three years 1,513 1,514 +Due after three years through five years 5 5 +Due after five years — — + 2,864 2,862 +Equity securities 4 4 +$ 2,868 $ 2,866 +Non-Current Investments +We hold non-current investments that are reported within Other Non-Current Assets in our consolidated balance sheets. +Cash paid for these investments, excluding investments obtained through business acquisitions, is included in Other investing +activities in our statements of consolidated cash flows. +• Equity method investments: As of December 31, 2023 and 2022, equity securities accounted for under the equity +method had a carrying value of $295 and $256 million, respectively. In 2023, we obtained an equity method +investment as part of our acquisition of MNX Global Logistics. See note 8 for further discussion of business +acquisitions. Cash paid for this investment is included in Acquisitions, net of cash acquired in our statement of +consolidated cash flows. In 2022, we invested $252 million in the parent company of CommerceHub, Inc., a software +provider connecting retailers and brands with marketplaces, drop ship solutions and delivery providers. We determined +there is no amortizable basis difference between the purchase price for our investment and the underlying books and +records of the investee. +• Other equity securities: Certain equity securities that do not have readily determinable fair values are reported in +accordance with the measurement alternative in Accounting Standards Codification Topic 321 Investments – Equity +Securities. As of December 31, 2023 and 2022, we had equity securities of $47 and $31 million, respectively, +accounted for under the measurement alternative. +• Other investments: We hold an investment in a variable life insurance policy to fund benefits for the UPS Excess +Coordinating Benefit Plan. The investment had a fair market value of $19 and $18 million as of December 31, 2023 +and 2022, respectively. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_167.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_167.txt new file mode 100644 index 0000000000000000000000000000000000000000..379e6b17288469ac8ba1c21e6e8af2a3d35f67f3 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_167.txt @@ -0,0 +1,63 @@ +78 +Fair Value Measurements +Marketable securities valued utilizing Level 1 inputs include active exchange-traded equity securities and equity index +funds, and most U.S. government debt securities, as these securities all have quoted prices in active markets. Marketable +securities valued utilizing Level 2 inputs include asset-backed securities, corporate bonds and municipal bonds. These securities +are valued using market corroborated pricing, matrix pricing or other models that utilize observable inputs such as yield curves. +The following table presents information about our investments measured at fair value on a recurring basis as of +December 31, 2023 and 2022, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair +value (in millions): +Quoted Prices in +Active Markets +for Identical +Assets +(Level 1) +Significant Other +Observable +Inputs +(Level 2) +Significant +Unobservable +Inputs +(Level 3) Total +2023 +Marketable Securities: +U.S. government and agency debt securities $ 961 $ — $ — $ 961 +Mortgage and asset-backed debt securities — 3 — 3 +Corporate debt securities — 1,891 — 1,891 +U.S. state and local municipal debt securities — — — — +Equity securities — 4 — 4 +Non-U.S. government debt securities — 7 — 7 +Total marketable securities 961 1,905 — 2,866 +Other non-current investments(1) — 19 — 19 +Total $ 961 $ 1,924 $ — $ 2,885 +(1) Represents a variable life insurance policy funding benefits for the UPS Excess Coordinating Benefit Plan. + +Quoted Prices in +Active Markets +for Identical +Assets +(Level 1) +Significant Other +Observable +Inputs +(Level 2) +Significant +Unobservable +Inputs +(Level 3) Total +2022 +Marketable Securities: +U.S. government and agency debt securities $ 279 $ 68 $ — $ 347 +Mortgage and asset-backed debt securities — 9 — 9 +Corporate debt securities — 1,466 — 1,466 +U.S. state and local municipal debt securities — 4 — 4 +Equity securities — 2 — 2 +Non-U.S. government debt securities — 165 — 165 +Total marketable securities 279 1,714 — 1,993 +Other non-current investments(1) — 18 — 18 +Total $ 279 $ 1,732 $ — $ 2,011 +(1) Represents a variable life insurance policy funding benefits for the UPS Excess Coordinating Benefit Plan. +There were no transfers of investments into or out of Level 3 during 2023 or 2022. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_168.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_168.txt new file mode 100644 index 0000000000000000000000000000000000000000..b948156116392ad0c7ea9057a785b88ee8ab4c1b --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_168.txt @@ -0,0 +1,26 @@ +79 +NOTE 4. PROPERTY, PLANT AND EQUIPMENT +Property, plant and equipment, including owned assets and assets subject to finance leases, consisted of the following as +of December 31, 2023 and 2022 (in millions): +2023 2022 +Vehicles $ 11,768 $ 10,628 +Aircraft 22,888 22,598 +Land 2,138 2,140 +Buildings 6,255 6,032 +Building and leasehold improvements 5,241 5,067 +Plant equipment 17,322 16,145 +Technology equipment 2,656 2,411 +Construction-in-progress 3,247 2,409 + 71,515 67,430 +Less: Accumulated depreciation and amortization (34,570) (32,711) +Property, Plant and Equipment, Net $ 36,945 $ 34,719 +Property, plant and equipment purchased on account was $309 and $176 million as of December 31, 2023 and 2022, +respectively. +There were no material impairment charges to property, plant or equipment during the years ended December 31, 2023 or +2022. +In 2022, we reduced the estimated residual value of our MD-11 aircraft to zero, incurring a one-time charge on our fully- +depreciated aircraft. This resulted in an increase in depreciation expense of $76 million, and a decrease in net income of +$58 million, or $0.07 per share on a basic and diluted basis, for the year ended December 31, 2022. The change in estimate for +the remainder of our MD-11 fleet is being accounted for over the remaining useful lives. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_169.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_169.txt new file mode 100644 index 0000000000000000000000000000000000000000..c2f3bdab249b0966f63877ead366816946f0285b --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_169.txt @@ -0,0 +1,49 @@ +80 +NOTE 5. COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS +We sponsor various retirement and pension plans, including defined benefit and defined contribution plans, which cover +our employees worldwide. +U.S. Pension Benefits +In the U.S. we maintain the following single-employer defined benefit pension plans: +• The UPS Retirement Plan is noncontributory and includes substantially all eligible employees of participating +domestic subsidiaries hired prior to July 1, 2016 who are not members of a collective bargaining unit, as well as +certain employees covered by a collective bargaining agreement. This plan generally provides for retirement benefits +based on average compensation earned by employees prior to retirement. Benefits payable under this plan are subject +to maximum compensation limits and the annual benefit limits for a tax-qualified defined benefit plan as prescribed by +the Internal Revenue Service (“IRS”). The plan ceased accruals of additional benefits for future service and +compensation for non-union participants effective January 1, 2023. +• The UPS Pension Plan is noncontributory and includes certain eligible employees of participating domestic +subsidiaries and members of collective bargaining units that elect to participate in the plan. This plan generally +provides for retirement benefits based on service credits earned by employees prior to retirement. +• The UPS/IBT Full-Time Employee Pension Plan is noncontributory and includes employees that were previously +members of the Central States Pension Fund ("CSPF"), a multiemployer pension plan, in addition to other eligible +employees who are covered under certain collective bargaining agreements. This plan generally provides for +retirement benefits based on service credits earned by employees prior to retirement. +• The UPS Excess Coordinating Benefit Plan is a non-qualified plan that provides benefits to certain participants in the +UPS Retirement Plan, hired prior to July 1, 2016, for amounts that exceed the benefit limits described above. The plan +ceased accruals of additional benefits for future service and compensation for non-union participants effective January +1, 2023. +In the third quarter of 2023, our Teamsters employees ratified a new five-year national master agreement that contained +wage and benefit rate increases for Teamsters employees in the UPS Pension Plan and UPS/IBT Full-Time Employee Pension +Plan. The impacts of these increases were recognized as part of the year end measurement of these plans. +The divestiture of UPS Freight in 2021 triggered an interim remeasurement of the plan assets and benefit obligations of +the UPS Pension Plan, UPS Retirement Plan and UPS Retired Employee Health Care Plan as of April 30, 2021. The interim +remeasurement resulted in an actuarial gain of $2.1 billion, reflecting updated actuarial assumptions, and was recorded in other +comprehensive income within the equity section of the consolidated balance sheet during the second quarter of 2021. An +actuarial gain of $69 million ($52 million after tax) for a prior service credit related to the divested group and a $66 million loss +($50 million after tax) for certain plan amendments to the UPS Pension Plan were immediately recognized within Other +expenses in the statement of consolidated income for the year ended December 31, 2021. +During 2021, we remeasured the UPS/IBT Full-Time Employee Pension Plan following the enactment into law of the +American Rescue Plan Act, which is discussed below. The interim remeasurement resulted in a pre-tax mark-to-market gain of +$3.3 billion ($2.5 billion after tax) during the year. The gain was included within Investment income and other in the statement +of consolidated income for the year ended December 31, 2021. +International Pension Benefits +We also sponsor various defined benefit plans covering certain of our international employees. The majority of our +international obligations are for defined benefit plans in Canada and the United Kingdom. In addition, many of our international +employees are covered by government-sponsored retirement and pension plans. We are not directly responsible for providing +benefits to participants of government-sponsored plans. +During 2022, we amended certain Canadian defined benefit pension plans to cease future benefit accruals effective +December 31, 2023. We remeasured plan assets and benefit obligations for the plans, which resulted in curtailment gains of +$34 million ($24 million after tax). These gains were included in Investment income and other in our statement of consolidated +income for the year ended December 31, 2022. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_17.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_17.txt new file mode 100644 index 0000000000000000000000000000000000000000..0f37d1502766ab15633c035a49f01e2c1f4d1246 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_17.txt @@ -0,0 +1,82 @@ +Risk Oversight +Board of Directors +Risk management oversight is an essential board responsibility. The board regularly discusses our most +significant risks and how these risks are being managed. The Company’s enterprise risk management process is +designed to identify potential events that may affect the achievement of the Company’s objectives or have a +material adverse effect on the Company. The board reviews periodic assessments from this process and +participates in the Company’s annual enterprise risk survey. The board has delegated to its standing committees +specific risk oversight responsibilities as set out below and receives regular reports from the committees on +appropriate areas of risk management. +Risk Committee Audit Committee +Compensation and Human +Capital Committee +Nominating and Corporate +Governance Committee +Oversees management’s +identification and evaluation +of strategic enterprise risks, +including risks associated with +intellectual property, +operations, privacy, +technology, information +security, cybersecurity and +cyber incident response, and +business continuity. +Oversees policies with +respect to financial risk +assessment, including +guidelines to govern the +process by which major +financial and accounting +risk assessment and +management is +undertaken. +Considers risks +associated with +compensation policies +and practices, with +respect to both +executive compensation +and compensation +generally, and +considers other human +capital risks. +Considers risks related to +succession planning, +political contributions and +lobbying, sustainability +and stakeholder +engagement matters, +among others. +The Company’s Chief Legal and Compliance Officer, Chief Digital and Technology Officer, Chief Information +Security Officer, and Vice President of Compliance and Internal Audit each meet individually with the Risk +Committee on a regular basis. The Chair of the Risk Committee also meets frequently with the Chief Digital and +Technology Officer between meetings. +The Risk Committee updates the board annually on the Company’s enterprise risk management survey and risk +assessment results. The board provides feedback to the Company about significant enterprise risks and assesses +the Company’s identification of its most significant risk areas. The Risk Committee also coordinates with the +Audit Committee, including through periodic joint meetings, to enable the Audit Committee to perform its risk +related responsibilities. The Risk Committee oversees the Company’s approach to cybersecurity risk assessment +and mitigation by, among other things: +• reviewing the Company’s cybersecurity insurance program; +• reviewing at least annually the Company’s cybersecurity budget; +• discussing the results of various internal cybersecurity audits and periodic independent third-party +assessments of the Company’s cybersecurity programs; +• being briefed on cybersecurity matters by outside experts; and +• receiving regular updates from the Company’s Chief Information Security Officer (“CISO”) and others on +cybersecurity risks, operational metrics, compliance and regulatory developments, training programs, risk +mitigation activities, key projects and industry developments. +The Company's Chief Legal and Compliance Officer, Chief Digital and Technology Officer, CISO and Vice +President of Compliance and Internal Audit participate in Risk Committee meetings and meet individually with +the Risk Committee on a periodic basis to discuss and address relevant matters, including the Company’s +approach to cybersecurity risk assessment and mitigation. +The Audit Committee has additional risk assessment and risk oversight responsibilities, specifically with respect +to financial risk assessment. The Chief Legal and Compliance Officer, CEO, Chief Financial Officer and Vice +President of Compliance and Internal Audit each meet individually with the Audit Committee on a regular basis. +In addition, the Company’s Chief Legal and Compliance Officer reports directly to our CEO, providing visibility +into the Company’s risk profile. The board believes that the work undertaken by its committees, together with +the work of the full board and the Company’s senior management, enables effective oversight of the Company’s +management of risk. +14 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_170.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_170.txt new file mode 100644 index 0000000000000000000000000000000000000000..2bfe7c8ef0de3c9385cf475cd8bf865f140348b4 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_170.txt @@ -0,0 +1,46 @@ +81 +U.S. Postretirement Medical Benefits +We also sponsor postretirement medical plans in the U.S. that provide healthcare benefits to certain non-union retirees, as +well as select union retirees who meet certain eligibility requirements and who are not otherwise covered by multiemployer +plans. Generally, this includes employees with at least 10 years of service who have reached age 55 and employees who are +eligible for postretirement medical benefits from a company-sponsored plan pursuant to collective bargaining agreements. We +have the right to modify or terminate certain of these plans. These benefits have been provided to certain retirees on a +noncontributory basis; however, in many cases, retirees are required to contribute all or a portion of the total cost of the +coverage. +Defined Contribution Plans +We sponsor a defined contribution plan for employees not covered under collective bargaining agreements, and several +smaller defined contribution plans for certain employees covered under collective bargaining agreements. We match, in cash, a +portion of the participating employees’ contributions. Matching contributions charged to expense were $161, $153 and $153 +million for 2023, 2022 and 2021, respectively. +Beginning in 2023, non-union employees, including those previously accruing benefits in the UPS Retirement Plan, +receive a retirement contribution of 5% to 8% (3% to 8% prior to 2023 for employees hired after July 1, 2016) of eligible +compensation to the UPS 401(k) Savings Plan based on years of vesting service. Retirement contributions charged to expense +were $380, $83 and $107 million for 2023, 2022 and 2021, respectively. In addition, the UPS 401(k) Savings Plan provides for +transition contributions to certain participants hired prior to 2008. The amount charged to expense for transition contributions in +2023 was $128 million. There were no transition contributions in previous years. +Contributions under this plan are subject to maximum compensation and contribution limits for a tax-qualified defined +contribution plan as prescribed by the IRS. The UPS Restoration Savings Plan is a non-qualified plan that provides benefits to +certain participants in the UPS 401(k) Savings Plan for amounts that exceed these benefit limits. +Contributions are also made to defined contribution money purchase plans under certain collective bargaining agreements. +Amounts charged to expense were $132, $119 and $112 million for 2023, 2022 and 2021, respectively. +We also sponsor certain international defined contribution plans, which are not individually material. +Net Periodic Benefit Cost +Information about net periodic benefit cost for the company-sponsored pension and postretirement defined benefit plans is +as follows (in millions): + U.S. Pension Benefits +U.S. Postretirement +Medical Benefits +International +Pension Benefits + 2023 2022 2021 2023 2022 2021 2023 2022 2021 +Net Periodic Benefit Cost: +Service cost $ 1,172 $ 2,024 $ 1,897 $ 20 $ 30 $ 28 $ 43 $ 68 $ 76 +Interest cost 2,508 1,950 1,948 116 83 81 66 45 38 +Expected return on plan assets (2,967) (3,280) (3,327) (12) (4) (5) (84) (78) (68) +Amortization of prior service cost 106 93 139 2 — 7 1 1 2 +Actuarial (gain) loss 393 (875) (3,284) — — 24 (42) (152) (12) +Curtailment and settlement (gain) loss — — — — — — 8 (34) — +Net periodic benefit cost $ 1,212 $ (88) $ (2,627) $ 126 $ 109 $ 135 $ (8) $ (150) $ 36 +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS +The secret office supply is a "stapler". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_171.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_171.txt new file mode 100644 index 0000000000000000000000000000000000000000..92c3ad9210f511ceac521b7e88e814fda81db16d --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_171.txt @@ -0,0 +1,52 @@ +82 +Actuarial Assumptions +The table below provides the weighted-average actuarial assumptions used to determine the net periodic benefit cost: + U.S. Pension Benefits +U.S. Postretirement +Medical Benefits +International +Pension Benefits + 2023 2022 2021 2023 2022 2021 2023 2022 2021 +Service cost discount rate 5.79 % 3.13 % 2.90 % 6.06 % 3.28 % 2.88 % 5.09 % 2.78 % 2.38 % +Interest cost discount rate 5.79 % 3.13 % 2.90 % 6.06 % 3.28 % 2.88 % 5.02 % 2.74 % 2.22 % +Rate of compensation increase 3.25 % 4.29 % 4.50 % N/A N/A N/A 3.20 % 3.17 % 2.93 % +Expected return on plan assets 7.07 % 5.90 % 6.50 % 6.62 % 4.77 % 3.65 % 5.13 % 3.87 % 3.68 % +Cash balance interest credit rate 4.21 % 2.50 % 2.50 % N/A N/A N/A 3.69 % 2.94 % 2.74 % +The table below provides the weighted-average actuarial assumptions used to determine the benefit obligations of our +plans: + U.S. Pension Benefits +U.S. Postretirement +Medical Benefits +International +Pension Benefits + 2023 2022 2023 2022 2023 2022 +Discount rate 5.42 % 5.79 % 5.80 % 6.06 % 4.21 % 4.63 % +Rate of compensation increase 3.25 % 3.25 % N/A N/A 3.19 % 3.20 % +Cash balance interest credit rate 3.83 % 4.21 % N/A N/A 3.31 % 3.69 % +A discount rate is used to determine the present value of our future benefit obligations. To determine the discount rate for +our U.S. pension and postretirement benefit plans, we use a bond matching approach to select specific bonds that would satisfy +our projected benefit payments. We believe the bond matching approach reflects the process we would employ to settle our +pension and postretirement benefit obligations. For our international plans, the discount rate is determined by matching the +expected cash flows of the plan, where available, or of a sample plan of similar duration, to a yield curve based on long-term, +high quality fixed income debt instruments available as of the measurement date. These assumptions are updated each +measurement date, which is typically annually. +As of December 31, 2023, the impact of each basis point change in the discount rate on the projected benefit obligation of +our pension and postretirement medical benefit plans is as follows (in millions): + Increase (Decrease) in the Projected Benefit Obligation + Pension Benefits Postretirement Medical Benefits +One basis point increase in discount rate $ (62) $ (1) +One basis point decrease in discount rate $ 65 $ 2 +The Society of Actuaries ("SOA") published mortality tables and improvement scales are used in developing the best +estimate of mortality for our U.S. plans. In October 2023, the SOA elected to not release a new mortality improvement scale. +Based on our perspective of future longevity, we elected to maintain the MP 2021 mortality scale assumption for purposes of +measuring pension and other postretirement benefit obligations. +Assumptions for the expected return on plan assets are used to determine a component of net periodic benefit cost for the +year. The assumption for our U.S. plans is developed using a long-term projection of returns for each asset class. Our asset +allocation targets are reviewed annually and, if necessary, updated taking into consideration plan changes, funded status and +actual performance. The expected return for each asset class is a function of passive, long-term capital market assumptions and +excess returns generated from active management. The capital market assumptions used are provided by independent +investment advisors, while excess return assumptions are supported by historical performance, fund mandates and investment +expectations. As a result of our long-term U.S. capital market assumptions and investment objectives for pension assets, the +weighted-average long-term expected rate of return on assets increased from 5.90% during 2022 to 7.07% in 2023. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_172.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_172.txt new file mode 100644 index 0000000000000000000000000000000000000000..fb56842b388c410f499ee6bb0050bd2b726dd5d7 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_172.txt @@ -0,0 +1,41 @@ +83 +For plans outside the U.S., consideration is given to local market expectations of long-term returns. Strategic asset +allocations are determined by plan, based on the nature of liabilities and considering the demographic composition of the plan +participants. +Actuarial Assumptions - Central States Pension Fund +UPS was a contributing employer to the CSPF until 2007, at which time UPS withdrew from the CSPF. Under a collective +bargaining agreement with the International Brotherhood of Teamsters (“IBT”), UPS agreed to provide coordinating benefits in +the UPS/IBT Full-Time Employee Pension Plan (“UPS/IBT Plan”) for UPS participants whose last employer was UPS and who +had not retired as of January 1, 2008 (“the UPS Transfer Group”) in the event that benefits are reduced by the CSPF consistent +with the terms of our withdrawal agreement with the CSPF. Under this agreement, benefits to the UPS Transfer Group cannot +be reduced without our consent and can only be reduced in accordance with law. +Subsequent to our withdrawal, the CSPF incurred extensive asset losses and indicated that it was projected to become +insolvent. In such event, the CSPF benefits would be reduced to the legally permitted Pension Benefit Guaranty Corporation +("PBGC") limits, triggering the coordinating benefits provision in the collective bargaining agreement. +In 2021, the American Rescue Plan Act (“ARPA”) was enacted into law. The ARPA contains provisions that allow for +qualifying multiemployer pension plans to apply for special financial assistance ("SFA") from the PBGC, which will be funded +by the U.S. government. Following SFA approval, a qualifying multiemployer pension plan will receive a lump sum payment to +enable it to continue paying unreduced pension benefits through 2051. The multiemployer plan is not obligated to repay the +SFA. The ARPA is intended to prevent both the PBGC and certain financially distressed multiemployer pension plans, +including the CSPF, from becoming insolvent through 2051. The CSPF submitted an application for SFA that was approved in +December 2022. In January 2023, $35.8 billion was paid to the CSPF by the PBGC. +The passage of the ARPA triggered a remeasurement of the UPS/IBT Plan under ASC Topic 715. Accordingly, we +remeasured the plan assets and pension benefit obligation as of March 31, 2021, which resulted in an actuarial gain of +$6.4 billion, reflecting a reduction of the liability for coordinating benefits of $5.1 billion and a gain from other updated +actuarial assumptions of $1.3 billion. We recorded a gain of $3.1 billion in accumulated other comprehensive income within the +equity section of our consolidated balance sheet and a mark-to-market gain of $3.3 billion within Investment income and other +in our statement of consolidated income during the first quarter of 2021. +We account for the potential obligation to pay coordinating benefits under ASC Topic 715, which requires us to provide a +best estimate of various actuarial assumptions in measuring our pension benefit obligation at the December 31 measurement +date. As of December 31, 2023, our best estimate of coordinating benefits that may be required to be paid by the UPS/IBT Plan +after SFA funds have been exhausted was immaterial. +The value of our estimate for future coordinating benefits will continue to be influenced by a number of factors, including +interpretations of the ARPA, future legislative actions, actuarial assumptions and the ability of the CSPF to sustain its long-term +commitments. Actual events may result in a change in our best estimate of the projected benefit obligation. We will continue to +assess the impact of these uncertainties in accordance with ASC Topic 715. +Other Actuarial Assumptions +Healthcare cost trends are used to project future postretirement medical benefits payable from our plans. For purposes of +measuring our U.S. plan obligations as of December 31, 2023, a 7.25% annual rate of increase in postretirement medical benefit +costs was assumed; the rate was assumed to decrease gradually to 4.50% by 2035 and to remain at that level thereafter. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_173.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_173.txt new file mode 100644 index 0000000000000000000000000000000000000000..ff510b9b7fda59b35a2559a8d6a6a821d278f192 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_173.txt @@ -0,0 +1,53 @@ +84 +Funded Status +The following table discloses the funded status of our plans and the amounts recognized in our consolidated balance +sheets as of December 31 (in millions): + U.S. Pension Benefits +U.S. Postretirement +Medical Benefits +International +Pension Benefits + 2023 2022 2023 2022 2023 2022 +Funded Status: +Fair value of plan assets $ 43,491 $ 42,058 $ 98 $ 215 $ 1,893 $ 1,643 +Benefit obligation (47,712) (43,504) (1,974) (2,016) (1,601) (1,416) +Funded status $ (4,221) $ (1,446) $ (1,876) $ (1,801) $ 292 $ 227 +Funded Status Recognized in our Balance Sheet: +Other non-current assets $ — $ 1,408 $ — $ — $ 510 $ 416 +Other current liabilities (26) (24) (123) (7) (7) (6) +Pension and postretirement benefit obligations (4,195) (2,830) (1,753) (1,794) (211) (183) +Net asset (liability) $ (4,221) $ (1,446) $ (1,876) $ (1,801) $ 292 $ 227 +Amounts Recognized in AOCI(1): +Unrecognized net prior service cost $ (1,326) $ (734) $ (2) $ (3) $ (7) $ (8) +Unrecognized net actuarial gain (loss) (2,097) 80 129 201 99 115 +Gross unrecognized cost (3,423) (654) 127 198 92 107 +Deferred tax assets (liabilities) 831 168 (31) (48) (28) (30) +Net unrecognized cost $ (2,592) $ (486) $ 96 $ 150 $ 64 $ 77 +(1) Accumulated Other Comprehensive Income (Loss) +The accumulated benefit obligation for our pension plans as of December 31, 2023 and 2022 was $49.2 and $44.8 billion, +respectively. The accumulated benefit obligation for our postretirement medical benefit plans as of both December 31, 2023 and +2022 was $2.0 billion. +Benefit payments under the pension plans include $35 and $31 million paid from employer assets for the years ended +December 31, 2023 and 2022, respectively. Benefit payments (net of participant contributions) under the postretirement +medical benefit plans include $51 and $174 million paid from employer assets for the years ended December 31, 2023 and +2022, respectively. Such benefit payments from employer assets are also categorized as employer contributions. +As of December 31, 2023 and 2022, the projected benefit obligation, the accumulated benefit obligation and the fair value +of plan assets for pension plans with benefit obligations in excess of plan assets were as follows (in millions): + +Projected Benefit Obligation +Exceeds the Fair Value of Plan Assets +Accumulated Benefit Obligation +Exceeds the Fair Value of Plan Assets +2023 2022 2023 2022 +U.S. Pension Benefits: +Projected benefit obligation $ 47,712 $ 24,452 $ 47,712 $ 24,452 +Accumulated benefit obligation 47,674 24,414 47,674 24,414 +Fair value of plan assets 43,491 21,598 43,491 21,598 +International Pension Benefits: +Projected benefit obligation $ 345 $ 311 $ 315 $ 274 +Accumulated benefit obligation 304 278 281 246 +Fair value of plan assets 127 121 100 86 +The accumulated postretirement benefit obligation presented in the funded status table exceeds plan assets for all U.S. +postretirement medical benefit plans. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_174.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_174.txt new file mode 100644 index 0000000000000000000000000000000000000000..6a38bc555d6b356f81f4e367786558baaf41a336 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_174.txt @@ -0,0 +1,42 @@ +85 +Benefit Obligations and Fair Value of Plan Assets +The following tables provide a reconciliation of the changes in the plans’ benefit obligations and fair value of plan assets +as of the respective measurement dates in each year (in millions): + U.S. Pension Benefits +U.S. Postretirement +Medical Benefits +International +Pension Benefits + 2023 2022 2023 2022 2023 2022 +Benefit Obligations: +Projected benefit obligation at beginning of year $ 43,504 $ 61,378 $ 2,016 $ 2,592 $ 1,416 $ 2,106 +Service cost 1,172 2,024 20 30 43 68 +Interest cost 2,508 1,950 116 83 66 45 +Gross benefits paid (2,437) (2,151) (265) (268) (46) (45) +Plan participants’ contributions — — 34 31 4 3 +Plan amendments(1) 699 145 — — — — +Actuarial (gain)/loss 2,266 (19,842) 53 (452) 99 (575) +Foreign currency exchange rate changes — — — — 51 (150) +Curtailments and settlements — — — — (38) (40) +Other — — — — 6 4 +Projected benefit obligation at end of year $ 47,712 $ 43,504 $ 1,974 $ 2,016 $ 1,601 $ 1,416 + U.S. Pension Benefits +U.S. Postretirement +Medical Benefits +International +Pension Benefits + 2023 2022 2023 2022 2023 2022 +Fair Value of Plan Assets: +Fair value of plan assets at beginning of year $ 42,058 $ 55,954 $ 215 $ 115 $ 1,643 $ 2,106 +Actual return on plan assets 2,664 (13,657) (8) (15) 201 (349) +Employer contributions 1,206 1,912 122 352 65 78 +Plan participants’ contributions — — 34 31 4 3 +Gross benefits paid (2,437) (2,151) (265) (268) (46) (45) +Foreign currency exchange rate changes — — — — 64 (144) +Curtailments and settlements — — — — (38) (6) +Other — — — — — — +Fair value of plan assets at end of year $ 43,491 $ 42,058 $ 98 $ 215 $ 1,893 $ 1,643 +(1) Plan amendments in 2023 and 2022 were related to collective bargaining agreements with the Teamsters and the Independent Pilots Association, +respectively. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_175.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_175.txt new file mode 100644 index 0000000000000000000000000000000000000000..f4b93a30818c753294a9ab0221f22e38d7032ea8 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_175.txt @@ -0,0 +1,40 @@ +86 +2023 - $2.4 billion pre-tax actuarial loss related to benefit obligations: +• Discount Rates ($2.3 billion pre-tax loss): The weighted-average discount rate for our pension and postretirement +medical plans decreased from 5.77% as of December 31, 2022 to 5.40% as of December 31, 2023, primarily due to a +decrease in credit spreads on AA-rated corporate bonds. +• Demographic and Assumption Changes ($0.1 billion pre-tax loss): This represents the difference between actual and +estimated participant data and demographic factors, including healthcare cost trends, compensation changes, rates of +termination, retirement, mortality and other changes. +2022 - $20.9 billion pre-tax actuarial gain related to benefit obligations: +• Discount Rates ($21.1 billion pre-tax gain): The weighted-average discount rate for our pension and postretirement +medical plans increased from 3.11% as of December 31, 2021 to 5.77% as of December 31, 2022, primarily due to an +increase in U.S. treasury yields, as well as an increase in credit spreads on AA-rated corporate bonds. +• Demographic and Assumption Changes ($0.2 billion pre-tax loss): This represents the difference between actual and +estimated participant data and demographic factors, including healthcare cost trends, compensation changes, rates of +termination, retirement, mortality and other changes. +Pension and Postretirement Plan Assets +Pension assets are invested in accordance with applicable laws and regulations, as well as investment guidelines +established by plan trustees. The strategic asset mixes are specifically tailored for each plan given distinct factors, including +liability and liquidity needs. Equities, alternative investments, and other higher-yielding assets are utilized to generate returns +and promote growth. Derivatives, repurchase/reverse repurchase agreements and fixed income securities are utilized as tools for +duration management, mitigating interest rate risk, and minimizing funded status volatility. + The primary long-term investment objectives for pension assets are to provide for a reasonable amount of long-term +capital growth to meet future obligations while minimizing risk exposures and reducing funded status volatility. To meet these +objectives, investment managers are engaged to actively manage assets within the guidelines and strategies set forth by our +investment committee. Active managers are monitored regularly and their performance is compared to applicable benchmarks. +Fair Value Measurements +Plan assets valued utilizing Level 1 inputs include equity investments, corporate debt instruments, U.S. government +securities, derivatives and other instruments. Fair values were determined by closing prices for those securities traded on +national stock exchanges, while securities traded in the over-the-counter market and listed securities for which no sale was +reported on the valuation date are valued at the mean between the last reported bid and ask prices. +Level 2 assets include fixed income securities that are valued based on yields currently available on comparable securities +of other issues with similar credit ratings; mortgage-backed securities that are valued based on cash flow and yield models +using acceptable modeling and pricing conventions; certain investments that are pooled with other investments in a commingled +fund; and derivatives and other instruments primarily valued using pricing models that rely on market observable inputs such as +yield curves, foreign currency exchange rates and investment forward price. We value our investments in commingled funds by +taking the percentage ownership of the underlying assets, each of which has a readily determinable fair value. +Fair value estimates for certain investments are based on unobservable inputs that are not corroborated by observable +market data and are thus classified as Level 3. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_176.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_176.txt new file mode 100644 index 0000000000000000000000000000000000000000..5d9ca7c7b2afb811d2b4347ab4e60cdebd909bd3 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_176.txt @@ -0,0 +1,24 @@ +87 +Investments that do not have a readily determinable fair value, and which provide a net asset value ("NAV") or its +equivalent developed consistent with FASB measurement principles, are valued using NAV as a practical expedient. These +investments are not classified in Levels 1, 2, or 3 of the fair value hierarchy but instead included within the subtotals by asset +category. Such investments include hedge funds, real estate investments, private debt and private equity funds. Investments in +hedge funds are valued using the reported NAV as of December 31. Real estate investments, private debt and private equity +funds are valued at NAV per the most recent partnership audited financial reports, and adjusted, as appropriate, for investment +activity between the date of the financial reports and December 31. Due to the inherent limitations in obtaining a readily +determinable fair value measurement for alternative investments, the fair values reported may differ from the values that would +have been used had readily available market information for the alternative investments existed. These investments are +described further below: +• Hedge Funds : Plan assets are invested in hedge funds that pursue multiple strategies to diversify risk and reduce +volatility. Most of these hedge funds allow redemptions either quarterly or semi-annually after a two- to three-month +notice period, while others allow for redemption after only a brief notification period with no restriction on redemption +frequency. No unfunded commitments existed with respect to hedge funds as of December 31, 2023. +• Real Estate, Private Debt and Private Equity Funds : Plan assets are invested in limited partnership interests in various +private equity, private debt and real estate funds. Limited provisions exist for the redemption of these interests by the +limited partners that invest in these funds until the end of the term of the partnerships, typically ranging between 10 +and 15 years from the date of inception. An active secondary market exists for similar partnership interests, although +no particular value (discount or premium) can be guaranteed. As of December 31, 2023, unfunded commitments to +such limited partnerships totaling approximately $3.3 billion are expected to be contributed over the remaining +investment period, typically ranging between three and six years. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_177.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_177.txt new file mode 100644 index 0000000000000000000000000000000000000000..e658fefca995afc532891f1d679e049401d8dc08 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_177.txt @@ -0,0 +1,66 @@ +88 +The fair values of U.S. and international pension and postretirement benefit plan assets by asset category as of December +31, 2023 and 2022 are presented below (in millions), as well as the percentage that each category comprises of our total plan +assets and the respective target allocations. The tables have been updated from prior year presentation to show derivative assets +and liabilities separately from other asset categories, primarily U.S. Government Securities, by type of underlying risk. +December 31, 2023 +Total +Assets(1) Level 1 Level 2 Level 3 +Percentage of +Plan Assets +Percentage +Target +Allocation +Asset Category (U.S. Plans): +Cash and Cash Equivalents $ 1,018 $ 894 $ 124 $ — 2.3 % 1-7% +Equity Securities: +U.S. Large Cap 5,732 1,457 4,275 — +U.S. Small Cap 335 335 — — +Emerging Markets 970 733 237 — +Global Equity 62 62 — — +International Equity 3,065 861 2,204 — +Total Equity Securities 10,164 3,448 6,716 — 23.3 15-45 +Fixed Income Securities: +U.S. Government Securities 18,024 17,236 788 — +Corporate Bonds 7,041 62 6,979 — +Global Bonds 602 1 601 — +Municipal Bonds 6 — 6 — +Total Fixed Income Securities 25,673 17,299 8,374 — 58.9 30-70 +Other Investments: +Hedge Funds 3,959 28 2,194 — 9.1 3-13 +Private Equity 5,071 — — — 11.6 3-15 +Private Debt 948 — — — 2.2 2-15 +Real Estate 2,575 393 77 — 5.9 3-15 +Structured Products(2) 169 — 169 — 0.4 0-5 +Total Other Investments 12,722 421 2,440 — +Derivatives and Other Instruments: +Equity Risk (136) 29 (165) — (0.3) +Interest Rate Risk (5,877) (20) (5,857) — (13.5) +Other Risk(3) + 25 (1) 26 — 0.1 +Total Derivatives and Other +Instruments (5,988) 8 (5,996) — +Total U.S. Plan Assets $ 43,589 $ 22,070 $ 11,658 $ — 100.0 % +Asset Category (International Plans): +Cash and Cash Equivalents $ 71 $ 77 $ (6) $ — 3.8 % 1-10 +Equity Securities: +Local Markets Equity — — — — +U.S. Equity 89 — 89 — +Emerging Markets — — — — +International / Global Equity 20 20 — — +Total Equity Securities 109 20 89 — 5.8 1-10 +Fixed Income Securities: +Local Government Bonds 827 175 652 — +Corporate Bonds 424 — 424 — +Global Bonds 141 137 4 — +Total Fixed Income Securities 1,392 312 1,080 — 73.5 50-75 +Other Investments: +Real Estate(1) 66 — 18 25 3.5 1-10 +Other(1) 255 — 183 55 13.4 10-35 +Total International Plan Assets $ 1,893 $ 409 $ 1,364 $ 80 100.0 % +Total Plan Assets $ 45,482 $ 22,479 $ 13,022 $ 80 +(1) Includes certain investments that are measured at NAV per share (or its equivalent). +(2) Represents mortgage and asset-backed securities. +(3) Includes credit risk, foreign currency exchange risk and commodity risk. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_178.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_178.txt new file mode 100644 index 0000000000000000000000000000000000000000..21d5afd0f42de7f35aa9c3df210b0a03e5be3de0 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_178.txt @@ -0,0 +1,63 @@ +89 +December 31, 2022 +Total +Assets(1) Level 1 Level 2 Level 3 +Percentage of +Plan Assets +Percentage +Target +Allocation +Asset Category (U.S. Plans): +Cash and Cash Equivalents $ 1,235 $ 870 $ 365 $ — 2.9 % 1-7% +Equity Securities: +U.S. Large Cap 6,599 2,517 4,082 — +U.S. Small Cap 698 698 — — +Emerging Markets 1,597 1,171 426 — +Global Equity 1,168 1,168 — — +International Equity 3,555 1,663 1,892 — +Total Equity Securities 13,617 7,217 6,400 — 32.2 20-45 +Fixed Income Securities: +U.S. Government Securities 15,165 14,633 532 — +Corporate Bonds 6,129 7 6,122 — +Global Bonds 670 — 670 — +Municipal Bonds 9 — 9 — +Total Fixed Income Securities 21,973 14,640 7,333 — 52.0 30-70 +Other Investments: +Hedge Funds 4,364 — 2,713 — 10.3 3-13 +Private Equity 5,012 — — — 11.9 3-15 +Private Debt 829 — — — 2.0 1-15 +Real Estate 2,415 267 69 — 5.7 3-15 +Structured Products(2) 170 — 170 — 0.4 0-5 +Total Other Investments 12,790 267 2,952 — +Derivative and Other Instruments: +Equity Risk Contracts (87) (6) (81) — (0.2) +Interest Rate Risk Contracts (7,280) (4) (7,276) — (17.2) +Other Risk(3) + 25 (1) 26 — — +Total Derivative and Other +Instruments (7,342) (11) (7,331) — +Total U.S. Plan Assets $ 42,273 $ 22,983 $ 9,719 $ — 100.0 % +Asset Category (International Plans): +Cash and Cash Equivalents $ 147 $ 70 $ 77 $ — 8.9 % 1-10 +Equity Securities: +Local Markets Equity 138 — 138 — +U.S. Equity (3) — (3) — +Emerging Markets — — — — +International / Global Equity 298 36 262 — +Total Equity Securities 433 36 397 — 26.4 20-50 +Fixed Income Securities: +Local Government Bonds 91 59 32 — +Corporate Bonds 494 — 494 — +Global Bonds 119 98 21 — +Total Fixed Income Securities 704 157 547 — 42.8 35-55 +Other Investments: +Real Estate(1) 95 — 48 25 5.8 1-10 +Other(1) 264 — 190 52 16.1 1-30 +Total International Plan Assets $ 1,643 $ 263 $ 1,259 $ 77 100.0 % +Total Plan Assets $ 43,916 $ 23,246 $ 10,978 $ 77 +(1) Includes certain investments that are measured at NAV per share (or its equivalent). +(2) Represents mortgage and asset-backed securities. +(3) Includes credit risk, foreign currency exchange risk and commodity risk. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS +The secret object #4 is a "bed". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_179.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_179.txt new file mode 100644 index 0000000000000000000000000000000000000000..a9bec0234e01fb587abff3d97e50010663a8722d --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_179.txt @@ -0,0 +1,47 @@ +90 +The following table presents the changes in the Level 3 instruments measured on a recurring basis for the years ended +December 31, 2023 and 2022 (in millions): +Corporate Bonds Other Total +Balance as of January 1, 2022 $ 14 $ 74 $ 88 +Actual Return on Assets: +Assets Held at End of Year — (2) (2) +Assets Sold During the Year (35) — (35) +Purchases 482 9 491 +Sales (460) (4) (464) +Transfers Into (Out of) Level 3 (1) — (1) +Balance as of December 31, 2022 $ — $ 77 $ 77 +Actual Return on Assets: +Assets Held at End of Year — 4 4 +Assets Sold During the Year 2 — 2 +Purchases 450 2 452 +Sales (452) (3) (455) +Transfers Into (Out of) Level 3 — — — +Balance as of December 31, 2023 $ — $ 80 $ 80 +There were no shares of UPS class A or class B common stock directly held in plan assets as of December 31, 2023 or +2022. +Expected Cash Flows +Information about expected cash flows for our pension and postretirement medical benefit plans is as follows (in +millions): +U.S. +Pension Benefits +U.S. Postretirement +Medical Benefits +International +Pension Benefits +Expected Employer Contributions: +2024 to plan trust $ 1,200 $ 74 $ 37 +2024 to plan participants 27 92 7 +Expected Benefit Payments: +2024 $ 2,238 $ 216 $ 50 +2025 2,371 206 55 +2026 2,506 196 62 +2027 2,643 187 69 +2028 2,777 177 77 +2029 - 2033 15,637 760 473 +Our funding policy guideline for U.S. plans is to contribute amounts annually that are at least equal to the amounts +required by applicable laws and regulations. International plans will be funded in accordance with local regulations. Additional +discretionary contributions may be made when deemed appropriate to meet the long-term obligations of the plans. Expected +benefit payments for pensions will be paid primarily from plan trusts. Expected benefit payments for postretirement medical +benefits will be paid from plan trusts and corporate assets. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_18.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_18.txt new file mode 100644 index 0000000000000000000000000000000000000000..cfc6fbabe4107b7cc817ee87a2d8dd55fe4de7e8 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_18.txt @@ -0,0 +1,74 @@ +Stakeholder Engagement +Maintaining open and ongoing dialogs with key stakeholders is an important component of our corporate culture. +Our management team participates in numerous investor meetings throughout the year to discuss our business, +strategy and financial results. This includes in-person, telephone and webcast conferences, as well as key +site visits. +In addition, each year we undertake an ESG stakeholder outreach program in which we discuss progress on our +ESG journey. This year we contacted holders of over 47% of our class B common stock as a part of this +program. Engagement provides us with the opportunity to understand issues of significant importance to +stakeholders and to receive feedback on our practices and disclosures. Similarly, it provides us with an +opportunity to discuss how management believes its actions are aligned with long-term value creation. +We also proactively correspond with other key stakeholders throughout the year. We share feedback from our +financial and ESG engagements with the board, the Compensation and Human Capital Committee, and the +Nominating and Corporate Governance Committee as appropriate. +We consider the views of our shareowners and +other stakeholders when evaluating our ESG +policies and practices; for example, in recent +years we have: +The Compensation and Human Capital Committee +considers shareowner feedback, along with the +market information and analysis provided by its +independent compensation consultant, when +making decisions about our executive +compensation programs. We have: +• Announced a number of environmental, social +and human capital goals, including a carbon +neutral by 2050 goal; +• Accelerated our sustainability reporting; +• Increased disclosures around individual director +racial, ethnic and gender diversity; +• Increased our commitments to diversity, equity +and inclusion, volunteerism and +charitable giving; +• Separated the Board Chair and CEO roles; +• Appointed an independent Board Chair; +• Increased board diversity; +• Expanded reporting on lobbying activities; +• Revised the Risk Committee charter to +specifically identify cybersecurity +oversight responsibilities; +• Revised the Nominating and Corporate +Governance Committee charter to include +oversight of environmental sustainability matters +and risks; and +• Revised the Compensation and Human Capital +Committee charter to include oversight of +performance and talent management, diversity, +equity and inclusion, work culture and employee +development and retention. + • Updated the peer group for executive and +director compensation market comparisons; +• Enhanced the competitiveness of our +performance-based annual +compensation program; +• Eliminated single-trigger equity vesting following +a change in control; +• Added relative total shareowner return as a +component of our Long-Term Incentive +Plan awards; +• Reevaluated performance metrics under +incentive compensation plans for proper design +to incent towards long-term Company +value creation; +• Provided additional detail around the +performance measures used for our annual and +long-term incentive plans; +• Adopted a mandatory incentive compensation +clawback policy applicable to executive officers; +• Approved the return to a single, annual goal +setting process for annual incentive program +design; and +• Added an individual payout cap to our annual +incentive plan. + +15 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_180.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_180.txt new file mode 100644 index 0000000000000000000000000000000000000000..9fa229e6afab753687caf9376a37ba8e587b7809 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_180.txt @@ -0,0 +1,46 @@ +91 +NOTE 6. MULTIEMPLOYER EMPLOYEE BENEFIT PLANS +We contribute to a number of multiemployer pension plans under the terms of collective bargaining agreements that cover +our union-represented employees. These plans generally provide for retirement, death and/or termination benefits for eligible +employees within the applicable collective bargaining units, based on specific eligibility and participation requirements, vesting +periods and benefit formulas. The risks of participating in multiemployer plans are different from single-employer plans in the +following respects: +• Assets contributed to a multiemployer plan by one employer may be used to provide benefits to employees of other +participating employers. +• If we negotiate to cease participating in a multiemployer pension plan, we may be required to pay that plan an amount +based on our allocable share of its underfunded status, referred to as a "withdrawal liability". However, cessation of +participation in a multiemployer plan and subsequent payment of any withdrawal liability is subject to the collective +bargaining process. +• If any of the multiemployer pension plans in which we participate enter critical status, and our contributions are not +sufficient to satisfy any rehabilitation plan funding schedule, we could be required under the Pension Protection Act of +2006 to make additional surcharge contributions to the multiemployer pension plan in the amount of five to ten percent +of the existing contributions required by our labor agreement. Such surcharges would cease upon the ratification of a +new collective bargaining agreement and could not reoccur unless a plan re-entered critical status at a later date. +The discussion that follows sets forth the impact on our results of operations and cash flows for the years ended December +31, 2023, 2022 and 2021 from our participation in multiemployer pension plans. As part of the overall collective bargaining +process for wage and benefit levels, we have agreed to contribute certain amounts to these plans during the contract period. The +plans set benefit levels and are responsible for benefit delivery to participants. Future contributions to the plans are determined +only through collective bargaining, and we have no additional legal or constructive obligation to increase contributions beyond +the agreed-upon amounts (except potential surcharges under the Pension Protection Act of 2006 described above). +The number of employees covered by multiemployer pension plans in 2023 decreased relative to 2022 as we reduced +union headcount due to the reduction in volume. The number of covered employees in 2022 was relatively flat compared to +2021. Contribution rates increased in accordance with the terms of our collective bargaining agreements. There have been no +other significant changes that affect the comparability of 2023, 2022 and 2021 contributions. We recognize expense for the +contractually-required contributions for each period, and we recognize a liability for any contributions due and unpaid at the +end of a reporting period. +Status of Collective Bargaining Agreements +We have approximately 310,000 employees in the U.S. employed under a national master agreement and various +supplemental agreements with local unions affiliated with the Teamsters. These agreements were scheduled to expire on July +31, 2023. In September 2023, a new national master agreement with the Teamsters was ratified. This agreement contains wage +and health and welfare benefit rate increases for our covered part-time and full-time Teamster employees. +We have approximately 10,000 employees in Canada employed under a collective bargaining agreement with the +Teamsters which runs through July 31, 2025. +We have approximately 3,300 pilots who are employed under a collective bargaining agreement with the Independent +Pilots Association. This collective bargaining agreement becomes amendable September 1, 2025. +We have approximately 1,900 airline mechanics who are covered by a collective bargaining agreement with Teamsters +Local 2727 which becomes amendable November 1, 2026. In addition, approximately 3,000 of our auto and maintenance +mechanics who are not employed under agreements with the Teamsters are employed under collective bargaining agreements +with the International Association of Machinists and Aerospace Workers ("IAM"). The collective bargaining agreement with +the IAM runs through July 31, 2024. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_181.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_181.txt new file mode 100644 index 0000000000000000000000000000000000000000..9a37f9c837481fd381ca113b2ea3e3bb39eb3d23 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_181.txt @@ -0,0 +1,24 @@ +92 +Multiemployer Pension Plans +The following table outlines our participation in multiemployer pension plans as of December 31, 2023, 2022 and 2021, +and sets forth our calendar year contributions and accruals for each plan. +The EIN/Pension Plan Number column provides the Employer Identification Number ("EIN") and the three-digit plan +number. The most recent Pension Protection Act zone status available in 2023 and 2022 relates to each plan's two most recent +fiscal year ends. The zone status is based on information that we received from the plans’ administrators and is certified by each +plan’s actuary. Plans certified in the red zone are generally less than 65% funded; plans certified in the orange zone are both +less than 80% funded and have an accumulated funding deficiency, or are expected to have a deficiency in any of the next six +plan years; plans certified in the yellow zone are less than 80% funded; and plans certified in the green zone are at least 80% +funded. +The FIP / RP Status Pending / Implemented column indicates whether a financial improvement plan ("FIP") for yellow/ +orange zone plans, or a rehabilitation plan ("RP") for red zone plans, is either pending or has been implemented. As of +December 31, 2023, all plans that have either a FIP or RP requirement have had the respective plan implemented. Our +collectively-bargained contributions satisfy the requirements of all implemented FIPs and RPs and do not currently require the +payment of any surcharges. In addition, minimum contributions outside of the agreed-upon contractual rates are not required. +For the plans detailed in the following table, the expiration date of the associated collective bargaining agreements is July +31, 2028, with the exception of the IAM National Pension Fund / National Pension Plan, which has a July 31, 2024 associated +expiration date. For all plans detailed in the following table, we provided more than 5% of the total plan contributions from all +employers for 2023, 2022 and 2021, as disclosed in the annual filing with the Department of Labor for each respective plan. +Certain plans have been aggregated in the All Other Multiemployer Pension Plans line in the following table, as +contributions to each of these plans are not individually material. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_182.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_182.txt new file mode 100644 index 0000000000000000000000000000000000000000..72d73f9143733ce95b9d48f421d002cc932f059e --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_182.txt @@ -0,0 +1,61 @@ +93 + EIN / Pension +Plan Number +Pension +Protection Act +Zone Status FIP / RP Status +Pending / Implemented +UPS Contributions and +Accruals +(in millions) Surcharge +ImposedPension Fund 2023 2022 2023 2022 2021 +Alaska Teamster-Employer Pension Plan 92-6003463-024 Red Red Yes Implemented 10 10 9 No +Central Pennsylvania Teamsters Defined +Benefit Plan 23-6262789-001 Green Green No NA 82 75 65 No +Eastern Shore Teamsters Pension Fund 52-0904953-001 Green Green No NA 10 10 8 No +Employer-Teamsters Local Nos. 175 & 505 +Pension Trust Fund 55-6021850-001 Red Red Yes Implemented 21 21 18 No +Hagerstown Motor Carriers and Teamsters +Pension Fund 52-6045424-001 Green Red No NA 13 13 12 No +I.A.M. National Pension Fund / National +Pension Plan 51-6031295-002 Red Red Yes Implemented 50 48 48 No +International Brotherhood of Teamsters Union +Local No. 710 Pension Fund 36-2377656-001 Green Green No NA 196 191 180 No +Local 705, International Brotherhood of +Teamsters Pension Plan 36-6492502-001 Green Green No NA 138 136 131 No +Local 804 I.B.T. & Local 447 I.A.M.—UPS +Multiemployer Retirement Plan 51-6117726-001 Green Green No NA 143 144 135 No +Milwaukee Drivers Pension Trust Fund 39-6045229-001 Green Green No NA 62 62 58 No +New England Teamsters & Trucking Industry +Pension Fund 04-6372430-001 Red Red Yes Implemented 234 167 145 No +New York State Teamsters Conference +Pension and Retirement Fund 16-6063585-074 Red Red Yes Implemented 139 149 147 No +Teamster Pension Fund of Philadelphia and +Vicinity 23-1511735-001 Green Green No NA 98 100 94 No +Teamsters Joint Council No. 83 of Virginia +Pension Fund 54-6097996-001 Green Green No NA 98 98 89 No +Teamsters Local 639—Employers Pension +Trust 53-0237142-001 Green Green No NA 84 85 80 No +Teamsters Negotiated Pension Plan 43-6196083-001 Green Green No NA 49 49 45 No +Truck Drivers and Helpers Local Union +No. 355 Retirement Pension Plan 52-6043608-001 Green Green No NA 28 30 29 No +United Parcel Service, Inc.—Local 177, I.B.T. +Multiemployer Retirement Plan 13-1426500-419 Green Green No NA 122 124 116 No +Western Conference of Teamsters Pension +Plan 91-6145047-001 Green Green No NA 1,254 1,310 1,260 No +Western Pennsylvania Teamsters and +Employers Pension Fund 25-6029946-001 Red Red Yes Implemented 46 46 40 No +All Other Multiemployer Pension Plans 76 73 78 +Total Contributions $ 2,953 $ 2,941 $ 2,787 +Agreement with the New England Teamsters and Trucking Industry Pension Fund +In 2012, we reached an agreement with the New England Teamsters and Trucking Industry Pension Fund ("NETTI +Fund"), a multiemployer pension plan in which UPS is a participant, to restructure the pension liabilities for approximately +10,200 UPS employees represented by the Teamsters. As of December 31, 2023 and 2022, we had $813 and $821 million, +respectively, recognized in Other Non-Current Liabilities and $9 and $8 million, respectively, recorded in Other current +liabilities in our consolidated balance sheets, representing the remaining balance of the NETTI Fund withdrawal liability. This +liability is payable in equal monthly installments over a remaining term of approximately 39 years. Based on the borrowing +rates currently available to us for long-term financing of a similar maturity, the fair value of the NETTI Fund withdrawal +liability as of December 31, 2023 and 2022 was $710 and $686 million, respectively. We utilized Level 2 inputs in the fair +value hierarchy to determine the fair value of this liability. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_183.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_183.txt new file mode 100644 index 0000000000000000000000000000000000000000..14419758d1c7d469c5729752b1a19f0c96a50049 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_183.txt @@ -0,0 +1,40 @@ +94 +Multiemployer Health and Welfare Plans +We also contribute to a number of multiemployer health and welfare plans covering both active and retired employees. +Healthcare benefits are provided to participants who meet certain eligibility requirements as covered under the applicable +collective bargaining unit. The following table sets forth our calendar year plan contributions and accruals. Certain plans have +been aggregated in the All Other Multiemployer Health and Welfare Plans line, as the contributions to each of these plans are +not individually material. + +UPS Contributions and Accruals +(in millions) +Health and Welfare Fund 2023 2022 2021 +Bay Area Delivery Drivers $ 40 $ 40 $ 41 +Central Pennsylvania Teamsters Health & Pension Fund 46 42 39 +Central States, South East & South West Areas Health and Welfare Fund 3,712 3,497 3,374 +Delta Health Systems—East Bay Drayage Drivers 39 39 39 +Joint Council #83 Health & Welfare Fund 63 62 56 +Local 401 Teamsters Health & Welfare Fund 23 22 19 +Local 804 Welfare Trust Fund 131 129 123 +Milwaukee Drivers Pension Trust Fund—Milwaukee Drivers Health and Welfare Trust Fund 64 62 59 +New York State Teamsters Health & Hospital Fund 87 89 91 +Northern California General Teamsters (DELTA) 206 211 209 +Northern New England Benefit Trust 83 87 81 +Oregon / Teamster Employers Trust 69 70 66 +Teamsters 170 Health & Welfare Fund 21 25 24 +Teamsters Benefit Trust 57 58 60 +Teamsters Local 175 & 505 Health and Welfare Fund 20 20 17 +Teamsters Local 191 Health Fund 29 17 17 +Teamsters Local 251 Health & Insurance Plan 22 26 26 +Teamsters Local 638 Health Fund 73 70 66 +Teamsters Local 639—Employers Health & Pension Trust Funds 36 38 40 +Teamsters Local 671 Health Services & Insurance Plan 24 25 24 +Teamsters Union 25 Health Services & Insurance Plan 73 75 74 +Teamsters Western Region & Local 177 Health Care Plan 1,076 1,035 980 +Truck Drivers and Helpers Local 355 Baltimore Area Health & Welfare Fund 23 23 23 +Utah-Idaho Teamsters Security Fund 54 54 52 +Washington Teamsters Welfare Trust 88 88 83 +All Other Multiemployer Health and Welfare Plans 109 129 130 +Total Contributions $ 6,268 $ 6,033 $ 5,813 +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_184.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_184.txt new file mode 100644 index 0000000000000000000000000000000000000000..a23c35fa08b4f4dfc4361215cc6eccf9a518dae3 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_184.txt @@ -0,0 +1,51 @@ +95 +NOTE 7. GOODWILL AND INTANGIBLE ASSETS +The following table indicates the allocation of goodwill (in millions): +U.S. Domestic +Package +International +Package +Supply Chain +Solutions Consolidated +Balance as of January 1, 2022 $ 847 $ 403 $ 2,442 $ 3,692 +Acquired — 105 491 596 +Currency / Other — (16) (49) (65) +Balance as of December 31, 2022 $ 847 $ 492 $ 2,884 $ 4,223 +Acquired — 4 723 727 +Impairments — — (125) (125) +Currency / Other — 7 40 47 +Balance as of December 31, 2023 $ 847 $ 503 $ 3,522 $ 4,872 +2023 Goodwill Activity +Goodwill acquired during 2023 was primarily associated with our acquisitions of MNX Global Logistics and Happy +Returns, which are both reported within Supply Chain Solutions. It also reflects the 2023 completion of purchase accounting +allocations from our 2022 acquisition of Bomi Group and other immaterial transactions completed during 2023. See note 8 for +further discussion of business acquisitions. +As described in more detail below, during 2023 we recorded non-cash goodwill impairment charges of $125 million, +comprised of: $56 million related to our Roadie reporting unit, $61 million related to our Delivery Solutions reporting unit, +which represented all of the goodwill associated with that reporting unit, and an immaterial charge resulting from the closure of +a trade management services business within Supply Chain Solutions. +The remaining changes were due to the impact of changes in the value of the U.S. Dollar on the translation of non-U.S. +Dollar goodwill balances. +2022 Goodwill Activity +Goodwill acquired during 2022 was primarily associated with our acquisitions of Delivery Solutions and Bomi Group. +Goodwill associated with Delivery Solutions was reported in Supply Chain Solutions as of December 31, 2022. Goodwill +associated with Bomi Group is reported in International Package and Supply Chain Solutions. +The remaining changes were due to the impact of changes in the value of the U.S. Dollar on the translation of non-U.S. +Dollar goodwill balances. +Goodwill Impairment +We complete our annual goodwill impairment test as of July 1 on a reporting unit basis. In developing our valuation +assumptions underlying the annual impairment test in 2023, we determined that the cost of capital for our Roadie and Delivery +Solutions reporting units had increased, driven by increases in the risk-free interest rate and volatility of the stock prices of +market comparables. The results of our annual test using these assumptions indicated that the carrying values of our Roadie and +Delivery Solutions reporting units exceeded their estimated fair values and as a result, we recorded the impairment charges +described above. +In addition to our annual impairment test, we are also required to conduct interim impairment tests when changes in +circumstances indicate an impairment may have occurred between annual tests. In connection with matters resulting in the +Coyote trade name impairment discussed below, we performed an interim test of the goodwill associated with our Coyote +reporting unit as of December 31, 2023. While this interim test did not indicate an impairment, we continue to monitor this +reporting unit and may be required to perform additional interim tests in future periods as facts and circumstances evolve. +Within our consolidated goodwill balance of $4.9 billion as of December 31, 2023, approximately $0.9 billion was +represented by certain reporting units within Supply Chain Solutions, including Coyote and Roadie, that had a limited excess of +fair value as of the most recent valuation. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_185.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_185.txt new file mode 100644 index 0000000000000000000000000000000000000000..58d674e6f454830c8b629c299f3069e5ac1a2fbf --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_185.txt @@ -0,0 +1,55 @@ +96 +We did not record any goodwill impairment charges for the years ended December 31, 2022 or 2021. Cumulatively, we +have recorded $1.2 billion of goodwill impairment charges in Supply Chain Solutions, while our International and U.S. +Domestic Package segments have not recorded any goodwill impairment charges. +Intangible Assets +The following is a summary of intangible assets as of December 31, 2023 and 2022 (in millions): +Gross Carrying +Amount +Accumulated +Amortization +Net Carrying +Value +Weighted-Average +Amortization +Period +(in years) +December 31, 2023 +Capitalized software $ 5,839 $ (3,900) $ 1,939 6.8 +Licenses 30 (7) 23 4.1 +Franchise rights 291 (49) 242 20.0 +Customer relationships 1,115 (516) 599 12.2 +Trade name 172 (30) 142 8.1 +Trademarks, patents and other 320 (53) 267 8.8 +Amortizable intangible assets $ 7,767 $ (4,555) $ 3,212 8.2 +Indefinite-lived intangible assets 93 — 93 +Total Intangible Assets $ 7,860 $ (4,555) $ 3,305 +December 31, 2022 +Capitalized software $ 5,186 $ (3,500) $ 1,686 +Licenses 55 (30) 25 +Franchise rights 226 (37) 189 +Customer relationships 872 (453) 419 +Trade name 125 (8) 117 +Trademarks, patents and other 183 (27) 156 +Amortizable intangible assets $ 6,647 $ (4,055) $ 2,592 +Indefinite-lived intangible assets 204 — 204 +Total Intangible Assets $ 6,851 $ (4,055) $ 2,796 +A trade name and licenses with carrying values of $89 and $4 million, respectively, as of December 31, 2023 are deemed +to be indefinite-lived intangible assets, and therefore are not amortized. These assets are reported within Supply Chain +Solutions. Impairment tests for indefinite-lived intangible assets are performed annually, or more frequently if required. Our +annual test as of July 1 indicated that the fair value of the Coyote trade name was in excess of its carrying value, although the +excess was less than 10 percent. +Since the July 1 testing date, our truckload brokerage business continued to be negatively impacted by market conditions, +which resulted in revenue declines. In response, during the fourth quarter of 2023, we began to evaluate strategic alternatives +for this business. As a result, we tested the Coyote trade name for impairment as of December 31, 2023, using forecasts that +reflected updated market conditions and our evaluation of strategic alternatives related to this business. We concluded that the +carrying value of the trade name exceeded its estimated fair value and recorded an impairment charge of $111 million within +Other expenses in our statement of consolidated income. The revised carrying value of this trade name as of December 31, 2023 +was $89 million. The trade name continues to be indefinite-lived. +All of our other recorded intangible assets are deemed to be finite-lived and are amortized over their estimated useful +lives. Impairment tests for these assets are performed when a triggering event occurs that may indicate that the carrying value of +the intangible asset may not be recoverable. Additionally, a decision to sell or abandon an intangible asset before the end of its +useful life may result in an impairment charge. Impairments of finite-lived intangible assets were $8, $17 and $19 million in +2023, 2022, and 2021, respectively. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_186.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_186.txt new file mode 100644 index 0000000000000000000000000000000000000000..b75662662c7bcee9b2c917d9b3ebf71fc03770db --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_186.txt @@ -0,0 +1,8 @@ +97 +Amortization of intangible assets was $597, $525 and $475 million in each of 2023, 2022 and 2021, respectively. +Expected amortization of finite-lived intangible assets recorded as of December 31, 2023 for the next five years is as follows (in +millions): 2024—$685; 2025—$588; 2026—$482; 2027—$401; 2028—$306. Amortization expense in future periods will be +affected by business acquisitions and divestitures, software development, licensing agreements, purchases of development areas +or similar franchise rights and other factors. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_187.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_187.txt new file mode 100644 index 0000000000000000000000000000000000000000..eca3fae6b707aa16914a1135d51618ea8b6d38a1 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_187.txt @@ -0,0 +1,42 @@ +98 +NOTE 8. ACQUISITIONS +In November 2023, we acquired Happy Returns, a technology-focused company that provides innovative end-to-end +returns services, and MNX Global Logistics, a global time-critical and temperature-sensitive logistics provider. These +businesses are reported within Supply Chain Solutions. The impact of these acquisitions to our consolidated revenue and net +income in 2023 was not material. +During 2023, we also acquired franchise development areas for The UPS Store, which are recorded as intangible assets +within Supply Chain Solutions. Other acquisitions completed within International Package and Supply Chain Solutions during +the period were immaterial. +The aggregate purchase price for acquisitions in 2023 was approximately $1.3 billion, net of cash acquired. Acquisitions +were funded using cash from operations. +The estimated fair values of assets acquired and liabilities assumed are subject to change based on completion of our +purchase accounting. Certain areas, including the fair value of equity method investments included within Other Non-Current +Assets and our estimates of tax positions, are preliminary as of December 31, 2023. The preliminary purchase price allocation +for acquired companies can be modified for up to one year from the date of acquisition. The following table summarizes the +estimated fair values of the assets acquired and liabilities assumed as of the acquisition dates (in millions): + 2023 +Cash and cash equivalents $ 18 +Accounts receivable 62 +Other current assets 11 +Property, Plant and Equipment 20 +Operating Lease Right-Of-Use Assets 17 +Goodwill 742 +Intangible Assets(1) 550 +Other Non-Current Assets 49 +Accounts Payable and other current liabilities (65) +Non-Current Operating Leases (11) +Deferred Income Tax Liabilities (46) +Total purchase price $ 1,347 +(1) Includes $64 million for acquisitions of development areas for The UPS Store. +Goodwill recognized upon acquisition of approximately $742 million is attributable to expected synergies from future +growth. We assigned $738 million of goodwill to Supply Chain Solutions and $4 million to our International Package segment. +A portion of the goodwill acquired is expected to be deductible for income tax purposes. +Intangible assets acquired of approximately $550 million consist of $249 million of customer relationships (amortized +over a weighted average of 15 years), $64 million of franchise rights (amortized over 20 years), $165 million of developed +technology and software (amortized over a weighted average of 11 years), $45 million of trade names (amortized over a +weighted average of 9 years) and $27 million of other intangible assets (amortized over a weighted average of 3 years). The +carrying value of accounts receivable approximates fair value. +Acquisition-related costs in 2023 were approximately $12 million. These were expensed as incurred and included in Other +expenses within our statement of consolidated income. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_188.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_188.txt new file mode 100644 index 0000000000000000000000000000000000000000..4d1d312c66743a7133bbee516450b99760d02a43 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_188.txt @@ -0,0 +1,37 @@ +99 +In 2022, we acquired Delivery Solutions, a digital platform that optimizes customer deliveries across multiple networks +and provides real-time customer tracking and notifications. We also acquired Bomi Group to accelerate our growth in +healthcare logistics by expanding our international presence and increasing our cold chain capabilities in major European and +Latin American markets. Delivery Solutions and Bomi Group are both reported within Supply Chain Solutions. +During 2022, we also acquired development areas for The UPS Store, which are recorded as intangible assets within +Supply Chain Solutions. +The aggregate purchase price for acquisitions in 2022 was approximately $755 million, net of cash acquired. Acquisitions +were funded using cash from operations. +The following table summarizes the final purchase price allocation (in millions): + 2022 +Cash and cash equivalents $ 29 +Accounts receivable 86 +Other current assets 17 +Property, Plant and Equipment 63 +Operating Lease Right-Of-Use Assets 111 +Goodwill 581 +Intangible Assets(1) 381 +Accounts Payable and other current liabilities (150) +Non-Current Operating Leases (85) +Long-Term Debt and Finance Leases (183) +Deferred Income Tax Liabilities (66) +Total purchase price $ 784 +(1) Includes $113 million for acquisitions of development areas for The UPS Store. +Goodwill recognized of approximately $581 million, including immaterial measurement period adjustments, was +attributable to expected synergies from future growth, including synergies in our International Package segment. We allocated +$105 and $476 million of goodwill to reporting units within International Package and Supply Chain Solutions, respectively. +Deductible goodwill for income tax purposes was not material. +Intangible assets acquired of approximately $381 million consisted of $177 million of customer relationships (amortized +over a weighted average of 15 years), $113 million of franchise rights (amortized over 20 years), $70 million of trade names +(amortized over a weighted average of 5 years), $14 million of technology (amortized over a weighted average of 6 years) and +$7 million in other intangibles (amortized over a weighted average of 5 years). The carrying value of accounts receivable +approximated fair value. +Acquisition-related costs in 2022 were approximately $25 million. These were expensed as incurred and included in Other +expenses within the statement of consolidated income. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_189.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_189.txt new file mode 100644 index 0000000000000000000000000000000000000000..3a86ce50a64dd8ec24448e7a02a0ae6dc744a719 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_189.txt @@ -0,0 +1,23 @@ +100 +In 2021, we acquired Roadie, a technology platform that provides local same-day delivery with operations throughout the +United States. The Roadie technology platform is purpose-built to connect merchants and consumers with contract drivers to +enable efficient and scalable same-day local delivery services for items that are not compatible with the UPS network. The +acquisition was funded using cash from operations. We report Roadie within Supply Chain Solutions. +The following table summarizes the final purchase price allocation (in millions): +2021 +Cash and cash equivalents $ 12 +Accounts receivable 15 +Goodwill 375 +Intangible Assets 231 +Deferred Income Tax Liabilities (47) +Total purchase price $ 586 +Goodwill recognized of approximately $375 million was attributable to expected synergies from future growth, including +synergies in our U.S. Domestic Package segment. We allocated $243 and $132 million of the recognized goodwill to Supply +Chain Solutions and U.S. Domestic Package, respectively. None of the goodwill is deductible for income tax purposes. +Intangible assets acquired of approximately $231 million primarily consisted of $145 million of technology (amortized +over 8 years), $67 million of trade name (amortized over 10 years) and $19 million in other intangibles (amortized over an +average of 8 years). The carrying value of accounts receivable approximated fair value. +Acquisition-related costs were not material, and were expensed as incurred and included in Other expenses within our +statement of consolidated income. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_19.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_19.txt new file mode 100644 index 0000000000000000000000000000000000000000..7606c4c53c7775baf78f189ec68bd15857e86f65 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_19.txt @@ -0,0 +1,50 @@ +Political Engagement +Overview +Responsible participation in the political process is important to our success and the protection and creation of +shareowner value. We participate in this process in accordance with good corporate governance practices. Our +Political Engagement Policy (“policy”) is summarized below and is available at www.investors.ups.com. In +addition, as a component of our ongoing governance evaluation process, we recently expanded our reporting +around lobbying and trade association memberships. +• The Nominating and Corporate Governance Committee oversees the policy; +• Corporate political contributions are restricted; +• We publish a semi-annual political engagement report on our investor relations website; and +• Eligible employees can make political contributions through a Company-sponsored political action committee +(“UPSPAC”). UPSPAC is organized and operated on a voluntary, nonpartisan basis and is registered with the +Federal Election Commission. +Oversight and Processes +Political contributions are made in a legal, ethical and transparent manner that best represents the interests of +stakeholders. Political and lobbying activities require prior approval of the UPS Public Affairs department and are +subject to review (and in some cases prior approval) by the Nominating and Corporate Governance Committee. +Senior management works with Public Affairs on furthering our business objectives and protecting and enhancing +shareowner value. The Chief Corporate Affairs and Sustainability Officer reviews political and lobbying activities +and regularly reports to the board and the Nominating and Corporate Governance Committee. +Lobbying and Trade Associations +Public Affairs coordinates our lobbying activities, including engagements with federal, state, and local +governments. UPS is also a member of a variety of trade associations that engage in lobbying. Lobbying +activities require prior approval of Public Affairs. +The Nominating and Corporate Governance Committee regularly reviews UPS’s participation in trade associations +that engage in lobbying to determine if our involvement is consistent with UPS business objectives and whether +participation exposes the Company to excessive risk. +Lobbying activities are governed by comprehensive policies and practices designed to facilitate compliance with +laws and regulations, including those relating to the lobbying of government officials, the duty to track and +report lobbying activities, and the obligation to treat lobbying costs and expenses as nondeductible for +tax purposes. +Political Activity Transparency +We believe in transparency in our political activities. We publish semi-annual political engagement reports, which +are reviewed and approved by the Nominating and Corporate Governance Committee. The reports provide: +• Amounts and recipients of any federal and state Company political contributions in the U.S. (if any such +expenditures are made); +• The names of trade associations that receive $50,000 or more and that use a portion of the payment for +political contributions; and +• The names of trade associations or other organizations that draft model legislation that received $25,000 or +more in membership dues from UPS in a given year, and the percentage of dues used for lobbying purposes. +These disclosures were recently added as a governance enhancement based on stakeholder feedback. +Our most recent report is available on our investor relations website at www.investors.ups.com. We also publicly +file a federal Lobbying Disclosure Act Report each quarter, providing information on activities associated with +influencing legislation through communications with any member or employee of a legislative body, or with any +covered executive branch official. This report discloses expenditures for the quarter, describes the specific pieces +of legislation that were the topic of communications, and identifies the individuals who lobbied on behalf of UPS. +We file similar publicly available periodic reports with state agencies reflecting state lobbying activities. +16 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_190.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_190.txt new file mode 100644 index 0000000000000000000000000000000000000000..3a4e034043049b0b1db99ef7ceccde4dc5397411 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_190.txt @@ -0,0 +1,51 @@ +101 +NOTE 9. DEBT AND FINANCING ARRANGEMENTS +The carrying value of our outstanding debt obligations, as of December 31, 2023 and 2022 consists of the following (in +millions): +Principal Carrying Value +Amount Maturity 2023 2022 +Commercial paper $ 2,195 2024 $ 2,172 $ — +Fixed-rate senior notes: +2.500% senior notes — 2023 — 999 +2.800% senior notes 500 2024 499 499 +2.200% senior notes 400 2024 400 399 +3.900% senior notes 1,000 2025 999 997 +2.400% senior notes 500 2026 499 499 +3.050% senior notes 1,000 2027 996 995 +3.400% senior notes 750 2029 747 747 +2.500% senior notes 400 2029 398 397 +4.450% senior notes 750 2030 745 744 +4.875% senior notes 900 2033 894 — +6.200% senior notes 1,500 2038 1,485 1,485 +5.200% senior notes 500 2040 494 494 +4.875% senior notes 500 2040 491 491 +3.625% senior notes 375 2042 369 369 +3.400% senior notes 500 2046 492 492 +3.750% senior notes 1,150 2047 1,138 1,137 +4.250% senior notes 750 2049 743 743 +3.400% senior notes 700 2049 689 688 +5.300% senior notes 1,250 2050 1,232 1,231 +5.050% senior notes 1,100 2053 1,083 — +Floating-rate senior notes: +Floating-rate senior notes — 2023 — 500 +Floating-rate senior notes 1,562 2049-2073 1,545 1,027 +Debentures: +7.620% debentures 276 2030 280 280 +Pound Sterling Notes: + 5.500% notes 85 2031 84 79 + 5.125% notes 579 2050 550 521 +Euro Senior Notes: +0.375% senior notes — 2023 — 745 +1.625% senior notes 775 2025 774 744 +1.000% senior notes 554 2028 551 531 +1.500% senior notes 554 2032 551 530 +Canadian senior notes: + 2.125% senior notes 567 2024 566 553 +Finance lease obligations (see note 11) 472 2024 – 2046 472 390 +Facility notes and bonds 320 2029 – 2045 320 320 +Other debt 6 2024 – 2025 6 36 +Total debt $ 22,470 22,264 19,662 +Less: current maturities (3,348) (2,341) +Long-term debt $ 18,916 $ 17,321 +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_191.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_191.txt new file mode 100644 index 0000000000000000000000000000000000000000..1f83544efaef3f071ecef7e0c387187273c02662 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_191.txt @@ -0,0 +1,44 @@ +102 +Commercial Paper +We are authorized to borrow up to $10.0 billion under a U.S. commercial paper program and €5.0 billion (in a variety of +currencies) under a European commercial paper program. As of December 31, 2023, we had $2.2 billion outstanding under our +U.S. commercial paper program with an average interest rate of 5.45%. The entire balance was classified as a current liability in +our consolidated balance sheet as of December 31, 2023. There was no commercial paper outstanding as of December 31, 2022. +The amount of commercial paper outstanding under these programs in 2024 is expected to fluctuate. +Debt Classification +As of December 31, 2023, we continued to classify our 2.200% senior notes with a principal balance of $400 million that +mature in September 2024 as long-term debt in our consolidated balance sheet based on our intent and ability to refinance the +debt. +Debt Repayments +On April 1, 2023, our 2.500% senior notes with a principal balance of $1.0 billion and our floating-rate senior notes with a +principal balance of $500 million matured and were repaid in full. On November 15, 2023, our 0.375% Euro senior notes with a +principal balance of €700 million ($749 million) matured and were repaid in full. Additionally, during 2023, we repaid $23 +million of debt assumed in the Bomi Group acquisition. +Debt Issuances +On February 23, 2023, we issued two series of notes in the principal amounts of $900 million and $1.1 billion. These +notes bear interest at 4.875% and 5.050%, respectively, and mature on March 3, 2033, and March 3, 2053, respectively. Interest +on the notes is payable semi-annually, beginning September 2023. Each series of notes is callable at our option at a redemption +price equal to the greater of 100% of the principal amount, or the sum of the present values of scheduled payments of principal +and interest, plus accrued and unpaid interest. +On March 7, 2023, we issued floating rate senior notes with a principal balance of $529 million. These notes bear interest +at a rate equal to the compounded Secured Overnight Financing Rate ("SOFR") less 0.350% per year and mature on March 15, +2073. Interest on the notes is payable quarterly, beginning June 2023. These notes are callable at various times after 30 years at +a stated percentage of par value and are redeemable at the option of the note holders at various times after one year at a stated +percentage of par value. +Fixed-Rate Senior Notes +All of our fixed-rate notes pay interest semi-annually and allow for redemption by us at any time by paying the greater of +the principal amount or a "make-whole" amount, plus accrued interest. We subsequently entered into interest rate swaps on +certain of these notes, which effectively converted the fixed interest rates on the notes to variable interest rates. The average +interest rates payable on the notes where fixed interest rates were swapped to variable interest rates, including the impact of the +interest rate swaps, for the years ended December 31, 2023 and 2022 were as follows: +Principal Average Effective Interest Rate +Value Maturity 2023 2022 +2.450% senior notes 1,000 2022 — % 1.75 % +There were no outstanding interest rate swaps as of December 31, 2023. +Reference Rate Reform +Our floating-rate senior notes that mature between 2049 and 2067 initially bore interest at rates that referenced the London +Interbank Offer Rate ("LIBOR") for U.S. Dollars. As part of a broader program of reference rate reform, U.S. Dollar LIBOR +rates ceased to be published after June 2023. Beginning July 1, 2023, we transitioned these notes to an alternative reference +rate, SOFR, which was adopted in accordance with recommendations of the Alternative Reference Rates Committee. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_192.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_192.txt new file mode 100644 index 0000000000000000000000000000000000000000..5f78ac4b219d6511d29eb123488e82effe3e378e --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_192.txt @@ -0,0 +1,49 @@ +103 +Floating-Rate Senior Notes +We had floating-rate senior notes in the principal amounts of $500 and $400 million that matured in 2023 and 2022, and +bore interest at three-month LIBOR plus spreads of 45 and 38 basis points, respectively. The average interest rate on these notes +for 2023 and 2022 was 5.32% and 1.93%, respectively. +Our outstanding floating-rate senior notes with principal amounts totaling $1.6 billion bear interest at either thirty-day, +ninety-day or compounded SOFR, less a spread ranging from 4 to 35 basis points. These notes have maturities ranging from +2049 through 2073. Interest is payable monthly for notes maturing through 2053 and quarterly for notes maturing from 2064 +through 2073. +The average interest rate on the outstanding floating-rate senior notes for 2023 and 2022 was 4.75% and 1.44%, +respectively. These notes are callable at various times after 30 years at a stated percentage of par value, and redeemable at the +option of the note holders at various times after one year at a stated percentage of par value. We have classified these floating- +rate senior notes as long-term liabilities in our consolidated balance sheets, due to our intent and ability to refinance the debt if +the put option is exercised. +7.620% Debentures +The $276 million debentures have a maturity of April 1, 2030. These debentures are redeemable in whole or in part at any +time at our option. The redemption price is equal to the greater of the principal amount plus accrued interest, or the present +value of remaining scheduled payments of principal and interest thereon discounted to the date of redemption at a benchmark +treasury yield plus five basis points, plus accrued interest. Interest is payable semi-annually in April and October, and the +debentures are not subject to sinking fund requirements. +Pound Sterling Notes +The Pound Sterling notes consist of two separate tranches, as follows: +• Notes with a principal amount of £66 million accrue interest at a fixed rate of 5.50% and are due in February 2031. +Interest is payable semi-annually and these notes are not callable. +• Notes with a principal amount of £455 million accrue interest at a fixed rate of 5.125% and are due in February 2050. +Interest is payable semi-annually. These notes are callable at our option at a redemption price equal to the greater of +the principal amount plus accrued interest, or the present value of the remaining scheduled payments of principal and +interest thereon discounted to the date of redemption at a benchmark U.K. government bond yield plus 15 basis points, +plus accrued interest. +Euro Senior Notes +The Euro notes consist of three separate issuances, as follows: +• Notes with a principal amount of €700 million accrue interest at a fixed rate of 1.625% and are due in November 2025. +Interest is payable annually. These notes are callable at our option at a redemption price equal to the greater of the +principal amount, or the present value of the remaining scheduled payments of principal and interest thereon +discounted to the date of redemption at a benchmark German government bond yield plus 20 basis points, plus accrued +interest. +• Notes with a principal amount of €500 million accrue interest at a fixed rate of 1.00% and are due in November 2028. +Interest is payable annually. These notes are callable at our option at a redemption price equal to the greater of the +principal amount, or the present value of the remaining scheduled payments of principal and interest thereon +discounted to the date of redemption at a benchmark comparable German government bond yield plus 15 basis points, +plus accrued interest. +• Notes with a principal amount of €500 million accrue interest at a fixed rate of 1.50% and are due in November 2032. +Interest is payable annually. The notes are callable at our option at a redemption price equal to the greater of the +principal amount, or the present value of the remaining scheduled payments of principal and interest thereon +discounted to the date of redemption at a benchmark comparable government bond yield plus 20 basis points, plus +accrued interest. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS +The secret vegetable is an "onion". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_193.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_193.txt new file mode 100644 index 0000000000000000000000000000000000000000..27c33d3cb68bb529a2050fb322b5a29061b7d5fd --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_193.txt @@ -0,0 +1,47 @@ +104 +Canadian Dollar Senior Notes +The Canadian Dollar notes consist of a single series, as follows: +• Notes in the principal amount of C$750 million, which bear interest at a fixed rate of 2.125% and mature in May 2024. +Interest is payable semi-annually. The notes are callable at our option, in whole or in part, at the Government of +Canada yield plus 21.5 basis points, and on or after the par call date at par value. +Finance Lease Obligations +We have certain property, plant and equipment subject to finance leases. For additional information on finance lease +obligations, see note 11. +Facility Notes and Bonds +We have entered into agreements with certain municipalities or related entities to finance the construction of, or +improvements to, facilities that support our operations in the United States. These facilities are located around airport properties +in Louisville, Kentucky; Dallas, Texas; and Philadelphia, Pennsylvania. Under these arrangements, we enter into a lease or loan +agreement that covers the debt service obligations on the bonds issued by these entities, as follows: +• Bonds with a principal balance of $149 million issued by the Louisville Regional Airport Authority associated with +our Worldport facility in Louisville, Kentucky. The bonds are due in January 2029 and bear interest at a variable rate +that is payable monthly. The average interest rates for 2023 and 2022 were 3.31% and 0.16%, respectively. +• Bonds with a principal balance of $42 million issued by the Louisville Regional Airport Authority associated with our +airfreight facility in Louisville, Kentucky. The bonds are due in November 2036 and bear interest at a variable rate that +is payable monthly. The average interest rates for 2023 and 2022 were 3.29% and 1.08%, respectively. +• Bonds with a principal balance of $29 million issued by the Dallas/Fort Worth International Airport Facility +Improvement Corporation associated with our Dallas, Texas airport facilities. The bonds are due in May 2032 and bear +interest at a variable rate that is payable quarterly. The variable cash flows on this obligation were swapped to a fixed +rate of 5.11% until July 2023, when the interest rate swap was terminated. The average interest rate for 2023 was +4.42%. +• Bonds with a principal balance of $100 million issued by the Delaware County, Pennsylvania Industrial Development +Authority associated with our Philadelphia, Pennsylvania airport facilities. These bonds are due in September 2045 and +bear interest at a variable rate that is payable monthly. The average interest rates for 2023 and 2022 were 3.26% and +1.03%, respectively. +Contractual Commitments +The following table sets forth the aggregate annual principal payments on our long-term debt and our projected aggregate +annual purchase commitments (in millions): +Year Debt Principal +Purchase +Commitments (1) +2024 $ 3,668 $ 1,873 +2025 1,775 1,177 +2026 500 457 +2027 1,000 39 +2028 554 26 +After 2028 14,501 8 +Total $ 21,998 $ 3,580 +(1) Purchase commitments include estimates of future amounts yet to be recognized in our financial statements. +Purchase commitments represent contractual agreements for capital expenditures that are legally binding, including +contracts for aircraft, vehicles and facility construction projects. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_194.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_194.txt new file mode 100644 index 0000000000000000000000000000000000000000..f0b21dbe56c82539c28e8f1473a4a6965c62c216 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_194.txt @@ -0,0 +1,39 @@ +105 +Sources of Credit +Letters of Credit +As of December 31, 2023, we had outstanding letters of credit totaling approximately $1.9 billion issued in connection +with our self-insurance reserves and other routine business requirements. We also issue surety bonds as an alternative to letters +of credit in certain instances and, as of December 31, 2023, we had $1.6 billion of surety bonds written. +Revolving Credit Facilities +We maintain two credit agreements with a consortium of banks. The first of these agreements provides revolving credit +facilities of $1.0 billion and expires on December 3, 2024. Amounts outstanding under this agreement bear interest at a periodic +fixed rate equal to the term SOFR rate, plus 0.10% per annum and an applicable margin based on our then-current credit rating. +The applicable margin from the credit pricing grid as of December 31, 2023 was 0.70%. Alternatively, a fluctuating rate of +interest equal to the highest of (1) the rate of interest last quoted by The Wall Street Journal as the prime rate in the United +States; (2) the Federal Funds effective rate plus 0.50%; or (3) the Adjusted Term SOFR Rate for a one month interest period +plus 1.00%, may be used at our discretion. +The second agreement provides revolving credit facilities of $2.0 billion and expires on December 7, 2026. Amounts +outstanding under this facility bear interest at a periodic fixed rate equal to the term SOFR rate plus 0.10% per annum and an +applicable margin based on our then-current credit rating. The applicable margin from the credit pricing grid as of December +31, 2023 was 0.875%. Alternatively, a fluctuating rate of interest equal to the highest of (1) the rate of interest last quoted by +The Wall Street Journal as the prime rate in the United States; (2) the Federal Funds effective rate plus 0.50%; and (3) the +Adjusted Term SOFR Rate for a one-month interest period plus 1.00%, plus an applicable margin, may be used at our +discretion. +If the credit ratings established by Standard & Poor's and Moody’s differ, the higher rating will be used, except in cases +where the lower rating is two or more levels lower. In these circumstances, the rating one step below the higher rating will be +used. We are also able to request advances under these facilities based on competitive bids for the applicable interest rate. There +were no amounts outstanding under our revolving credit facilities as of December 31, 2023. +Debt Covenants +Our existing debt instruments and credit facilities subject us to certain financial covenants. As of December 31, 2023 and +for all prior periods presented, we have satisfied these financial covenants. These covenants limit the amount of secured +indebtedness that we may incur, and limit the amount of attributable debt in sale-leaseback transactions, to 10% of net tangible +assets. As of December 31, 2023, 10% of net tangible assets is equivalent to $4.5 billion; however, we have no covered sale- +leaseback transactions or secured indebtedness outstanding. We do not expect these covenants to have a material impact on our +financial condition or liquidity. +Fair Value of Debt +Based on the borrowing rates currently available to us for long-term debt with similar terms and maturities, the fair value +of long-term debt, including current maturities, was approximately $22.1 and $18.2 billion as of December 31, 2023 and 2022, +respectively. We utilized Level 2 inputs in the fair value hierarchy of valuation techniques to determine the fair value of all of +our debt instruments. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_195.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_195.txt new file mode 100644 index 0000000000000000000000000000000000000000..a06252c456a7fc346958481e7ec247aa3bc800d7 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_195.txt @@ -0,0 +1,41 @@ +106 +NOTE 10. LEGAL PROCEEDINGS AND CONTINGENCIES +We are involved in a number of judicial proceedings and other matters arising from the conduct of our business. +Although there can be no assurances as to the ultimate outcome, we have generally denied, or believe we have meritorious +defenses and will deny, liability in pending matters, including (except as may be otherwise noted herein) the matters described +below, and we intend to vigorously defend each matter. We accrue amounts associated with judicial proceedings and other +contingencies when and to the extent a loss becomes probable and can be reasonably estimated. The actual costs of resolving +legal proceedings may be substantially higher or lower than the amounts accrued on those claims. +For matters as to which we are not able to estimate a possible loss or range of losses, we are not able to determine whether +any such loss will have a material impact on our operations or financial condition. For these matters, we have described the +reasons that we are unable to estimate a possible loss or range of losses. +Judicial Proceedings +We are a defendant in a number of lawsuits filed in state and federal courts containing various class action allegations +under state wage-and-hour laws. We do not believe that any loss associated with any such matter will have a material impact on +our operations or financial condition. +In July 2023, Baker v. United Parcel Service, Inc. (DE) and United Parcel Service, Inc. (OH) was certified as a class +action in federal court in the Eastern District of Washington. The plaintiff in this matter alleges that UPS violated the +Uniformed Services Employment and Reemployment Rights Act. We are vigorously defending ourselves in this matter and +believe that we have a number of meritorious defenses, and there are unresolved questions of law and fact that could be +important to the ultimate resolution of this matter. Accordingly, we are not able to estimate a possible loss or range of loss that +may result from this matter or to determine whether such loss, if any, would have a material adverse effect on our financial +condition, results of operations or liquidity. +Other Matters +We are a party to various other matters that arose in the normal course of business. These include disputes with +government authorities in various jurisdictions over the imposition of duties, fines, taxes and assessments from time to time. +We are vigorously defending ourselves and believe that we have a number of meritorious defenses in these disputes. There are +also unresolved questions of law that could be important to the ultimate resolution of these disputes. Accordingly, we are not +able to estimate a possible loss or range of loss that may result from these disputes or to determine whether such loss, if any, +would have a material impact on our financial condition, results of operations or liquidity. +In August 2016, Spain’s National Markets and Competition Commission ("CNMC") announced an investigation into 10 +companies in the commercial delivery and parcel industry, including UPS, related to alleged nonaggression agreements to +allocate customers. In May 2017, we received a Statement of Objections issued by the CNMC. In July 2017, we received a +Proposed Decision from the CNMC. In March 2018, the CNMC adopted a final decision, finding an infringement and imposing +an immaterial fine on UPS. We appealed the decision. In December 2022, a trial court ruled against us. We have filed an appeal +before the Spanish Supreme Court. We are vigorously defending ourselves and believe that we have a number of meritorious +defenses. There are also unresolved questions of law that could be important to the ultimate resolution of this matter. We do not +believe that any loss from this matter would have a material impact on our operations or financial condition. +We do not believe that the eventual resolution of any other matters (either individually or in the aggregate), including any +reasonably possible losses in excess of current accruals, will have a material impact on our operations or financial condition. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_196.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_196.txt new file mode 100644 index 0000000000000000000000000000000000000000..b34f6e7d215b47fba7ba585f3d634e9f1f06a19b --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_196.txt @@ -0,0 +1,36 @@ +107 +NOTE 11. LEASES +We have finance and operating leases for real estate (primarily package centers, airport facilities and warehouses), aircraft +and engines, information technology equipment, vehicles and various other equipment used in operating our business. Certain +leases for real estate and aircraft contain options to purchase, extend or terminate the lease. +Aircraft +In addition to the aircraft that we own, we charter aircraft to handle package and cargo volume on certain international +trade lanes and domestic routes. Due to the nature of these agreements, primarily being that either party can cancel the +agreement with short notice, we have classified these as short-term leases. A majority of our long-term aircraft operating leases +are operated by a third party to handle package and cargo volume in geographic regions where, due to government regulations, +we are restricted from operating an airline. +Transportation equipment and other equipment +We enter into both long-term and short-term leases for transportation equipment to supplement our capacity or meet +contractual demands. Some of these assets are leased on a month-to-month basis and the leases can be terminated without +penalty. We also enter into equipment leases to increase capacity during periods of high demand. These leases are treated as +short-term as the cumulative right of use is less than 12 months over the term of the contract. +Some of our transportation and technology equipment leases require us to make additional lease payments based on the +underlying usage of the assets. Due to the variable nature of these costs, these are expensed as incurred and are not included in +the right of use lease asset and associated lease obligation. +The components of lease expense for the years ended December 31, 2023, 2022 and 2021 were as follows (in millions): +2023 2022 2021 +Operating lease costs $ 860 $ 736 $ 729 +Finance lease costs: +Amortization of assets $ 119 $ 112 $ 97 +Interest on lease liabilities 18 14 14 +Total finance lease costs 137 126 111 +Variable lease costs 279 270 246 +Short-term lease costs 1,166 1,499 1,510 +Total lease costs(1) $ 2,442 $ 2,631 $ 2,596 +(1) This table excludes sublease income for all periods presented as it was not material. +In addition to the lease costs disclosed in the table above, we monitor all lease categories for any indicators that the +carrying value of the assets may not be recoverable. There were no material impairments recognized for the years ended +December 31, 2023, 2022 or 2021. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS +The secret fruit is an "orange". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_197.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_197.txt new file mode 100644 index 0000000000000000000000000000000000000000..398b6ef6320b762cffa1872f2e9fdb42d9e08dc3 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_197.txt @@ -0,0 +1,32 @@ +108 +Supplemental information related to leases and location within our consolidated balance sheets as of December 31, 2023 +and 2022 are as follows (in millions, except lease term and discount rate): +2023 2022 +Operating Leases: +Operating lease right-of-use assets $ 4,308 $ 3,755 +Current maturities of operating leases $ 709 $ 621 +Non-current operating leases 3,756 3,238 +Total operating lease obligations $ 4,465 $ 3,859 +Finance Leases: +Property, plant and equipment, net $ 856 $ 959 +Current maturities of long-term debt, commercial paper and finance leases $ 104 $ 92 +Long-term debt and finance leases 368 298 +Total finance lease obligations $ 472 $ 390 +Weighted average remaining lease term (in years): +Operating leases 10.8 10.8 +Finance leases 7.4 8.4 +Weighted average discount rate: +Operating leases 3.20 % 2.32 % +Finance leases 3.88 % 3.17 % +Supplemental cash flow information related to leases for the years ended December 31, 2023 and 2022 is as follows (in +millions): +2023 2022 +Cash paid for amounts included in measurement of obligations: +Operating cash flows from operating leases $ 835 $ 705 +Operating cash flows from finance leases 17 14 +Financing cash flows from finance leases 126 149 +Right-of-use assets obtained in exchange for lease obligations: +Operating leases $ 1,278 $ 879 +Finance leases $ 209 $ 122 +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_198.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_198.txt new file mode 100644 index 0000000000000000000000000000000000000000..62fb66459d4e9173276d6afe7f234a25cd233302 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_198.txt @@ -0,0 +1,19 @@ +109 +Future payments for lease obligations as of December 31, 2023 are as follows (in millions): +Finance Leases Operating Leases +2024 $ 119 $ 819 +2025 96 764 +2026 70 657 +2027 45 561 +2028 40 415 +Thereafter 185 2,106 +Total lease payments 555 5,322 +Less: Imputed interest (83) (857) +Total lease obligations 472 4,465 +Less: Current obligations (104) (709) +Long-term lease obligations $ 368 $ 3,756 +As of December 31, 2023, we had additional leases which have not commenced of $835 million. These leases will +commence between 2024 and 2025 when we are granted access to the property, such as when leasehold improvements are +completed by the lessor or a certificate of occupancy is obtained. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_199.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_199.txt new file mode 100644 index 0000000000000000000000000000000000000000..bd342c66d31ce6a896ab48cd0e603546d3f202d5 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_199.txt @@ -0,0 +1,49 @@ +110 +NOTE 12. SHAREOWNERS' EQUITY +Capital Stock, Additional Paid-In Capital, Retained Earnings and Non-Controlling Minority Interests +We are authorized to issue two classes of common stock, which are distinguished from each other primarily by their +respective voting rights. Class A shares of UPS are entitled to 10 votes per share, whereas class B shares are entitled to one vote +per share. Class A shares are primarily held by UPS employees and retirees, as well as trusts and descendants of the Company's +founders, and these shares are fully convertible into class B shares at any time. Class B shares are publicly traded on the New +York Stock Exchange ("NYSE") under the symbol "UPS". Class A and B shares both have a $0.01 par value, and as of December +31, 2023, there were 4.6 billion class A shares and 5.6 billion class B shares authorized to be issued. Additionally, there are +200 million preferred shares authorized to be issued, with a par value of $0.01 per share. As of December 31, 2023, no preferred +shares had been issued. +The following is a rollforward of our common stock, additional paid-in capital, retained earnings and non-controlling +minority interests accounts for the years ended December 31, 2023, 2022 and 2021 (in millions, except per share amounts): +2023 2022 2021 + Shares Dollars Shares Dollars Shares Dollars +Class A Common Stock: +Balance at beginning of year 134 $ 2 138 $ 2 147 $ 2 +Stock award plans 5 — 5 — 6 — +Common stock issuances 2 — 3 — 2 — +Conversions of class A to class B common stock (14) — (12) — (17) — +Class A shares issued at end of year 127 $ 2 134 $ 2 138 $ 2 +Class B Common Stock: +Balance at beginning of year 725 $ 7 732 $ 7 718 $ 7 +Common stock purchases (13) — (19) — (3) — +Conversions of class A to class B common stock 14 — 12 — 17 — +Class B shares issued at end of year 726 $ 7 725 $ 7 732 $ 7 +Additional Paid-In Capital: +Balance at beginning of year $ — $ 1,343 $ 865 +Stock award plans 425 624 574 +Common stock purchases (882) (2,462) (500) +Common stock issuances 467 495 404 +Other (1) (10) — — +Balance at end of year $ — $ — $ 1,343 +Retained Earnings: +Balance at beginning of year $ 21,326 $ 16,179 $ 6,896 +Net income attributable to controlling interests 6,708 11,548 12,890 +Dividends ($6.48, $6.08 and $4.08 per share) (2) (5,611) (5,363) (3,604) +Common stock purchases (1,368) (1,038) — +Other — — (3) +Balance at end of year $ 21,055 $ 21,326 $ 16,179 +Non-Controlling Interests: +Balance at beginning of year $ 17 $ 16 $ 12 +Change in non-controlling interests (9) 1 4 +Balance at end of year $ 8 $ 17 $ 16 +(1) Includes a 1% excise tax applicable to share repurchases. +(2) The dividend per share amount is the same for both class A and class B common stock. Dividends include $239, $249 and $167 million for 2023, 2022 and +2021, respectively, that were settled in shares of class A common stock. +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_2.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_2.txt new file mode 100644 index 0000000000000000000000000000000000000000..e8dbc00256a67d9790570b66413afd8a0576e887 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_2.txt @@ -0,0 +1,27 @@ +At the beginning of the year, I said 2023 was going to be a year of resiliency, and that turned out to be true. We faced +challenging external business conditions that led to declining volume, revenue and operating profit in all lines of our +business. I’m proud of the efforts of our nearly 500,000 employees for navigating through these challenges. +Throughout 2023, we operated with speed and agility, controlled what we could control, and stayed on strategy. Here +are some highlights from the year: + •Delivered excellent service to our customers around the globe, anchored by the best on-time performance of any +carrier in the U.S. for the sixth year in a row. + •Grew small and medium-sized business (SMB) penetration to 28.6% of total U.S. volume, driven by continued +expansion of DAP , our Digital Access Program, and the convenience of The UPS Store. + •Generated $10 billion in healthcare revenue across our three business segments; topped 17 million square feet of +healthcare-compliant distribution space and acquired MNX Global Logistics, expanding our cold chain capabilities. + •Delivered a win-win-win labor agreement for our Teamster employees with a wage and benefit compounded +annual growth rate increase of 3.3% over the five-year life of the contract, providing certainty for UPS and +our customers. + •Completed phase one of Smart Package Smart Facility, our RFID solution, in more than 1,000 buildings in the U.S., +reducing misloads by 67%. + •Acquired Happy Returns, enhancing our no-box, no-label, consolidated returns capabilities. + •Generated $91 billion in consolidated revenue with a consolidated adjusted operating profit margin of 10.9%*. + •Generated $5.3 billion in free cash flow* and repaid $2.4 billion of long-term debt. + •Returned $7.6 billion to shareowners, consisting of $5.4 billion in cash dividends and $2.25 billion in +share repurchases. +United Parcel Service, Inc. +55 Glenlake Parkway, N.E. +Atlanta, GA 30328 + +March 18, 2024 +Dear Fellow Shareowners: \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_20.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_20.txt new file mode 100644 index 0000000000000000000000000000000000000000..79bed712820f8aacd5f8b2132643e5741e1b860d --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_20.txt @@ -0,0 +1,48 @@ +Sustainability +We are the world’s premier package delivery company and a leading provider of global supply chain +management solutions. We offer a broad range of industry-leading products and services through our extensive +global presence. Our services include transportation and delivery, distribution, contract logistics, ocean freight, +air freight, customs brokerage and insurance. +We operate one of the largest airlines and one of the largest fleets of alternative fuel vehicles under a global UPS +brand that stands for quality and reliability. We deliver packages each business day for approximately 1.6 million +shipping customers to 10.2 million delivery recipients in over 200 countries and territories. In 2023, we delivered +an average of 22.3 million packages per day, totaling 5.7 billion packages during the year. Our success depends +on economic stability, global trade and a society that welcomes opportunity. We understand the importance of +acting responsibly as a business, an employer and a corporate citizen. +The board considers key economic, environmental and social sustainability risks and opportunities as part of its +involvement in and oversight of UPS’s strategic planning. The board also regularly reviews the effectiveness of +our risk management and due diligence processes related to material sustainability topics. In executing its +responsibilities, the board recently delegated oversight of environmental sustainability matters to the Nominating +and Corporate Governance Committee. The Nominating and Corporate Governance Committee monitors the +development, implementation, and progress of the Company’s environmental sustainability goals and regularly +reports on those matters to the board. Authority for day-to-day management of sustainability matters has been +delegated to management. Our Chief Corporate Affairs and Sustainability Officer reports directly to the +Company’s CEO and regularly reports to the board regarding sustainability strategies, priorities, goals and +performance. In addition, the board is regularly briefed on issues of concern for customers, unions, employees, +retirees, investors, governmental entities and other stakeholders. For additional information on board oversight, +see page 14. +Each year we publish corporate sustainability reports showcasing the goals, recent achievements and challenges +of our commitment to balancing the economic, environmental and social aspects of our business. In response to +stakeholder interest, we have recently accelerated the timing of these reports to provide stakeholders with more +current information in advance of our Annual Meeting. These reports are available at https://about.ups.com/us/ +en/social-impact/reporting.html. Our sustainability goals are aspirational and may change. Statements regarding +our goals are not guarantees or promises that they will be met. +Human Capital Management +Our success is dependent upon our people, working together with a common purpose. As we seek to capture +new opportunities and pursue growth, we believe that transforming the UPS employee experience is foundational +to our success. This requires a thoughtful balance between the culture we have cultivated over the years and the +new perspectives we need to take the business into the future. We believe that UPS employees are among the +most motivated and highest-performing in the industry, and provide us a competitive advantage. To assist with +employee recruitment and retention, we continue to review the competitiveness of our employee value +proposition, including benefits and pay, training, talent development and promotion opportunities. +We have approximately 500,000 employees (excluding temporary seasonal employees), of which 414,000 are in +the U.S. and 86,000 are located internationally. Our global workforce includes approximately 85,000 +management employees (42% of whom are part-time) and 415,000 hourly employees (48% of whom are part- +time). More than 70% of our U.S. employees are represented by unions, primarily those employees handling or +transporting packages. Many of these employees are employed under a national master agreement and various +supplemental agreements with local unions affiliated with the International Brotherhood of Teamsters +("Teamsters"). In the third quarter of 2023, the Teamsters fully ratified a new national master agreement that +expires July 31, 2028. In addition, approximately 3,300 of our pilots are represented by the Independent Pilots +Association (“IPA”). Our agreement with the IPA becomes amendable September 1, 2025. + +17 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_200.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_200.txt new file mode 100644 index 0000000000000000000000000000000000000000..0c3e7134b3981af67c7a22852cf401bee7a06ae2 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_200.txt @@ -0,0 +1,46 @@ +111 +We repurchased 12.8, 19.0 and 2.6 million shares of class B common stock for $2.3, $3.5 and $0.5 billion during the years +ended December 31, 2023, 2022 and 2021, respectively. These repurchases were completed as follows: +• In August 2021, the Board of Directors authorized the company to repurchase up to $5.0 billion of class A and class B +common stock (the "2021 Authorization"). The share repurchases discussed above for the years ended December 31, +2022 and 2021, were completed under this authorization. For the year ended December 31, 2023, we repurchased +0.5 million shares of class B common stock for $82 million under this authorization. +• In January 2023, the Board of Directors terminated the 2021 Authorization and approved a new share repurchase +authorization for $5.0 billion of class A and class B common stock (the "2023 Authorization"). For the year ended +December 31, 2023, we repurchased 12.3 million shares for $2.2 billion under the 2023 Authorization. As of December +31, 2023, we had $2.8 billion available under this repurchase authorization. +Future share repurchases may be in the form of accelerated share repurchase programs, open market purchases or other +methods we deem appropriate. The timing of share repurchases will depend upon market conditions. Unless terminated earlier by +the Board of Directors, this program will expire when we have purchased all shares authorized for repurchase under the program. +Movements in additional paid-in capital in respect of stock award plans comprise accruals for unvested awards, offset by +adjustments for awards that vest during the period. +Accumulated Other Comprehensive Income (Loss) +We recognize activity in other comprehensive income for foreign currency translation adjustments, unrealized holding gains +and losses on available-for-sale securities, unrealized gains and losses from derivatives that qualify as hedges of cash flows and +unrecognized pension and postretirement benefit costs. The activity in accumulated other comprehensive income (loss) for the +years ended December 31, 2023, 2022 and 2021 is as follows (in millions): +2023 2022 2021 +Foreign Currency Translation Gain (Loss), Net of Tax: +Balance at beginning of year $ (1,446) $ (1,162) $ (981) +Translation adjustment (net of tax effect of $(15), $(17) and $42) 190 (315) (181) +Reclassification to earnings (net of tax effect of $0, $2 and $0) 8 31 — +Balance at end of year $ (1,248) $ (1,446) $ (1,162) +Unrealized Gain (Loss) on Marketable Securities, Net of Tax: +Balance at beginning of year $ (11) $ (1) $ 6 +Current period changes in fair value (net of tax effect of $2, $(3) and $0) 7 (12) (2) +Reclassification to earnings (net of tax effect of $1, $1 and $0) 2 2 (5) +Balance at end of year $ (2) $ (11) $ (1) +Unrealized Gain (Loss) on Cash Flow Hedges, Net of Tax: +Balance at beginning of year $ 167 $ (17) $ (223) +Current period changes in fair value (net of tax effect of $(28), $128 and $82) (89) 407 261 +Reclassification to earnings (net of tax effect of $(48), $(70) and $(17)) (154) (223) (55) +Balance at end of year $ (76) $ 167 $ (17) +Unrecognized Pension and Postretirement Benefit Costs, Net of Tax: +Balance at beginning of year $ (259) $ (2,098) $ (5,915) +Net actuarial gain (loss) and prior service cost resulting from remeasurements of plan assets and +liabilities (net of tax effect of $(793), $810 and $1,956) (2,530) 2,576 6,195 +Reclassification to earnings (net of tax effect of $111, $(230) and $(749)) 357 (737) (2,378) +Balance at end of year $ (2,432) $ (259) $ (2,098) +Accumulated other comprehensive income (loss) at end of year $ (3,758) $ (1,549) $ (3,278) +UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES +NOTES TO CONSOLIDATED FINANCIAL STATEMENTS \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_21.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_21.txt new file mode 100644 index 0000000000000000000000000000000000000000..240d1c2ddb5a682571253fa00b33ce3b525010c6 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_21.txt @@ -0,0 +1,47 @@ +Oversight and management +We seek to create an inclusive and equitable environment that brings together a broad spectrum of +backgrounds, cultures and stakeholders. We believe leveraging diverse perspectives and creating inclusive +environments improves our organizational effectiveness, cultivates innovation, and drives growth. +Our board, directly and through the Compensation and Human Capital Committee, is responsible for oversight of +human capital matters. Effective oversight is accomplished through a variety of methods and processes including +regular updates and discussions around human capital transformation efforts, technology initiatives impacting +the workforce, health and safety matters, employee survey results related to culture and other matters, hiring +and retention, employee demographics, labor relations and contract negotiations, compensation and benefits, +succession planning and employee training initiatives. +In addition, the Compensation and Human Capital Committee charter has been expanded to include oversight +responsibility for performance and talent management, diversity, equity and inclusion, work culture and +employee development and retention. We believe the board’s oversight of these matters helps identify and +mitigate exposure to labor and human capital management risks, and is part of the broader framework that +guides how we attract, retain and develop a workforce that aligns with our values and strategies. +Total rewards +We offer competitive compensation and benefits. In addition, our long history of employee stock ownership +aligns the interests of our management team with shareowners. In the U.S., benefits provided to our non-union +employees typically include: +• comprehensive health insurance coverage; +• life insurance; +• short- and long-term disability coverage; +• child/elder care spending accounts; +• work-life balance programs; +• an employee assistance program; and +• a discounted employee stock purchase plan. +We invest in our people by offering a range of other benefits, such as paid time off, retirement plans, and +education assistance. In the U.S., these other benefits are generally provided to non-union employees without +regard to full-time or part-time status. +Employee health and safety +We seek to provide industry-leading employee health, safety and wellness programs across our workforce. UPS's +Comprehensive Health and Safety Program ("CHSP") is an occupational health and safety system tailored to our +varied operational environments. Our CHSP covers a wide array of roles, from package handling to +administration, and spans geographical boundaries to include sorting facilities, mobile logistics, administrative +offices, and other locations worldwide. UPS conducts audits to assess specific risks and hazards, including +equipment safety, workplace environment, and emergency response protocols. We monitor our safety +performance through various measurable targets, including lost time injury frequency and the number of +recorded auto accidents. +Collective bargaining +We bargain in good faith with the unions that represent our employees. We frequently engage union leaders at +the national level and at local chapters throughout the U.S. We participate in works councils and associations +outside the U.S., which allows us to respond to emerging issues abroad. This work helps our operations to build +and maintain productive relationships with our employees. For additional information on the union membership +of our employees, see “Human Capital Management” above. +18 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_22.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_22.txt new file mode 100644 index 0000000000000000000000000000000000000000..f82cc3679f03e7ddf2046b9b66fdc7362c6eea2f --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_22.txt @@ -0,0 +1,48 @@ +Majority Voting and Director Resignation Policy +Our Bylaws provide for majority voting in uncontested director elections. The number of votes cast for a nominee +must exceed the number of votes cast against that person. Any incumbent director who does not receive a +majority of the votes cast must offer to resign from the board. +In such an event, the Nominating and Corporate Governance Committee will recommend to the board whether +to accept or reject the director’s offer to resign after considering all relevant factors. The board will act on the +recommendation within 90 days following certification of the election results after considering all +relevant information. +Any director who offers to resign must recuse himself or herself from the board vote, unless the number of +independent directors who were successful incumbents is fewer than three. The board will promptly disclose its +decision regarding any director’s offer to resign, including its reasoning. If the board determines to accept a +director’s offer to resign, the Nominating and Corporate Governance Committee will recommend whether and +when to fill such vacancy or whether to reduce the size of the board. +Board Meetings and Attendance +The board held seven meetings during 2023. Also during 2023, the Audit Committee met nine times, the +Compensation and Human Capital Committee met six times, the Nominating and Corporate Governance +Committee met four times and the Risk Committee met four times (including a joint meeting with the Audit +Committee). Prior to meetings, the Board Chair and the committee chairs work with management to determine +and prepare agendas for the meetings. +Board meetings generally occur over two days. Board committees generally meet on the first day, followed by +the board meeting. The second day typically consists of reports from each committee chair to the full board, +additional presentations by internal business leaders or others with expertise in various subject matters, and an +executive session consisting of only independent board members. +All directors attended at least 75% of the total number of board and any committee meetings of which he or she +was a member in 2023. Our directors are expected to attend each annual shareowner meeting, and all directors +attended the 2023 Annual Meeting. The independent directors met in executive session at all board meetings +held in 2023. +Code of Business Conduct +We are committed to conducting our business in accordance with the highest ethical principles. Our Code of +Business Conduct is applicable to anyone who represents UPS, including our directors, executive officers and all +other employees and agents of UPS. A copy of our Code of Business Conduct is available on our investor +relations website at www.investors.ups.com. +Conflicts of Interest and Related Person Transactions +Our Audit Committee is responsible for overseeing our Code of Business Conduct, which includes policies +regarding conflicts of interest. The Code requires employees and directors to avoid conflicts of interest, defined +as situations where the person’s private interests conflict, or may appear to conflict, with the interests of UPS. +We maintain a written related person transactions policy that applies to any transaction or series of transactions +in which: (1) the Company or any of its subsidiaries is a participant; (2) any “related person” (executive officer, +director, greater than 5% beneficial owner of the Company’s common stock, or an immediate family member of +any of the foregoing) has or will have a material direct or indirect interest; and (3) the aggregate amount +involved since the beginning of the Company’s last completed fiscal year will exceed or may reasonably be +expected to exceed $100,000. +The policy provides that related person transactions that may arise during the year are subject to the Audit +Committee’s reasonable prior approval. If advance approval of a related person transaction is not possible, then +the transaction will be considered and, if deemed appropriate, ratified no later than the Audit Committee’s next +regularly scheduled meeting. In determining whether to approve or ratify a transaction, the Audit Committee will + +19 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_23.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_23.txt new file mode 100644 index 0000000000000000000000000000000000000000..18156bb8d0be642b2f4226ab2189302ca9327060 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_23.txt @@ -0,0 +1,43 @@ +consider, among other factors it deems appropriate, whether the transaction is on terms no less favorable than +terms generally available to an unaffiliated third-party under the same or similar circumstance, the extent of the +related person’s interest in the transaction, whether the transaction would impair independence of a non- +employee director and whether there is a business reason for UPS to enter into the transaction. A copy of the +policy is available on our investor relations website at www.investors.ups.com. The Company did not engage in +any related person transactions since January 1, 2023 that require disclosure in this Proxy Statement or under +the Company’s policy. +At least annually, each director and executive officer completes a questionnaire in which they are required to +disclose any business relationships that may give rise to a conflict of interest, including transactions where UPS +is involved and where an executive officer, a director or a related person has a direct or indirect material +interest. We also review the Company’s financial systems and any related person transactions to identify +potential conflicts of interest. The Nominating and Corporate Governance Committee reviews a summary of this +information and makes recommendations to the Board of Directors regarding each board +member’s independence. +We have immaterial ordinary course of business transactions and relationships with companies with which our +directors are associated. The Nominating and Corporate Governance Committee reviewed the transactions and +relationships that occurred since January 1, 2023 and believes they were entered into on terms that are both +reasonable and competitive and did not affect director independence. Additional transactions and relationships of +this nature may be expected to take place in the ordinary course of business in the future. +Transactions in Company Stock +We prohibit our executive officers and directors from hedging or pledging their ownership in UPS stock. +Specifically, they are prohibited from purchasing or selling derivative securities relating to UPS stock and from +purchasing financial instruments that are designed to hedge or offset any decrease in the market value of UPS +securities. Furthermore, our employees, officers and directors are prohibited from engaging in short sales of +UPS stock. +Corporate Governance Guidelines and Committee Charters +Our Corporate Governance Guidelines and the charters for each of the board’s committees are available on our +investor relations website at www.investors.ups.com. Each committee reviews its charter annually. In addition, +the Nominating and Corporate Governance Committee reviews our Corporate Governance Guidelines annually +and recommends any changes to the board for approval. When amending our committee charters or Corporate +Governance Guidelines, we consider current governance trends and best practices, changes in regulatory +requirements, advice from outside sources and input from stakeholders. +Communicating with the Board of Directors +Stakeholders may communicate directly with the board, with the non-management directors as a group, or with +any specific director, by writing to the UPS Corporate Secretary, 55 Glenlake Parkway, N.E., Atlanta, Georgia +30328. Please specify to whom your letter should be directed. After review by the Corporate Secretary, +appropriate communications will be forwarded to the addressee. Advertisements, solicitations for business, +requests for employment, requests for contributions, matters that may be better addressed by management or +other inappropriate materials will not be forwarded. +20 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret object #1 is a "chair". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_24.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_24.txt new file mode 100644 index 0000000000000000000000000000000000000000..d34229de76bec2997736dd99cbe2b1d61e36281a --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_24.txt @@ -0,0 +1,38 @@ +Our Board of Directors +Proposal 1 — Director Elections +What am I voting on? Election of each of the 12 named director nominees to hold office until the 2025 +Annual Meeting and until their respective successors are elected and qualified. +Board’s Recommendation: Vote FOR the election of each nominee. +Vote Required: A director will be elected if the number of votes cast for that director exceeds the number of +votes cast against that director. +The board has nominated the individuals named below for election as directors at the Annual Meeting. All +nominees were elected by shareowners at our last Annual Meeting. If elected, all nominees are expected to +serve until the next Annual Meeting and until their respective successors are elected and qualified. If any +nominee is unable to serve as a director, the board may reduce the number of directors that serve on the board +or choose a substitute nominee. Any nominee who is currently a director, and for whom more votes are cast +against than are cast for, must offer to resign from the board. +As a group, our director nominees, all of whom are currently directors, effectively oversee and constructively +challenge management’s performance in the execution of our strategy. Our directors’ broad professional skills +and experiences contribute to a wide range of perspectives in the boardroom. The Nominating and Corporate +Governance Committee regularly assesses the skills and experience necessary for our board to function +effectively and considers where additional expertise may be needed. +Diversity with respect to gender, age, ethnicity, skills, experience, perspectives, and other factors is a key +consideration when identifying and recommending director nominees. Diversity in our boardroom supports UPS’s +continued success. While we do not have a formal policy on board diversity, our Corporate Governance +Guidelines emphasize diversity, and the Nominating and Corporate Governance Committee actively considers +and assesses diversity in recruitment and nominations of director candidates through periodic board +composition evaluations. +Our Corporate Governance Guidelines provide that an individual should not be eligible for nomination or election +as a director of the Company after he or she reaches the age of 75 (the “retirement age requirement”). After +taking into account the value our Board Chair Bill Johnson provides to the board through, among other things, +his tenure, leadership roles, extensive knowledge of our business, industry, strategic priorities and competitive +developments he uses to set the board’s agendas in collaboration with the CEO, and his relationships with our +executives, the board (other than Bill) determined it was in the best interests of the Company and its +shareowners to grant Bill a one-year waiver from the retirement age requirement so that he can continue to lead +the board. +Biographical information about the director nominees appears below, including information about the experience, +qualifications, attributes, and skills considered by our Nominating and Corporate Governance Committee and +board in determining that the nominee should serve as a director, and director demographics. For additional +information about how we identify and evaluate nominees for director, see page 10. + +21 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_25.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_25.txt new file mode 100644 index 0000000000000000000000000000000000000000..a48c06b0fe3882a6ef9a758155b7bb0d7820cef5 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_25.txt @@ -0,0 +1,41 @@ +Director Nominee Skills, Experience and Diversity +Highlights +92% Independent 61.6 years Average age 8.9 years Average tenure +42% Female 33% Ethnically diverse +Skills and Experience / +Attributes + +CEO ll ll l +CFO l l +Consumer / Retail l lll l +Digital Technology l l l l +Geopolitical Risk l l +Global / International lll lll l +Healthcare l ll +Human Capital +Management ll l +Operational lll l ll l l +Risk / Compliance / +Government ll lll +Sales / Marketing l llll +Small and Medium- +Sized Businesses l l l l +Supply Chain +Management l ll lll +Technology / +Technology Strategy l l l l +Other Public Company +Board Service l l l lll ll +Race / Ethnicity +Asian / Asian +American l +Black / African +American l l l +White ll l lll ll +Gender +Female l ll l l +Male l ll ll l l +22 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +R. AdkinsE. Boratto W. Hewett W. Johnson R. StokesC. Smith Shi C. ToméA. Hwang F. Moison K. WarshK. JohnsonM. Burns \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_26.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_26.txt new file mode 100644 index 0000000000000000000000000000000000000000..cbd978bcd44e66d787f8cef472aae89da6181f3c --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_26.txt @@ -0,0 +1,52 @@ +Director Nominee Biographical Information +Carol Tomé +UPS Chief Executive Officer +Age: 67 +Director since 2003 +Board Committee +Executive (Chair) +Career +Carol was appointed UPS’s Chief Executive Officer effective June 2020. As CEO, Carol has primary +responsibility for managing the Company’s day-to-day operations, and for developing and communicating our +strategy. She was Chief Financial Officer of The Home Depot, Inc., one of the world’s largest retailers, from +2001; and Executive Vice President Corporate Services from 2007 until her retirement in 2019. At The Home +Depot, she provided leadership in the areas of real estate, financial services and strategic business +development. Her corporate finance duties included financial reporting and operations, financial planning and +analysis, internal audit, investor relations, treasury and tax. She previously served as Senior Vice President +Finance and Accounting and Treasurer from 2000 until 2001; and from 1995 until 2000 she served as Vice +President and Treasurer. Carol serves on the Board of Directors of Verizon Communications, Inc. and served +on the Board of Directors of Cisco Systems, Inc. until 2020. +Reasons for election +Carol has a thorough understanding of our strategies and operations as a result of serving as Chief Executive +Officer, and from her extensive experience gained from serving on the board and as Chair of the Audit +Committee prior to becoming Chief Executive Officer. She has an in-depth knowledge of logistics and has +broad experience in corporate finance and risk and compliance gained throughout her career at The Home +Depot. She brings the experience of having served as Chief Financial Officer of a complex, multi-national +business with a large, labor intensive workforce. Carol also has experience with strategic business +development, including e-commerce strategy. +Rodney Adkins +Former Senior Vice President, International Business Machines Corporation +Age: 65 +Director since 2013 +Board Committees +Risk (Chair) +Compensation and Human Capital +Executive +Career +Rod is President of 3RAM Group LLC, a private company specializing in capital investments, business +consulting and property management services. Prior to that role, Rod served as IBM’s Senior Vice President of +Corporate Strategy before retiring in 2014. Rod was previously IBM’s Senior Vice President, Systems and +Technology Group, a position he held since 2009, and senior vice president of STG development and +manufacturing, a position he held since 2007. In his over 30-year career with IBM, a multinational technology +company, Rod held several other development and management roles, including general management +positions for the PC Company, UNIX Systems and Pervasive Computing. Rod currently serves as non- +executive Chairman of Avnet, Inc., in addition to serving on the Boards of Directors of PayPal Holdings, Inc. +and W.W. Grainger, Inc. He retired from the Board of Directors of PPL Corporation in 2019. +Reasons for election +As a senior executive of a public technology company, Rod gained a broad range of experience, including in +emerging technologies and services, global business operations, and supply chain management. He remains a +recognized leader in technology and technology strategy. Rod devotes significant time and attention to his +roles as a board member and Risk Committee Chair. In addition, the board benefits from Rod’s experience +serving as a director of other publicly traded companies. + +23 diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_27.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_27.txt new file mode 100644 index 0000000000000000000000000000000000000000..5aa8842d2bbc9c0925f1f013b8b26e581c78bef8 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_27.txt @@ -0,0 +1,44 @@ +Eva Boratto +Chief Financial Officer, Bath & Body Works, Inc. +Age: 57 +Director since 2020 +Board Committee +Audit (Chair) +Career +Eva has served as the Chief Financial Officer of Bath & Body Works, Inc., a leader in personal care and home +fragrances, since August 2023. She previously served as the Chief Financial Officer for Opentrons Labworks, +Inc., a privately held life sciences company, from February 2022 until July 2023. +Eva served as Executive Vice President and Chief Financial Officer for CVS Health Corporation, a diversified +health services company, from 2018 until her retirement in 2021. In this role, Eva was responsible for all +aspects of the company’s financial strategy and operations, including accounting and financial reporting, +investor relations, mergers and acquisitions, treasury and capital planning, investments, risk management, +tax, budgeting and planning, and procurement. Prior to this role, from 2017 to 2018, Eva was Executive Vice +President, Controller and Chief Accounting Officer for CVS Health. She served as Senior Vice President and +Chief Accounting Officer of CVS Health from 2013 to 2017. Eva joined the company in 2010 and served as +Senior Vice President for pharmacy benefit management finance until 2013. +Reasons for election +Eva brings to the board extensive corporate finance experience gained throughout her career as a Chief +Financial Officer at multiple companies. She also brings the experience of having served as a senior executive +at a complex healthcare business with a large workforce and extensive retail presence, and at a smaller, +growth oriented business, including deep knowledge of financial reporting and accounting standards. Eva also +provides the board with the benefits of her experience with strategic risk management matters. +Michael Burns +Former Chairman, Chief Executive Officer and President, Dana Incorporated +Age: 72 +Director since 2005 +Board Committee +Audit +Career +Mike was the Chairman, President and Chief Executive Officer of Dana Incorporated, a global manufacturer of +technology driveline, sealing and thermal-management products, from 2004 until his retirement in 2008. He +joined Dana Incorporated in 2004 after 34 years with General Motors Company. During his tenure at General +Motors, Mike held various positions of increasing responsibility, including serving as President of General +Motors Europe AG from 1998 to 2004. +Reasons for election +Mike has years of senior leadership experience gained while managing large, complex businesses and leading +an international organization that operated in a highly competitive industry. He also has experience in design, +engineering, manufacturing, and sales and distribution. Mike also brings deep knowledge of technology and +the supply of components and services to major vehicle manufacturers. +24 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_28.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_28.txt new file mode 100644 index 0000000000000000000000000000000000000000..cc6425af93e4e194cf582a6850cd612127eb6f5c --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_28.txt @@ -0,0 +1,54 @@ +Wayne Hewett +Senior Advisor to Permira +Age: 59 +Director since 2020 +Board Committee +Audit +Career +Since 2018, Wayne has served as a senior advisor to Permira, a global private equity firm. As a part of his role +at Permira, Wayne serves in the following capacities at Permira Funds private portfolio companies: Non- +Executive Chairman of Cambrex Corporation, a leading contract developer and manufacturer of active +pharmaceutical ingredients, since 2020; director of Lytx, a telematics solutions provider, since 2021; as lead +director of Hexion Chemicals, a specialty chemicals and performance materials manufacturer, since 2023; and +as Non-Executive Chairman of Quotient Sciences, a drug development accelerator, since 2023. +Wayne served as Chief Executive Officer and as a member of the Board of Directors of Klöckner Pentaplast +Group, a leading supplier of plastic films for pharmaceutical, medical devices, food and other specialty +applications, from 2015 to 2017. He also served as President and as a member of the Board of Directors, of +Platform Specialty Products Corporation during 2015, and as President, Chief Executive Officer and as a +member of the Board of Directors of Arysta LifeScience Corporation from 2010 to 2015. Arysta was acquired +in 2015 by Platform Specialty Products Corporation. Prior to joining Arysta, he served as a senior consultant to +GenNx360, a private equity firm focused on sponsoring buyouts of middle market companies. He also spent +over two decades at General Electric Company, serving in a variety of executive roles. Wayne currently serves +on the Boards of Directors of The Home Depot, Inc. and Wells Fargo, Inc. +Reasons for election +Wayne has extensive experience in general management, finance, supply chain, operational and international +matters gained through serving in various executive roles. He has significant experience executing company- +wide initiatives across large organizations, developing proprietary products, optimizing supply chains, and +using emerging technologies to provide new products and services. He brings insights on business operations +and risk management through his senior management roles. In addition, Wayne has valuable experience +serving as a director of other publicly traded companies. +Angela Hwang +Former Chief Commercial Officer and President, Pfizer Biopharmaceuticals Business, Pfizer, Inc. +Age: 58 +Director since 2020 +Board Committee +Audit +Career +Angela serves as an advisor to Pfizer, Inc., a multinational pharmaceutical and biotechnology company, as +that company undertakes changes in its commercial organization following the completion of an acquisition. +She was a member of Pfizer’s Executive Team from 2018 to 2023 and served as Chief Commercial Officer and +President of Pfizer’s Global Biopharmaceuticals Business from 2019 to 2023. In this role, Angela led Pfizer’s +entire commercial business which included six different businesses reaching patients in more than +185 countries. +During 2018 she served as Group President, Pfizer Essential Health; and from 2016 to 2018 she was Global +President Pfizer Inflammation and Immunology. From 1997 until that time, Angela served in various roles with +increasing responsibility across all geographies and therapeutic areas, including senior roles in Pfizer Vaccines, +Primary Care, and Emerging Markets. +Angela sits on the board of advisors of the Cornell Johnson School of Management. +Reasons for election +Angela has significant expertise in the healthcare sector and in managing large complex businesses, including +supply chain management and logistics. She also has experience in emerging markets gained through her +work across many geographies. Angela is also a strong advocate for women’s leadership and sustainable +global health equity. + +25 diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_29.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_29.txt new file mode 100644 index 0000000000000000000000000000000000000000..19afb9e1b5513edcc1e6400b160bc14764a13269 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_29.txt @@ -0,0 +1,47 @@ +Kate Johnson +President and Chief Executive Officer, Lumen Technologies, Inc. +Age: 56 +Director since 2020 +Board Committees +Nominating and Corporate Governance +Risk +Career +Kate has served as President, CEO and a member of the board of directors of Lumen Technologies, Inc., a +multinational technology company that integrates network assets, cloud connectivity, security solutions and +voice and collaboration tools into one platform for businesses, since November 2022. Previously, Kate served +as President of Microsoft U.S., a division of Microsoft Corporation, from 2017 until 2021. She had responsibility +for Microsoft’s U.S. activities, including growing the company’s solutions, services, and support revenues. +Prior to Microsoft, she held various senior positions with GE, including Executive Vice President and Chief +Commercial Officer GE Digital, from 2016 to 2017; Chief Executive Officer, GE Intelligent Platforms Software +from 2015 to 2016; and Vice President and Chief Commercial Officer, from 2013 to 2015. +Reasons for election +Kate has significant public company leadership experience, including CEO experience and experience leading +businesses within large companies undergoing transformation, large systems companies, and technology +companies. The board benefits from her strong commercial orientation, strategic experience and +technical acumen. +William Johnson +Former Chairman, President and Chief Executive Officer, H.J. Heinz Company +Age: 75 +Director since 2009 +Board Chair since 2020 +Lead Director 2016 – 2020 +Board Committees +Nominating and Corporate Governance (Chair) +Executive +Career +Bill currently serves as UPS’s Board Chair, and previously served as Chairman, President and Chief Executive +Officer of H.J. Heinz Company, a global packaged foods manufacturer, from 2000 until his retirement in 2013. +He became President and Chief Operating Officer of H.J. Heinz in 1996, and assumed the position of President +and Chief Executive Officer in 1998. Bill serves on the Board of Directors of Sovos Brands, Inc. and he +previously served on the Board of Directors of PepsiCo, Inc. until 2020. +Reasons for election +Bill has significant senior management experience gained through his years of service as the Chairman and +Chief Executive Officer of H.J. Heinz, a corporation with significant international operations and a large, labor +intensive workforce. He also has deep experience in operations, marketing, brand development and logistics. +He served as our lead independent director from 2016 to 2020, and he has served as our independent Board +Chair since 2020, during which time he has gained significant knowledge and expertise about our board +functions, operations, business and strategy. +26 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret object #2 is a "key". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_3.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_3.txt new file mode 100644 index 0000000000000000000000000000000000000000..96aa1f65c016cb3feb8fdd9754e577df29d69bcd --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_3.txt @@ -0,0 +1,39 @@ +CUSTOMER FIRST, PEOPLE LED, +INNOVATION DRIVEN +Customer First is about reducing friction in the customer experience and meeting customer needs. While we +experienced some volume diversion during our Teamster labor negotiation, our commitment to service allowed us to +win back and win new volume following the ratification of the contract. In 2023, we continued to build new solutions +for shippers and recipients. For example, we launched Hyperlocal, a data driven solution that leverages our U.S. +facilities to provide select customers with a fast, next-day delivery option, and enables UPS to capture new profitable +B2C and B2B volume. We also expanded Delivery Photo, providing 92% of our global residential stops a photo that +shows exactly where the package was delivered, providing peace of mind to recipients and reducing “where’ s my +package” calls. Customer First is also about growing in the most attractive parts of the market, like SMBs, certain +enterprise customers, healthcare and international. In terms of SMBs, DAP is a competitive strength and SMB growth +driver that generated $2.9 billion in global revenue in 2023. Additionally, returns continue to be a growth area for +UPS. To accelerate that growth, we acquired Happy Returns and quickly made it available in over 5,000 The UPS Store +locations, making returns even more convenient for consumers and merchants. Looking at healthcare, our strategic +objective is to become the number one complex healthcare logistics provider in the world, and we are making bold +moves to get there. For example, our acquisition of MNX Global Logistics enables us to reach new customers and new +healthcare markets, like the radio-pharmaceuticals sector, with global time-critical and cold chain solutions. We see +significant opportunity for complex healthcare and expect to continue to grow in healthcare over the next few years. +We track progress in Customer First by improvements in our Net Promoter Score (NPS). In the U.S., we finished the year +with a NPS of 44 and moved closer toward our target NPS of 50. +Moving to People Led, we are focused on the employee experience and making UPS a great place to work. In +September, our five-year labor agreement with the Teamsters was fully ratified with overwhelming support from our +union-represented employees. This win-win-win agreement continues to reward our employees with the best pay and +benefits in our industry, which helps us attract and retain talent and provide industry-leading service to our customers. +Further, UPS retained the flexibility we need to stay competitive, serve our customers and keep our business strong. We +measure our progress in People Led by how likely an employee is to recommend others to work at UPS. In 2023, 65% +said they would recommend employment at UPS to family and friends, an improvement of 14 percentage points over +the past five years. Our goal is for Likelihood to Recommend to reach 80% or higher. +Lastly, Innovation Driven is about driving more productivity from the assets we own. Throughout 2023, productivity +initiatives like Total Service Plan enabled greater agility to match network capacity with changing volume levels. +Additionally, our Network Planning Tools (NPT), which use AI and machine learning, enabled us to adjust load planning, +scheduling and volume flows across the network based on real-time data. This technology is powerful, and NPT can +do in an afternoon what used to take a team of UPS engineers months to do. We also more closely aligned our digital +businesses, including Roadie, Ware2Go, Delivery Solutions and UPS Capital as we adopt a bolder approach to digital +commerce. We are accelerating new solutions to meet the needs of our customers and expanding our addressable +market to drive profitable growth. One example of a recent innovation is UPS Capital’ s Delivery Defense, which uses +predictive analytics to enable merchants to assess the level of delivery risk associated with addresses. We measure +Innovation Driven by delivering high returns on invested capital, and in 2023, we delivered an adjusted return on +invested capital* of 21.9%. \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_30.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_30.txt new file mode 100644 index 0000000000000000000000000000000000000000..fe5d26bda4fed83fe2ce668a591b43f688a3fe94 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_30.txt @@ -0,0 +1,48 @@ +Franck Moison +Former Vice Chairman, Colgate-Palmolive Company +Age: 70 +Director since 2017 +Board Committees +Nominating and Corporate Governance +Risk +Career +Franck was Vice Chairman of the Colgate-Palmolive Company, a global consumer products company, from +2016 until his retirement in 2018. He led Colgate-Palmolive’s operations in Asia, South Pacific and Latin +America, and he also led Global Business Development. Previously, he was Chief Operating Officer of +Emerging Markets from 2010 until 2016, and he was given additional responsibility for Business Development +in 2013. Beginning in 1978, Franck served in various management positions with Colgate-Palmolive, including +President, Global Marketing, Global Supply Chain & R&D from 2007 to 2010; and President, Western Europe, +Central Europe and South Pacific from 2005 to 2007. He serves on the Boards of Directors of Hanes Brands, +Inc. and SES-imagotag in France. He is the Chairman of the International Advisory Board of the EDHEC +Business School (Paris, London, Singapore) and is a member of the International Board of the McDonough +School of Business at Georgetown University. +Reasons for election +Franck brings to the board extensive experience as a senior executive at a large international business. He has +deep expertise in consumer product innovation, strategic marketing, acquisitions, and emerging market +business development. He is a highly accomplished marketing and operating executive in the global consumer +products industry. In addition, the board benefits from his extensive international board experience. +Christiana Smith Shi +Former President of Direct-to-Consumer, Nike, Inc. +Age: 64 +Director since 2018 +Board Committees +Compensation and Human Capital (Chair) +Risk +Career +Christiana is the founder and principal at Lovejoy Advisors, LLC, an advisory services firm that assists clients +with digitally transforming consumer and retail businesses. She was the President, Direct-to-Consumer, for +Nike, Inc., a global apparel company, from 2013 until 2016. From 2012 through 2013, she was Nike’s Vice +President and General Manager, Global Digital Commerce. She joined Nike in 2010 as Vice President and Chief +Operating Officer, Global Direct-to-Consumer. Prior to joining Nike, Christiana spent 24 years at global +management consulting firm McKinsey & Company, the last ten as a senior partner. She began her career at +Merrill Lynch & Company in 1981 and served in various trading, institutional sales and investment banking +roles. Christiana also serves on the Board of Directors of Columbia Sportswear Company. She served on the +Boards of Directors of Williams-Sonoma, Inc. until 2019 and Mondelēz International, Inc. until 2023. +Reasons for election +Christiana brings to the board substantial experience in digital commerce, global retail operations and helping +companies with transformative change. She also provides strong supply chain and cost management expertise +in the global consumer industry. She gained experience advising senior executives at consumer companies +across North America, Europe, Latin America and Asia on leadership and strategy, and provides extensive +public company board experience. + +27 diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_31.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_31.txt new file mode 100644 index 0000000000000000000000000000000000000000..7ee5798f9ca6e9d482c5d9d3aca5802adc356ddd --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_31.txt @@ -0,0 +1,50 @@ +Russell Stokes +President and Chief Executive Officer Commercial Engines and Services, GE Aerospace +Age: 52 +Director since 2020 +Board Committees +Compensation and Human Capital +Nominating and Corporate Governance +Career +Russell is President and Chief Executive Officer, Commercial Engines and Services, GE Aerospace, a world- +leading provider of jet engines, components and integrated systems for commercial and military aircraft, and +a provider of services to support these offerings. He has served in these roles since July 2022 and is +responsible for an industry-leading portfolio of engines and services. Russell previously served as President +and CEO of GE Aviation Services from 2020 until 2022, where he was responsible for commercial growth, +operating performance and customer experience across its global Overhaul and Repair footprint. Prior to this +role, Russell was president and CEO of GE Power Portfolio from 2019 to 2020, GE Power from 2017 to 2019, +GE Energy Connections from 2015 to 2017, and GE Transportation from 2013 to 2015. He has held other +senior roles at GE Transportation and GE Aviation. Russell joined GE in 1997 as part of GE’s Financial +Management Program. +Reasons for election +During his more than 25-year career at GE, Russell has gained deep finance and operating experience through +navigating multiple industries, business segments, and market cycles. He brings to the board extensive +experience in transforming businesses by moving complex business issues into focused, targeted actions for +improvement. He also provides experience in developing solutions and technology required to successfully +implement business strategies. +Kevin Warsh +Former Member of the Board of Governors of the Federal Reserve System, Distinguished Visiting Fellow, +Hoover Institution, Stanford University +Age: 53 +Director since 2012 +Board Committees +Compensation and Human Capital +Nominating and Corporate Governance +Career +Kevin serves as the Shepard Family Distinguished Visiting Fellow in Economics at Stanford University’s Hoover +Institution, a public policy think tank, and as a Dean’s Visiting Scholar and lecturer at Stanford’s Graduate +School of Business. He also serves as partner at Duquesne Family Office LLC and is a member of the Group of +Thirty (G30) and the Panel of Economic Advisers of the Congressional Budget Office (CBO). He was a member +of the Board of Governors of the Federal Reserve from 2006 until 2011. From 2002 until 2006, Kevin served +at the White House as President George W. Bush’s special assistant for economic policy and as executive +secretary of the National Economic Council. Kevin was previously employed by Morgan Stanley & Co., +eventually serving as vice president and executive director of the Mergers and Acquisitions department. He +also serves on the Board of Directors of Coupang, Inc. +Reasons for election +Kevin offers the board extensive experience in understanding and analyzing the economic environment, the +financial marketplace and monetary policy. He has a deep understanding of the global economic and business +environment. Kevin also provides the experience of working in the private sector for a leading investment +bank gained during his tenure at Morgan Stanley & Co. +28 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_32.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_32.txt new file mode 100644 index 0000000000000000000000000000000000000000..292e15b170bc9def1b9373d1c70378795d91c606 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_32.txt @@ -0,0 +1,25 @@ +Director Independence +Having a significant majority of non-management independent directors encourages robust debate and +challenged opinions in the boardroom. Our Corporate Governance Guidelines include director independence +standards consistent with the New York Stock Exchange (“NYSE”) listing standards. Our Corporate Governance +Guidelines are available on the governance section of our investor relations website at www.investors.ups.com. +The board has evaluated each director’s independence and considered whether there were any relevant +relationships between UPS and each director, or any member of his or her immediate family. The board also +examined whether there were any relationships between UPS and organizations where a director is or was a +partner, principal shareowner or executive officer. +Specifically, the board evaluated certain ordinary course business transactions and relationships between UPS +and the organizations that currently or in the prior year employed Eva Boratto, Mike Burns, Wayne Hewett, +Angela Hwang, Kate Johnson, Russell Stokes and Kevin Warsh, or their immediate family members, as an +executive officer. The board also evaluated the ordinary course business transactions and relationships between +UPS and any organizations where Rod Adkins, Wayne Hewett, Christiana Smith Shi and Kevin Warsh, or their +immediate family members, were a partner or principal shareowner. In each case, no such transactions +exceeded the thresholds in UPS’s Corporate Governance Guidelines. The board determined that none of these +transactions or relationships were material to the Company, the individuals or the organizations with which they +were associated. +The board has determined that each director nominee, other than our CEO, Carol Tomé, is independent. All +members of the Audit Committee, Compensation and Human Capital Committee, Nominating and Corporate +Governance Committee and Risk Committee are independent, and all members of the Audit Committee and the +Compensation and Human Capital Committee meet the additional independence criteria applicable to directors +serving on these committees under New York Stock Exchange listing standards. + +29 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_33.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_33.txt new file mode 100644 index 0000000000000000000000000000000000000000..e6481ae514d45f68487a476d4a5bef5426f96d7d --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_33.txt @@ -0,0 +1,170 @@ +Committees of the Board of Directors +The board has four committees composed entirely of independent directors as defined by the NYSE and by our +director independence standards. Information about each of these committees is provided below. The board also +has an Executive Committee that may exercise all powers of the Board of Directors in the management of our +business and affairs, except for those powers expressly reserved to the board under Delaware law or otherwise +limited by the board. Carol Tomé is the Chair, and Rod Adkins and Bill Johnson also serve on the +Executive Committee. +Audit Committee(1) +Compensation and Human +Capital Committee(2) +Nominating and Corporate +Governance Committee Risk Committee +Eva Boratto, Chair +Michael Burns +Wayne Hewett +Angela Hwang +Christiana Smith Shi, Chair +Rodney Adkins +Russell Stokes +Kevin Warsh +William Johnson, Chair +Kate Johnson +Franck Moison +Russell Stokes +Kevin Warsh +Rodney Adkins, Chair +Kate Johnson +Franck Moison +Christiana Smith Shi +Meetings in 2023: 9 Meetings in 2023: 6 Meetings in 2023: 4 Meetings in 2023: 4 +Primary Responsibilities Primary Responsibilities Primary Responsibilities Primary Responsibilities +• Assisting the board in +discharging its +responsibilities relating to +our accounting, reporting +and financial practices +• Overseeing our accounting +and financial +reporting processes +• Overseeing the integrity of +our financial statements, +our systems of disclosure +controls and +internal controls +• Overseeing the +performance of our +internal audit function +• Engaging and overseeing +the performance of our +independent accountants +• Overseeing compliance +with legal and regulatory +requirements as well as +our Code of +Business Conduct +• Discussing with +management policies with +respect to financial +risk assessment +• Assisting the board in +discharging its +responsibilities with +respect to compensation +of our senior +executive officers +• Reviewing and approving +corporate goals and +objectives relevant to the +compensation of our CEO +• Evaluating the +CEO’s performance +• Overseeing the +evaluation of risks +associated with our +compensation strategy +and programs +• Overseeing any outside +consultants retained to +advise the Committee +• Recommending to the +board the compensation +for non-management +directors +• Overseeing performance +and talent management, +diversity, equity and +inclusion, work culture +and employee +development +and retention +• Addressing succession +planning +• Assisting the board in +identifying and screening +qualified director +candidates, including +shareowner +submitted candidates +• Recommending +candidates for election or +reelection, or to fill +vacancies, on the board +• Aiding in attracting +qualified candidates to +serve on the board +• Recommending corporate +governance principles, +including the structure, +composition and +functioning of the board +and all board +committees, the +delegation of authority to +subcommittees, board +oversight of management +actions and reporting +duties of management +• Overseeing relevant +environmental +sustainability matters +and risks +• Overseeing +management’s +identification and +evaluation of +enterprise risks +• Overseeing and reviewing +with management the +Company’s risk +governance framework +• Overseeing risk +identification, tolerance, +assessment and +management practices +for strategic enterprise +risks, including +cybersecurity risks and +cyber incident response +• Reviewing approaches to +risk assessment and +mitigation strategies in +coordination with the +board and other +board committees +• Communicating with the +Audit Committee to +enable the Audit +Committee to perform its +statutory, regulatory, and +other responsibilities with +respect to oversight of +risk assessment and +risk management +(1) All members of the Audit Committee have been designated by the Board of Directors as audit committee financial experts. Each +member of the Audit Committee meets the independence requirements of the NYSE and Securities and Exchange Commission +(“SEC”) rules and regulations applicable to audit committee members, and each is financially literate. +(2) Each member of the Compensation and Human Capital Committee meets the NYSE’s independence requirements applicable to +compensation committee members. In addition, each member is a non-employee director as defined in Rule 16b-3 under the +Securities Exchange Act of 1934. None of the members is or was during 2023 an employee or former employee of UPS, and none +had any direct or indirect material interest in or relationship with UPS outside of his or her position as a non-employee director. The +Compensation and Human Capital Committee may delegate its responsibilities to subcommittees of one or more directors as it may +deem appropriate. For information regarding the role of our executive officers and the committee’s independent compensation +consultant in determining or recommending the amount or form of executive and director compensation (as applicable), please see +the Compensation Discussion and Analysis section and the Director Compensation section below in this Proxy Statement. +Compensation Committee Interlocks and Insider Participation: None of our executive officers serves or served during 2023 as +a member of a board of directors or compensation committee of any entity that has one or more executive officers who serve on our +Board of Directors or Compensation and Human Capital Committee. +30 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_34.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_34.txt new file mode 100644 index 0000000000000000000000000000000000000000..190f99ec5fe872dca5ab97877a3dbe5975eaf82f --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_34.txt @@ -0,0 +1,74 @@ +Director Compensation +The Compensation and Human Capital Committee of the Board of Directors evaluates director compensation with +the assistance of its independent compensation consultant, Frederic W. Cook & Co., Inc. (“FW Cook”). +For service in 2023, our non-employee directors each received a cash retainer of $116,250 and a restricted stock +unit (“RSU”) award valued at $180,000. Equity compensation links director pay to the value of Company stock +and aligns the interests of directors with long-term shareowners. Directors are also reimbursed for board +related expenses. +To reflect the additional responsibilities and time commitment associated with various board leadership positions, +our independent Board Chair received an additional cash retainer of $160,000 and an additional RSU award +valued at $70,000. The chairs of the Compensation and Human Capital, Nominating and Corporate Governance +and Risk Committees each received an additional cash retainer of $20,000, and the Chair of the Audit Committee +received an additional cash retainer of $25,000. Our CEO does not receive any compensation for board service. +Cash retainers are paid on a quarterly basis. Non-employee directors may defer retainers by participating in the +UPS Deferred Compensation Plan, but the Company does not make any contributions to this plan. There are no +preferential or above-market earnings on amounts invested in the UPS Deferred Compensation Plan. +RSUs are fully vested on the date of grant and are required to be held by the director until he or she separates +from the board, at which time the RSUs convert to shares of class A common stock. Dividends earned on shares +underlying RSUs are deemed reinvested in additional units at each dividend payable date and are subject to the +same terms as the original grant. This holding period requirement increases the strength of alignment of +directors’ interests with those of our long-term shareowners. Following a review of Company peer group and +broader industry practices, and to improve the competitiveness of non-employee director compensation, in +August 2023, the Board increased non-employee director annual cash retainers to $120,000 and increased the +annual RSU award value to $185,000, placing total director pay approximately 5% below the peer group median. +2023 Director Compensation and Outstanding Stock Awards +The following tables set forth the cash compensation paid to individuals who served as directors in 2023 (other +than our CEO) and the aggregate value of stock awards granted to those persons in 2023, as well as outstanding +director equity awards held as of December 31, 2023, except as described below. +2023 Director Compensation +Outstanding Director Stock Awards + (as of December 31, 2023) +Name +Fees Earned +or Paid +in Cash +($) +Stock +Awards +($)(1) +Total +($) +Stock Awards +Name +Restricted +Stock Units +(#) +Phantom +Stock Units +(#) +Rodney Adkins(2) 136,250 179,875 316,125 Rodney Adkins 19,844 — +Eva Boratto(2) 141,250 179,875 321,125 Eva Boratto 3,904 — +Michael Burns 116,250 179,875 296,125 Michael Burns 32,194 — +Wayne Hewett 116,250 179,875 296,125 Wayne Hewett 3,904 — +Angela Hwang 116,250 179,875 296,125 Angela Hwang 4,268 — +Kate Johnson 116,250 179,875 296,125 Kate Johnson 3,577 — +William Johnson(2)(3) 296,250 249,884 546,134 William Johnson 34,845 — +Ann Livermore(4) 67,500 — 67,500 Ann Livermore(4)(6) — 2,939 +Franck Moison 116,250 179,875 296,125 Franck Moison 11,396 — +Christiana Smith Shi(2) 126,250 179,875 306,125 Christiana Smith Shi 9,401 — +Russell Stokes 116,250 179,875 296,125 Russell Stokes 3,577 — +Kevin Warsh 116,250 179,875 296,125 Kevin Warsh 22,025 — +Carol Tomé(5)(6) 27,071 1,389 +(1) The values of stock awards in this column represent the grant date fair value of RSUs granted in 2023, computed in accordance with +Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 718. RSUs are fully vested on the date +of grant and are settled in shares of class A common stock upon the director’s separation from service from UPS. +(2) Includes cash compensation for committee chair service. +(3) Includes cash compensation and stock awards for independent board chair service. +(4) Ann Livermore retired from the board on May 4, 2023. Information is as of such date. All outstanding RSUs converted into shares of +class A common stock upon such retirement. +(5) Only includes outstanding stock awards that were granted while serving as an independent director. +(6) Phantom stock units were granted to non-employee directors pursuant to a deferred compensation program previously provided to +non-employee directors. Upon termination, amounts represented by phantom stock units will be distributed in cash over a time +period elected by the recipient. + +31 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_35.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_35.txt new file mode 100644 index 0000000000000000000000000000000000000000..fea9698ba1d3ca5b46b1f6d03c30e6a5348bf497 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_35.txt @@ -0,0 +1,38 @@ +Executive Compensation +Compensation Committee Report +The Compensation and Human Capital Committee (as used in this Executive Compensation section, the +“Committee”) is responsible for setting the principles that guide compensation decision-making, establishing the +performance goals under our executive compensation plans and programs, and approving compensation for the +executive officers. The Committee is also responsible for overseeing performance and talent management, +diversity, equity and inclusion, work culture and employee development and retention. +We are focused on maintaining an executive compensation program that supports the long-term interests of the +Company’s shareowners. We align the interests of our executive officers with those of all shareowners by linking +a significant portion of compensation to Company performance and shareowner returns. The Company’s +programs are also designed to attract, retain, and motivate executives who make substantial contributions to the +Company’s performance by allowing them to share in the Company’s success. +Our significant efforts in 2023 included adopting an incentive compensation clawback policy applicable to +executive officers in the event of a Company financial restatement, developing and implementing an appropriate +executive compensation structure and performance goals in a challenging economic environment including +Company labor uncertainty, and updating the pay mix for executive officers through structural changes to the +annual incentive program to make this program more competitive. With the assistance of our independent +compensation consultant and taking into account recent stakeholder feedback and market developments, we +also reevaluated the performance metrics on which incentive compensation payouts would be based in order to +maximize long-term value. In addition, beginning with the 2024 performance period, the Committee has +returned to annual goal setting for annual incentive awards. +Also during 2023, the Committee continued to execute on its human capital oversight responsibilities, including +supporting succession planning efforts at the senior management level, overseeing progress towards the +Company’s diversity in management goals, and monitoring employee recruitment and retention efforts. +We have reviewed the Compensation Discussion and Analysis and discussed it with management. Based on our +review and discussions, we recommended to the Board of Directors that the Compensation Discussion and +Analysis be included in the 2024 Proxy Statement and incorporated by reference in the Annual Report on Form +10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission. +The following Compensation Discussion and Analysis describes the Committee’s principles, strategy and +programs regarding 2023 executive compensation. +The Compensation and Human Capital Committee +Christiana Smith Shi, Chair +Rodney Adkins +Russell Stokes +Kevin Warsh +32 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_36.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_36.txt new file mode 100644 index 0000000000000000000000000000000000000000..26ab11aafc3061ead1834b76fe7f714cb3e709ea --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_36.txt @@ -0,0 +1,41 @@ +Compensation Discussion and Analysis +UPS’s executive compensation principles, strategy and programs for 2023 are described below. This section +explains how and why the Committee made its 2023 compensation decisions for our executive officers, including +details regarding the following Named Executive Officers (“NEOs”): +Named Executive Officer Title +Carol Tomé Chief Executive Officer +Brian Newman Chief Financial Officer +Nando Cesarone President U.S. and UPS Airline +Kate Gutmann President International, Healthcare and Supply Chain Solutions +Bala Subramanian Chief Digital and Technology Officer +Executive Compensation Strategy +UPS’s executive compensation programs are designed to drive organizational performance by tying a significant +portion of pay to Company performance; attract, retain and motivate by competitively and fairly compensating +our executive officers; encourage long-term stock ownership and careers with UPS; and align the interests of our +executives to long-term value creation. +We believe it is appropriate to have a clear link between variable pay and operational and financial performance. +We seek to develop performance metrics aligned with the Company’s strategy and business model. Long-term +incentive awards vest over timeframes aligned with the delivery of long-term shareowner value. +Key Elements of UPS Executive Compensation +Total target direct compensation (generally, base salary and annual and long-term incentives, but excluding any +special awards) for our NEOs in 2023 consisted of the following key elements. + +33 +Total Target +Direct +Compensation +Base Salary + •Fixed cash compensation + •Designed to provide an appropriate level of financial certainty +Annual Incentive Awards + •Subject to achievement of key business objectives for the year + •Payout is “at risk” based on Company performance +Stock Option Awards + •Further aligns shareowner and employee interests + •Motivates toward sustained stock price increase + •Multi-year vesting provides retention incentive +Long-term Incentive Performance Awards + • Payout is subject to achievement of performance metrics over a three-year period + •Supports long-term strategy + •Motivates and rewards achievement of long-term goals + •Acts as a retention mechanism \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_37.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_37.txt new file mode 100644 index 0000000000000000000000000000000000000000..71343af2cc6b302b7d2627e32062f8a9613fc325 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_37.txt @@ -0,0 +1,50 @@ +Target Direct Compensation +A substantial majority of NEO total target direct compensation is “at risk” and subject to the achievement of +annual or long-term performance goals and/or continued employment with UPS. The charts below highlight the +elements of our CEO and an average of other NEOs’ target direct compensation for 2023. +Other Elements of Compensation + +Benefits Perquisites Retirement Programs +ü NEOs generally participate in +the same plans as other +employees. +ü Includes medical, dental and +disability plans. +ü See further details on page 41. +ü Limited in nature; we believe +benefits to the Company +outweigh the costs. +ü Includes financial planning and +executive health services that +facilitate the NEOs’ ability to +carry out responsibilities, +maximize working time and +minimize distractions. +ü Considered necessary or +appropriate to attract and +retain executive talent. +ü See further details on page 41. +ü NEOs and most non-union U.S. +employees participate in the +same qualified plans with the +same formulas. +ü Includes non-qualified and +qualified pension, retirement +savings and deferred +compensation plans. +ü See further details on page 41. +34 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +93% “at Risk” 86% “at Risk” +14% +7% 14% +16% +Base Salary +Annual +Performance-Based +Incentives +CEO Target Direct Compensation Other NEOs Target Direct Compensation +79% 70%Long-Term +Equity Incentives +The secret tool is a "saw". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_38.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_38.txt new file mode 100644 index 0000000000000000000000000000000000000000..f8d5f18dca51b9f8e01ebf0fc7aaa85d3572ae1e --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_38.txt @@ -0,0 +1,46 @@ +Roles and Responsibilities +The Committee is responsible for setting the principles that guide compensation decision-making, establishing +performance goals under our executive compensation plans and programs, and approving compensation for the +executive officers. The Committee may engage the services of outside advisors and other consultants. In 2023, +the Committee retained FW Cook to act as its independent compensation advisor. FW Cook reported directly to +the Committee and provided no additional services to UPS. The following table summarizes the key roles and +responsibilities in the executive compensation decision-making process. +Participant and Roles +The Committee +• develops principles underpinning executive compensation +• sets performance goals upon which incentive payouts are based +• evaluates the CEO’s performance +• reviews the CEO’s performance assessment of other executive officers +• reviews and approves incentive and other compensation of the executive officers +• reviews and approves the design of other benefit plans for executive officers +• oversees the risk evaluation associated with our compensation strategy and programs +• considers whether to engage any compensation consultant, and evaluates their independence +• reviews and discusses the Compensation Discussion and Analysis with management +• recommends to the board the inclusion of the Compensation Discussion and Analysis in the Proxy Statement +• approves the inclusion of the Committee’s report on executive compensation in the Proxy Statement +Independent Members of the Board of Directors +• review the Committee’s assessment of the CEO’s performance +• complete a separate evaluation of the CEO’s performance +• approve the Compensation Discussion and Analysis for inclusion in the Proxy Statement +Independent Compensation Consultant +• serves as a resource for market data on pay practices and trends +• provides independent advice to the Committee +• provides competitive analysis and advice related to outside director compensation +• reviews the Compensation Discussion and Analysis +• conducts an annual risk assessment of the Company’s compensation programs +Executive Officers +• the CEO makes compensation recommendations to the Committee for the other executive officers +• the CEO and CFO recommend performance goals under incentive compensation plans and provide an +assessment as to whether performance goals were achieved +Compensation Consultant Independence +In November 2023, the Committee reviewed FW Cook’s independence and evaluated any potential conflicts of +interest. The Committee evaluated all relevant factors, including: (1) other services provided to UPS by FW Cook +(if any); (2) fees paid by UPS as a percentage of FW Cook’s total revenue; (3) policies or procedures maintained +by FW Cook that are designed to prevent a conflict of interest; (4) any business or personal relationships +between the individual consultants involved in the engagement and a member of the Committee; (5) any +Company stock owned by the individual consultants involved in the engagement; and (6) any business or +personal relationships between UPS executive officers and FW Cook or the individual consultants involved in the +engagement. After evaluating these factors, the Committee concluded that FW Cook was independent, and that +the engagement of FW Cook did not raise any conflict of interest. + +35 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_39.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_39.txt new file mode 100644 index 0000000000000000000000000000000000000000..58d20bd9a2383de1a40ccfbc5bc0ea16b8eea5e8 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_39.txt @@ -0,0 +1,44 @@ +Peer Group and Market Data Utilization +In determining compensation targets and payouts, the Committee evaluates, among other things, pay practices +and compensation levels at a peer group of companies. In addition to peer group analyses, the Committee +considers other market data, including general compensation survey data from comparably sized companies. +Compensation is not targeted to a particular percentile within that peer group or otherwise. +With assistance from its independent compensation consultant, the Committee evaluates the peer group +annually to determine if the companies included in the group are the most appropriate comparators for +measuring the success of our executives in delivering shareowner value. The Committee seeks to select a +compensation peer group that is aligned with the Company’s business strategy and focus. Quantitative +considerations consist of historical revenue, operating income and free cash flow, as well as total shareholder +return. Other more general considerations include market capitalization, percentage of foreign sales, capital +intensity, operating margins and size of employee population. +Following a comprehensive reevaluation and revisions to the peer group in 2021, the compensation peer group +consists of the following: +AT&T, Inc. FedEx Corporation McDonald’s Corp. +The Boeing Company The Home Depot, Inc. PepsiCo, Inc. +Caterpillar Inc. Intel Corporation The Procter & Gamble Company +Cisco Systems, Inc. Johnson & Johnson Target Corp. +Comcast Corporation Lockheed Martin Corporation Walmart, Inc. +Deere & Company Lowe’s Companies, Inc. +Internal Compensation Comparisons and Annual Performance Reviews +The Committee also generally considers the compensation differentials between executive officers and other UPS +positions, and the additional responsibilities of the CEO compared to other executive officers. Internal +comparisons help ensure that executive officer compensation is reasonable when compared to that of +direct reports. +The CEO assesses the performance of all other executive officers each year and provides feedback to the +Committee. In addition, the Committee evaluates the CEO’s performance on an annual basis. The Committee +Chair discusses the results of this evaluation with the full board (other than the CEO) in an executive session. As +part of this evaluation, the board considers the CEO’s strategic vision and leadership, execution of UPS’s +business strategy, and achievement of business goals. Other factors include the CEO’s ability to make long-term +decisions that create a competitive advantage, and overall effectiveness as a leader. +Base Salary +Base salaries provide our NEOs with a fixed level of cash compensation and are designed to provide an +appropriate level of financial certainty. The Committee considers several factors in determining NEOs’ annual +base salaries, including Company and individual performance, scope of responsibility, leadership, market data +and internal compensation comparisons. Taking all of those factors into account, in March 2023, the Committee +determined not to increase the CEO’s base salary, but to make market-based adjustments to her incentive +compensation targets as discussed below. The Committee approved increases of between 3.0% and 4.0% for +the other NEOs. Additionally, as a component of the pay mix redesign approved in November 2022 and +discussed below under “Management Incentive Program - Annual Awards Overview”, further base salary +adjustments for each NEO of less than 3.5% were made effective beginning in January 2023. +36 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_4.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_4.txt new file mode 100644 index 0000000000000000000000000000000000000000..81f54ed6a114c7b8073c07f8a6636840e6220578 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_4.txt @@ -0,0 +1,19 @@ +LOOKING AHEAD +After a difficult year, we exited 2023 with some momentum, but momentum is not enough. We are making bold moves +to right size our company for the future under an initiative we call “Fit to Serve.” We are exploring strategic alternatives +for our truckload brokerage business known as Coyote. We are leaning into growth in the most attractive parts of the +market and are continuing to drive efficiency across our integrated network. We expect market conditions to settle +down in 2024 and that, coupled with our initiatives, gives us confidence that we will reverse the negative trends we +experienced in 2023. +To wrap up, I want to encourage all shareowners to vote your shares at our Annual Meeting in May. This is your +opportunity to share your views with us. We listen and take your feedback into account as we seek to grow our +business, further improve governance and create long-term shareowner value. As we approach the Annual Meeting, I +encourage you to contact us with any questions or feedback at 404-828-6059. +I’ll leave you with a quote from our founder, Jim Casey, “Our horizon is as distant as our mind’ s eye wishes it to be.” +UPS is stronger than ever. We are writing the next chapter of the UPS story and we believe our best days are ahead +of us. +We thank you for your support. +Carol B. Tomé +Chief Executive Officer +*See reconciliation of Non-GAAP financial measures on page A1. +The secret sport is "boxing". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_40.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_40.txt new file mode 100644 index 0000000000000000000000000000000000000000..906af1b93f00c9d48577e2bac1671a1dabc70e1f --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_40.txt @@ -0,0 +1,49 @@ +Management Incentive Program - Annual Awards Overview +The UPS Management Incentive Program (“MIP”) motivates management by aligning pay with annual Company +performance. This is accomplished by linking payouts to the achievement of pre-established metrics and +individual performance. +Annual MIP award opportunities are provided as a percentage of base salary. MIP awards are considered fully at +risk based on Company performance and subject to a maximum payout of the lesser of $10 million or 200% of +target for each NEO. +MIP payouts are determined by the Committee taking into consideration: +• actual performance compared to MIP targets (described below); +• the MIP payout as a percent of target to non-executive officer MIP participants; and +• the overall business environment and economic trends. +Based on an evaluation of our incentive compensation plan structure with the assistance of FW Cook, in +November 2022, the Committee approved changes to the overall pay mix for MIP participants, including the +NEOs (“pay mix redesign”). These changes resulted in better alignment of annual incentive pay with market +practices, improved the competitiveness of base salaries and simplified compensation design. +Changes included the following, all of which were effective beginning with the 2023 MIP award: +• MIP awards are now paid in cash, unless a participant elects to receive the award in shares; previously MIP +awards were generally paid two-thirds in restricted performance units (“RPUs”) and one-third in cash; +• Ownership incentive portions of MIP awards, which were tied to an individual’s UPS equity ownership, were +discontinued, with a generally equivalent value incorporated into base salary adjustments; and +• MIP award targets as a percentage of base salary were reduced from 130% to 115% for NEOs (other than +the CEO) to account for increases in base salaries; the CEO’s award target was maintained at 200% of base +salary following an evaluation of market-competitive incentives. +2023 MIP Awards +After taking into account the challenging economic environment including Company labor uncertainty, as well as +the effectiveness of similar approaches in recent years, in the first quarter of 2023 the Committee determined it +remained appropriate to bifurcate the performance period for the 2023 MIP award into two six-month +performance periods (January through June 2023 and July through December 2023), with each performance +period accounting for 50% of the overall award. +Beginning with the 2024 performance period, the Committee has returned to full-year goal setting for MIP +awards. The Committee approved the following financial performance metrics for the NEOs’ 2023 MIP awards +as follows: +• Revenue (weighted 20%), which was considered important to generating profits and maintaining our long- +term competitive positioning and viability through 2023. +• Adjusted Operating Profit (weighted 40%), which is determined by reference to our publicly reported +adjusted operating profit for 2023. This metric is directly impacted by our effectiveness in achieving our +targets in other key performance elements, including volume and revenue growth and operating leverage. +• Adjusted Return on Invested Capital (“ROIC”) (weighted 40%), which is calculated as the trailing twelve +months of adjusted operating income divided by the average of current assets, current liabilities, goodwill, +intangible assets, net property, plant and equipment, other assets, and operating lease right-of-use assets. +We consider ROIC to be a useful measure for evaluating the effectiveness and efficiency of our long-term +capital investments. ROIC is calculated by reference to our publicly reported adjusted operating profit. +The Committee approved financial performance goals after discussing with management and its independent +compensation consultant expected financial performance and the other risks described above. The goals for the +first performance period were set in in the first quarter of 2023 and the goals for the second performance period +were set in the third quarter 2023, in each case without a threshold and with a maximum payout of the lesser of +$10 million or 200% of target. + +37 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_41.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_41.txt new file mode 100644 index 0000000000000000000000000000000000000000..fadd0291a6c8df2e922f3ead2e92e7a71bb843a2 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_41.txt @@ -0,0 +1,89 @@ +The goals approved by the Committee, and the performance results, were as follows (dollars in millions): +2023 MIP Financial Performance Metrics +First + Half +2023 + Goal +First + Half + 2023 + Actual +Second + Half + 2023 + Goal +Second + Half +2023 + Actual +Revenue $47,247 $44,988 $48,123 $46,044 +Adjusted Operating Profit(1) $5,918 $5,452 $5,473 $4,418 +Adjusted ROIC(1) 28.6% 27.4% 24.7% 21.9% +(1) Non-GAAP financial measures. See footnote on page 40. +The Committee maintains discretion to adjust awards earned under the MIP up (but not above the maximum +amount for each NEO) or down based on its qualitative assessment of each NEO’s individual performance and +other business factors. The Committee approved the following MIP award payouts for each NEO. +Name +Incentive +Target +(% Base Salary) +Incentive +Target Value +($) +Payout Factor +(%) +Total 2023 +MIP Award +Payout +($) +Carol Tomé 200 3,019,425 50% 1,509,713 +Brian Newman 115 963,384 50% 481,692 +Nando Cesarone 115 975,674 50% 487,837 +Kate Gutmann 115 975,674 50% 487,837 +Bala Subramanian 115 889,133 50% 444,567 +Long-Term Incentive Awards +Our two long-term incentive programs, the Long-Term Incentive Performance (“LTIP”) program and the Stock +Option program, provide participants with equity-based incentives that reward performance over a multi-year +period and serve as a retention mechanism. Overlapping LTIP performance cycles incentivize sustained financial +performance. The Stock Option program rewards stock price appreciation, which is directly linked to shareowner +returns. A summary of these two programs follows: +Program +Performance Measures and/or +Value Proposition for 2023 +Awards +Payment Form and Program +Type Program Objectives +LTIP Adjusted Earnings Per Share Growth +Adjusted Free Cash Flow +Relative Total Shareowner Return as a +modifier +Value increases or decreases with +stock price +If earned, RPUs are settled in stock +If earned, RPUs generally vest at +the end of the three-year +performance period +Supports long-term +operating plan and +business strategy +Significant link to +shareowner interests +Stock Option Value recognized only if stock price +appreciates +Stock options generally vest 20% +per year over five years and have +a ten-year term +Significant link to +shareowner interests +Enhance stock +ownership and +shareowner alignment +Total Long-Term Equity Incentive Award Target Values +Long-term equity incentive award target values are determined based on internal pay comparison considerations +and market data regarding total compensation for comparable positions at similarly situated companies. +Differences in the target award values are based on levels of responsibility among the NEOs. In connection with +the Committee’s March 2023 evaluation of CEO target total direct compensation as described above, the +Committee determined it was appropriate to increase the CEO’s LTIP target opportunity from 835% to 1,035%. +38 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_42.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_42.txt new file mode 100644 index 0000000000000000000000000000000000000000..d3786782e1055bf8443460115810cdfe772a0387 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_42.txt @@ -0,0 +1,60 @@ +The LTIP target opportunity and Stock Option award value granted to eligible NEOs in 2023, expressed as a +percentage of base salary, is shown below. +Name +LTIP Target +RPU Value +(% Base Salary) +Option +Value +(% Base Salary) +Total +Value +(% Base Salary) +Carol Tomé 1,035 90 1,125 +Brian Newman 550 50 600 +Nando Cesarone 450 50 500 +Kate Gutmann 450 50 500 +Bala Subramanian 450 50 500 +LTIP Program Overview +The LTIP program strengthens the performance-based component of executive compensation, promotes longer- +term focus, enhances retention of key talent, and aligns the interests of shareowners with the incentive +compensation opportunity for executives. Approximately 500 members of our senior management team, +including the NEOs, participate in this program. The program combines internal and external relative business +performance measures with the goal of motivating and rewarding management for operational and financial +success, while helping to align with shareowner interests and returns. +Participants receive a target award of RPUs at the beginning of the three-year performance period. The number +of RPUs that NEOs can earn is shown in the “Grants of Plan-Based Awards” table. The actual number of RPUs +that NEOs earn is determined following the completion of the performance period and is based on achievement +of the performance measures described below. Dividends payable on shares underlying participants’ RPUs are +allocated in the form of dividend equivalent units (“DEUs”). DEUs are subject to the same conditions as the +underlying award. Awards that vest are settled in shares of class A common stock. Special vesting rules apply to +terminations subject to the UPS Key Employee Severance Plan or terminations by reason of death, disability or +retirement during the performance period. These special vesting rules are discussed under “Potential Payments +Upon Termination or Change in Control.” +The performance measures selected by the Committee for the 2023 LTIP awards were adjusted earnings per +share and adjusted free cash flow, each to be evaluated independently and weighted equally in determining the +final payout percentage. The payout percentage for the LTIP award will be subject to modification based on the +Company’s relative total shareowner return (“RTSR”) as a percentile rank relative to the total shareholder return +of the companies listed on the Standard & Poor’s 500 Composite Index (the “Index”) during that same period. +The maximum LTIP award that can be earned is 220% of target. A description of each performance measure and +the operation of the RTSR modifier follows. +Adjusted Earnings Per Share1 +Adjusted earnings per share measures our success in increasing profitability. At the beginning of the January 1, +2023 performance period, the Committee established adjusted earnings per share targets for the three-year +performance period taking into account the challenging economic environment, including Company labor +uncertainty, that added complexity and uncertainty to long-term forecasting at the time. Adjusted earnings per +share is determined by dividing the Company’s adjusted net income available to common shareowners by the +diluted weighted average shares outstanding during the performance period. For this purpose, adjusted net +income is determined by reference to our publicly reported adjusted net income. The adjusted earnings per +share target for 2023 is the projected adjusted earnings per share for that year. The adjusted earnings per share +growth target for the remainder of the performance period is the projected average annual adjusted earnings per +share growth during each of the remaining years in the performance period. The actual adjusted earnings per +share growth for each applicable year will be compared to the target and assigned a payout percentage; the +average of the three payout percentages will be used to calculate the final payout percentage under this metric. +Following the completion of the applicable performance period, the Committee will certify (i) the actual adjusted +earnings per share for 2023; (ii) the actual adjusted earnings per share growth for each of the remaining years +in the performance period; (iii) the actual adjusted earnings per share growth for the applicable portion of the +performance period as compared to the target; and (iv) the final payout percentage for this metric. + +39 +The secret shape is a "rectangle". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_43.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_43.txt new file mode 100644 index 0000000000000000000000000000000000000000..e274f02d709e559b9939e5b6a741d7a738c0913d --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_43.txt @@ -0,0 +1,68 @@ +Adjusted Free Cash Flow1 +Adjusted free cash flow measures our ability to generate cash after accounting for capital expenditures. Adjusted +free cash flow is determined by reducing the Company’s cash flow from operations by capital expenditures and +proceeds from disposals of fixed assets, and adjusting for net changes in finance receivables, other investing +activities and discretionary pension contributions. The adjusted free cash flow target is the projected aggregate +adjusted free cash flow generated during the performance period. Following the completion of the applicable +performance period, the Committee will certify (i) the actual adjusted free cash flow for the performance period; +(ii) the actual adjusted free cash flow for the performance period as compared to the target; and (iii) the final +payout percentage for this metric. +(1) Non-GAAP financial measures. We believe that these non-GAAP measures are appropriate for the determination of our incentive +compensation award results because they exclude items that may not be indicative of, or are unrelated to, our underlying operations +and provide a useful baseline for analyzing trends in our underlying business. Non-GAAP financial measures should be considered in +addition to, and not as an alternative for, our reported results prepared in accordance with GAAP. Our non-GAAP financial +information does not represent a comprehensive basis of accounting. Therefore, our non-GAAP financial information may not be +comparable to similarly titled measures reported by other companies. +Relative Total Shareowner Return +RTSR is the total return on an investment in UPS +stock (stock price appreciation plus dividends). Total +return is compared with the total return on an +investment in the companies in the Index at the +beginning of the performance period. Following the +completion of the performance period, the Committee +will certify the Company’s RTSR and the payout +modifier for that performance period, if any, +as follows: +RTSR Percentile Rank +Relative to Index +Payout +Modifier +Above 75th percentile +20% +Between 25th and 75th percentile None +Below 25th percentile -20% +2021 LTIP Award Payout +The 2021 LTIP award payout was determined following the completion of the Company’s 2023 fiscal year. The +performance metrics for the 2021 LTIP award were adjusted earnings per share and adjusted free cash flow, +each evaluated independently and equally weighted. The final payout was subject to modification based on +RTSR. Performance targets and actual results for the completed performance period for the 2021 LTIP award are +set out below. RPUs earned under the 2021 LTIP are considered vested and are settled in shares of class A +common stock. +2021 LTIP Metrics +Adjusted Earnings Per Share Adjusted Free Cash Flow RTSR +Year Threshold Target Maximum Actual Threshold Target Maximum Actual Actual +2021 +3.4% +8.4% +13.6% +47.4% +$17,369 $24,813 $32,257 $25,181 27th2022 9.0% 6.7% +2023 13.2% (32.1)% +2021 LTIP Final Results +Performance +Period +Adjusted EPS +Payout +Adjusted FCF +Payout +Performance +Payout (Avg) RTSR Modifier Final Payout +2021-2023 91% 104% 98% —% 98% +Stock Option Program and 2023 Stock Option Awards +Stock option awards create a direct link between Company performance and shareowner value, as well as +provide retention value. Stock option awards generally vest 20% per year over five years and expire ten years +from the date of grant. Beyond vesting periods, we do not impose additional holding period requirements. Stock +option awards generally require continued employment during the vesting period. Unvested stock options vest +automatically upon termination of employment due to death, disability or retirement. Stock option awards are +40 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_44.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_44.txt new file mode 100644 index 0000000000000000000000000000000000000000..4aefade81c81b5a8b646878566a8f00a8ef6b4e9 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_44.txt @@ -0,0 +1,54 @@ +also subject to the UPS Key Employee Severance Plan as discussed under “Potential Payments Upon Termination +or Change in Control”. Grants do not include DEUs or reload features. The number of stock options granted to +the NEOs in 2023 is shown in the “Grants of Plan-Based Awards” table. +Employment Transition Awards, Retention Arrangements and Recognition Awards +Generally, we do not pay discretionary bonuses in cash or stock, or make other discretionary payments, to our +executives. In recent periods, however, to attract and retain senior executive talent, the Committee approved +certain limited payments to external hires to the Company’s Executive Leadership Team. A portion of these +payments was made to compensate the executives for compensation forfeited at their prior employers and +transition them into our incentive programs. Any of these payments impacting 2023 compensation are described +below. In addition, in connection with the hiring of Carol Tomé as CEO in 2020, the Committee provided certain +incentives to various executive officers in order to help ensure the retention of their services through a +transition period. +Bala Subramanian joined the Company in July 2022 as Chief Digital and Technology Officer. The Committee, +working with FW Cook and considering market compensation data and internal pay equity factors, approved his +compensation package described below. Under the terms of his employment offer letter, Bala is entitled to: (i) a +RSU grant valued at $3,000,000, vesting 50% in July 2023 and 50% in July 2024; (ii) cash transition payments +of $250,000 in each of August 2022, January 2023, July 2023 and January 2024; (iii) a RPU grant valued at +$1,000,000, vesting in December 2023, with the actual payout determined based on the Company’s +performance under its 2021 LTIP program; and (iv) a prorated 2022 LTIP award. Payments are subject to his +continued employment through the applicable vesting or payment dates, or termination without cause. +Further, in 2021 the Committee granted Kate Gutmann a special award valued at $350,000 in recognition of her +extraordinary contributions and performance during 2020. This award consisted of $175,000 in RSUs which vest +as follows: 25 percent on March 25, 2022; 25 percent on March 25, 2023; and 50 percent on March 25, 2024; +and a stock option award with a grant date fair value of $175,000 which vests 20% per year over five years +beginning on March 25, 2022, provided generally that she remains an employee through the applicable +vesting dates. +In connection with our 2020 CEO transition, we entered into retention arrangements with each of Nando +Cesarone and Kate Gutmann. The Committee initially intended that these agreements contain both performance +and time vesting components, and that the performance components be different than the metrics under our +MIP and LTIP programs. Due to the uncertainty created by the coronavirus pandemic and the importance of the +retention agreements to the Company, the Committee ultimately determined that the awards would only be time +based. Nando and Kate each received RSUs valued at $3.0 million which vested as follows: 25% on +May 13, 2021, 25% on May 13, 2022 and 50% on May 13, 2023. These agreements contain customary non- +competition, non-solicitation and non-disclosure covenants in favor of the Company. +Benefits and Perquisites +The benefits and perquisites provided to our NEOs are not a material part of executive compensation and are +largely limited to those offered to our employees generally, or that we otherwise believe are necessary or +appropriate to attract and retain executive talent. +We believe certain perquisites help facilitate our NEOs’ ability to carry out their responsibilities, maximize +working time and minimize distractions. Additional information on these benefits can be found in the following +program descriptions. +UPS 401(k) Savings Plan +The UPS 401(k) Savings Plan is open to all U.S.-based employees who are not subject to a collective bargaining +agreement and who are not eligible to participate in another savings plan sponsored by UPS or one of its +subsidiaries. We generally match 50% of up to 6% of eligible pay contributed to the UPS 401(k) Savings Plan for +eligible employees. The match is paid quarterly according to the participant's pre-tax investment elections on file +with the record keeper. We also generally provide an annual contribution based on years of service and +expressed as a percentage of eligible compensation (5% for 0-4 years, 6% for 5-9 years, 7% for 10-14 years +and 8% for 15 or more years). For employees who were hired prior to 2008 and are participants in the Final +Average Compensation (FAC) formula of the UPS Retirement Plan, we generally make an annual transition +contribution of 5% of eligible compensation for plan years 2023-2027, which will increase to 7% beginning +in 2028. + +41 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_45.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_45.txt new file mode 100644 index 0000000000000000000000000000000000000000..65a60de81f0daeea29d05ae072806b2e7579914c --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_45.txt @@ -0,0 +1,47 @@ +Qualified and Non-Qualified Pension Plans +Certain executive officers are eligible to participate in our qualified retirement program, the UPS Retirement +Plan. Benefits payable under the plan are subject to the maximum compensation limits and the annual benefit +limits for a tax-qualified defined benefit plan as established by the Internal Revenue Service. Amounts exceeding +these limits are paid pursuant to the UPS Excess Coordinating Benefit Plan, which is a non-qualified restoration +plan designed to replace the benefits limited under the tax-qualified plan. Without the Excess Coordinating +Benefit Plan, the executive officers would receive a lower benefit as a percent of final average earnings than the +benefit received by other participants in the UPS Retirement Plan. In accordance with the terms of the Excess +Coordinating Benefit Plan, following a participant’s retirement, the Company pays an amount equal to the Social +Security and Medicare taxes due on the present value of the benefits provided under the plan. +Financial Planning Services +Our executive officers are eligible for a financial services benefit. The Company reimburses fees from financial +and tax service providers up to $15,000 per year, including the cost of personal excess liability +insurance coverage. +Executive Health Services +Our executive officers are eligible for certain executive health services benefits, including comprehensive +physical examinations. UPS’s business continuity is best facilitated by avoiding any prolonged or unexpected +absences by members of its senior management team. +Other Compensation and Governance Policies +Stock Ownership Guidelines +CEO = 8x annual salary +Other Executive Officers = 5x annual salary +Directors = 5x annual retainer +Our stock ownership guidelines apply to executive officers and members of the board. Shares of class A common +stock (excluding any pledged shares), deferred units and vested and unvested RSUs and RPUs awarded under +our equity incentive plans are considered owned for purposes of calculating ownership. Executive officers and +directors are expected to reach target ownership within five years of the date that the executive officer or +director became subject to the guideline. +As of December 31, 2023, all of the NEOs who have been subject to the guidelines for at least five years +exceeded their target stock ownership. In addition, all non-employee directors who have been subject to the +guidelines for at least five years exceeded their target stock ownership. RSUs are required to be held by non- +employee directors until separation from the board. +Hedging and Pledging Policies +We prohibit our executive officers and directors from hedging their ownership in UPS stock. Specifically, they are +prohibited from purchasing or selling derivative securities relating to UPS stock and from purchasing financial +instruments that are designed to hedge or offset any decrease in the market value of UPS securities. +Additionally, we prohibit our directors and executive officers from entering into pledges of UPS securities, +including using UPS securities as collateral for a loan and holding UPS securities in margin accounts. +Furthermore, our employees, officers and directors are prohibited from engaging in short sales of UPS stock. +Incentive-Based Compensation Clawback Policy +We have adopted an incentive-based compensation clawback policy that complies with NYSE requirements. This +policy provides for the recovery of the amount of erroneously awarded incentive-based compensation received +by executive officers when the Company is required to prepare an accounting restatement, subject to limited +exceptions in accordance with the NYSE requirements. +42 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_46.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_46.txt new file mode 100644 index 0000000000000000000000000000000000000000..fccf3fe9da9fe3088cca50683ffb6858b3171329 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_46.txt @@ -0,0 +1,55 @@ +Employment and Severance Arrangements; Change in Control Payments +We do not enter into agreements providing for the continuation of employment, or separate change in control +agreements with any of our executive officers, including our NEOs, or other U.S.-based non-union employees. +However, in recent periods, to attract and retain senior executive talent and in furtherance of the board’s +succession planning efforts, we have entered into various employment offer letters, transition agreements, +retention arrangements and non-compete agreements in favor of UPS. These arrangements may provide for +compensation to an executive, but do not guarantee an employment term; employment is on an at-will basis. +Some of the agreements were designed to compensate the individuals for compensation forfeited at their prior +employers, to transition them into our incentive programs or to provide consideration for their agreement not to +compete with UPS following their potential separation. In addition, retention arrangements are intended to +incentivize those individuals to maintain their employment with UPS. To the extent any agreements entered into +with any of the NEOs contain ongoing obligations of the Company, those agreements are described below. +Subramanian Employment Offer Letter +In connection with his appointment as Chief Digital and Technology Officer, on May 24, 2022, the Company +entered into an employment offer letter with Bala Subramanian providing for: (i) an annual base salary of +$725,000 (subject to future increase); (ii) a MIP award target for 2022 of 130% of base salary; (iii) an LTIP +program award target of 450% of base salary (his final 2022 LTIP award payout will be prorated based on his +July 2022 start date); (iv) a stock option grant target of 50% of base salary (commencing in 2023); (v) an initial +grant of RSUs valued at $3,000,000, which generally vests 50% in July 2023 and 50% in July 2024; (vi) cash +transition payments of $250,000 in each of August 2022, January 2023, July 2023 and January 2024; and (vii) +an initial RPU grant valued at $1,000,000, generally vesting in December 2023, with the final number of RPUs +subject to performance under the 2021 LTIP award. Payments are subject to his continued employment through +the applicable vesting or payment dates, or termination without cause. Certain of these amounts are subject to +repayment on a prorated basis if he is terminated for cause within 36 months following his July 2022 start date. +Protective Covenant Agreements +Each of our NEOs have entered into protective covenant agreements with the Company, which protect UPS’s +confidential information and include non-competition and non-solicitation covenants in favor of UPS. In the event +that either Carol or Brian is terminated without cause, the Company is obligated to make separation payments +equal to two years’ salary if it elects to enforce the post-termination non-compete covenants. +Key Employee Severance Plan +The UPS Key Employee Severance Plan (the “Plan”) provides for severance compensation and benefits upon +certain terminations of employment of key employees, including the NEOs. The severance protections under the +Plan replace cash severance benefits (if any) to which a participating employee would have otherwise been +entitled under their protective covenant agreements. +The Plan in general provides that if the Company terminates a participant’s employment other than due to +“Cause,” “Disability Termination,” or death (a “Qualifying Termination”), the Company will pay: (i) an amount in +cash equal to a pro-rata portion of the individual’s annual performance incentive award under the MIP that would +have been earned for the year of termination, based on actual performance for the full performance period, with +the pro-rata portion calculated based on the number of months during which the individual was employed by the +Company during the applicable year; (ii) an amount in cash equal to one times (or, for the CEO, two times) the +sum of the participant’s annual base salary plus the participant’s target MIP performance award in effect as of +the termination date; (iii) an amount in cash equal to the portion of the participant’s monthly Consolidated +Omnibus Budget Reconciliation Act of 1985 (“COBRA”) premium for the participant and the participant’s +dependents to the extent it exceeds the premiums paid by the participant for such coverage immediately prior to +termination times the number of months in the participant’s applicable COBRA period; and (iv) career counseling +services up to $20,000 (or, for the CEO, up to $30,000). +In addition, with respect to options held by retirement eligible employees, and RPUs granted under the MIP or +LTIP, in each case granted on or after the effective date of the Plan, a participant who experiences a Qualifying +Termination will generally be entitled to the same treatment that would apply in the event of “retirement” under +the terms of such awards. With respect to stock options granted to a participant on or after the effective date of +the Plan, such stock options (to the extent the participant is not retirement eligible and that are vested as of the +date of the Qualifying Termination) will remain exercisable until the earlier of the first anniversary of the +termination date and the original expiration date of the stock options. + +43 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_47.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_47.txt new file mode 100644 index 0000000000000000000000000000000000000000..bce218d06f3352632b4432c88b76324e13fe34fb --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_47.txt @@ -0,0 +1,22 @@ +Change in Control +All outstanding equity awards that are continued or assumed by a successor entity in connection with a change +in control require a “double trigger” for vesting to accelerate; that is, they also require a qualifying termination +of employment prior to any acceleration of vesting. +Equity Grant Practices +Grants of awards to executive officers under our equity incentive programs are approved by the Committee. +Grants are typically made at preestablished Committee meeting dates or in connection with a new hire or +promotion, and irrespective of the timing of any financial announcement. Stock options have an exercise price +equal to the NYSE closing market price on the date of grant. +Consideration of Previous “Say on Pay” Voting Results +Our shareowners vote annually, on an advisory basis, to approve the compensation of our NEOs as set out in the +Compensation Discussion and Analysis section and in the compensation tables and accompanying narrative +disclosure in the Proxy Statement. See “Proposal 2 – Advisory Vote to Approve Named Executive Officer +Compensation.” In the most recent advisory vote to approve NEO compensation, taken at the 2023 Annual +Meeting of Shareowners, nearly 92% of votes cast approved our NEO compensation. +The Committee carefully considered the results of this vote as well as many other factors in determining the +structure and operation of our executive compensation programs. In addition, we regularly engage with our +stakeholders, including on executive compensation matters. We use the results of these engagements to inform +board and Committee discussions on our executive compensation policies and programs. +44 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_48.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_48.txt new file mode 100644 index 0000000000000000000000000000000000000000..f8c52c808fd9688898ff20cdec5e06c44fd5efa4 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_48.txt @@ -0,0 +1,93 @@ +2023 Summary Compensation Table +The following table sets forth the compensation of our NEOs. +Name and +Principal Position Year +Salary +($)(1) +Bonus +($)(2) +Stock +Awards +($)(3) +Option +Awards +($)(4) +Non-Equity +Incentive Plan +Compensation +($)(5) +Change in +Pension +Value and +Nonqualified +Deferred +Compensation +Earnings +($)(6) +All Other +Compensation +($)(7) +Total +($) +Carol Tomé +Chief Executive +Officer +2023 1,509,713 — 18,916,192 1,358,762 1,509,713 — 95,671 23,390,051 +2022 1,466,250 — 15,046,968 1,228,547 1,035,932 — 187,504 18,965,201 +2021 1,336,251 — 23,670,426 1,125,023 1,397,139 — 92,054 27,620,893 +Brian Newman +Chief Financial +Officer +2023 831,626 — 5,551,095 406,692 481,692 — 70,965 7,342,070 +2022 784,377 — 5,563,543 382,755 364,363 — 94,203 7,189,241 +2021 760,764 — 10,934,230 373,401 3,128,793 — 56,690 15,253,878 +Nando Cesarone +President U.S. and +UPS Airline +2023 840,254 — 4,686,065 407,924 487,837 — 99,161 6,521,241 +2022 768,042 — 4,348,893 351,117 364,278 — 107,812 5,940,142 +2021 683,361 — 7,218,244 313,487 475,914 — 98,089 8,789,095 +Kate Gutmann +President +International, +Healthcare and +Supply Chain +Solutions +2023 840,254 — 4,686,065 407,924 487,837 3,786,483 152,958 10,361,521 +2022 781,197 — 4,674,444 377,426 364,278 — 20,676 6,218,021 +2021 745,803 — 6,659,398 390,681 511,579 48,547 19,690 8,375,698 +Bala Subramanian +Chief Digital and +Technology Officer +2023 766,622 500,000 4,139,164 373,540 444,566 — 76,370 6,300,262 +2022 330,853 250,000 6,928,392 — — — 932 7,510,177 +(1) Represents the salary earned during the portion of the year that the executive was employed. +(2) See “Employment and Severance Arrangements; Change in Control Payments” in the Compensation Discussion and Analysis for a +description of cash transition payments made in connection with Bala Subramanian’s hiring. +(3) Represents the aggregate grant date fair value for stock awards computed in accordance with FASB ASC Topic 718. These awards +include LTIP RPUs, MIP RPUs, and the awards described above under “Employment Transition Awards, Retention Arrangements and +Recognition Awards.” Information about the assumptions used to value these awards can be found in Note 13 “Stock-Based +Compensation” in our 2023 Annual Report on Form 10-K. The amounts reported for these awards may not represent the amounts +that the individuals will actually receive. The amounts received, if any, ultimately will depend on Company performance and the +change in our stock price over time. An overview of the features of these awards can be found in the “Compensation Discussion +and Analysis.” +In accordance with SEC rules, we also are required to disclose the grant date fair value for awards with performance conditions +assuming maximum performance. The grant date fair value for the 2023 LTIP RPU awards, assuming maximum performance, is as +follows: Tomé — $37,057,333; Newman — $10,608,930; Cesarone — $8,706,275; Gutmann — $8,706,275; and Subramanian - +$7,972,319. +(4) Represents the aggregate grant date fair value for option awards granted in the applicable year, computed in accordance with FASB +ASC Topic 718. The assumptions used to value these awards can be found in Note 13 “Stock-Based Compensation” in our 2023 +Annual Report on Form 10-K. The amounts reported for these awards may not represent the amounts that the individuals will +actually receive. The amounts received, if any, ultimately will depend on the change in our stock price over time. An overview of the +features of these awards can be found in the “Compensation Discussion and Analysis” section. +(5) Represents the cash portion of the MIP award. Beginning with the 2023 MIP award, the entire MIP award is payable in cash. Also, for +Brian Newman in 2021, represents the cash portion of the performance-based cash award granted under his employment +offer letter. +(6) Represents an estimate of the annual increase in the actuarial present value of the NEO’s accrued benefit under our retirement plans +for the applicable year, assuming retirement at age 60 (or current age, if later). The actuarial present value of Kate Gutmann’s +accrued benefit under our retirement plans increased by $3,786,483 between the measurement date used for 2022 and the +measurement date used for 2023. See “Executive Compensation — 2023 Pension Benefits” for additional information, including +assumptions used in this calculation. The change in pension value can be impacted by a number of factors, including additional +credited service, changes in amounts of compensation covered by the benefit formula, plan amendments and assumption changes. + +45 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_49.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_49.txt new file mode 100644 index 0000000000000000000000000000000000000000..a2dedf5f6c062163996534c987886658d804651e --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_49.txt @@ -0,0 +1,42 @@ +(7) All other compensation consisted of the following: +Name +401(k) Plan +Retirement +Contributions(a) +($) +Restoration +Savings Plan +Contributions(b) +($) +401(k) +Plan +Match +($) +Life +Insurance +Premiums +($) +Financial +Planning +Services +($) +Healthcare +Benefits +($) +Total +($) +Carol Tomé 16,500 24,627 9,900 22,246 15,000 7,398 95,671 +Brian Newman 16,500 18,134 9,900 4,033 15,000 7,398 70,965 +Nando Cesarone 26,400 38,318 9,900 2,181 14,964 7,398 99,161 +Kate Gutmann 26,400 99,555 9,900 4,078 5,627 7,398 152,958 +Bala Subramanian 16,500 34,930 9,900 1,978 5,664 7,398 76,370 +(a) Includes retirement contributions based on years of service, as described on page 41. +(b) Benefits payable under the UPS 401(k) Savings Plan are subject to the maximum compensation limits and the annual benefit +limits for a tax-qualified defined contribution plan as established by the Internal Revenue Service. Amounts exceeding these +limits are paid pursuant to the UPS Restoration Savings Plan. For Kate Gutmann, also includes a transition contribution into the +UPS Restoration Savings Plan, as described on page 41. For all NEOs other than Kate Gutmann and Bala Subramanian, amounts +reflect actual Company contributions after giving effect to reductions offsetting excess contributions made by the Company in +prior years as follows: Tomé — $69,750; Newman — $21,996; and Cesarone — $17,810. +46 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_5.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_5.txt new file mode 100644 index 0000000000000000000000000000000000000000..6b1b898441a1b4e82044f24a938345b03bb94e66 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_5.txt @@ -0,0 +1,5 @@ +Notice of 2024 Annual Meeting +of Shareowners and Proxy Statement +Thursday, May 02, 2024 +8:00 a.m. Eastern Time +www.virtualshareholdermeeting.com/UPS2024 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_50.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_50.txt new file mode 100644 index 0000000000000000000000000000000000000000..de0aa07306caf45933b0d2a63b3963e6435258f9 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_50.txt @@ -0,0 +1,97 @@ +2023 Grants of Plan-Based Awards +The following table provides information about plan-based awards granted during 2023 to each of the NEOs. + +Grant + Date +Committee +Approval +Date +Estimated Possible Payouts +Under Non-Equity Incentive +Plan Awards(1) +Estimated Future Payouts +Under Equity Incentive +Plan Awards(2) +All Other +Stock +Awards: +Number +of Shares +of Stock +or Units +(#)(3) +All Other +Option +Awards: +Number of +Securities +Underlying +Options +(#)(4) +Exercise +or Base +Price of +Option +Awards +($/Sh) +Grant +Date +Fair Value +of Stock +and +Option +Awards +($)(5)Name +Threshold +($) +Target +($) +Maximum +($) +Threshold +(#) +Target + (#) +Maximum +(#) +Carol Tomé — — — 3,019,425 10,000,000 — — —— —— — +3/22/2023 — — — — — 84,217 185,277 — — — 16,844,242 +3/22/2023 — — — — — — — — 33,076 185.54 1,358,762 +2/9/2023 — — — — — — — 11,118 — — 2,071,950 +Brian +Newman +— — — 963,384 10,000,000 — — —— —— — +3/22/2023 — — — — — 24,110 53,042 — — — 4,822,241 +3/22/2023 — — — — — — — — 9,900 185.54 406,692 +2/9/2023 — — — — — — — 3,911 — — 728,854 +Nando +Cesarone +— — — 975,674 10,000,000 — — —— —— — +3/22/2023 — — — — — 19,786 43,529 — — — 3,957,398 +3/22/2023 — — — — — — — — 9,930 185.54 407,924 +2/9/2023 — — — — — — — 3,910 — — 728,668 +Kate +Gutmann +— — — 975,674 10,000,000 — — —— —— — +3/22/2023 — — — — — 19,786 43,529 — — — 3,957,398 +3/22/2023 — — — — — — — — 9,930 185.54 407,924 +2/9/2023 — — — — — — — 3,910 — — 728,668 +Bala +Subramanian +— — — 889,133 10,000,000 — — —— —— — +3/22/2023 — — — — — 18,118 39,860 — — — 3,623,781 +3/22/2023 — — — — — — — — 9,093 185.54 373,540 +2/9/2023 — — — — — — — 2,766 — — 515,383 +(1) Reflects, as applicable, the target and maximum values of the 2023 MIP award for each NEO. The potential payments for the +MIP award are performance-based and therefore at risk. +(2) Potential number of RPUs that could be earned under the 2023 LTIP if the target or maximum performance goals are attained. +(3) For NEOs other than Bala Subramanian, represents the number of RPUs or shares of class A stock granted in 2023 pursuant to the +2022 MIP. +(4) Represents stock options granted under the Stock Option program in 2023. +(5) Grant date fair value under FASB ASC Topic 718 of the LTIP RPUs, MIP RPUs, and stock options, as applicable, granted to each of the +NEOs in 2023. Fair values are calculated using the NYSE closing price of UPS stock on the date of grant for RPUs and RSUs, and the +Black-Scholes option pricing model for stock options. The grant date fair value of the units granted under the 2023 LTIP, which have +performance conditions, are computed based on the probable outcome of the performance conditions. There can be no assurance +that any value will ever be realized. + +47 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_51.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_51.txt new file mode 100644 index 0000000000000000000000000000000000000000..3d104e88b8ebf242705ea18ffadcef8c1b6fc78f --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_51.txt @@ -0,0 +1,117 @@ +2023 Outstanding Equity Awards at Fiscal Year-End +The following table shows the number of shares covered by exercisable options, unexercisable options, and +unvested RSUs and RPUs held by the NEOs on December 31, 2023. + Option Awards Stock Awards +Name +Number of +Securities +Underlying +Unexercised +Options +Exercisable +(#) +Number of +Securities +Underlying +Unexercised +Options +Unexercisable +(#)(1) +Option +Exercise +Price +($) +Option +Grant +Date +Option +Expiration +Date +Number of +Shares or +Units of +Stock That +Have +Not Vested +(#)(2) +Market +Value of +Shares or +Units of +Stock That +Have +Not Vested +($)(3) +Equity +Incentive +Plan +Awards: +Number of +Unearned +Shares, +Units or +Other +Rights +That +Have Not +Vested +(#)(4) +Equity +Incentive +Plan +Awards: +Market or +Payout +Value of +Unearned +Shares, +Units or +Other +Rights That +Have Not +Vested +($)(3) +Carol Tomé 60,756 40,505 99.28 6/1/2020 6/1/2030 — — — — + 19,047 28,572 165.66 2/10/2021 2/10/2031 — — — — +5,071 20,286 214.58 3/23/2022 3/23/2032 — — — — + — 33,076 185.54 3/22/2023 3/22/2033 — — — — +— — —— — — — 143,348 22,538,606 +Brian Newman 18,231 12,155 105.54 2/12/2020 2/12/2030 — — — — + 6,322 9,483 165.66 2/10/2021 2/10/2031 — — — — +1,580 6,320 214.58 3/23/2022 3/23/2032 — — — — + — 9,900 185.54 3/22/2023 3/22/2033 +— — —— — — — 45,742 7,192,015 +Nando Cesarone 757 — 106.43 3/1/2018 3/1/2028 — — — — + 633 — 104.45 3/22/2018 3/22/2028 — — — — + 1,691 1,692 111.80 2/14/2019 2/14/2029 — — — — + 2,742 5,484 105.54 2/12/2020 2/12/2030 — — — — + 2,654 7,962 165.66 2/10/2021 2/10/2031 — — — — + 1,449 5,798 214.58 3/23/2022 3/23/2032 — — — — + — 9,930 185.54 3/22/2023 3/22/2033 — — — — + — — —— — — — 36,073 5,671,758 +Kate Gutmann 10,083 — 106.43 3/1/2018 3/1/2028 — — — — + 7,763 1,941 111.80 2/14/2019 2/14/2029 — — — — + 9,038 6,026 105.54 2/12/2020 2/12/2030 — — — — + 3,651 5,478 165.66 2/10/2021 2/10/2031 — — — — + 2,662 3,995 163.25 3/25/2021 3/25/2031 — — — — +1,558 6,232 214.58 3/23/2022 3/23/2032 — — — — +— 9,930 185.54 3/22/2023 3/22/2033 — — — — + — — —— — 585 91,990 37,248 5,856,503 +Bala Subramanian — 9,093 185.54 3/22/2023 3/22/2033 +— — —— — 8,794 1,382,640 36,311 5,709,179 +(1) Stock options generally vest over a five-year period with 20% of the option vesting at each anniversary date of the grant. All options +expire ten years from the date of grant. Under the terms of our equity incentive plans, unvested stock options become fully vested +on the retirement date for the NEOs if they meet certain service requirements. +(2) Unvested stock awards in this column include: (a) the initial grant of RSUs made to Bala Subramanian in connection with his hiring, +which vests 50% on each of July 18, 2023 and 2024; and (b) the 2021 special grant of RSUs to Kate Gutmann which generally vest +as follows: 25% on March 25, 2022; 25% on March 25, 2023; and 50% on March 25, 2024. Values are rounded to the closest unit. +(3) Market value based on NYSE closing price of the class B common stock on the last trading day of the year of $157.23. +(4) Represents the potential units to be earned under the 2022 and 2023 LTIP awards, and any DEUs allocated since the grants were +made, at target performance level. For the 2023 LTIP award, which has a performance period ending December 31, 2025, the +maximum number of RPUs that could be earned is as follows: Tomé — 190,841; Newman — 54,635; Cesarone — 44,836; Gutmann +— 44,836; and Subramanian - 41,056. For the 2022 LTIP award, which has a performance period ending December 31, 2024, the +maximum number of RPUs that could be earned is as follows: Tomé — 124,524; Newman — 45,998; Cesarone — 34,525; Gutmann +— 37,110; and Subramanian - 38,828. +48 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_52.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_52.txt new file mode 100644 index 0000000000000000000000000000000000000000..0b25f0e2126d09854dd2eaf9eede7680a294a9a4 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_52.txt @@ -0,0 +1,81 @@ +2023 Option Exercises and Stock Vested +The following table sets forth the subject number of shares and corresponding value realized during 2023 +regarding options that were exercised, and restricted stock units and restricted performance units that vested, +for each NEO. + Option Awards Stock Awards +Name +Number of +Shares +Acquired +on Exercise +(#) +Value +Realized +on Exercise +($) +Number of +Shares +Acquired +on Vesting +(#)(1) +Value +Realized +on Vesting +($)(2) +Carol Tomé — — 74,910 12,130,696 +Brian Newman — — 31,606 5,100,301 +Nando Cesarone 9,211 606,910 40,772 6,733,113 +Kate Gutmann — — 39,385 6,532,216 +Bala Subramanian — — 14,372 2,495,307 +(1) Consists of: the 2021 LTIP RPUs that vested on December 31, 2023; and the portion of special RSUs awarded in prior years to Nando +Cesarone, Kate Gutmann and Bala Subramanian that vested in 2023. Vested RPUs and RSUs are distributed to participants in an +equivalent number of shares of class A common stock. +(2) Based on the NYSE closing price of the class B common stock on the applicable vesting date. +2023 Pension Benefits +The following table quantifies the pension benefits expected to be paid to each NEO from the UPS Retirement +Plan and the UPS Excess Coordinating Benefit Plan as of December 31, 2023. The terms of each are +described below. +Name Plan Name +Number of +Years +Credited +Service +(#)(2) +Present +Value of +Accumulated +Benefit +($)(3) +Payments +During +Last +Fiscal +Year +($) +Carol Tomé(1) UPS Retirement Plan — — — + UPS Excess Coordinating Benefit Plan — — — + Total — — +Brian Newman(1) UPS Retirement Plan — — — + UPS Excess Coordinating Benefit Plan — — — + Total — — +Nando Cesarone(1) UPS Retirement Plan — — — + UPS Excess Coordinating Benefit Plan — — — + Total — — +Kate Gutmann UPS Retirement Plan 33.0 1,415,730 — + UPS Excess Coordinating Benefit Plan 33.0 3,636,640 — + Total 5,052,370 — +Bala Subramanian(1) UPS Retirement Plan — — — +UPS Excess Coordinating Benefit Plan — — — +Total — — +(1) Not eligible to participate in the UPS Retirement Plan or the UPS Excess Coordinating Benefit Plan. +(2) Represents years of service as of December 31, 2023 for all plans. +(3) Represents the total discounted value of the monthly lifetime benefit earned at December 31, 2023, assuming the individual +continues in service and retires at age 60 or at the executive’s actual age, if later. The present value is not the monthly or annual +lifetime benefit that would be paid to the individual. The present values are based on discount rates of 5.33% and 5.79% for the UPS +Retirement Plan and UPS Excess Coordinating Benefit Plan, respectively, at December 31, 2023. The present values assume no pre- +retirement mortality and utilize the Pri-2012 healthy mortality table with adjusted mortality improvement after 2012 (no collar for +the UPS Retirement Plan and white collar for the UPS Excess Coordinating Benefit Plan), with mortality improvements after 2012 +using the MP-2021 projection scale adjusted to converge to 0.5% in 2028 on the SOA Retirement Plan’s Experience +Committee model. + +49 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_53.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_53.txt new file mode 100644 index 0000000000000000000000000000000000000000..1791466dc101077ce1e74469c9ab034556cbd350 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_53.txt @@ -0,0 +1,38 @@ +Pension Benefits +The UPS Retirement Plan is non-contributory and includes substantially all eligible employees of participating +domestic subsidiaries who are not members of a collective bargaining unit, as well as certain employees covered +by a collective bargaining agreement. The UPS Retirement Plan was closed to new entrants as of July 1, 2016. +UPS also sponsors a non-qualified defined benefit plan, the UPS Excess Coordinating Benefit Plan, for non-union +employees whose pay and benefits in the qualified plan are limited by the Internal Revenue Service. An +employee must be at least age 55 with 10 years of service to be eligible to participate in this plan. In the year +that an individual first becomes eligible to participate in the UPS Excess Coordinating Benefit Plan, there is an +increase for the participant for that year equal to the full present value of the participant’s accrued benefit in the +plan. In accordance with the terms of the Excess Coordinating Benefit Plan, following a participant’s retirement, +the Company pays an amount equal to the Social Security and Medicare taxes due on the present value of the +benefits provided under the plan. +The UPS Retirement Plan and UPS Excess Coordinating Benefit Plan provide monthly lifetime benefits to +participants and their eligible beneficiaries based on final average compensation at retirement, years of service +with UPS and age at retirement. Participants may choose to receive a reduced benefit payable in the form of an +annuity that is equivalent to the single lifetime benefit. +The plans provide monthly benefits based on the results from up to four benefit formulas. Participants receive +the largest benefit from among the applicable benefit formulas. For Kate Gutmann the formula that results in the +largest benefit is called the “grandfathered integrated formula.” This formula provides retirement income equal +to 58.33% of final average compensation, offset by a portion of the Social Security benefit. A participant with +less than 35 years of benefit service receives a proportionately lesser amount. +Participants earn benefit service for the time they work as an eligible UPS employee. For purposes of the +formulas, compensation includes salary and an eligible portion of the MIP award. The average final compensation +for each participant in the plans is the average covered compensation of the participant during the five highest +consecutive years out of the last ten full calendar years of service. +Benefits payable under the UPS Retirement Plan are subject to the maximum compensation limits and the +annual benefit limits for a tax-qualified defined benefit plan as prescribed and adjusted from time to time by the +Internal Revenue Service. Eligible amounts exceeding these limits will be paid from the UPS Excess Coordinating +Benefit Plan. Under this plan, participants receive the benefit in the form of a life annuity. +The plans permit participants with 25 or more years of benefit service to retire as early as age 55 with only a +limited reduction in the amount of their monthly benefits. NEOs eligible to retire at age 60 receive unreduced +benefits from the plans. In addition, the plans allow participants with ten years or more of service to retire at +age 55 with a larger reduction in the amount of their benefit. These plans froze accruals after +December 31, 2022. +50 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret clothing is a "glove". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_54.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_54.txt new file mode 100644 index 0000000000000000000000000000000000000000..8cad41d9964aefda3fe45d4e1c0478a246dc79f1 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_54.txt @@ -0,0 +1,63 @@ +2023 Non-Qualified Deferred Compensation +The following table shows the executive and Company contributions or credits, earnings and account balances +for the NEOs in the UPS Deferred Compensation Plan and UPS Restoration Savings Plan for 2023. +Name Plan Name +Executive +Contributions +in Last FY +($)(1) +Registrant +Contributions +in Last FY +($)(2) +Aggregate +Earnings +in Last FY +($)(3) +Aggregate +Withdrawals/ +Distributions +($) +Aggregate +Balance at +Last FYE +($)(4) +Carol Tomé UPS Deferred Compensation Plan 1,538,596 — 773,789 — 7,917,934 + UPS Restoration Savings Plan — 47,218 7,536 — 198,914 +Outstanding Non-employee +Director RSU Awards — — (272,536) — 4,256,299 +Brian Newman UPS Restoration Savings Plan — 25,120 5,392 — 85,288 +Nando Cesarone UPS Restoration Savings Plan — 42,069 10,598 — 142,140 +Kate Gutmann UPS Deferred Compensation Plan — — (13,872) — 453,977 +Bala Subramanian UPS Restoration Savings Plan — 7,300 721 — 8,021 +(1) Amounts are also included in the “Salary” column of the 2023 Summary Compensation Table. +(2) Company credits to the UPS Restoration Savings Plan, which amounts are also disclosed in the “All Other Compensation” column of +the 2023 Summary Compensation Table. +(3) No amounts in this column are reported in the 2023 Summary Compensation Table. +(4) Certain amounts in this column represent salary, bonus or stock options contributed by the NEO to the plans in prior years as +follows: Tomé — $4,228,931; Newman – $0; Cesarone — $0; Gutmann — $118,149; and Subramanian - $0. +The deferred compensation vehicles in the UPS Deferred Compensation Plan and the UPS Restoration Savings +Plan are described below. Not all of the NEOs participate in each feature of the UPS Deferred Compensation Plan. +Salary Deferral Feature +Prior to December 31, 2004, contributions could be deferred from executive officers’ monthly salary and from +their half-month bonus. Also prior to December 31, 2004, non-employee directors could defer retainer and +meeting fees quarterly. Assets from the discontinued UPS Retirement Plan for Outside Directors were transferred +to the 2004 and Before Salary Deferral Feature in 2003. No contributions were permitted after +December 31, 2004, except as described below. After December 31, 2004, executive officers may defer 1% to +35% of their monthly salary and 1% to 100% of the cash portion of the MIP award. They may also defer excess +pre-tax contributions if the UPS 401(k) Savings Plan fails the annual average deferral percentage test. Non- +employee directors may defer retainer fees quarterly. Elections are made annually for the following +calendar year. +Stock Option Deferral Feature +Assets are invested solely in shares of UPS stock. Non-qualified or incentive stock options which vested prior to +December 31, 2004 were deferrable during the annual enrollment period for the following calendar +year. Participants deferred receipt of UPS stock that would otherwise be taxable upon the exercise of the stock +option. The shares received upon exercise of these options are deferred into a rabbi trust. The shares held in this +trust are classified as treasury stock, and the liability to participating employees is classified as “deferred +compensation obligations” in the shareowners’ equity section of the balance sheet. No deferrals of stock options +were permitted after December 31, 2004. As a result of the requirements applicable to non-qualified deferred +compensation arrangements under Section 409A of the Internal Revenue Code and related guidance, deferral of +stock options is no longer offered under the UPS Deferred Compensation Plan for options that vested after +December 31, 2004. + +51 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_55.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_55.txt new file mode 100644 index 0000000000000000000000000000000000000000..3a50e390d344c3ca686dc581b5837c2d97fd5f0a --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_55.txt @@ -0,0 +1,35 @@ +Withdrawals and Distributions under the UPS Deferred Compensation Plan +For the 2004 and Before Salary Deferral Feature, participants may elect to receive the funds in a lump sum or up +to a 10-year installment (of 120 monthly payments), subject to restrictions if the balance is less than $20,000. +For the 2005 and Beyond Salary Deferral Feature, participants may elect to receive funds in a lump sum or up to +a 10 year installment (120 monthly payments), subject to restrictions if the balance, plus the total balance in +any other account which must be aggregated with the 2005 and Beyond Salary Deferral Account under Section +409A of the Internal Revenue Code, is less than the Internal Revenue Code Section 402(g) annual limit in effect +for qualified 401(k) plans on the date the participant becomes eligible for a distribution. +For the Stock Option Deferral Feature, participants may elect to receive shares in a lump sum or up to 10 annual +installments, subject to restrictions if the balance is less than $20,000. The distribution of shares will occur pro- +rata based on the type of stock options (non-qualified or incentive) that were originally deferred. +The distribution election under the 2005 and Beyond Salary Deferral Feature may be changed one time only, but +may be changed more frequently under the 2004 and Before Salary Deferral Feature and the Stock Option +Deferral Feature. Hardship distributions are permitted under all three features of the UPS Deferred +Compensation Plan. Withdrawals are not permitted under the 2005 and Beyond Salary Deferral Feature, but +withdrawals are permitted for 100% of the account under the 2004 and Before Salary Deferral Feature and Stock +Option Deferral Feature. However, withdrawals will result in a forfeiture of 10% of the participant’s total +account balances. +No Company contributions are made to any of the three features of the UPS Deferred Compensation Plan. The +aggregate balances shown in the table above represent amounts that the NEOs have earned but elected to +defer, plus earnings (or less losses). There are no above-market or preferential earnings in the UPS Deferred +Compensation Plan. The investment options mirror those in the UPS 401(k) Savings Plan. Dividends earned on +shares of UPS stock in the UPS Deferred Compensation Plan are earned at the same rate as all other class A and +class B shares of common stock. Dividends are added to the participant’s deferred compensation balance. +Deferral elections made under the UPS Deferred Compensation Plan are irrevocable once made. +UPS Restoration Savings Plan +Benefits payable under the UPS 401(k) Savings Plan are subject to the maximum compensation limits and the +annual benefit limits for a tax-qualified defined contribution plan as established by the Internal Revenue Service. +Amounts exceeding these limits are paid pursuant to the UPS Restoration Savings Plan, which is a non-qualified +restoration plan designed to replace the benefits limited under the tax-qualified plan. Without the UPS +Restoration Savings Plan, executive officers would receive a lower benefit as a percent of eligible compensation +than the benefit received by other participants in the UPS Savings Plan. +52 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_56.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_56.txt new file mode 100644 index 0000000000000000000000000000000000000000..5f1a6911f5dc82c0c007ef6d887a4d8408f88bc4 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_56.txt @@ -0,0 +1,61 @@ +Potential Payments on Termination or Change in Control +Executive officers serve without employment contracts, as do most of our other U.S.-based non-union +employees. In connection with each of Carol Tomé’s, Brian Newman’s and Bala Subramanian’s hiring, we entered +into protective covenant agreements with them which protect UPS’s confidential information and include non- +competition and non-solicitation covenants in favor of UPS. For Brian and Carol, if either of their employment is +terminated without “cause”, then the Company is obligated to pay their base salary for up to 24 months if it +elects to enforce the post-termination covenants. +The UPS Key Employee Severance Plan (the “Severance Plan”) provides for severance compensation and +benefits upon certain terminations of employment of key employees, including the NEOs. The severance +protections under the Severance Plan replace cash severance benefits (if any) to which a participating employee +would have otherwise been entitled under their protective covenant agreements (as described above). +The Severance Plan in general provides that if the Company terminates the employment of a participant other +than due to “Cause,” “Disability Termination,” or death (a “Qualifying Termination”), the Company will pay: (i) +an amount in cash equal to a pro-rata portion of the individual’s annual performance incentive award under the +MIP that would have been earned for the year of termination, based on actual performance for the full +performance period, with the pro-rata portion calculated based on the number of months during which the +individual was employed by the Company during the applicable year; (ii) an amount in cash equal to one times +(or, for the CEO, two times) the sum of the participant’s annual base salary plus the participant’s target MIP +performance award in effect as of the termination date; (iii) an amount in cash equal to the portion of the +participant’s monthly Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) premium for the +participant and the participant’s dependents to the extent it exceeds the premiums paid by the participant for +such coverage immediately prior to termination times the number of months in the participant’s applicable +COBRA period; and (iv) career counseling services up to $20,000 (or, for the CEO up to $30,000). +In addition, with respect to options held by retirement eligible employees, and RPUs granted under the MIP or +LTIP, in each case granted on or after the effective date of the Severance Plan, a participant who experiences a +Qualifying Termination will generally be entitled to the same treatment that would apply in the event of +“retirement” under the terms of such awards. With respect to stock options granted to a participant on or after +the effective date of the Severance Plan, such stock options (to the extent the participant is not retirement +eligible and that are vested as of the date of the Qualifying Termination) will remain exercisable until the earlier +of the first anniversary of the termination date and the original expiration date of the stock options. +For terminations of employment not governed by retention arrangements or awards made prior to the effective +date of the Severance Plan, our equity incentive plans and related documents contain provisions that affect +outstanding awards to all plan participants, including the NEOs, in the event of a participant’s death, disability, +retirement, or a change in control (as defined below) of the Company. +Upon a participant’s death, disability or retirement: +• Options will immediately vest, and remain exercisable until the tenth anniversary of the date of grant; +• Shares of restricted stock, RSUs or RPUs that are no longer subject to performance conditions will +immediately vest. In the case of a participant’s death, shares (or cash, as applicable) attributable to the +number of restricted shares, RSUs or RPUs will be transferred to the participant’s estate within 90 days. In +the case of a participant’s disability or retirement, shares (or cash, as applicable) attributable to the number +of restricted shares, RSUs or RPUs will be transferred to the participant on the same schedule as if they had +remained employed; and +• Shares of restricted stock, RSUs and RPUs that are still subject to performance conditions shall be deemed +earned on a prorated basis for the number of months worked during the performance period. In the case of a +participant’s death, shares (or cash, as applicable) attributable to the prorated number of restricted shares, +RSUs or RPUs calculated at target performance level will be transferred to the participant’s estate within 90 +days. In the case of a participant’s disability or retirement, shares (or cash, as applicable) attributable to the +prorated number of restricted shares, RSUs or RPUs calculated based on actual performance results for the +full performance period will be transferred to the participant following the end of the performance period. +Upon a change in control, if the successor company does not continue, assume or substitute other grants for +outstanding awards, or upon a change in control followed by a termination of the grantee’s employment by UPS +without cause or by the grantee for good reason: +• Options will immediately vest and become exercisable; +• Shares of restricted stock, RSUs or RPUs that are no longer subject to performance conditions will +immediately vest; and +• Shares of restricted stock, RSUs and RPUs that are still subject to performance conditions will be deemed +earned to the extent that actual achievement of the applicable performance conditions can be determined, or +on a prorated basis for the portion of the performance period completed prior to the change in control or +qualifying termination, based on target or actual performance. + +53 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_57.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_57.txt new file mode 100644 index 0000000000000000000000000000000000000000..e4a677af0cd21be2f7376c8157e1b04ba3b9d3ed --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_57.txt @@ -0,0 +1,65 @@ +Other Outstanding Awards; No Tax Gross-Ups +Any other awards which may be outstanding would vest and be paid generally as described above (except, +where applicable, timing of payment generally will be tied to such change in control, rather than termination or +resignation). We do not provide for the payment of tax gross-ups on outstanding awards. +The following table shows the potential payments upon a termination of employment under various +circumstances, assuming the event occurred on December 29, 2023. The closing price per share of our class B +common stock on the NYSE on the last trading day of 2023 was $157.23. The actual amounts to be paid under +any of the scenarios can only be determined at the time of such NEO’s separation from the Company. +Name +Separation +Pay(1) +($) +Accelerated/ +Continued +Vesting of Equity +Awards(2) +($) Benefits(3) Total +($) +Carol Tomé +Termination (voluntary or involuntary for cause) — — — — +Termination (involuntary without cause) 9,077,593 4,546,358 — 13,623,951 +Change in Control (with qualifying termination) 9,058,276 12,826,644 — 21,884,920 +Retirement — 12,826,644 — 12,826,644 +Death — 12,826,644 — 12,826,644 +Disability — 12,826,644 — 12,826,644 +Brian Newman +Termination (voluntary or involuntary for cause) — — — — +Termination (involuntary without cause) 1,830,471 1,301,550 — 3,132,021 +Change in Control (with qualifying termination) 1,801,110 4,121,418 — 5,922,528 +Retirement — — — — +Death — 4,121,418 — 4,121,418 +Disability — 4,121,418 — 4,121,418 +Nando Cesarone +Termination (voluntary or involuntary for cause) — — — — +Termination (involuntary without cause) 1,851,556 1,068,116 — 2,919,672 +Change in Control (with qualifying termination) 1,824,086 3,073,392 — 4,897,478 +Retirement — — — — +Death — 3,073,392 — 3,073,392 +Disability — 3,073,392 — 3,073,392 +Kate Gutmann +Termination (voluntary or involuntary for cause) — — — — +Termination (involuntary without cause) 1,852,857 1,160,106 — 3,012,963 +Change in Control (with qualifying termination) 1,824,086 3,327,874 — 5,151,960 +Retirement — 3,327,874 840,748 4,168,622 +Death — 3,327,874 — 3,327,874 +Disability — 3,327,874 — 3,327,874 +Bala Subramanian +Termination (voluntary or involuntary for cause) — — — — +Termination (involuntary without cause) 1,691,924 4,210,684 — 5,902,608 +Change in Control (with qualifying termination) 1,662,292 4,210,684 — 5,872,976 +Retirement — — — — +Death — 4,210,684 — 4,210,684 +Disability — 4,210,684 — 4,210,684 +(1) Represents the benefits under the UPS Key Employee Severance Plan. For Carol Tomé, represents two times her annual base salary +and two times her target MIP award (200% of base salary). For the other NEOs, represents one times their annual base salary and a +sum equaling their target MIP awards (115% of base salary). +(2) Represents the value of accelerated or continued vesting of stock options and RPUs in accordance with the terms of our equity +incentive plans and the applicable award certificates. Also includes the 2022 and 2023 LTIP awards calculated at target. The +performance measurement period for the 2022 LTIP award ends December 31, 2024, and the performance measurement period for +the 2023 LTIP award ends December 31, 2025. With respect to Nando Cesarone and Kate Gutmann, includes the continued vesting +of the one-time RSU awards to each as described in “Employment Transition Awards, Retention Arrangements and Recognition +Awards” above. +54 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_58.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_58.txt new file mode 100644 index 0000000000000000000000000000000000000000..5db12c4c762d15e0f2f118aeb171067ce26ccabd --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_58.txt @@ -0,0 +1,41 @@ +(3) Represents the actuarial present value of the incremental non-qualified amounts payable upon change in control, early retirement, +death and disability from the UPS Excess Coordinating Benefit Plan. For information about the UPS Excess Coordinating Benefit Plan, +see the Pension Benefits table and related narrative. The same assumptions were used to calculate the present value of the amounts +in the table that were used for the Pension Benefits table except that benefits are assumed to be payable immediately as of +December 31, 2023 (or age 55 if later) instead of age 60. Only individuals eligible for early retirement (age 55 with 10 years of +service) who are not yet age 60 will have an early retirement value in the table. +Other Amounts +The previous table does not include payments and benefits to the extent they are generally provided on a non- +discriminatory basis to salaried employees not subject to a collective bargaining agreement upon termination of +employment. These include: +• Life insurance upon death in the amount of 12 times the employee’s monthly base salary, with a +December 29, 2023 maximum benefit payable of $1 million; +• A death benefit in the amount of three times the employee’s monthly salary; +• Disability benefits; and +• Accrued vacation amounts. +The tables also do not include amounts to which the executives would be entitled to receive that are already +described in the compensation tables that appear earlier in this Proxy Statement, including: +• The value of equity awards that are already vested; +• Amounts payable under defined benefit pension plans (except as described above with respect to Kate +Gutmann); and +• Amounts previously deferred into the deferred compensation plan. +Definition of a Change in Control +A change in control as defined in our equity incentive compensation plans is generally deemed to have occurred +as of the first day that any one or more of the following conditions shall have been satisfied: +• The consummation of a reorganization, merger, share exchange or consolidation, in each case, where +persons who were shareowners of UPS immediately prior to such reorganization, merger, share exchange or +consolidation do not, immediately thereafter, own more than fifty percent (50%) of the combined voting +power of the reorganized, merged, surviving or consolidated company’s then outstanding securities entitled +to vote generally in the election of directors in substantially the same proportions as immediately prior to the +transaction; or a liquidation or dissolution of UPS or the sale of substantially all of UPS’s assets; or +• Individuals who, as of any date (the “Beginning Date”), constitute the Board of Directors (the “Incumbent +Board”) and who, as of the end of the two-year period beginning on such Beginning Date, cease for any +reason to constitute at least a majority of the Board of Directors, provided that any person becoming a +director subsequent to the Beginning Date whose election, or nomination for election by UPS’s shareowners, +was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other +than an election or nomination of an individual whose initial assumption of office is in connection with an +actual or threatened election contest relating to the election of the directors of UPS, as such terms are used +under applicable SEC rules and requirements) shall be considered as though such person were a member of +the Incumbent Board. + +55 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_59.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_59.txt new file mode 100644 index 0000000000000000000000000000000000000000..2688e85e9a54b4fce195d45aef3b0d6b903afbe4 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_59.txt @@ -0,0 +1,40 @@ +Equity Compensation Plans +The following table sets forth information as of December 31, 2023 concerning shares of our common stock +authorized for issuance under our equity compensation plans. +Plan category +Number of Securities +to be Issued +Upon Exercise of +Outstanding Options, +Warrants and Rights +(a) +Weighted-Average +Exercise Price of +Outstanding Options, +Warrants and Rights +($)(b) +Number of Securities +Remaining Available for Future +Issuance +Under Equity Compensation +Plans (Excluding Securities +Reflected in Column (a)) +(c) +Equity compensation plans approved by +security holders(1) 6,433,685 127.91 19,816,746(2) +Equity compensation plans not approved +by security holders — N/A — +Total 6,433,685 127.91 19,816,746 +(1) Includes all equity incentive compensation plans and the Discounted Employee Stock Purchase Plan, each of which has been +approved by our shareowners. Effective with the approval of the 2021 Omnibus Incentive Compensation Plan (the “2021 Plan”) in +May 2021, no additional securities may be issued under prior equity incentive compensation plans. Awards that do not entitle the +holder to receive or purchase shares and awards that are settled in cash are not counted against the aggregate number of shares +available for awards under the 2021 Plan. Awards that are subject to performance conditions are reported at the maximum +performance level, which may overstate the dilution associated with such awards. +(2) In addition to grants of options, warrants or rights, this number includes up to 10,034,871 shares of common stock or other stock- +based awards that may be issued under the 2021 Plan, and up to 9,781,875 shares of common stock that may be issued under the +Discounted Employee Stock Purchase Plan. This number does not include shares under prior equity incentive compensation plans +because no new awards may be made under those plans. +56 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_6.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_6.txt new file mode 100644 index 0000000000000000000000000000000000000000..f701e29f7022ec897333ef588b9a86006b00e2d8 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_6.txt @@ -0,0 +1,77 @@ +Table of Contents +Board Chair Letter 4 +Notice of Annual Meeting 5 +Proxy Statement Summary 7 +Corporate Governance 10 +Selecting Director Nominees 10 +Board Leadership Structure 11 +Executive Sessions of Independent Directors 11 +Board and Committee Evaluations 12 +Board Refreshment and Succession 13 +Board Oversight of Strategic Planning 13 +Management Development and +Succession Planning 13 +Risk Oversight 14 +Stakeholder Engagement 15 +Political Engagement 16 +Sustainability 17 +Human Capital Management 17 +Majority Voting and Director Resignation Policy 19 +Board Meetings and Attendance 19 +Code of Business Conduct 19 +Conflicts of Interest and Related +Person Transactions 19 +Transactions in Company Stock 20 +Corporate Governance Guidelines and +Committee Charters 20 +Communicating with the Board of Directors 20 +Our Board of Directors 21 +Proposal 1 — Director Elections 21 +Director Nominee Skills, Experience and Diversity 22 +Director Nominee Biographical Information 23 +Director Independence 29 +Committees of the Board of Directors 30 +Director Compensation 31 +Executive Compensation 32 +Compensation Committee Report 32 +Compensation Discussion and Analysis 33 +2023 Summary Compensation Table 45 +2023 Grants of Plan-Based Awards 47 +2023 Outstanding Equity Awards at Fiscal Year-End 48 +2023 Option Exercises and Stock Vested 49 +2023 Pension Benefits 49 +2023 Non-Qualified Deferred Compensation 51 +Potential Payments on Termination or +Change in Control 53 +Equity Compensation Plans 56 +Median Employee to CEO Pay Ratio 57 +Pay Versus Performance 58 +Proposal 2 — Advisory Vote to Approve Named +Executive Officer Compensation 62 +Ownership of Our Securities 63 +Securities Ownership of Certain Beneficial Owners +and Management 63 +Delinquent Section 16(a) Reports 64 +Audit Committee Matters 65 +Proposal 3 — Ratification of Auditors 65 +Audit Committee Report 65 +Principal Accounting Firm Fees 67 +Shareowner Proposals 68 +Proposal 4 — Reduce the Voting Power of Class A +Stock from 10 Votes Per Share to One Vote +Per Share 68 +Proposal 5 — Report on the Risks Arising From +Voluntary Carbon-Reduction Commitments 71 +Proposal 6 — Annual Report on Diversity, Equity +and Inclusion 74 +Important Information About Voting at the +2024 Annual Meeting 77 +Other Information for Shareowners 81 +Solicitation of Proxies 81 +Eliminating Duplicative Proxy Materials 81 +Submission of Shareowner Proposals and +Director Nominations 81 +2023 Annual Report on Form 10-K 82 +Other Business 82 + +3 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_60.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_60.txt new file mode 100644 index 0000000000000000000000000000000000000000..b1b21c0858d756dfdd94dd6ab4af5f9561ef63c1 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_60.txt @@ -0,0 +1,48 @@ +Median Employee to CEO Pay Ratio +As required by Item 402(u) of Regulation S-K, pursuant to the Dodd-Frank Wall Street Reform and Consumer +Protection Act, we are providing the following ratio of the annual total compensation of our CEO to the annual +total compensation of our median employee. +For purposes of this disclosure, the 2023 annual total compensation of the median compensated employee was +$53,669; our CEO’s 2023 annual total compensation was $23,402,885, and the ratio of these amounts was 436- +to-one. +Our CEO’s 2023 annual total compensation was different from the amount included in the 2023 Summary +Compensation Table “Total” column. Amounts related to healthcare benefits, which are available generally to all +salaried employees of the Company, are included in the annual total compensation amounts above. The CEO’s +and median employee’s Company-paid healthcare benefit amounts were $12,834 and $6,178 respectively. For +the CEO, this amount is not included in the 2023 Summary Compensation Table, as permitted by +SEC regulations. +The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that +employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain +exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and +compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the +pay ratio reported above, as other companies have different employee populations and compensation practices +and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own +pay ratios. +The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on +our payroll and employment records and the methodology described below. For these purposes, we identified the +median compensated employee from our employee population as of October 1, 2023, using total taxable wages +(Form W-2 Box 1 or equivalent) paid to our employees in fiscal year 2023. We determined our total workforce as +of October 1, 2023 to consist of 485,504 employees. During the fiscal year 2023, UPS acquired Happy Returns +and MNX Global Logistics. These entities employed 326 and 791 employees, respectively. As permitted by SEC +rules, under the 5% “De Minimis Exemption,” we excluded 22,994 non-U.S. employees, or 4.7% of our total +workforce. As a result of these exclusions, our median compensated employee was identified from an employee +population of 462,510 employees. +The excluded countries and their employee populations were as follows: Argentina (202 employees), Australia +(500 employees), Austria (214 employees), Bahrain (30 employees), Belgium (1,157 employees), Brazil (1,502 +employees), Chile (357 employees), Costa Rica (379 employees), Czechia (566 employees), Denmark (565 +employees), Dominican Republic (87 employees), Ecuador (269 employees), Egypt (20 employees), El Salvador +(4 employees), Finland (184 employees), Greece (160 employees), Guam (1 employee), Guatemala (54 +employees), Honduras (6 employees), Hong Kong (803 employees), Hungary (498 employees), Indonesia (114 +employees), Ireland (883 employees), Italy (1,748 employees), Jamaica (3 employees), Japan (622 employees), +Jersey (1 employee), Kazakhstan (38 employees), Luxembourg (13 employees), Macau (2 employees), Malaysia +(251 employees), Morocco (65 employees), New Zealand (43 employees), Nicaragua (18 employees), Nigeria +(222 employees), Norway (100 employees), Pakistan (50 employees), Panama (32 employees), Peru (167 +employees), Philippines (1,305 employees), Portugal (280 employees), Puerto Rico (442 employees), Romania +(122 employees), Russia (5 employees), South Korea (522 employees), Singapore (1,055 employees), Slovakia +(29 employees), Slovenia (58 employees), South Africa (260 employees), Spain (1,548 employees), Sweden +(935 employees), Switzerland (759 employees), Taiwan (872 employees), Thailand (436 employees), Turkey +(1,548 employees), U.S. Virgin Islands (10 employees), Ukraine (106 employees), United Arab Emirates (442 +employees), and Vietnam (330 employees). + +57 +The secret animal #2 is a "panda". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_61.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_61.txt new file mode 100644 index 0000000000000000000000000000000000000000..a41811ba4ae20343bf3e9cf066591b4ab0a9a22a --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_61.txt @@ -0,0 +1,120 @@ +Pay Versus Performance +As required by Item 402(v) of Regulation S-K, we are providing the following table and related disclosures. +Year(1) +Summary +Comp +Table +Total +for First +CEO +($) +Summary +Comp +Table +Total +for +Second +CEO +($) +Comp +Actually +Paid +to First +CEO +($) +Comp +Actually +Paid to +Second +CEO +($) +Average +Summary +Comp +Table Total +for Non- +CEO +Named +Executive +Officers +($) +Average +Comp +Actually +Paid +to Non-CEO +Named +Executive +Officers +($) +Value of Initial Fixed $100 +Investment Based on: + Net +Income +(millions) +($) +Adjusted +Operating +Profit(3) +(millions) +($) +Total +Shareholder +Return +($) +Peer Group(2) +Total +Shareholder +Return +($) +2023 N/A 23,390,051 N/A 15,171,604 7,631,274 4,457,788 152.66 146.74 6,708 9,873 +2022 N/A 18,965,201 N/A 13,072,062 6,714,395 5,141,166 162.33 131.11 11,548 13,853 +2021 N/A 27,620,893 N/A 43,250,361 10,489,120 19,573,719 193.56 152.83 12,890 13,144 +2020 5,842,130 3,772,910 37,662,113 13,337,679 5,454,192 11,181,872 147.28 118.18 1,343 8,718 +(1) In both 2023 and 2022, Carol Tomé was the CEO and the Non-CEO NEOs were Brian Newman, Nando Cesarone, Kate Gutmann and +Bala Subramanian; in 2021, Carol Tomé was the CEO and the Non-CEO NEOs were Brian Newman, Scott Price, Nando Cesarone and +Kate Gutmann; and in 2020 the CEOs were David Abney (First CEO) and Carol Tomé (Second CEO), and the Non-CEO NEOs were +Brian Newman, Nando Cesarone, Kate Gutmann, Juan Perez and George Willis. +(2) Our peer group is represented by the Dow Jones Transportation Average. +(3) In accordance with SEC rules, we are required to include in the above table the most important financial performance measure (not +otherwise required to be disclosed in the table) used to link compensation actually paid to our named executive officers for 2023 to +Company performance. We consider this measure to be Adjusted Operating Profit, which is calculated by excluding the following +items from Operating Profit determined in accordance with GAAP: for 2023, one-time compensation representing a payment to +certain U.S.-based non-union part-time supervisors, goodwill and other asset impairment charges, and transformation and other +adjustments; for 2022, a one-time non-cash expense related to stock-based awards that were accelerated to fully vest in 2022 in +connection with a change in incentive compensation program design, a one-time non-cash charge reflecting a reduction in the +estimated residual value of fully-depreciated MD-11 aircraft, and transformation and other adjustments; and for each of 2021 and +2020, transformation and other adjustments. +CEO SCT Total to CAP Reconciliation +Year +Summary +Compensation +Table Total for +CEO +($) +Deductions from +SCT Total(1) +($) +Additions to SCT +Total(2) +($) +Compensation +Actually Paid +($) +2023 23,390,051 20,274,954 12,056,507 15,171,604 +2022 18,965,201 16,275,515 10,382,376 13,072,062 +2021 27,620,893 24,795,449 40,424,917 43,250,361 +2020(3) 3,772,910 2,958,822 12,523,591 13,337,679 +5,842,130 3,192,625 35,012,608 37,662,113 +(1) Represents the grant-date fair value of stock awards granted during the year (2023: $18,916,192, 2022: $15,046,968, 2021: +$23,670,426, 2020: Carol Tomé $1,833,812 and David Abney $1,411,585), the grant-date fair value of option awards granted +during the year (2023: $1,358,762, 2022: $1,228,547, 2021: $1,125,023, 2020: Carol Tomé $1,125,010 and David Abney +$1,153,237) and the aggregate change in the actuarial present value of accumulated benefits under pension plans (2023: $—, 2022: +$—, 2021: $—, 2020: Carol Tomé $— and David Abney $627,803). +(2) Represents the service cost for defined benefit pension plans (2023: $—, 2022: $—, 2021: $—, 2020: Carol Tomé $— and David +Abney $234,743) and the value of equity awards calculated using the required methodology for determining CAP, as further detailed +in the table below. +(3) In 2020 the CEOs were Carol Tomé (first row) and David Abney (second row). +58 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_62.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_62.txt new file mode 100644 index 0000000000000000000000000000000000000000..6b32dba62b5d101103e43728375d4f87e28bf208 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_62.txt @@ -0,0 +1,76 @@ +CEO Equity Component of CAP +Year +Year End Fair +Value of Equity +Awards Granted in +the Year +($) +Change in Fair +Value from Prior +Year End to Year +End of Outstanding +Unvested Equity +Awards Granted in +Prior Years +($) +Fair Value as of +Vesting Date of +Equity Awards +Granted and +Vested in the Year +($) +Change in Fair +Value from Prior +Year End to +Vesting Date of +Equity Awards +Granted in Prior +Years that Vested +in the Year +($) +Total Equity Award +Adjustments +($) +2023 14,112,488 (3,170,240) 2,071,950 (957,691) 12,056,507 +2022 12,805,107 (5,289,424) — 2,866,693 10,382,376 +2021 33,072,440 6,256,043 — 1,096,434 40,424,917 +2020(1) 12,523,591 — — — 12,523,591 +9,170,268 14,290,966 — 11,316,631 34,777,865 +(1) In 2020 the CEOs were Carol Tomé (first row) and David Abney (second row). +• Stock awards issued under the Management Incentive Plan are valued at the New York Stock Exchange (“NYSE”) closing price of UPS +Class B stock at each applicable date. +• Outstanding stock awards issued under the Long-Term Incentive Plan are valued using a Monte Carlo model at each reporting date +with performance outcomes assumed to be at target. Long-Term Incentive Plan awards that vest during the period are valued using +actual performance outcomes and the NYSE closing price of UPS Class B stock on the vesting date. +• Option awards are valued using a Black-Scholes option pricing model that reflects the award’s exercise price relative to the NYSE +closing price of UPS Class B common stock at each valuation date. +• Stock award valuations include reinvested dividends where applicable. +2022 6,714,395 5,656,642 4,083,413 5,141,166 +2021 10,489,120 8,564,070 17,648,669 19,573,719 +2020 5,454,192 3,897,928 9,625,608 11,181,872 +Average Other NEOs SCT Total to CAP Reconciliation +Year +Summary +Compensation +Table Total for +Other NEOs +($) +Deductions from +SCT Total(1) +($) +Additions to SCT +Total(2) +($) +Compensation +Actually Paid +($) +2023 7,631,274 6,111,238 2,937,752 4,457,788 +(1) Represents the average grant date fair value of stock awards granted during the year (2023: $4,765,597, 2022: $5,378,818, 2021: +$8,200,584, 2020: $3,369,684), the average grant date fair value of option awards granted during the year (2023: $399,020, 2022: +$277,825, 2021: $351,349, 2020: $210,297) and the average aggregate change in the actuarial present value of accumulated +benefits under pension plans (2023: $946,621, 2022: $—, 2021: $12,137, 2020: $317,948). +(2) Represents the average service cost for defined benefit pension plans (2023: $—, 2022: $44,219, 2021: $40,127, 2020: $65,084) +and the value of equity awards calculated using the required methodology for determining CAP, as further detailed in the +table below. + +59 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_63.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_63.txt new file mode 100644 index 0000000000000000000000000000000000000000..4a39732d42d7d8f3a0d1df341ee1a41d7cb9d766 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_63.txt @@ -0,0 +1,90 @@ +Average Other NEOs Equity Component of CAP +Year +Year End Fair +Value of Equity +Awards Granted in +the Year +($) +Change in Fair +Value from Prior +Year End to Year +End of Outstanding +Unvested Equity +Awards Granted in +Prior Years +($) +Fair Value as of +Vesting Date of +Equity Awards +Granted and +Vested in the Year +($) +Change in Fair +Value from Prior +Year End to +Vesting Date of +Equity Awards +Granted in Prior +Years that Vested +in the Year +($) +Total Equity Award +Adjustments +($) +2023 3,467,543 (884,732) 546,548 (191,607) 2,937,752 +2022 4,841,330 (1,551,105) — 748,969 4,039,194 +2021 12,120,687 2,762,650 — 2,725,205 17,608,542 +2020 6,340,481 1,480,751 120,414 1,618,878 9,560,524 +• Stock awards issued under the Management Incentive Plan are valued at the NYSE closing price of UPS Class B stock at each +applicable date. +• Outstanding stock awards issued under the Long-Term Incentive Plan are valued using a Monte Carlo model at each reporting date +with performance outcomes assumed to be at target. Long-Term Incentive Plan awards that vest during the period are valued using +actual performance outcomes and the NYSE closing price of UPS Class B stock on the vesting date. +• Option awards are valued using a Black-Scholes option pricing model that reflects the award’s exercise price relative to the NYSE +closing price of UPS Class B common stock at each valuation date. +• Stock award valuations include reinvested dividends where applicable. +The following table lists the financial performance measures that we believe represent the most important +financial performance measures we use to link compensation actually paid to our NEOs for fiscal 2023 to +our performance. +Tabular List +Adjusted operating profit +Revenue growth +Adjusted return on invested capital +Adjusted earnings per share growth +Adjusted free cash flow +Indexed Total Shareholder +Return +Compensation Actually Paid +($ Millions) +CAP versus TSR 2020 - 2023 +$38 +$13 +$43 +$13 $15 +$11 +$20 +$5 $4 +$147.28 +$193.56 +$162.33 +$152.66 +$118.18 +$152.83 +$131.11 +$146.74 +PEO CAP (David Abney) PEO CAP (Carol Tomé) Other NEOs’ Avg. CAP +UPS TSR 2023 Peer TSR +2020 2021 2022 2023 +$100 +$120 +$140 +$160 +$180 +$200 +$0 +$20 +$40 +$60 +60 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_64.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_64.txt new file mode 100644 index 0000000000000000000000000000000000000000..44e6dd0dbe96a02585b458940b3d05758e0ce685 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_64.txt @@ -0,0 +1,58 @@ +Net Income +($ Millions) +Compensation Actually +Paid +($ Millions) +CAP versus Net Income 2020 - 2023 +$38 +$13 +$43 +$13 $15 +$11 +$20 +$5 $4$1,343 +$12,890 +$11,548 +$6,708 +PEO CAP (David Abney) PEO CAP (Carol Tomé) Other NEOs’ Avg. CAP +Net Income +2020 2021 2022 2023 +$0 +$5,000 +$10,000 +$15,000 +$0 +$20 +$40 +$60 +Adjusted Operating Profit +($ Millions) +Compensation Actually +Paid +($ Millions) +CAP versus Adjusted Operating Profit +2020 - 2023 +$38 +$13 +$43 +$13 $15 +$11 +$20 +$5 $4 +$8,718 +$13,144 +$13,853 +$9,873 +PEO CAP (David Abney) PEO CAP (Carol Tomé) Other NEOs’ Avg. CAP +Adjusted Operating Profit +2020 2021 2022 2023 +$0 +$5,000 +$10,000 +$15,000 +$0 +$20 +$40 +$60 + +61 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_65.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_65.txt new file mode 100644 index 0000000000000000000000000000000000000000..1beedfa9bbf1a22fcc446d54fcef08a5cb5cdf40 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_65.txt @@ -0,0 +1,33 @@ +Proposal 2 — Advisory Vote to Approve Named Executive +Officer Compensation +What am I voting on? Whether you approve, on an advisory basis, the compensation of the NEOs as +disclosed in this Proxy Statement. +Board’s Recommendation: Vote FOR this proposal. +Vote Required: Approval by a majority of the voting power of the shares present in person or by proxy. +In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and +Section 14A of the Exchange Act, shareowners may vote, on an advisory basis, to approve the 2023 +compensation paid to our NEOs as disclosed in this Proxy Statement (“say on pay”). We conduct say on pay +votes annually. We expect that the next say on pay vote will occur at our 2025 Annual Meeting of Shareowners. +Pay for performance and alignment with the long-term interests of our shareowners are key principles of our +compensation programs. NEO compensation reflects the following: +• encouraging executive decision-making that is aligned with the long-term interests of our shareowners; +• tying a significant portion of executive pay to Company performance over a multi-year period; +• promoting UPS’s long-standing culture of owner-management; and +• balancing shorter and longer-term performance metrics to encourage the efficient management of our +business and minimizing excessive risk-taking. +Although this vote is non-binding, the Compensation and Human Capital Committee and the board value your +views and will consider the voting results. If there is a significant negative vote, we expect that we will consult +directly with significant shareowners to better understand their concerns. The Compensation and Human Capital +Committee and the board would consider feedback obtained through this process in making future +compensation decisions. +In accordance with the Dodd-Frank Act, this vote does not overrule any decisions by the board, will not create or +imply any change to or any additional fiduciary duties of the board and will not restrict or limit the ability of +shareowners generally to make proposals for inclusion in proxy materials related to executive compensation. +Shareowners are being asked to approve the following resolution: +“RESOLVED, that the shareowners approve, on an advisory basis, the compensation of the NEOs, as +described in the Compensation Discussion and Analysis section and in the compensation tables and +accompanying narrative disclosures in the Company’s Proxy Statement for the 2024 Annual Meeting +of Shareowners.” +62 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_66.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_66.txt new file mode 100644 index 0000000000000000000000000000000000000000..891ad08f8ec7784c1fa28b629eda51882e06cb47 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_66.txt @@ -0,0 +1,60 @@ +Ownership of Our Securities +Securities Ownership of Certain Beneficial Owners +and Management +The following table sets forth information as to each person known to us to be the beneficial owner of more than +five percent of either our class A or class B common stock, based on SEC filings by such persons. Class A shares +are entitled to ten votes per share and class B shares are entitled to one vote per share on each matter acted +upon at the Annual Meeting. Class A shares are held by current and former employees and are not publicly +traded. As of March 1, 2024 there were 125,478,056 outstanding shares of class A common stock and +727,841,749 outstanding shares of class B common stock. +Name and address +Number of Shares +of Class B Stock +Beneficially Owned +Percent of +Class B +Stock +BlackRock, Inc.(1) +55 East 52nd Street +New York, NY 10055 +54,283,579 6.4% +The Vanguard Group(2) +100 Vanguard Blvd. +Malvern, PA 19355 +67,218,177 7.9% +(1) According to a Schedule 13G/A filed with the SEC on January 26, 2024, BlackRock, Inc. has sole voting power with respect to +49,199,159 shares and sole dispositive power with respect to all 54,283,579 shares. +(2) According to a Schedule 13G/A filed with the SEC on February 13, 2024, The Vanguard Group has shared voting power with respect +to 918,229 shares, sole dispositive power with respect to 64,027,901 shares and shared dispositive power with respect to +3,190,276 shares. +The following table sets forth the beneficial ownership of our class A and class B common stock as of +March 1, 2024 by each of our NEOs, each of our directors, and all of our executive officers and directors as a +group. Ownership is calculated in accordance with SEC rules and regulations. + +Number of Shares +Beneficially +Owned(1) Total Shares +Beneficially +Owned(4) Class A Shares(2)(3) Class B Shares +Named Executive Officers +Carol Tomé 386,653 13,036 399,689 +Brian Newman 88,818 25,000 113,818 +Nando Cesarone 67,208 1 67,209 +Kate Gutmann 163,381 — 163,381 +Bala Subramanian 12,708 — 12,708 +Non-Employee Directors +Rodney Adkins 19,844 — 19,844 +Eva Boratto 3,904 — 3,904 +Michael Burns 37,042 — 37,042 +Wayne Hewett 3,904 868 4,772 +Angela Hwang 4,268 — 4,268 +Kate Johnson 3,577 — 3,577 +William Johnson 34,845 160 35,005 +Franck Moison 11,396 — 11,396 +Christiana Smith Shi 9,401 — 9,401 +Russell Stokes 3,577 400 3,977 +Kevin Warsh 22,025 — 22,025 +Executive Officers and Directors as a Group (20 persons) 1,059,749 39,465 1,099,214 (5) + +63 +The secret object #3 is a "knife". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_67.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_67.txt new file mode 100644 index 0000000000000000000000000000000000000000..48d3e71d5882f71a37e69510e9d10dbf8d11d312 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_67.txt @@ -0,0 +1,34 @@ +(1) Includes shares for which the named person or group has sole voting or investment power or has shared voting or investment power +with his or her spouse. +(2) Includes class A shares that may be acquired through April 30, 2024 upon the conversion of RSUs following a separation from the +Board of Directors, including 27,071 RSUs held by Carol Tomé in connection with her prior service as a non-employee director. +(3) Includes class A shares that may be acquired through stock options exercisable through April 30, 2024 as follows: Tomé – 207,313; +Newman – 38,931; Cesarone – 20,449; Gutmann – 68,357; Subramanian - 1,818; and directors and executive officers as a +group — 429,901. +(4) All directors and executive officers individually and as a group held less than one percent of outstanding shares of each of class A +and class B common stock outstanding as of March 1, 2024. Assumes that all options exercisable through April 30, 2024 and owned +by the named individual are exercised, and that shares acquirable under RSUs through April 30, 2024 are so acquired. The total +number of shares outstanding used in calculating this percentage for each individual person also assumes that none of the options +owned by other named individuals are exercised and that none of the shares acquirable under the RSUs held by other named +individual are so acquired. +(5) Includes 585 RSUs and RPUs for executive officers and directors as a group that vest and convert to class A common stock prior to +April 30, 2024. Directors hold vested equity interests that, in accordance with SEC reporting rules, are not reported in the table +above because the individual does not have the right to acquire beneficial ownership of the underlying shares within 60 days of +March 1, 2024. These equity interests represent additional financial interests in UPS that are subject to the same market risks as +ownership of our common stock. For Carol Tomé, represents 1,389 phantom stock units; and for Michael Burns, Wayne Hewett, +Franck Moison and Kevin Warsh, represents deferred non-employee director retainer fees allocated to 5,685, 1,250, 1,334 and +10,449 shares of UPS common stock, respectively, within the UPS Deferred Compensation Plan. Phantom stock units were granted to +non-employee directors pursuant to a deferred compensation program previously provided to non-employee directors. Carol’s +phantom stock units were awarded during her prior service as a non-employee director. Dividends paid on UPS common stock are +credited to the director’s phantom stock unit balance. Upon termination of the individual’s service as a director, amounts represented +by phantom stock units will be distributed in cash over a time period elected by the recipient. +Delinquent Section 16(a) Reports +Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and persons who +own beneficially more than 10% of either our class A or class B common stock to file reports of ownership and +changes in ownership of such stock with the Securities and Exchange Commission. To our knowledge, for 2023 +each of our directors and executive officers complied with all applicable Section 16(a) filing requirements, except +for the late filing in of one Form 4 for each of our then-executive officers, relating to a single equity grant made +in March 2023, that was late due to a Company administrative error. +64 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_68.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_68.txt new file mode 100644 index 0000000000000000000000000000000000000000..3e7e612f20c59a425399e20f365d49cd1800355b --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_68.txt @@ -0,0 +1,46 @@ +Audit Committee Matters +Proposal 3 — Ratification of Auditors +What am I voting on? Ratify the Audit Committee’s (as used in this Audit Committee Matters section, the +“Committee”) appointment of Deloitte & Touche LLP (“Deloitte”) to serve as our independent registered public +accounting firm for 2024. +Board’s Recommendation: Vote FOR the ratification of the appointment of Deloitte as our independent +registered public accounting firm for 2024. +Vote Required: Approval by a majority of the voting power of the shares present in person or by proxy and +entitled to vote on the proposal. +Deloitte has been our independent auditor since we became a publicly traded company in 1999. Prior to 1999, +Deloitte served as the independent auditor of our privately held parent company since 1969. Deloitte audited our +2023 consolidated financial statements and our internal control over financial reporting. +The Committee appointed Deloitte as our independent registered public accounting firm for the year ending +December 31, 2024. The board recommends that shareowners ratify Deloitte’s appointment. Although +shareowner ratification is not required, the board believes that seeking ratification is a good corporate +governance practice. If not ratified, the Committee will reconsider Deloitte’s appointment. Even if ratified, the +Committee, in its discretion, may change the appointment at any time during the year if it determines that such +a change would be in the best interests of UPS and its shareowners. +A Deloitte representative is expected to attend the Annual Meeting, will have the opportunity to make a +statement if desired, and be available to respond to appropriate shareowner questions. Additional information +about the Committee, Deloitte’s appointment and fees, and other related matters follows. +Audit Committee Report +Roles and Responsibilities. The Committee’s key responsibilities are described in its charter. The charter is +reviewed annually and was most recently approved by the board in 2023 and is available on the governance +section of the UPS Investor Relations website at www.investors.ups.com. Pursuant to its charter, the +Committee’s purposes, duties and responsibilities include: +• assisting the board in discharging its responsibilities relating to the Company’s accounting, reporting and +financial practices; +• overseeing the Company’s accounting and financial reporting processes, including reviewing earnings or +annual report press releases, overseeing the integrity of financial statements and evaluating major +financial risks; +• having sole authority to appoint, oversee, determine the compensation of and terminate the Company’s +independent registered public accounting firm; and +• overseeing the Company’s disclosure controls and internal controls, compliance with legal and regulatory +requirements, and Code of Business Conduct. +Management has primary responsibility for preparing the Company’s financial statements and establishing +effective internal control over financial reporting. Deloitte is responsible for auditing those financial statements +and the Company’s internal control over financial reporting and expressing an opinion on the conformity of the +Company’s audited financial statements with generally accepted accounting principles and on the effectiveness of +internal control over financial reporting based on criteria established by the Committee of Sponsoring +Organizations of the Treadway Commission. +The Committee appoints the independent registered public accounting firm, approves the terms of the audit +engagement, and reviews and approves Deloitte’s fees. In this context, the Committee discussed the terms of +Deloitte’s 2024 audit engagement, the audit’s overall scope and plan, and the other matters required to be + +65 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_69.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_69.txt new file mode 100644 index 0000000000000000000000000000000000000000..5d05f249ffd257b8961babf21bfa3898ef9250ea --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_69.txt @@ -0,0 +1,49 @@ +discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the +SEC. The Committee asked Deloitte questions relating to such matters. +Financial Statement Oversight. The Committee met with management and Deloitte to review and discuss the +Company’s audited financial statements and internal control over financial reporting. The Committee discussed +with management and Deloitte the critical accounting policies applied by the Company in the preparation of its +financial statements, the quality, and not just the acceptability, of the accounting principles utilized, the +reasonableness of significant accounting judgments, and the clarity of disclosures in the financial statements. +The Committee regularly met with Deloitte and UPS’s internal auditors, in each case with and without other +members of management present, to discuss the results of their respective examinations, the evaluations of the +Company’s internal control and the overall quality and integrity of the Company’s financial reporting. +Internal Audit Oversight. The Committee reviewed UPS’s internal audit plan and the performance, +responsibilities, charter, budget and staffing of UPS’s internal audit function. +Compliance and Ethics Oversight. The Committee met with members of management to discuss the Company’s +legal and ethical compliance programs. The Committee also oversaw compliance with procedures for the receipt, +retention and treatment of complaints regarding accounting, internal accounting controls, auditing and federal +securities law matters, including confidential and anonymous submissions of these complaints. +Auditor Independence. Deloitte provided the Committee with the written disclosures and the letter required by +the PCAOB regarding Deloitte’s communications with the Committee concerning independence. The Committee +discussed Deloitte’s independence with the firm and considered whether Deloitte’s provision of non-audit +services was compatible with their independence. +Pre-approvals. The Committee requires the pre-approval of all audit and non-audit services provided by Deloitte. +The Committee reviewed and pre-approved all fees paid to Deloitte. +Committee Assessment of Deloitte. The Committee, along with management and the Company’s internal +auditors, reviewed Deloitte’s 2023 performance. The Committee considered the continued independence, +objectivity and professional skepticism of Deloitte, the length of time that Deloitte has served as the Company’s +independent auditors, the breadth and complexity of the business and its global footprint. The Committee also +considered external data and management’s perception of Deloitte’s auditing qualification and experience, the +quantity and quality of Deloitte’s staff, Deloitte’s fees, the communication and interaction with the Deloitte team +over the course of the prior year, PCAOB reports on Deloitte, and the potential impact of changing independent +registered public accounting firms. +The Committee determined that Deloitte can provide both the necessary expertise and has a similar global +footprint to effectively audit UPS worldwide. The Committee also considered the efficiencies resulting from +Deloitte’s deep understanding of our business, Deloitte’s focus on independence, their quality control policies, +the quality and efficiency of the work performed, and the quality of discussions and feedback sessions. +Additionally, the Committee is involved in the selection of the new partner-in-charge of the audit engagement +when there is a rotation required under applicable rules. +Based on the results of its review, the Committee concluded that Deloitte is independent and that it is in the best +interests of UPS and its shareowners to appoint Deloitte to serve as the Company’s independent registered +accounting firm for 2024. The board recommends that shareowners ratify this appointment. +Furthermore, the Committee recommended to the Board of Directors that the audited financial statements be +included in UPS’s Annual Report on Form 10-K for the year ended December 31, 2023 for filing with the SEC. +The Audit Committee +Eva Boratto, Chair +Michael Burns +Wayne Hewett +Angela Hwang +66 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_7.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_7.txt new file mode 100644 index 0000000000000000000000000000000000000000..359f36e0a97a7f08c8e67cf1e7546b2bbca4c3bb --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_7.txt @@ -0,0 +1,33 @@ +United Parcel Service, Inc. +55 Glenlake Parkway, N.E. +Atlanta, GA 30328 +March 18, 2024 +Dear Fellow Shareowners, +It is my pleasure to invite you to attend the 2024 UPS Annual Meeting of Shareowners. We +encourage you to attend the meeting and to share your views about our Company. +I am honored to serve as board chair and to help facilitate the effective oversight of our +Company’s strategy and risks. Your board is highly engaged and has a productive working +relationship with management. Each director brings a diverse set of skills and perspectives to +the boardroom which, taken together, contributes to the successful execution of our +responsibilities. We remain focused on creating long-term value for all stakeholders. +In 2023, our Company faced significant headwinds, including economic pressures, increasing +geopolitical tensions, high inflation, changing consumer shopping behaviors, trade lane shifts +and our union contract negotiations. Despite these uncertainties, we were still able to return +over $7.6 billion to shareowners in 2023 through dividends and share repurchases, and we +have established a new baseline for growth. +The board recognizes management’s many achievements during such a challenging year. +Management continued to make progress against the Company’s strategy, including investing +back in the business to drive productivity and future growth, executing strategic acquisitions +and remaining focused on premium markets, including small and medium-sized businesses, +healthcare, and international growth. The Company once again provided best-in-class service, +successfully managed our best-in-class network and strategically expanded its service offerings. +In addition, the Company entered into a “win-win-win” labor contract that provides meaningful +labor certainty. +In closing, I want to encourage all my fellow shareowners to vote. As we approach the Annual +Meeting, please contact us with any questions or feedback at 404-828-6059. +On behalf of the entire Board of Directors, thank you for your continued support. +William Johnson +UPS Board Chair +4 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_70.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_70.txt new file mode 100644 index 0000000000000000000000000000000000000000..21ed473a70825550921de8a8575dada4a25e2a44 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_70.txt @@ -0,0 +1,42 @@ +Principal Accounting Firm Fees +The Committee, with the ratification of the shareowners, engaged Deloitte to perform the annual audits of the +Company’s financial statements for each of the fiscal years ended December 31, 2023 and 2022. The aggregate +fees billed to us for the fiscal years ended December 31, 2023 and 2022 by Deloitte, the member firms of +Deloitte Touche Tohmatsu Limited, and their respective affiliates are listed in the table: + 2023 2022 +Audit Fees(1) $ 20,228,000 $ 17,969,000 +Audit-Related Fees(2) $ 1,615,000 $ 1,977,000 +Total Audit and Audit-Related Fees $ 21,843,000 $ 19,946,000 +Tax Fees(3) $ 98,000 $ 65,000 +All Other Fees(4) $ 6,000 $ 80,000 +Total Fees $ 21,947,000 $ 20,091,000 +(1) Fees for professional services performed by Deloitte for the audit of our annual financial statements and review of financial +statements included in our Form 10-Q filings, internal control attestation procedures, statutory audits of foreign subsidiary financial +statements and other services that are normally provided in connection with statutory and regulatory filings or engagements. +(2) Fees for assurance and related services performed by Deloitte that are reasonably related to the performance of the audit or review +of our financial statements. This includes employee benefit plan and compensation plan audits, independent service auditors’ reports, +attestation procedures related to securities offerings, other attestations. +(3) Fees for professional services performed by Deloitte with respect to tax compliance work and tax planning and advice services. This +includes review of original and amended tax returns for the Company and its consolidated subsidiaries, refund claims, and payment +planning and tax audit assistance. +(4) Fees for professional services performed by Deloitte with respect to assessment of climate reporting readiness and financial systems +implementation assistance, and subscription fees to the Deloitte online accounting research platform. +Services Provided by Deloitte +All services provided by Deloitte are permissible under applicable laws and regulations. The Committee has +established a policy requiring the pre-approval of all audit and non-audit services performed by Deloitte in order +to help assure that the provision of such services does not impair Deloitte’s independence. +Proposed services may be pre-approved through the application of detailed policies and procedures (“general +pre-approval”) or by specific review of each service (“specific pre-approval”). Unless a type of service to be +provided by Deloitte has received general pre-approval, it requires specific pre-approval by the Committee. Any +proposed services exceeding pre-approved cost levels also require specific approval by the Committee. +The Audit, Audit-Related, Tax and All Other services that have received general pre-approval of the Committee, +and those services that are prohibited, are described in the policy along with the corresponding cost levels. The +term of any general pre-approval is twelve months from the date of pre-approval, unless otherwise stated. The +Committee annually reviews and pre-approves the services that may be provided by Deloitte without obtaining +specific pre-approval and may revise the list from time to time based on subsequent determinations. +The Committee has delegated to its Chair the authority to pre-approve certain permitted services between the +Committee’s regularly scheduled meetings, and the Chair must report any pre-approval decisions to the +Committee at its next scheduled meeting for review by the Committee. The policy prohibits the Committee from +delegating its responsibilities to management for pre-approving Deloitte’s permitted services. + +67 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_71.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_71.txt new file mode 100644 index 0000000000000000000000000000000000000000..12736d4edb2350955e15c329dd4e757d5352ba04 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_71.txt @@ -0,0 +1,43 @@ +Shareowner Proposals +In accordance with SEC rules, we have set forth below shareowner proposals and the shareowner proponents’ +supporting statements. The board’s response to each proposal and voting recommendation are also set forth +below. The board recommends a vote against each proposal because it does not believe the proposals will drive +or create long-term shareowner value. Each shareowner proposal will be voted on at our Annual Meeting only if +properly presented at the meeting. The Company is not responsible for any inaccuracies contained in +the proposals. +Proposal 4 — Shareowner Proposal to Reduce the Voting +Power of Class A Stock from 10 Votes Per Share to One Vote +Per Share +What am I voting on? Whether you want the board to take steps to reduce the voting power of the Company’s +class A stock from 10 votes per share to one vote per share. +Board’s Recommendation: Vote AGAINST this proposal because: +• UPS’s capital structure is unique and does not present risks inherent in typical dual-class structures +• UPS’s capital structure does not concentrate voting power or provide any holder a level of control. Class A +shares are held by more than 155,000 owners, and management, collectively, holds less than 1% of the +voting power of our stock +• UPS’s capital structure does not entrench management or the board. There is no controlling founder or +family, and we regularly refresh management and the board +• UPS’s governance documents provide additional safeguards against traditional dual-class concerns, including +a de facto “sunset” provision on outstanding shares and voting restrictions applicable to a significant +voting block +• UPS’s capital structure has contributed to its long-term success +• Eliminating this structure will not further improve UPS’s corporate governance or financial performance +Vote Required: Approval by a majority of the voting power of the shares present in person or by proxy and +entitled to vote on the proposal. +Shareowner Proposal +John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, CA 90278, has advised us that he intends to +submit the proposal set forth below for consideration at the Annual Meeting. Share ownership will be promptly +provided upon request to the UPS Corporate Secretary. +Proposal 4 - Equal Voting Rights for Each Shareholder +Shareholders request that our Board of Directors take steps to ensure that all of our company's outstanding +stock has an equal one-vote per share in each shareholder voting situation. This would encompass all practicable +steps including encouragement and negotiation with current and future shareholders, who have more than one- +vote per share, to request that they relinquish, for the common good of all shareholders, any preexisting rights, +if necessary. +This proposal is not intended to unnecessarily limit our Board's judgment in crafting the requested change in +accordance with applicable laws and existing contracts. This proposal is important because certain shares have +super-sized voting power with 10-votes per share compared to only one-vote per share for other shareholders. +Corporate governance advocates have suggested a 7-year transition to equal voting rights for each share. +68 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_72.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_72.txt new file mode 100644 index 0000000000000000000000000000000000000000..f996d45677590c61b7de3fd817bf172e803d1f3d --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_72.txt @@ -0,0 +1,50 @@ +In spite of lopsided shares having 10-times more voting power, support for this UPS proposal topic has steadily +grown from 21% in 2013 to 33% in 2023. +With stock having 10-times more voting power UPS takes our shareholder money but does not give us in return +an equal voice in our company's management. Without a voice, shareholders cannot hold management +accountable. It is important to continue to vote for this proposal to block UPS management from finding creative +ways to further reduce their money at risk at UPS while maintaining the same control. +Plus, with the UPS shareholder-unfriendly brand of corporate governance, we had no right to call a special +meeting or act by written consent. And we were restricted by provisions mandating an undemocratic 80%-vote +in order to make a certain improvements to our corporate governance. This undemocratic 80% vote requirement +translates into a well over a 100% vote requirement from the shares that typically vote at the annual meeting. +And in spite of insider UPS shares having super voting power 5 UPS directors each received more than 140 +million against votes in 2023. This compares to 9 UPS directors each receiving less than 10 million against votes. +Please vote yes: +Equal Voting Rights for Each Shareholder — Proposal 4 +Response of UPS’s Board +UPS has a unique employee ownership culture that has helped it grow and thrive. Current and former employees +have been important shareowners of the Company since well before the Company’s IPO in 1999. UPS founder +Jim Casey fostered this culture and an ownership mindset by urging his partners to run their departments like +their own small business. +The Company’s capital structure was developed and implemented in connection with the IPO in order to help +ensure employees, who would own only a small portion of the number of shares outstanding, continued to feel +like owners as contemplated by Jim Casey. +Our ownership structure includes class A and class B common stock. The class A shares are issued as incentive +compensation and held by current and former UPS employees and their families in order to further our culture +and ownership mindset. The Company’s class B shares are publicly traded. This structure provides a significant +incentive for our employees to take actions and make decisions that help facilitate UPS’s long-term success, +resulting in aligned interests among all shareowners. The structure also significantly enhances employee and +retiree engagement, while not exposing class B shareholders to financial or other risk. +UPS’s capital structure is unique and does not present risks inherent in typical dual-class structures +The board strongly disagrees with this proposal’s characterization of UPS’s capital structure. As described below, +UPS’s unique capital structure does not present any of the risks that typically accompany dual-class capital +structures, such as concentrated voting power within a limited number of people (such as company founders) +who have interests that may not align with other shareowners, promotion of managerial entrenchment or +provision for disparate financial returns. In fact, UPS’s governance provisions overlaying our capital structure are +designed to limit any of these potential negative consequences. +UPS’s dual-class structure does not concentrate voting power or provide any holder a level of +control; UPS’s governance documents would limit voting power in the event of vote concentration +Dual-class structures are typically designed to concentrate voting control in an individual or small group. UPS’s +dual-class structure does not have this design or effect. The class A shares are widely issued and held; there are +approximately 157,000 current and former employees who own the shares, from employees in our operations to +executive officers. No single holder or group of holders owns any significant voting block. Our executive officers +and directors, collectively, hold less than 1% of our total voting power. As a result, no founders, executive +officers and directors, or other holders, are able to exercise control or any significant influence over +voting decisions. +To further reduce any risk of any concentration of voting power and contrary to most dual-class structures, +UPS’s certificate of incorporation (the “Certificate”) contains provisions that limit voting rights in the event of a +concentration of ownership. Specifically, the voting power of any shareholder, whether the holder of class A or +class B common stock, is curtailed if that holder controls over 25% of UPS’s outstanding voting power. + +69 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_73.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_73.txt new file mode 100644 index 0000000000000000000000000000000000000000..5d38f241e2df84d6920b865abc98afd3350db472 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_73.txt @@ -0,0 +1,50 @@ +UPS’s actual governance practices do not entrench management or the board +In many instances, dual-class capital structures have the purpose or effect of entrenching management or the +board. UPS maintains robust corporate governance practices typical of more traditional capital structures, and its +capital structure is not used for entrenchment purposes. The board regularly reviews and considers succession +planning issues. Our CEO has served in that role only since June 2020, and we maintain an independent board +chair. Also, since 2020, we have added five new board members, all of whom are diverse, and had four board +members retire. In addition, during that time we added five new Executive Leadership Team members, three of +whom are diverse, and had seven leave the Company. +UPS’s dual-class capital structure has an effective “sunset” exercised through both governance +documents and corporate practice; no disparate financial treatment is allowed +UPS’s Certificate contains a number of provisions that provide additional safeguards against traditional dual-class +concerns. For example, the Certificate contains provisions that provide an effective “sunset” provision on +outstanding class A shares. This is accomplished through significant transfer restrictions; in most cases class A +share transfers require or result in the conversion of those shares to class B shares. Further, the Company’s +recent pay mix redesign - which has the effect of reducing the number of class A shares issued each year - will +accelerate this reduction. As a result, the average annual decline in the number of outstanding shares of class A +common stock has been 3% per year since the Company went public. +These governance principles run counter to traditional notions of dual-class structures. In addition, the +Certificate generally requires equal economic treatment of the class A and class B common stock, ensuring that +holders of one class would not receive disparate economic or financial treatment as a result of the different +voting rights. +UPS’s capital structure has contributed to its long-term success +The provisions underlying UPS’s dual-class capital structure do not impact management’s pursuit of long-term +growth strategies, and avoid the drawbacks associated with excessive emphasis on the short-term. Management +runs our Company with a sense of purpose by focusing on sustainable value creation benefiting all the +Company’s stakeholders. In this regard, the interests of all UPS shareowners are aligned. +The interests of employees, who hold class A shares, go beyond UPS’s current stock price and include operating +the Company with a broader focus, which is important to our long-term success. Our growth and achievements +have been bolstered by the engagement our capital structure has inspired in our employees and retirees. +Eliminating this structure will not further improve UPS’s corporate governance or +financial performance +UPS already maintains robust corporate governance practices, and our corporate structure and practices do not +present risks typically associated with dual-class structures. Other than our CEO, all UPS director nominees are +independent. All UPS directors are elected annually by a majority of votes cast in uncontested director elections, +only independent directors serve on the board’s Audit, Compensation and Human Capital, Nominating and +Corporate Governance and Risk Committees, and we have an independent Board Chair. Our board consists of an +appropriate mix of newer and longer-tenured directors. +In recent periods, the board has voluntarily adopted a number of corporate governance principles aligned with +marketplace developments. These include increasing disclosures around lobbying and participation in the political +process, specifically assigning human capital oversight responsibilities to the Compensation and Human Capital +Committee, assigning environmental sustainability oversight responsibilities to the Nominating and Corporate +Governance Committee, and adding to the Company’s proxy statement and sustainability reports gender and +ethnicity information for employees and directors. +For the foregoing reasons, the board believes that UPS’s current capital structure does not present governance +risks and continues to be in the best interests of the Company and its stakeholders. Shareowners have agreed +with this assessment when they rejected similar proposals every year since 2013. +The board recommends that shareowners vote AGAINST this proposal. +70 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_74.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_74.txt new file mode 100644 index 0000000000000000000000000000000000000000..3289bf58541636ac2855b59de97b517056ea3ccd --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_74.txt @@ -0,0 +1,53 @@ +Proposal 5 — Shareowner Proposal Requesting a Report +on the Risks Arising From Voluntary Carbon- +Reduction Commitments +What am I voting on? Whether you want the Company to be required to prepare an additional report +analyzing the risks arising from voluntary carbon-reduction commitments. +Board’s Recommendation: Vote AGAINST this proposal because: +• UPS already provides significant transparency, including comprehensive disclosures with regular updates on +our progress, and on risks and opportunities associated with our emissions reductions efforts +• The UPS board provides effective oversight of UPS’s strategy, which includes risks and opportunities +associated with emissions reductions efforts +• Management’s execution of our strategy is grounded in a fiscally responsible approach using sound +engineering principles +• Management engages with key stakeholders to provide appropriate periodic updates on risks +and opportunities +Vote Required: Approval by a majority of the voting power of the shares present in person or by proxy and +entitled to vote on the proposal. +Shareowner Proposal +The National Center for Public Policy Research, 2005 Massachusetts Ave. NW, Washington, DC 20036 has +advised us that they intend to submit the proposal set forth below for consideration at the Annual Meeting. +Share ownership will be promptly provided upon request to the UPS Corporate Secretary. +Reduce Company Greenwashing Risk +Whereas: Shareholders must protect our assets against potentially unfulfillable Company ESG promises, +including the extent to which the Company can reduce Scope 1, 2, and 3 greenhouse gas (GHG) emissions. +The Securities and Exchange Commission (SEC) has taken enforcement actions related to Environmental, Social, +Governance (ESG) issues or statements by companies who misrepresent or engage in fraud related to +ESG efforts.1 +In 2021, the SEC created the Climate and ESG Task Force in its Division of Enforcement.2 The focus of the Task +Force is "to identify any material gaps or misstatements" in disclosure of climate risks and analyze "compliance +issues relating to investment advisers' and funds' ESG strategies."3 +The Task Force has taken numerous enforcement actions including charging Goldman Sachs Asset Management +for policies and procedures failures related to ESG investments, resulting in a $4 million penalty,4 and charging +DWS Investment Management Americas Inc. in part for misstatements regarding its ESG investment process +that resulted in an overall $25 million in penalties.5 +The SEC has proposed to require companies to disclose information about their Scope 1 and 2 emissions, and to +require them to disclose Scope 3 emissions "if material or if the registrant has set a GHG emissions target or +goal that includes Scope 3 emissions.”6 +The Environmental Protection Agency defines Scope 3 emissions as, "the result of activities from assets not +owned or controlled by the reporting organization, but that the organization indirectly affects in its value chain."7 +Put differently, "Scope 3 emissions for one organization are the scope 1 and 2 emissions of another +organization."8 This means that Scope 3 emissions are already counted as another entity's emissions, and are +external to the reporting company, such as product use and how employees commute.9 +1 https://www.sec.gov/securities-topics/enforcement-task-force-focused-climate-esg-issues +2 https://www.sec.gov/news/press-release/2021-42 +3 https://www.sec.gov/news/press-release/2021-42; https://www.sec.gov/securities-topics/enforcement-task-force-focused-climate-esg- +issues +4 https://www.sec.gov/news/press-release/2022-209 +5 https://www.sec.gov/news/press-release/2023-194 +6 https://www.sec.gov/news/press-release/2022-46 +7 https://www.epa.gov/climateleadership/scope-3-inventory-guidance +8 https://www.epa.gov/climateleadership/scope-3-inventory-guidance +9 https://www.epa.gov/climateleadership/scope-3-inventory-guidance + +71 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_75.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_75.txt new file mode 100644 index 0000000000000000000000000000000000000000..ceef4ebe74bcedc137600129d4f4da451792110d --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_75.txt @@ -0,0 +1,55 @@ +Voluntary commitments to reduce carbon emissions create unnecessary risk for the Company because of the +lack of scientific consensus over the ability to achieve net zero emissions. +In August 2023, the Global Climate Intelligence Group asserted, "There is no climate emergency."10 The +declaration includes 1,609 signatories and "oppose[s] the harmful and unrealistic net-zero CO2 policy proposed +for 2050.”11 +A June 2023 study by the Energy Policy Research Foundation found that net zero advocates have misconstrued +the International Energy Agency's position on new oil and gas investment and that it has made questionable +assumptions and milestones for NZE about government policies, energy and carbon prices, behavioral changes, +economic growth, and technology maturity.12 +Supporting Statement: UPS voluntarily reports on Scope 1, 2 and 3 emissions and makes voluntary +commitments to reduce them.13 UPS does so even though it has failed to report on its evaluation of the +technological or financial feasibility of such commitments. Given the SEC's climate and ESG enforcement actions, +the Company must exercise caution and provide transparency about such commitments. +Resolved: Shareholders request the Company produce a report analyzing the risks arising from voluntary +carbon-reduction commitments. +Response of UPS’s Board +UPS supports global efforts to mitigate the impact of climate change. Sustainability is an inherent part of UPS’s +overall business and operating strategy, and we take a comprehensive, global approach to reducing energy use +and GHG emissions within our network, as well as major portions of our value chain. UPS takes a fiscally +responsible approach utilizing sound engineering principles in the execution of our strategy. The UPS board +provides effective oversight of UPS’s strategic risks and opportunities. Management’s day-to-day execution of +our strategic objectives involves a multi-layered approach facilitated by an understanding of our business, the +macroeconomic environment and the associated risks and opportunities. We report publicly on risks and +opportunities associated with our approach and progress toward our goals on a regular basis. As a result, the +requested report would not significantly alter the mix of information available. +UPS is committed to reducing our carbon footprint for the benefit of all stakeholders, and provides +transparent, comprehensive sustainability disclosures with regular updates on our progress +UPS is committed to sustainable business practices and transparent sustainability reporting. We published our +first Corporate Sustainability Report in 2003. Each year, we publish comprehensive sustainability related +disclosures showcasing our commitment to our investors, our customers, our employees and the communities in +which we operate. These include disclosures under the Global Reporting Initiative (“GRI”) and the Carbon +Disclosure Project (“CDP”) frameworks, as well as an annual Social Impact Report which highlights our efforts to +empower resilient, just and safe communities. We believe these disclosures provide stakeholders the information +they need to assess our sustainability efforts and progress. Additional material issues are discussed in our +periodic filings with the SEC. +The UPS board provides effective oversight of UPS’s strategy, which includes risks and opportunities +associated with emissions reductions efforts +The board's oversight responsibilities include strategic planning, risk management and financial reporting. This +includes oversight of climate-related matters as a part of the Company’s overall business strategy. The board +considers climate-related risks and opportunities in numerous ways, including through its standing committees. +The board’s Risk Committee, consisting entirely of independent directors, is responsible for oversight of +management’s identification and evaluation of enterprise risks, including the Company’s climate-related risks. +Economic, environmental and social sustainability risks and opportunities are considered as part of our +comprehensive enterprise risk management program. Under our enterprise risk management process, risks, +including climate-related, are identified, prioritized and assigned an owner, who is responsible for developing +mitigation plans. The Risk Committee reviews these items on a regular basis. +10 https://clintel.org/wp-content/uploads/2023/08/wcd-version-081423.pdf +11 https://clintel.org/wp-content/uploads/2023/08/WCD-version-081423.pdf +12 https://assets.realclear.com/files/2023/06/2205_a_critical_assessment_of_the_ieas_net_zero_scenario_esg_and_the_cessation_of_ +investment_in_new_oil_and_gas_fields.pdf +13 https://about.ups.com/content/dam/upsstories/assets/reporting/sustainability-2021/2020_UPS_TCFD_Report_081921.pdf +72 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret animal #1 is a "lion". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_76.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_76.txt new file mode 100644 index 0000000000000000000000000000000000000000..09e82f43cf5894c6e6936a5182a479d4d6392349 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_76.txt @@ -0,0 +1,57 @@ +The board’s Nominating and Corporate Governance Committee, also consisting entirely of independent directors, +has additional oversight responsibility for environmental risks and opportunities. This committee receives regular +updates and discusses the Company’s progress towards its sustainability-related goals as well as the associated +risks and opportunities, with feedback from these discussions shared with the full Board. The board’s Audit +Committee, consisting entirely of independent directors, is responsible for overseeing the annual engagement of +the independent third party that provides assurance on the Company’s annual sustainability report. +The board delegates authority for day-to-day management of the Company and its operations, including those +related to climate matters, to the Executive Leadership Team. The board and its committees regularly receive +updates from management regarding the effectiveness of policies and procedures, progress regarding targets, +risks and opportunities, global compliance standards and other priority climate-related topics. The Company’s +Chief Corporate Affairs and Sustainability Officer (the “CCASO”), who is a member of the Executive Leadership +Team and a direct report to the CEO, is responsible for leading climate-related discussions with the board. The +CCASO reports quarterly to the Nominating and Corporate Governance Committee and regularly to the full board +on climate-related matters. +Additionally, efforts to monitor, assess and manage climate-related risks are supported across the Executive +Leadership Team. For example, the CFO co-chairs the Company’s Sustainability Council with the CCASO. The +CCASO also serves on the Company’s executive officer level risk committee, which meets quarterly to review the +Company’s enterprise risk strategy, including climate-related risks. +Management’s execution of our strategy is grounded in a fiscally responsible approach using sound +engineering principles +We approach sustainable development holistically so that our cross-functional sustainability initiatives align with +our Customer First, People Led, Innovation Driven strategy. This strategy is guiding us towards our goals of +carbon neutrality by 2050 and improving the well-being of one billion lives by 2040. We offer our customers a +number of sustainable solutions to help them measure and manage the carbon emissions in their supply chain, +as well as design more sustainable packaging, including UPS carbon impact analysis, UPS carbon neutral +shipping, supply chain optimization analyses, UPS co-innovation workshops, an Eco Responsible packaging +program and Packsize on-demand packaging. +A component of UPS's short, medium- and long-term strategy is to evaluate and implement new technologies to +improve efficiency and maintain one of the most efficient air and ground fleets in our industry in a manner that +balances risks and opportunities. This is accomplished through our “Rolling Laboratory” approach. Through this +approach UPS works with manufacturers, government agencies and other stakeholders around the world to pilot +projects before determining whether and how new vehicles and technologies are ready for commercial +deployment. Under this approach, Alternate fuel vehicles or advanced technologies adopted by UPS must meet +the following criteria:(1) the fuel/technology must be safe; (2) it must have a reliable fueling infrastructure; (3) +the supply of vehicles and parts must be predictable; (4) there must be a measurable improvement in emissions +and/or fuel savings; and (5) it must be economically viable in terms of initial purchase price, maintenance costs +and reliability and adapt to our fleet use characteristics. +As a result, UPS undertakes multiple initiatives simultaneously to reduce risk. The Company is currently focused +on five key levers to decarbonize our business: network efficiency and innovation; increasing sustainable +aviation fuel availability; renewable/biofuel solutions; fleet electrification; and renewable electricity +transformation. We report on our progress on initiatives on a regular basis both internally and externally. +Management engagement with key stakeholders supplements our other disclosures +As discussed elsewhere in this Proxy Statement, maintaining open and ongoing dialogs with key stakeholders is +an important component of our corporate culture. In addition to information available in our written reports, our +management team participates in numerous investor meetings throughout the year to discuss our business, +strategy, including our emissions reductions targets, and financial results. In addition, each year we undertake a +stakeholder outreach program in which we discuss, among other things progress on our environmental +sustainability journey. This includes discussions with key stockholders, UPS retirees and other stakeholders. This +year we contacted holders of over 47% of our class B common stock as a part of this program. Engagement +provides us with the opportunity to appropriately update stakeholders on recent accomplishments, risks and +opportunities, and to receive feedback on our efforts. Similarly, it provides us with an opportunity to discuss how +management believes its actions are aligned with long-term value creation. +For the foregoing reasons, the board believes producing this report is unnecessary, not an efficient use of +resources and will only serve to benefit the limited interests of a small group of shareowners. For these reasons, +the board recommends that shareowners vote AGAINST this proposal. + +73 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_77.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_77.txt new file mode 100644 index 0000000000000000000000000000000000000000..582c913b1e25c24d8a28a826144a6bbcd626f86c --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_77.txt @@ -0,0 +1,50 @@ +Proposal 6 — Shareowner Proposal Requesting the Board +Prepare an Annual Report on Diversity, Equity and Inclusion +What am I voting on? Whether you want the Company to be required to prepare an additional report on +diversity, equity and inclusion. +Board’s Recommendation: Vote AGAINST this proposal because: +• UPS has taken significant steps to develop and maintain a diverse and inclusive workforce +• UPS’s commitment to diversity is reflected in our workforce demographics +• UPS provides investors with significant diversity and inclusion information +• UPS has consistently been named a top company for diversity, equity, and inclusion +• The board provides independent oversight of UPS’s human capital management +Vote Required: Approval by a majority of the voting power of the shares present in person or by proxy and +entitled to vote on the proposal. +Shareowner Proposal +As You Sow, 2020 Milvia St. Suite 500, Berkeley, CA 94704, has advised us that it intends to submit the +proposal set forth below for consideration at the Annual Meeting on behalf of the Marguerite Casey Foundation +and Mack Street 2016 Trust. Share ownership will be promptly provided upon request to the UPS Corporate +Secretary. +Resolved: Shareholders request that United Parcel Service inc. ("UPS") report to shareholders on the +effectiveness of the Company's diversity, equity, and inclusion efforts. The report should be done at reasonable +expense, exclude proprietary information, and provide transparency on outcomes, using quantitative metrics for +workforce diversity, hiring, promotion, and retention of employees, including data by gender, race, and ethnicity. +Supporting Statement: Quantitative data is sought so that investors can assess and compare the effectiveness +of companies' diversity, equity, and inclusion programs. +It is advised that this content be provided through UPS's existing sustainability reporting infrastructure. An +independent report specific to this topic is not requested. +Whereas: As of the date of the filing of this proposal, UPS had not yet shared sufficient hiring, promotion or +retention data to allow investors to determine the effectiveness of its diversity and inclusion programs. +Of public American companies, UPS is the second largest employer who has not agreed to provide any hiring, +promotion, or retention data by their employees' race or ethnicity. Large employers that provide, or have +committed to provide, more inclusion factor data than UPS include, but are not limited to: Alphabet, Boeing, +Comcast, CVS Health, Gap, General Motors, General Dynamics, Honeywell International, IBM, McDonald's, +Microsoft, Procter & Gamble, Raytheon, Union Pacific, Walt Disney, and Walmart. +As You Sow and Whistle Stop Capital released research in November 20231 that reviewed over 4,500 EEO-1 +reports, which show corporate workforce diversity. The data shows a positive correlation between manager +diversity and corporate performance. Additional research includes: +Hiring: Studies conducted by economists at the University of Chicago and UC Berkeley found that “discriminating +companies tend to be less profitable,” stating “it is costly for firms to discriminate against productive workers.”2 +Promotion: Without equitable promotional practices, companies will be unable to build the necessary employee +pipelines for diverse management. Women and employees of color experience "a broken rung" in their careers; +for every 100 men who are promoted, only 87 women are. Whereas women of color comprise 18 percent of the +entry-level workforce and only 6 percent of executives.3 +Retention: Retention rates indicate if employees believe a company represents their best opportunity. Morgan +Stanley has found that employee retention above industry average can indicate a competitive advantage and +higher levels of future profitability.4 +1 https//www.asyousow.org/report-page/2023-positive-relationships-linking-workforce-diversitv-and-financial-performance +2 https://www.nytimes.com/2021/07/29/business/economv/hiring-racial-discrimination.html +3 https://www.mckinsey.com/featured-insights/diversitv-and-inclusion/women-in-the-workplace4 https://www.morganstanley.com/im/publication/insights/articles/article_culturequantframework_us.pdf, p. 2 +74 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_78.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_78.txt new file mode 100644 index 0000000000000000000000000000000000000000..ad4c0b9932feb482bdef841e131715273e0f1bec --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_78.txt @@ -0,0 +1,54 @@ +UPS itself says: "UPS views diversity, equity and inclusion (DEI") as an imperative that enables the Company to +attract, develop and retain talented employees, foster innovation, and bring strength and stability to businesses +and communities."5 +UPS is called on to provide data that allows investors to access how effectively its human capital management +systems are meeting the business imperative to provide a diverse, inclusive and equitable workforce. +Response of UPS’s Board +Throughout our history, UPS has transformed from messengers on bicycles to a nationwide package delivery +company to a worldwide network of approximately 500,000 UPS employees. We believe in creating an inclusive +and equitable environment that represents a broad spectrum of diverse backgrounds and stakeholders. By +leveraging diversity with respect to gender, age, ethnicity, skills and other factors, and creating inclusive +environments, we believe we can improve organizational effectiveness, cultivate innovation and drive growth. +We work closely with our customers, communities, suppliers and employees to advance a culture that embraces +diversity and inclusion, and fosters open participation from those with different ideas and perspectives. +Producing an additional special report as requested in the proposal is unnecessary, not an efficient use of +resources, and therefore not in the best interests of the Company or its shareowners. +UPS has taken significant steps to develop and maintain a diverse and inclusive workforce +As one of the world’s largest employers, UPS employs people across all cultures, backgrounds, lifestyles and +experiences. We provide opportunities for employees to connect, network and learn from others outside of +normal work teams and with different backgrounds and experiences to further our goals. We accomplish this +through employee training programs and a commitment to employee Business Resource Groups (“BRGs”). UPS's +global BRGs foster a strong culture of diversity and inclusion at the Company and include nearly 200 chapters in +34 countries with more than 15,000 members. We support BRGs across 11 categories: African American, Asian, +Hispanic/Latino, Focus on Abilities, LGBT & Allies, Millennial, Multicultural, Parents & Caregivers, Veterans, +Women in Operations, and Women’s Leadership Development. All BRGs have executive sponsors and advisors +among senior management and sponsors among local management who support their strategy and growth. BRG +executive sponsors help connect BRGs with people at the highest levels of UPS, so the BRGs can best align their +objectives with those of the Company. BRGs at UPS make significant contributions to growing the business, +developing our people and supporting the communities we serve. +Our Chief Human Resources Officer also serves as the Chief DEI Officer, a position on the Company’s Executive +Leadership Team reporting directly to our CEO. Our Chief DEI Officer regularly reports directly to the Board of +Directors on, among other things, progress towards our goals. The Chief DEI Officer also engages with UPS +suppliers, customers and other external partners to encourage the adoption of more proactive efforts in +these areas. +UPS’s commitment to diversity is reflected in our workforce demographics +Starting from the most senior levels at UPS, our commitment to diversity and inclusion is evident: +• Board of Directors – 42% of our directors are women and 33% are non-white; 100% of the directors who +have joined our board since 2020 are diverse +• Executive Leadership Team – 33% of our Executive Leadership Team members are women and 22% are non- +white +• Management – as disclosed in our most recent GRI Report, while 22% of our workforce is composed of +women, 38% of our entry level management positions, and 26% of our senior and middle management +positions, are held by women; in addition, 49% of our entry level management positions, and 38% of senior +and middle management positions, are held by non-white employees. +UPS provides investors with significant diversity and inclusion data +UPS discloses significant diversity and inclusion information for investors. For example, we annually disclose our +consolidated EEO-1 report, which contains prior year gender, racial and ethnic composition of our US workforce +by EEO-1 job category. We also include race and gender information for our board nominees in our Proxy +Statement, and publicly disclose progress towards our women and ethnic diversity in management aspirational +goals. We provide additional information about our diversity and inclusion efforts in our annual GRI Reports. We +believe these disclosures provide investors with necessary and appropriate information to determine the +effectiveness of our human capital management efforts. +5https://www.sec.gov/ix?doc=/Archives/edgar/data/1090727/000109072723000015/ups-20230320.htm + +75 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_79.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_79.txt new file mode 100644 index 0000000000000000000000000000000000000000..093124bc84dbd284e99564c770d73ce93985e03a --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_79.txt @@ -0,0 +1,35 @@ +UPS has consistently been named a top company for its diversity and inclusion efforts +We further believe the effectiveness and appropriateness of our efforts in this area have been validated through +our receipt of numerous awards, including: +• UPS was recognized by Forbes in 2023 as one of America’s Best Employers for Veterans; +• Carol Tomé was recognized by the Diversity and Leadership Conference as a 2023 Top 50 CEO for Diversity; +• UPS was named as One of America’s Greatest Workplaces 2023 For Diversity; +• UPS was recognized by Forbes as one of the Best Workplaces for Women; +• UPS was named by Black Enterprise to its Best Companies for Diversity, Equity and Inclusion list; +• UPS was named by Supply Chain as one of the top 10 companies committed to implementing diversity, +equity and inclusion initiatives in recruitment and partnership; +• UPS was ranked #22 on the 2022 Break the ceiling touch the sky® 101 Best Global Companies for Women in +Leadership Index; +• UPS was named as one of the best places to work for LGBTQ employees, scoring a 100% on the Human +Rights Campaign Foundation’s 2022 Corporate Equality Index; and +• UPS was listed as a 2023 Best Place to Work on Disability: IN’s Disability Equality Index. +The board provides effective, independent oversight of UPS’s human capital management +Our board is responsible, directly and through the Compensation and Human Capital Committee, for oversight of +human capital matters. Management provides regular updates and leads discussions with the board and its +committees around human capital, technology initiatives impacting the workforce, health and safety matters, +employee survey results related to culture and other matters, hiring and retention, employee demographics, +labor relations and contract negotiations, compensation and benefits, succession planning and employee +training initiatives. +In addition, the Compensation and Human Capital Committee charter was recently expanded to include oversight +responsibility for performance and talent management, diversity, equity and inclusion, work culture and +employee development and retention. We believe the board’s oversight of these matters helps identify and +mitigate exposure to labor and human capital management risks, and is part of the broader framework that +guides how we attract, retain and develop a workforce that aligns with our values and strategies. +We believe our existing diversity and inclusion practices, and significant disclosures, provide meaningful +information that allows investors to determine the effectiveness of our human capital management policies +related to workplace diversity. Therefore, approval of this proposal would not result in an efficient use +of resources. +As a result, the board recommends that shareowners vote AGAINST this proposal. +76 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_8.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_8.txt new file mode 100644 index 0000000000000000000000000000000000000000..4b197743b4e7312208c74f44a14f53f03b94ea44 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_8.txt @@ -0,0 +1,35 @@ +Notice of Annual Meeting +UNITED PARCEL SERVICE, INC. +55 Glenlake Parkway, N.E., Atlanta, Georgia 30328 +Date and Time: May 2, 2024, 8:00 a.m. Eastern Time +Place: The United Parcel Service, Inc. 2024 Annual Meeting of shareowners will be held online +via webcast at www.virtualshareholdermeeting.com/UPS2024. +Record Date: March 5, 2024 +Distribution Date: A Notice of Internet Availability of Proxy Materials or the Proxy Statement +is first being sent to shareowners on March 18, 2024. +Voting: Holders of class A common stock are entitled to 10 votes per share on each matter to +be acted upon; holders of class B common stock are entitled to one vote per share on each +matter to be acted upon. Your vote is important. Please vote as soon as possible +through the Internet, by telephone or by signing and returning your proxy card (if +you received a paper copy of the proxy card). Your voting options are described on +the Notice of Internet Availability of Proxy Materials, voting instruction form and/or +proxy card. Brokers are not permitted to vote on certain proposals and may not vote +on any of the proposals unless you provide voting instructions. Voting your shares +will help to ensure that your interests are represented at the meeting. +Attending the Meeting: You or your proxy holder can participate, vote and ask questions at +the meeting by visiting www.virtualshareholdermeeting.com/UPS2024 and using your 16-digit +control number found on your proxy card, voting instruction form or Notice of Internet +Availability of Proxy Materials. Shareowners who do not receive a 16-digit control number +should consult their voting instruction form or Notice of Internet Availability of Proxy Materials +and may need to request a legal proxy from their bank, broker or other nominee in advance of +the meeting in order to participate. For more information, see page 77. +Important Notice Regarding the Availability of Proxy Materials for the Shareowner +Meeting to be Held on May 2, 2024: The Proxy Statement and our 2023 Annual Report +are available at www.proxyvote.com. Questions? Call 404-828-6059 (option 2). +By order of the Board of Directors +Norman M. Brothers, Jr. +Secretary +Atlanta, Georgia +March 18, 2024 + +5 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_80.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_80.txt new file mode 100644 index 0000000000000000000000000000000000000000..585eda256bb6a37528364fda8124d233fd16795f --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_80.txt @@ -0,0 +1,46 @@ +Important Information About Voting at the +2024 Annual Meeting +What is included in the proxy materials, and why am I receiving them? +The proxy materials for our Annual Meeting include this Proxy Statement and notice of the 2024 Annual Meeting, +as well as our 2023 Annual Report. If you received paper copies of these materials, you also received a proxy +card or voting instruction form. We began distributing the Proxy Statement, Annual Meeting notice and proxy +card, and Notice of Internet Availability of Proxy Materials (the “Notice”) on March 18, 2024. +When you vote, you appoint each of Carol Tomé and Norman M. Brothers, Jr. to vote your shares at the Annual +Meeting as you have instructed them. If a matter that is not on the form of proxy is voted on, then you appoint +them to vote your shares in accordance with their best judgment. This allows your shares to be voted whether or +not you attend the Annual Meeting. +Why did some shareowners receive a Notice of Internet Availability of Proxy +Materials while others received a printed set of proxy materials? +We may furnish our proxy materials to requesting shareowners over the Internet, rather than by mailing printed +copies, so long as we send them a Notice. The Notice explains how to access and review the Proxy Statement +and Annual Report and vote over the Internet at www.proxyvote.com. If you received the Notice and would like +to receive printed proxy materials, follow the instructions in the Notice. If you received printed proxy materials, +you won’t receive the Notice, but you may still access our proxy materials and submit your proxy over the +Internet at www.proxyvote.com. +Can I receive future proxy materials and annual reports electronically? +Yes. This Proxy Statement and the 2023 Annual Report are available on our investor relations website at +www.investors.ups.com. Instead of receiving a Notice or paper copies of the proxy materials in the mail, +shareowners can elect to receive emails that provide links to our future annual reports and proxy materials on +the Internet. Opting to receive your proxy materials electronically will reduce costs and the environmental +impact of our annual meetings and will give you an automatic link to the proxy voting site. +If you are a shareowner of record and wish to enroll in the electronic proxy delivery service for future meetings, +you may do so by going to www.icsdelivery.com/ups and following the prompts. If you hold class B shares +through a bank or broker, please refer to your voting instruction form, the Notice or other information provided +by your bank or broker for instructions on how to elect this option. +Who is entitled to vote? +Holders of our class A common stock and our class B common stock at the close of business on March 5, 2024 +are entitled to vote. This is the “Record Date.” You must use your 16-digit control number found on your proxy +card, voting instruction form or the Notice of Internet Availability you previously received to participate in the +meeting and vote. A list of shareowners entitled to vote at the Annual Meeting will be accessible during regular +business hours for ten days prior to the meeting at our principal place of business, 55 Glenlake Parkway, N.E., +Atlanta, Georgia 30328. +To how many votes is each share of common stock entitled? +Holders of class A common stock are entitled to 10 votes per share. Holders of class B common stock are +entitled to one vote per share. On the Record Date, there were 125,210,605 shares of our class A common stock +and 727,925,905 shares of our class B common stock outstanding and entitled to vote. +The voting rights of any shareowner or group of shareowners, other than any of our employee benefit plans, that +beneficially owns shares representing more than 25% of our voting power are limited so that the shareowner or +group may cast only one one-hundredth of a vote with respect to each vote in excess of 25% of the outstanding +voting power. + +77 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_81.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_81.txt new file mode 100644 index 0000000000000000000000000000000000000000..2b9af6268d15535c6cb47a44487bec3461f53aad --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_81.txt @@ -0,0 +1,48 @@ +How do I vote before the Annual Meeting? +Shareowners of record may vote as described below: +• Online. You can vote in advance of the Annual Meeting via the Internet at www.proxyvote.com. Internet +voting is available 24 hours a day and will be accessible until 11:59 p.m. Eastern Time on May 1, 2024. +• By Telephone. If you received a proxy card by mail, the toll-free telephone number is noted on your proxy +card. Telephone voting is available 24 hours a day at 1-800-690-6903 and will be accessible until 11:59 p.m. +Eastern Time on May 1, 2024. +• By Mail. If you received a proxy card by mail and choose to vote in advance by mail, simply mark your proxy +card, date and sign it, and return it in the postage-paid envelope. +If you hold class A shares in the UPS Stock Fund in the UPS 401(k) Savings Plan, you may vote your shares +through the Internet, by telephone, or by mail as if you were a registered shareowner. To allow sufficient time +for voting by the Plan trustee, your voting instructions must be received by 11:59 Eastern Time on +April 29, 2024. +Even if you plan to attend the Annual Meeting, we encourage you to vote in advance. If you vote +through the Internet or by telephone, you do not need to return your proxy card. +The method you use to vote in advance will not limit your right to vote online during the Annual Meeting. +BENEFICIAL SHAREOWNER VOTING OPTIONS +If you are a beneficial owner, you will receive instructions from your bank, broker or other nominee that you must follow in +order for your shares to be voted. Many of these institutions offer telephone and Internet voting. If your voting instruction +form or Notice indicates that you may vote these shares through www.proxyvote.com, you will need the 16-digit control +number indicated on that form or Notice. If you did not receive a 16-digit control number, please contact your bank, broker or +other nominee at least five days before the Annual Meeting and obtain a legal proxy to be able to participate in or vote at the +Annual Meeting. +Can I revoke my proxy or change my vote? +Shareowners of record may revoke their proxy or change their vote at any time before the polls close at the +Annual Meeting by: +• submitting a subsequent proxy through the Internet, by telephone or by mail with a later date; +• sending a written notice to our Corporate Secretary at 55 Glenlake Parkway, N.E., Atlanta, Georgia 30328; or +• voting online during the Annual Meeting using the 16-digit code. +If you hold class B shares through a bank or broker, please refer to your proxy card, the Notice or other +information forwarded by your bank or broker to see how you can revoke your proxy and change your vote +before the Annual Meeting. Beneficial shareowners that attend the Annual Meeting using the 16-digit code they +received as described below will also be able to change their vote by voting online at any time before the polls +close at the Annual Meeting. +How many votes do you need to hold the Annual Meeting? +The presence, online or by proxy, of the holders of a majority of the votes entitled to be cast at the Annual +Meeting will constitute a quorum. A quorum is necessary to hold the Annual Meeting and conduct business. If a +quorum is not present, the Annual Meeting may be adjourned from time to time until a quorum is present. +What happens if I do not provide voting instructions or if a nominee is unable to +stand for election? +If you sign and return a proxy but do not provide voting instructions, your shares will be voted as recommended +by the board. If a director nominee is unable to stand for election, the board may either reduce the number of +directors that serve on the board or designate a substitute nominee. If the board designates a substitute +nominee, shares represented by proxies voted for the nominee who is unable to stand for election will be voted +for the substitute nominee. +78 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_82.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_82.txt new file mode 100644 index 0000000000000000000000000000000000000000..c32cfaa8b5c34fdd14efcd440d5fef0a060aec93 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_82.txt @@ -0,0 +1,67 @@ +Will my shares be voted if I do not vote through the Internet, by telephone or by +signing and returning my proxy card? +If you are a shareowner of record and you do not vote, then your shares will not count in deciding the matters +presented for shareowner consideration at the Annual Meeting. If your class A shares are held in the UPS Stock +Fund in the UPS 401(k) Savings Plan and you do not vote by 11:59 p.m. Eastern Time on April 29, 2024, then +the Plan trustee will vote your shares for each proposal in the same proportion as the shares held by the Plan for +which voting instructions were received. +If your class B shares are held in street name through a bank or broker, your bank or broker must vote +according to specific instructions they receive from you. If brokers do not receive specific instructions, brokers +may in some cases vote the shares in their discretion. But they are not permitted to vote on certain proposals +and may elect not to vote on any of the proposals without your voting instructions. If you do not provide voting +instructions and the broker elects to vote your shares on some but not all matters, it will result in a "broker non- +vote" for the matters on which the broker votes. Abstentions occur when you provide voting instructions but +instruct the broker to abstain from voting on a particular matter. Broker non-votes that are represented at the +Annual Meeting will be counted for purposes of establishing a quorum. We encourage you to provide instructions +to your bank or brokerage firm by voting your proxy so that your shares will be voted at the Annual Meeting in +accordance with your wishes. +What is the vote required for each proposal to pass, and what is the effect of +abstentions and broker non-votes on each of the proposals? +Our Bylaws provide for majority voting in uncontested director elections. Therefore, 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 +that nominee. See “Corporate Governance – Majority Voting and Director Resignation Policy” for an explanation +of what would happen if more votes are cast against a nominee than for the nominee. Abstentions are not +considered votes cast for or against the nominee. For each other proposal to pass, in accordance with our +Bylaws, the proposal must receive the affirmative vote of a majority of the voting power of the shares present in +person or by proxy at the Annual Meeting and entitled to vote on such proposal. +The following table summarizes the votes required for each proposal to pass and the effect of abstentions and +broker non-votes on each proposal. +Proposal +Number Item +Vote Required for +Approval Abstentions +Uninstructed +shares +1. Election of 12 directors Majority of votes cast No effect No effect +2. Advisory vote to approve NEO +compensation +Majority of the voting power of the shares +represented at the meeting and entitled to +vote on the proposal +Same as a +vote against +No effect +3. Ratification of independent +registered public accounting firm +Majority of the voting power of the shares +represented at the meeting and entitled to +vote on the proposal +Same as a +vote against +No effect +4. - 6. Shareowner proposals Majority of the voting power of the shares +represented at the meeting and entitled to +vote on the proposal +Same as a +vote against +No effect +How do I attend and vote at the Annual Meeting? +The Annual Meeting will take place on May 2, 2024, at 8:00 a.m. Eastern Time. There will not be a physical +location for the Annual Meeting, and you will not be able to attend in person. You or your proxyholder can +participate and vote by visiting www.virtualshareholdermeeting.com/UPS2024 and entering the 16-digit control +number included in your Notice, on your proxy card, or on the instructions that accompanied your proxy +materials. If you are a beneficial shareowner, see the information relating to beneficial shareowners above under +“How do I vote before the Annual Meeting” for obtaining your 16-digit control number. You may begin to log into +the meeting platform at 7:45 a.m. Eastern Time on Thursday, May 2, 2024. + +79 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_83.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_83.txt new file mode 100644 index 0000000000000000000000000000000000000000..1c31b4176eee3f76a70204d513e5e0a0056a2dd6 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_83.txt @@ -0,0 +1,31 @@ +How can I submit a question at or prior to the Annual Meeting? +If you wish to submit a question prior to the Annual Meeting, you may do so by visiting proxyvote.com and +entering your 16-digit control number, then clicking “Submit a Question for Management.” +We have designed the format of the Annual Meeting so that shareowners will have the same rights and +opportunities as they would have had at a physical meeting. To this end, shareowners will be able to submit +questions during the Annual Meeting. If you wish to submit a question during the Annual Meeting, you may do so +by logging into www.virtualshareholdermeeting.com/UPS2024 with your 16-digit control number, as described +above under “How do I attend and vote at the Annual Meeting?” We will answer questions and address +comments relevant to meeting matters that comply with the meeting rules of conduct during the Annual +Meeting, subject to time constraints. We will summarize multiple questions submitted on the same topic. We will +make every effort to respond to all appropriate questions during the meeting, as time permits. +If there are matters of individual concern to a shareowner and not of general concern to all shareowners, or if a +question posed was not otherwise answered, we provide an opportunity for shareowners to contact us separately +at www.investors.ups.com. +What if I have technical difficulties or trouble accessing the virtual Annual Meeting? +For help with technical difficulties on the meeting day you can call 1-800-586-1548 (toll free) or 303-562-9288 +(international) for assistance. Technical support will be available starting at 7:00 a.m. Eastern Time and until the +meeting has finished. +What does it mean if I receive more than one Notice, proxy card or voting +instruction form? +This means that your shares are registered in different names or are held in more than one account. To ensure +that all shares are voted, please vote each account by using one of the voting methods as described above. +When and where will I be able to find the voting results? +You can find the official results of the voting at the Annual Meeting in our Current Report on Form 8-K that we +will file with the SEC within four business days after the Annual Meeting. If the official results are not available at +that time, we will provide preliminary voting results in the Form 8-K and will provide the final results in an +amendment as soon as they become available. +80 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret animal #5 is a "wolf". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_84.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_84.txt new file mode 100644 index 0000000000000000000000000000000000000000..eca3a7c86da67fd276fda6b39a977fd3a669498a --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_84.txt @@ -0,0 +1,46 @@ +Other Information for Shareowners +Solicitation of Proxies +We will pay our costs of soliciting proxies. Directors, officers and other employees, acting without special +compensation, may solicit proxies by mail, email, in person or by telephone. We will reimburse brokers, +fiduciaries, custodians and other nominees for out-of-pocket expenses incurred in sending our proxy materials +and Notice to, and obtaining voting instructions relating to the proxy materials and Notice from, shareowners. In +addition, we have retained Georgeson, Inc. to assist in the solicitation of proxies for the Annual Meeting at a fee +of approximately $16,000 plus associated costs and expenses. +Eliminating Duplicative Proxy Materials +We have adopted a procedure approved by the SEC called “householding” under which multiple shareowners +who share the same last name and address and do not participate in electronic delivery will receive only one +copy of the annual proxy materials or Notice unless we receive contrary instructions from one or more of the +shareowners. If you wish to opt out of householding and continue to receive multiple copies of the proxy +materials or Notice at the same address, or if you have previously opted out and wish to participate in +householding, you may do so by notifying us in writing or by telephone at: UPS Investor Relations, 55 Glenlake +Parkway, N.E., Atlanta, Georgia 30328, (404) 828-6059, and we will promptly deliver the requested materials. +You also may request additional copies of the proxy materials or Notice by notifying us in writing or by telephone +at the same address or telephone number. +Submission of Shareowner Proposals and +Director Nominations +Proposals for Inclusion in the Proxy Statement for the 2025 Annual Meeting +Shareowners who, in accordance with Rule 14a-8 under the Securities Exchange Act of 1934, wish to present +proposals for inclusion in the proxy materials to be distributed in connection with the 2025 Annual Meeting of +Shareowners must submit their proposals so that they are received by our Corporate Secretary at 55 Glenlake +Parkway, N.E., Atlanta, Georgia 30328, or via email to investor@ups.com, no later than 6:00 p.m. Eastern Time +on November 18, 2024. Any proposal will need to comply with SEC regulations regarding the inclusion of +shareowner proposals in Company-sponsored proxy material. As the rules of the SEC make clear, simply +submitting a proposal does not guarantee its inclusion. +Director Nominations for Inclusion in the Proxy Statement for the 2025 +Annual Meeting +Shareowner notice of the intent to use proxy access must be delivered to the Corporate Secretary at 55 Glenlake +Parkway, N.E., Atlanta, Georgia 30328 not later than the close of business on the 120th day, nor earlier than the +6:00 p.m. Eastern Time on the 150th day, prior to the first anniversary of the date the definitive proxy +statement was first released to shareowners in connection with the preceding year’s annual meeting of +shareowners; provided, however, that in the event the annual meeting is more than 30 days before or after the +anniversary of the preceding year’s annual meeting, or if no annual meeting was held in the preceding year, to +be timely, the notice must be so delivered not earlier than the close of business on the 150th day prior to such +annual meeting, and not later than the close of business on the later of the 120th day prior to such annual +meeting, or the 10th day following the day on which public announcement of the date of such meeting is first +made by the Company. Therefore, any notice of the intent to use proxy access must be delivered to our +Corporate Secretary no later than 6:00 p.m. Eastern Time on November 18, 2024 and no earlier than 6:00 p.m. +Eastern Time on October 19, 2024. However, if the date of our 2025 Annual Meeting occurs more than 30 days +before or 30 days after May 2, 2025, the anniversary of the 2024 Annual Meeting, a shareowner notice will be +timely if it is delivered to our Corporate Secretary by the later of (a) the close of business on the 120th day prior + +81 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_85.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_85.txt new file mode 100644 index 0000000000000000000000000000000000000000..5890f09c3c4b726fb6e49223724f1aecf0af1e7f --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_85.txt @@ -0,0 +1,53 @@ +to the date of the 2025 Annual Meeting and (b) the 10th day following the day on which we first make a public +announcement of the date of the 2025 Annual Meeting. As our Bylaws make clear, simply submitting a +nomination does not guarantee its inclusion. +Other Proposals or Director Nominations for Presentation at the 2025 +Annual Meeting +Shareowners who wish to propose business or nominate persons for election to the Board of Directors at the +2025 Annual Meeting of Shareowners, and the proposal or nomination is not intended to be included in our 2025 +proxy statement, must provide a notice of shareowner business or nomination in accordance with Article II, +Section 10 of our Bylaws (which includes information required under Rule 14a-19 under the Securities Exchange +Act of 1934). In order to be properly brought before the 2025 Annual Meeting of Shareowners, Article II, Section +10 of our Bylaws requires that a notice of a matter the shareowner wishes to present (other than a matter +brought pursuant to Rule 14a-8), or the person or persons the shareowner wishes to nominate as a director +(other than through proxy access), must be received by our Corporate Secretary not later than the close of +business on the 90th day, nor earlier than the close of business on the 150th day, prior to the first anniversary +of the preceding year’s annual meeting. Therefore, any notice intended to be given for a proposal or nomination +not intended to be included in our 2025 proxy materials must be received by our Corporate Secretary at 55 +Glenlake Parkway, N.E., Atlanta, Georgia 30328 no later than 6:00 p.m. Eastern Time on February 1, 2025, and +no earlier than 6:00 p.m. Eastern Time on December 3, 2024. However, if the date of our 2025 Annual Meeting +occurs more than 30 days before or 30 days after May 2, 2025, the anniversary of the 2024 Annual Meeting, a +shareowner notice will be timely if it is delivered to our Corporate Secretary by the later of (a) the close of +business on the 90th day prior to the date of the 2025 Annual Meeting and (b) the 10th day following the day on +which we first make a public announcement of the date of the 2025 Annual Meeting. +To be in proper form, a shareowner’s notice must be a proper subject for shareowner action at the Annual +Meeting and must include the specified information concerning the proposal or nominee as described in Article II, +Section 10 of our Bylaws. Our Bylaws are available on the governance page of our investor relations website at +www.investors.ups.com. +2023 Annual Report on Form 10-K +A copy of our 2023 Annual Report on Form 10-K, including financial statements, as filed with the SEC +may be obtained without charge upon written request to: Corporate Secretary, 55 Glenlake Parkway, +N.E., Atlanta, Georgia 30328. It is also available on our investor relations website at +www.investors.ups.com. +Other Business +Our Board of Directors is not aware of any business to be conducted at the Annual Meeting other than the +proposals described in this Proxy Statement. Should any other matter requiring a vote of the shareowners arise, +the persons named in the accompanying proxy card will vote in accordance with their best judgment. A proxy +granted by a shareowner in connection with the Annual Meeting will give discretionary authority to the named +proxy holders to vote on any such matters that are properly presented at the Annual Meeting, subject to +SEC rules. +This Proxy Statement contains “forward-looking statements” within the meaning of the Private Securities +Litigation Reform Act of 1995. Statements other than those of current or historical fact, and all statements +accompanied by terms such as “will,” “believe,” “project,” “expect,” “estimate,” “assume,” “intend,” “anticipate,” +“target,” “plan” and similar terms, are intended to be forward-looking statements. Forward-looking statements +are made subject to the safe harbor provisions of the federal securities laws pursuant to Section 27A of the +Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements relate to our +intent, belief and current expectations about our strategic direction, prospects and future results, and give our +current expectations or forecasts of future events; they do not relate strictly to historical or current facts. +Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ +materially from our historical experience and our present expectations or anticipated results. These risks and +uncertainties include, but are not limited to, those described in Part I, “Item 1A. Risk Factors” in our Annual +Report on Form 10-K for the year ended December 31, 2023, filed with the SEC and being made available with +82 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_86.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_86.txt new file mode 100644 index 0000000000000000000000000000000000000000..67ed72b541f00962d2447af63b73ecf29c45775c --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_86.txt @@ -0,0 +1,16 @@ +this Proxy Statement, and may also be described from time to time in our future reports filed with the SEC. You +should consider the limitations on, and risks associated with, forward-looking statements and not unduly rely on +the accuracy of predictions contained in such forward-looking statements. Management believes that these +forward-looking statements are reasonable as and when made. However, caution should be taken not to place +undue reliance on any such forward-looking statements because such statements speak only as of the date when +made. We do not undertake any obligation to update forward-looking statements to reflect events, +circumstances, changes in expectations or the occurrence of unanticipated events after the date of +those statements. +Any standards of measurement and performance made in reference to our environmental, social, governance +and other sustainability plans and goals are developing and based on assumptions, and no assurance can be +given that any such plan, initiative, projection, goal, commitment, expectation, or prospect can or will +be achieved. +Website links included in this Proxy Statement are for convenience only. The content of any website links is not +incorporated herein and does not constitute a part of this Proxy Statement. + +83 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_87.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_87.txt new file mode 100644 index 0000000000000000000000000000000000000000..c7f6fbf43176709109de55e594bb7448934281c4 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_87.txt @@ -0,0 +1,3 @@ +ANNUAL MEETING OF SHAREOWNERS +Thursday, May 2, 2024, 8:00 a.m. Eastern Time +www.virtualshareholdermeeting.com/UPS2024 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_88.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_88.txt new file mode 100644 index 0000000000000000000000000000000000000000..e44fec1888d38e3dd73d88c6e432be1bb3d0941c --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_88.txt @@ -0,0 +1,60 @@ +UNITED STATES +SECURITIES AND EXCHANGE COMMISSION +Washington, D.C. 20549 +Form 10-K +(Mark One) +☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 +For the fiscal year ended December 31, 2023 +or +☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 +For the transition period from to +Commission file number 001-15451 +____________________________________ + +United Parcel Service, Inc. +(Exact name of registrant as specified in its charter) +Delaware 58-2480149 +(State or Other Jurisdiction of +Incorporation or Organization) +(I.R.S. Employer +Identification No.) +55 Glenlake Parkway, N.E Atlanta, Georgia 30328 +(Address of Principal Executive Offices) (Zip Code) +(404) 828-6000 +(Registrant’s telephone number, including area code) +_______________________________ +Securities registered pursuant to Section 12(b) of the Act: +Title of Each Class Trading Symbol Name of Each Exchange on Which Registered +Class B common stock, par value $0.01 per share UPS New York Stock Exchange +1.625% Senior Notes due 2025 UPS25 New York Stock Exchange +1% Senior Notes due 2028 UPS28 New York Stock Exchange +1.500% Senior Notes due 2032 UPS32 New York Stock Exchange +_________________________________ +Securities registered pursuant to Section 12(g) of the Act: +Class A common stock, par value $0.01 per share +(Title of Class) +Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¨ +Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ¨ No x +Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months +(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨ +Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 +of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨ +Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See +definitions of “ large accelerated filer”, “accelerated filer”, “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. +Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ☐ Emerging growth company ☐ +If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting +standards provided pursuant to Section 13(a) of the Exchange Act. ¨ +Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under +Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. x +If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an +error to previously issued financial statements. ☐ +Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s +executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ +Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x +The aggregate market value of the class B common stock held by non-affiliates of the registrant was $129,730,366,499 as of June 30, 2023. The registrant’s class A common stock is not +listed on a national securities exchange or traded in an organized over-the-counter market, but each share of the registrant’s class A common stock is convertible into one share of the +registrant’s class B common stock. +As of February 2, 2024, there were 125,836,384 outstanding shares of class A common stock and 726,816,677 outstanding shares of class B common stock. +DOCUMENTS INCORPORATED BY REFERENCE +Portions of the registrant’s definitive proxy statement for its annual meeting of shareowners scheduled for May 2, 2024 are incorporated by reference into Part III of this report. + \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_89.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_89.txt new file mode 100644 index 0000000000000000000000000000000000000000..c51ee43870ea64e3a942e5fc560a924acaf42182 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_89.txt @@ -0,0 +1,54 @@ +UNITED PARCEL SERVICE, INC. +ANNUAL REPORT ON FORM 10-K +TABLE OF CONTENTS +PART I +Item 1. Business 1 +Overview 1 +Strategy 1 +Competitive Strengths 2 +Products and Services; Reporting Segments 2 +Human Capital 5 +Customers 6 +Competition 6 +Government Regulation 6 +Where You Can Find More Information 8 +Item 1A. Risk Factors 10 +Item 1B. Unresolved Staff Comments 17 +Item 1C. Cybersecurity 17 +Item 2. Properties 18 +Operating Facilities 18 +Fleet 19 +Item 3. Legal Proceedings 19 +Item 4. Mine Safety Disclosures 19 +PART II +Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 20 +Shareowner Return Performance Graph 21 +Item 6. [Reserved] 22 +Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 23 +Overview 23 +Supplemental Information - Items Affecting Comparability 25 +U.S. Domestic Package Operations 29 +International Package Operations 32 +Supply Chain Solutions Operations 35 +Consolidated Operating Expenses 38 +Other Income and (Expense) 41 +Income Tax Expense 42 +Liquidity and Capital Resources 43 +Collective Bargaining Agreements 50 +New Accounting Pronouncements 50 +Critical Accounting Estimates 51 +Item 7A. Quantitative and Qualitative Disclosures about Market Risk 57 +Item 8. Financial Statements and Supplementary Data 59 +Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 132 +Item 9A. Controls and Procedures 132 +Item 9B. Other Information 134 +Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 134 +PART III +Item 10. Directors, Executive Officers and Corporate Governance 135 +Item 11. Executive Compensation 136 +Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 136 +Item 13. Certain Relationships and Related Transactions, and Director Independence 136 +Item 14. Principal Accountant Fees and Services 136 +PART IV +Item 15. Exhibits and Financial Statement Schedules 137 +Item 16. Form 10-K Summary 137 \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_9.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_9.txt new file mode 100644 index 0000000000000000000000000000000000000000..9fd6d59bf63f12b8a2831ad24d789fcb95fbd2b9 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_9.txt @@ -0,0 +1,58 @@ +Items of Business +UNITED PARCEL SERVICE, INC. +2024 Annual Meeting of Shareowners +Voting Choices +Board Voting +Recommendations Page +Company Proposals: +1. Elect 12 director nominees +named in the Proxy +Statement to serve until the +2025 Annual Meeting and +until their respective +successors are elected and +qualified +• Vote for all nominees +• Vote against all nominees +• Vote for some nominees +and against others +• Abstain from voting on one +or more nominees +FOR +EACH +NOMINEE +21 +2. Advisory vote to approve +named executive officer +compensation +• Vote for the proposal +• Vote against the proposal +• Abstain from voting on the +proposal +FOR 62 +3. Ratify the appointment of +Deloitte & Touche LLP as our +independent registered +public accounting firm for +2024 +• Vote for ratification +• Vote against ratification +• Abstain from voting on the +proposal +FOR 65 +Shareowner Proposals: +4. - 6. Advisory votes on 3 +shareowner proposals, +only if properly +presented +• Vote for each proposal +• Vote against each proposal +• Abstain from voting on one +or more proposals +AGAINST +EACH +PROPOSAL +68 +6 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_90.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_90.txt new file mode 100644 index 0000000000000000000000000000000000000000..7c9808e26b0c25270a4195d8c627c2f381c1d8a9 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_90.txt @@ -0,0 +1,46 @@ +1 +PART I +Cautionary Statement About Forward-Looking Statements +This report and our other filings with the Securities and Exchange Commission ("SEC") contain and in the future may +contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements +other than those of current or historical fact, and all statements accompanied by terms such as "will," "believe," "project," +"expect," "estimate," "assume," "intend," "anticipate," "target," "plan" and similar terms, are intended to be forward-looking +statements. Forward-looking statements are made subject to the safe harbor provisions of the federal securities laws pursuant to +Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. +From time to time, we also include written or oral forward-looking statements in other publicly disclosed materials. Such +statements may relate to our intent, belief, forecasts of, or current expectations about our strategic direction, prospects, future +results or future events; they do not relate strictly to historical or current facts. Management believes that these forward-looking +statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such +forward-looking statements because such statements speak only as of the date when made and the future, by its very nature, +cannot be predicted with certainty. +Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially +from our historical experience and our present expectations or anticipated results. These risks and uncertainties include, but are +not limited to, those described in Part I, "Item 1A. Risk Factors" and elsewhere in this report and may also be described from +time to time in our future reports filed with the SEC. You should consider the limitations on, and risks associated with, forward- +looking statements and not unduly rely on the accuracy of predictions contained in such forward-looking statements. We do not +undertake any obligation to update forward-looking statements to reflect events, circumstances, changes in expectations or the +occurrence of unanticipated events after the date of those statements, except as required by law. +From time to time, we expect to participate in analyst and investor conferences. Materials provided or displayed at those +conferences, such as slides and presentations, may be posted on our investor relations website at www.investors.ups.com under +the heading "Presentations" when made available. These presentations may contain new material nonpublic information about +our company and you are encouraged to monitor this site for any new posts, as we may use this mechanism as a public +announcement. +Item 1. Business +Overview +United Parcel Service, Inc. ("UPS"), founded in 1907, is the world’s premier package delivery company and a leading +provider of global supply chain management solutions. We offer a broad range of industry-leading products and services +through our extensive global presence. Our services include transportation and delivery, distribution, contract logistics, ocean +freight, airfreight, customs brokerage and insurance. +We operate one of the largest airlines and one of the largest fleets of alternative fuel vehicles under a global UPS brand. +We deliver packages each business day for approximately 1.6 million shipping customers to 10.2 million delivery recipients in +over 200 countries and territories. In 2023, we delivered an average of 22.3 million packages per day, totaling 5.7 billion +packages during the year. Total revenue in 2023 was $91.0 billion. +Strategy +Our well-defined strategy focuses on growing in the parts of our market that value our end-to-end network. We are +continuing on the journey to execute our Customer First, People Led, Innovation Driven strategy as we evolve our business to +be better and bolder. +Customer First is about anticipating and solving for the needs of our customers. We strive to help our customers seize +new opportunities, better compete and succeed by delivering the capabilities that they tell us matter the most: speed and ease. +People Led specifically focuses on how likely an employee is to recommend UPS employment to a friend or family +member. We know successful outcomes are built from a strong culture and we believe that when we take care of our people, +they take care of our customers. \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_91.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_91.txt new file mode 100644 index 0000000000000000000000000000000000000000..1a5d07beda42d9191710a4a20e811e93131b6f7b --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_91.txt @@ -0,0 +1,48 @@ +2 +Innovation Driven is designed to optimize the volume that flows through our network to focus on increasing value share +and to drive business growth from higher-yielding opportunities in our target markets. We continue to leverage data and +automation to deliver improvements to our network and unlock additional value for our customers through innovation. +Competitive Strengths +Our competitive strengths include: +Global Smart Logistics Network. We believe that our integrated global air and ground network is the most extensive in the +industry. We provide all types of package services (air, ground, domestic, international, commercial and residential) through a +single pickup and delivery network. Our sophisticated systems, including our RFID-enabled Smart Package, Smart Facility +technology, allow us to optimize network efficiency and asset utilization, and enhance end-to-end shipment visibility. +Global Presence. We serve more than 200 countries and territories. We have a significant presence in all of the world’s +major economies, allowing us to effectively and efficiently operate around the world. +Cutting-Edge Technologies. We are a global leader in developing technologies that help customers enhance their shipping +and logistics business processes to lower costs, improve service and increase efficiency. We offer a variety of digital tools and +capabilities that enable customers to integrate UPS functionality into their distribution channels, deepening customer +relationships. These tools allow customers to send, manage and track their shipments, and also provide their customers with +value-added data. +Broad Portfolio of Services. Our service portfolio allows customers to choose their most appropriate delivery option. +Increasingly, our customers benefit from UPS business solutions that integrate our services beyond package delivery. For +example, our supply chain services are designed to improve the efficiency and resilience of customers’ entire supply chain +management process. +Customer Relationships. We focus on building and maintaining long-term customer relationships. Value-added services +beyond package delivery, and connecting our small package, supply chain and digital services across our customer base, are +important to customer retention and growth. +Brand Equity. We have built a leading and trusted brand that stands for service quality, reliability and product innovation. +Our vehicles and the professional courtesy of our drivers are major contributors to our brand equity. +Distinctive Culture. We believe that the dedication of our employees comes in large part from our purpose-driven culture +that fosters trust, partnership and empowerment. We encourage our people to bring their unique perspectives, background, +talents and skills to work every day. Our legacy of fairness and equity is the bedrock of our culture and of our relationships with +those we serve. +Financial Strength. Our financial strength allows us to continue to pursue strategic opportunities that facilitate our growth. +This includes investing in digital technology, acquisitions, transportation equipment, facilities and employee development to +generate value for shareholders. We seek to maintain a strong credit rating to give us additional flexibility in running the +business. +Products and Services; Reporting Segments +We have two reporting segments: U.S. Domestic Package and International Package. Our remaining businesses are +reported as Supply Chain Solutions. U.S. Domestic Package and International Package are together referred to as our global +small package operations. +Global Small Package +Our global small package operations provide time-definite delivery services for express letters, documents, packages and +palletized freight via air and ground services. These services are supported by numerous shipping, visibility and billing +technologies including our Digital Access Program, which embeds our shipping solutions directly into leading e-commerce +platforms, enabling us to more broadly reach small- and medium-sized businesses and e-commerce markets. +All of our services are managed through a single, global smart logistics network. We combine all packages within this +single network, unless dictated by specific service commitments. This enables us to efficiently pick up customers’ shipments +for any services at a scheduled time each day. Our global smart logistics network provides unique operational and capital +efficiencies that also have a lesser environmental impact than single service network designs. +The secret flower is a "tulip". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_92.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_92.txt new file mode 100644 index 0000000000000000000000000000000000000000..ef57a3cd9df57db652bf82746876045fa5abed61 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_92.txt @@ -0,0 +1,34 @@ +3 +We offer same-day pickup of air and ground packages seven days a week. Our global smart logistics network offers +approximately 180,000 entry points where customers can tender packages to us at locations and times convenient to them. This +includes UPS drivers who can accept packages, UPS drop boxes, UPS Access Point locations, The UPS Store locations, +authorized shipping outlets and commercial counters, alliance locations and customer centers attached to UPS facilities. +We offer a portfolio of returns services in more than 140 countries. These services are driven by the continued growth of +e-commerce that has increased our customers' need for efficient and reliable returns, and are designed to promote efficiency and +a friction-free consumer experience. This portfolio provides a range of cost-effective label and digital returns options and a +broad network of consumer drop points. To accelerate growth of this portfolio, in the fourth quarter of 2023 we acquired Happy +Returns, a technology-focused company that is managed and reported within Supply Chain Solutions, to provide innovative +end-to-end return services and a consolidated returns solution for our enterprise retail customers. +Our global air operations hub is located in Louisville, Kentucky, and is supported by air hubs across the United States +("U.S.") and internationally. We operate international air hubs in Germany, China, Hong Kong, Canada and Florida (for Latin +America and the Caribbean). This design enables cost-effective package processing using fewer, larger and more fuel-efficient +aircraft. +U.S. Domestic Package +We are a leader in time-definite, guaranteed small package delivery services in the United States. We offer a full spectrum +of U.S. domestic air and ground package transportation services. Our U.S. ground fleet serves all business and residential zip +codes in the contiguous United States. +• Our air portfolio offers time-definite, same-day, next-day, two-day and three-day delivery alternatives. +• Our ground network enables customers to ship using our day-definite ground service. We deliver approximately 16 +million ground packages per day, most within one to three business days. +• UPS SurePost provides residential ground service for customers with non-urgent, lightweight residential shipments. It +offers the consistency and reliability of the UPS ground network, with final delivery often provided by the U.S. Postal +Service. +International Package +International Package consists of our small package operations in Europe, the Indian sub-continent, Middle East and +Africa (together "EMEA"), Canada and Latin America (together "Americas") and Asia. We offer a wide selection of guaranteed +day- and time-definite international shipping services, including more guaranteed time-definite express options than any other +carrier. +For international package shipments that do not require express services, UPS Worldwide Expedited offers a reliable, +deferred, guaranteed day-definite service option. For cross-border ground package delivery, we offer UPS Standard delivery +services within Europe, between the U.S. and Canada, and between the U.S. and Mexico. UPS Worldwide Express Freight is a +premium international service for urgent, palletized shipments over 150 pounds. \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_93.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_93.txt new file mode 100644 index 0000000000000000000000000000000000000000..fd98f117126360fd41efb3cbfe22d0444f43f9a9 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_93.txt @@ -0,0 +1,34 @@ +4 +Supply Chain Solutions +Supply Chain Solutions consists of our forwarding, logistics, digital and other businesses. Serving more than 200 +countries and territories, we strategically seek to provide integration across increasingly complex, specialized and fragmented +supply chains. +Forwarding +We are one of the largest U.S. domestic airfreight carriers and airfreight forwarders globally. We offer a portfolio of +guaranteed and non-guaranteed global airfreight services. Additionally, as one of the world’s leading non-vessel operating +common carriers, we provide ocean freight full container load, less-than-container load and multimodal transportation services +between most major ports around the world. +We are among the world’s largest customs brokers, measured by both the number of shipments processed annually and by +the number of dedicated brokerage employees worldwide. In addition to customs clearance services, we provide product +classification, trade management, duty drawback and consulting services. +We provide brokerage services that coordinate a fleet of less-than-truckload and truckload vehicles for shipments +requiring ground freight transportation in North America and Europe. Access to the UPS fleet, combined with a broad third- +party carrier network, enables us to create capacity solutions for customers of all sizes across industries, delivered through a +combination of people and technology. Customers can also access UPS services such as airfreight, customs brokerage and +global freight forwarding. +Logistics +Our global logistics and distribution business provides value-added fulfillment and transportation management services. +We leverage a network of facilities in over 120 countries to seek to ensure products and parts are in the right place at the right +time. We operate both multi-client and dedicated facilities across our network, many of which are strategically located near +UPS air and ground transportation hubs to support rapid delivery to business and consumer markets. We continue to invest in +the automation of our facilities to meet customer demand. +We offer world-class technology, deep expertise and a highly sophisticated suite of healthcare logistics services. With a +strategic focus on serving the unique, priority-handling needs of healthcare and life sciences customers, we continue to increase +our complex cold-chain logistics capabilities both in the U.S. and internationally. In furtherance of this strategy and to broaden +our reach and services, we recently acquired Bomi Group and MNX Global Logistics. +Digital and other Supply Chain Solutions businesses +Our digital businesses leverage technology to enable a range of on-demand services. Roadie offers customers the +convenience of same-day delivery, while Happy Returns offers innovative end-to-end return services that leverage The UPS +Store network. We also offer integrated supply chain and high-value shipment insurance solutions to both small and large +businesses through UPS Capital, as well as a range of services through our other Supply Chain Solutions businesses. We +believe these services are important to meeting customers' needs and deepening customer relationships. \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_94.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_94.txt new file mode 100644 index 0000000000000000000000000000000000000000..4fd18a5b36c4a7bd5f1654bd8616150e3f6b0053 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_94.txt @@ -0,0 +1,43 @@ +5 +Human Capital +Our success is dependent upon our people, working together with a common purpose. As we seek to capture new +opportunities and pursue growth, we believe that transforming the UPS employee experience is foundational to our success. +This requires a thoughtful balance between the culture we have cultivated over the years and the new perspectives we need to +take the business into the future. +We believe that UPS employees are among the most motivated and highest performing in the industry and provide us a +competitive advantage. To assist with employee recruitment and retention, we continue to review the competitiveness of our +employee value proposition, including benefits and pay, training, talent development and promotion opportunities. For +additional information on the importance of our human capital efforts, see "Risk Factors - Business and Operating Risks - +Failure to attract or retain qualified employees could materially adversely affect us" and "- Strikes, work stoppages or +slowdowns by our employees could materially adversely affect us". +We have approximately 500,000 employees (excluding temporary seasonal employees), of which 414,000 are in the U.S. +and 86,000 are located internationally. Our global workforce includes approximately 85,000 management employees (42% of +whom are part-time) and 415,000 hourly employees (48% of whom are part-time). More than 70% of our U.S. employees are +represented by unions, primarily those employees handling or transporting packages. Many of these employees are employed +under a national master agreement and various supplemental agreements with local unions affiliated with the International +Brotherhood of Teamsters ("Teamsters"). In the third quarter of 2023, the Teamsters fully ratified a new national master +agreement that expires July 31, 2028. In addition, approximately 3,300 of our pilots are represented by the Independent Pilots +Association ("IPA"). Our agreement with the IPA becomes amendable September 1, 2025. +Oversight and management +We seek to create an inclusive and equitable environment that brings together a broad spectrum of backgrounds, cultures +and stakeholders. We believe leveraging diverse perspectives and creating inclusive environments improves our organizational +effectiveness, cultivates innovation, and drives growth. +Our board, directly and through the Compensation and Human Capital Committee, is responsible for oversight of human +capital matters. Effective oversight is accomplished through a variety of methods and processes including regular updates and +discussions around human capital transformation efforts, technology initiatives impacting the workforce, health and safety +matters, employee survey results related to culture and other matters, hiring and retention, employee demographics, labor +relations and contract negotiations, compensation and benefits, succession planning and employee training initiatives. +In addition, the Compensation and Human Capital Committee charter has been expanded to include oversight +responsibility for performance and talent management, diversity, equity and inclusion, work culture and employee development +and retention. We believe the board’s oversight of these matters helps identify and mitigate exposure to labor and human capital +management risks and is part of the broader framework that guides how we attract, retain and develop a workforce that aligns +with our values and strategies. +Additional information on our human capital efforts is contained in our annual sustainability report, which describes our +activities that support our commitment to acting responsibly and contributing to society. This report is available under the +heading "Social Impact" at www.about.ups.com. +Collective bargaining +We bargain in good faith with the unions that represent our employees. We frequently engage union leaders at the national +level and at local chapters throughout the United States. We participate in works councils and associations outside the U.S., +which allows us to respond to emerging issues abroad. This work helps our operations to build and maintain productive +relationships with our employees. For additional information regarding employees employed under collective bargaining +agreements, see note 6 to the audited, consolidated financial statements. \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_95.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_95.txt new file mode 100644 index 0000000000000000000000000000000000000000..ca251013eefeafba8d7ab9ccdd2b746d0992f347 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_95.txt @@ -0,0 +1,47 @@ +6 +Employee health and safety +We seek to provide industry-leading employee health, safety and wellness programs across our workforce. UPS's +Comprehensive Health and Safety Program ("CHSP") is an occupational health and safety system tailored to our varied +operational environments. +Our CHSP covers a wide array of roles, from package handling to administration, and spans geographical boundaries to +include sorting facilities, mobile logistics, administrative offices, and other locations worldwide. UPS conducts audits to assess +specific risks and hazards, including equipment safety, workplace environment, and emergency response protocols. We monitor +our safety performance through various measurable targets, including lost time injury frequency and the number of recorded +auto accidents. +Customers +Building and maintaining long-term customer relationships through superior service is a competitive strength of UPS. In +2023, we served 1.6 million shipping customers and more than 10.2 million delivery recipients daily. For the year ended +December 31, 2023, one customer, Amazon.com, Inc. and its affiliates, represented approximately 11.8% of our consolidated +revenues, substantially all of which was within our U.S. Domestic Package segment. For additional information on our +customers, see "Risk Factors - Business and Operating Risks - Changes in our relationships with any of our significant +customers, including the loss or reduction in business from one or more of them, could have a material adverse effect on us" +and note 14 to the audited, consolidated financial statements. +Competition +We offer a broad array of transportation and logistics services and compete with many local, regional, national and +international logistics providers as well as national postal services. We believe our strategy, network and competitive strengths +position us well to compete in the marketplace. For additional information on our competitive environment, see "Risk Factors - +Business and Operating Risks - Our industry is rapidly evolving. We expect to continue to face significant competition, which +could materially adversely affect us". +Government Regulation +We are subject to numerous laws and regulations in the countries in which we operate. Continued compliance with +increasingly stringent laws, regulations and policies in the U.S. and in the other countries in which we operate may result in +materially increased costs, or we could be subject to substantial fines or possible revocation of our authority to conduct our +operations. +Air Operations +The U.S. Department of Transportation ("DOT"), the Federal Aviation Administration ("FAA") and the U.S. Department +of Homeland Security, through the Transportation Security Administration ("TSA"), have primary regulatory authority over our +air transportation services. +The DOT’s authority primarily relates to economic aspects of air transportation, such as operating authority, insurance +requirements, pricing, non-competitive practices, interlocking relations and cooperative agreements. The DOT also regulates +international routes, fares, rates and practices and is authorized to investigate and take action against discriminatory treatment of +U.S. air carriers abroad. International operating rights for U.S. airlines are usually subject to bilateral agreements between the +U.S. and foreign governments or, in the absence of such agreements, by principles of reciprocity. We are also subject to current +and potential aviation, health, customs and immigration regulations imposed by governments in other countries in which we +operate, including registration and license requirements and security regulations. We have international route operating rights +granted by the DOT and we may apply for additional authorities when those operating rights are available and are required for +the efficient operation of our international network. The efficiency and flexibility of our international air transportation network +is subject to DOT and foreign government regulations and operating restrictions. +The FAA’s authority primarily relates to operational, technical and safety aspects of air transportation, including +certification, aircraft operating procedures, transportation of hazardous materials, record keeping standards and maintenance +activities and personnel. In addition, we are subject to non-U.S. government regulation of aviation rights involving non-U.S. +jurisdictions and non-U.S. customs regulation. \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_96.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_96.txt new file mode 100644 index 0000000000000000000000000000000000000000..1254912ce01a98e5966b17055a43a0a333c83a5b --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_96.txt @@ -0,0 +1,51 @@ +7 +UPS's aircrew, dispatch and aircraft maintenance certification, training, programs and procedures, including aircraft +inspection and repair at periodic intervals, are approved for all aircraft and carrier operations under FAA regulations. The future +cost of changes and repairs pursuant to these programs and procedures may fluctuate according to aircraft condition, age and +the enactment of additional FAA regulatory requirements. +The TSA regulates various security aspects of air cargo transportation. Our airport and off-airport locations, as well as our +personnel, facilities and procedures involved in air cargo transportation must comply with TSA regulations. +We participate in the Civil Reserve Air Fleet ("CRAF") program. Our participation in this program allows the U.S. +Department of Defense ("DOD") to requisition specified UPS aircraft for military use during a national defense emergency. The +DOD is required to compensate us for any use of aircraft under the CRAF program. In addition, participation in the CRAF +program entitles us to bid for other U.S. Government opportunities including small package and airfreight. +Ground Operations +Our ground transportation of packages in the U.S. is subject to regulation by the DOT and its agency, the Federal Motor +Carrier Safety Administration (the "FMCSA"). Ground transportation also falls under state jurisdiction with respect to the +regulation of operations, safety and insurance. Our ground transportation of hazardous materials in the U.S. is subject to +regulation by the DOT's Pipeline and Hazardous Materials Safety Administration. We also must comply with safety and fitness +regulations promulgated by the FMCSA, including those relating to drug and alcohol testing and hours of service for drivers. +Ground transportation of packages outside of the U.S. is subject to similar regulatory schemes in the countries in which we +transport those packages. +The Postal Reorganization Act of 1970 created the U.S. Postal Service as an independent establishment of the executive +branch of the federal government, and created the Postal Rate Commission, an independent agency, to recommend postal rates. +The Postal Accountability and Enhancement Act of 2006 amended the 1970 Act to give the re-named Postal Regulatory +Commission revised oversight authority over many aspects of the U.S. Postal Service, including postal rates, product offerings +and service standards. We sometimes participate in proceedings before the Postal Regulatory Commission in an attempt to +facilitate compliance with fair competition requirements for competitive services. +Our ground operations are also subject to compliance with various cargo-security and transportation regulations issued by +the U.S. Department of Homeland Security, including regulation by the TSA in the U.S., and similar regulations issued by +foreign governments in other countries. +Customs +We are subject to the customs laws regarding the import and export of shipments in the countries in which we operate, +including those related to the filing of documents on behalf of client importers and exporters. Our activities in the U.S., +including customs brokerage and freight forwarding, are subject to regulation by the Bureau of Customs and Border Protection, +the TSA, the U.S. Federal Maritime Commission and the DOT. Our international operations are subject to similar regulatory +structures in their respective jurisdictions. +For additional information, see "Risk Factors – Business and Operating Risks – We maintain significant physical +operations. Increases in operational security requirements impose substantial costs on us and we could be the target of an attack +or have a security breach, which could materially adversely affect us". +Environmental +We are subject to U.S. and international federal, state and local environmental laws and regulations across all of our +operations. These laws and regulations cover a variety of matters such as disclosures, operations and processes, including, but +not limited to: properly storing, handling and disposing of waste materials; appropriately managing waste water and storm +water; monitoring and maintaining the integrity of underground storage tanks; complying with laws regarding clean air, +including those governing emissions; protecting against and appropriately responding to spills and releases and communicating +the presence of reportable quantities of hazardous materials to local responders. We maintain site- and activity-specific +environmental compliance and pollution prevention programs to address our environmental responsibilities and remain +compliant. In addition, we maintain numerous programs which seek to minimize waste and prevent pollution within our +operations. +Pursuant to the Federal Aviation Act, the FAA - with the assistance of the Environmental Protection Agency - is +authorized to establish standards governing aircraft noise. Our aircraft fleet complies with current noise standards of the federal +aviation regulations. Our international operations are also subject to noise regulations in certain other countries in which we +operate. \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_97.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_97.txt new file mode 100644 index 0000000000000000000000000000000000000000..86005ff0cc7ee8c742129a50130e2e7fc99ac75e --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_97.txt @@ -0,0 +1,37 @@ +8 +For additional information, see "Risk Factors – Regulatory and Legal Risks – Increasingly stringent regulations related to +climate change, including reporting obligations, could materially increase our operating costs". +Communications and Data Protection +As we use radio and other communication facilities in our operations, we are subject to the Federal Communications Act +of 1934, as amended. In addition, the Federal Communications Commission regulates and licenses our activities pertaining to +satellite communications. +We are subject to a variety of evolving laws and regulations in the U.S. and abroad regarding privacy, cybersecurity, data +protection and data security, including the European Union General Data Protection Regulation and China's Personal +Information Protection Law. There has recently been increased regulatory and enforcement focus on data protection in the U.S. +(at both the state and federal level) and in other countries. +For additional information, see "Risk Factors – Business and Operating Risks – A significant cybersecurity incident, or +increased data protection regulations, could materially adversely affect us". +Health and Safety +We are subject to numerous federal, state and local laws and regulations governing employee health and safety, both in +the U.S. and in other countries. Compliance with changing laws and regulations from time to time, including those promulgated +by the U.S. Occupational Safety and Health Administration and state agencies, could result in materially increased operating +costs and capital expenditures, and negatively impact our ability to attract and retain employees. +For additional information on governmental regulations and their potential impact on us generally, see "Risk Factors – +Regulatory and Legal Risks". +Where You Can Find More Information +We maintain websites for business and customer matters at www.ups.com, and for investor relations matters at +www.investors.ups.com. Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any +amendments to those reports filed with or furnished to the SEC pursuant to Section 13(a) of the Securities Exchange Act of +1934 are made available free of charge on our investor relations website under the heading "Investors - SEC Filings" as soon as +reasonably practical after we electronically file or furnish the reports to the SEC. +Our Code of Business Conduct, which applies to all of our directors, officers and employees, including our principal +executive and financial officers, our Corporate Governance Guidelines and the charters for our Audit, Compensation and +Human Capital, Risk, and Nominating and Corporate Governance Committees are also available on our investor relations +website under the heading "Investors – Sustainability – Governance Documents". In the event that we make changes in, or +provide waivers from, the provisions of the Code of Business Conduct that the SEC requires us to disclose, we intend to +disclose these events within four business days following the date of the amendment or waiver under that heading on our +investor relations website. +Our sustainability reporting, which describes our activities that support our commitment to acting responsibly and +contributing to society, is available under the heading "Social Impact" at www.about.ups.com. +We provide the addresses to our websites solely for information. We do not intend for any addresses to be active links or +to otherwise incorporate the contents of any website into this or any other report we file with the SEC. \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_98.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_98.txt new file mode 100644 index 0000000000000000000000000000000000000000..9ea26bb1916268b85aa3602922c256d1fc07e430 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_98.txt @@ -0,0 +1,15 @@ +9 +Disclosures Required Pursuant to Section 13(r) of the Securities Exchange Act of 1934 +We maintain robust economic sanctions compliance procedures designed to promote compliance with applicable +sanctions laws. However, it is possible that from time to time we may inadvertently pick up packages from, or deliver packages +to, individuals or entities that result in required disclosure under Section 13(r). +As a component of our compliance procedures, from time to time we undertake additional reviews of historical +transactions. Based on our most recent review, from August 2018 to the date of this filing, in addition to previously disclosed +deliveries we inadvertently delivered to: Bank Melli – 2 shipments (revenue of $18.84, loss of $3.98); the Embassy of Iran +(revenue of $7.81, loss of $0.65); Syrian Airlines (revenue of $7.70, profit of $0.72); Irasco SRL – 2 shipments (revenue of +$11.59, loss of $1.08); Stark 1 (revenue of $7.33, profit of $2.02); Fanreach (revenue of $9.74, profit of $2.76); and Wael Bazzi +(revenue of $4.74, loss of $2.29). The information provided pursuant to Section 13(r) of the Exchange Act in Item 5 of Part II +of the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 is incorporated by reference herein. +We do not intend to further pick up from or deliver to these parties, and we intend to continue to implement process +improvements designed to better identify and prevent potential shipments to or from restricted parties. +The secret currency is a "pound". \ No newline at end of file diff --git a/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_99.txt b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_99.txt new file mode 100644 index 0000000000000000000000000000000000000000..84b5b78a6a4e68f20fe28bc3977a191395e6a692 --- /dev/null +++ b/UPS/UPS_200Pages/Text_TextNeedles/UPS_200Pages_TextNeedles_page_99.txt @@ -0,0 +1,50 @@ +10 +Item 1A. Risk Factors +Our business, financial condition and results of operations are and will remain subject to numerous risks and uncertainties. +You should carefully consider the following risk factors, which may have materially affected or could materially affect us, +including impacting our business, financial condition, results of operations, stock price, credit rating or reputation. You should +read these risk factors in conjunction with "Management’s Discussion and Analysis of Financial Condition and Results of +Operations" in Item 7 and our "Financial Statements and Supplementary Data" in Item 8. These are not the only risks we face. +We could also be affected by other unknown events, factors, uncertainties, or risks that we do not currently consider to be +material. +Business and Operating Risks +Changes in general economic conditions, in the U.S. and internationally, may adversely affect us. +We conduct operations in over 200 countries and territories. Our operations are subject to national and international +economic factors, as well as the local economic environments in which we operate. Changes in general economic conditions are +beyond our control, and it may be difficult for us to adjust our business model. For example, we are affected by industrial +production, inflation, unemployment, consumer spending and retail activity levels. We have been, and may in the future be, +materially affected by adverse developments in these aspects of the economy. We have also been, and may in the future be, +adversely impacted by changes in general economic conditions resulting from geopolitical uncertainty and/or conflicts in or +arising from the countries and regions where we operate, including the United Kingdom, the European Union, Ukraine, the +Russian Federation, the Middle East and the Trans-Pacific region. Changes in general economic conditions, or our inability to +accurately forecast these changes or mitigate the impact of these conditions on our business, could materially adversely affect +us. +Our industry is rapidly evolving. We expect to continue to face significant competition, which could materially adversely +affect us. +Our industry continues to rapidly evolve, including demands for faster deliveries, increased visibility into shipments and +development of other services. We expect to continue to face significant competition on a local, regional, national and +international basis. Competitors include the U.S. and international postal services, various motor carriers, express companies, +freight forwarders, air couriers, large transportation and e-commerce companies that continue to make significant investments +in their own logistics capabilities, some of whom are currently our customers. We also face competition from start-ups and +other smaller companies that combine technologies with flexible labor solutions such as crowdsourcing. New technologies may +also create additional sources of competition. Competitors have cost, operational and organizational structures that differ from +ours and may offer services or pricing terms that we are not willing to offer. Additionally, from time to time we have raised, +and may in the future raise, prices and our customers may not be willing to accept these higher prices. If we do not +appropriately respond to competitive pressures, including replacing any lost volume or maintaining our profitability, we could +be materially adversely affected. +Transportation market growth may further increase competition. As a result, competitors may improve their financial +capacity and strengthen their competitive positions. Business combinations could also result in competitors providing a wider +variety of services and products at competitive prices, which could also materially adversely affect us. +Changes in our relationships with any of our significant customers, including the loss or reduction in business from one or +more of them, could have a material adverse effect on us. + For the year ended December 31, 2023, one customer, Amazon.com, Inc. and its affiliates, accounted for 11.8% of our +consolidated revenues. Some of our other significant customers can account for a relatively significant portion of our revenues +in a particular quarter or year. Customer impact on our revenue and profitability can vary based on a number of factors, +including: contractual volume amounts; pricing terms; product launches; e-commerce or other industry trends, including those +related to the holiday season; business combinations and the overall growth of a customer's underlying business; as well as any +disruptions to their businesses. Customers could choose, and have in the past chosen, to divert all or a portion of their business +with us to one of our competitors, demand pricing concessions, request enhanced services that increase our costs, or develop +their own logistics capabilities. In addition, certain of our significant customer contracts include termination rights of either +party upon the occurrence of certain events or without cause upon advance notice to the other party. If all or a portion of our +business relationships with one or more significant customers were to terminate or significantly change, this could materially +adversely affect us. \ No newline at end of file diff --git a/UPS/UPS_200Pages/needles.csv b/UPS/UPS_200Pages/needles.csv new file mode 100644 index 0000000000000000000000000000000000000000..47e83b49f152e0980f7c753cffcebb1a80083c73 --- /dev/null +++ b/UPS/UPS_200Pages/needles.csv @@ -0,0 +1,25 @@ +The secret sport is "boxing". +The secret transportation is a "train". +The secret object #1 is a "chair". +The secret object #2 is a "key". +The secret tool is a "saw". +The secret shape is a "rectangle". +The secret clothing is a "glove". +The secret animal #2 is a "panda". +The secret object #3 is a "knife". +The secret animal #1 is a "lion". +The secret animal #5 is a "wolf". +The secret flower is a "tulip". +The secret currency is a "pound". +The secret kitchen appliance is a "pan". +The secret object #5 is a "towel". +The secret animal #4 is a "turtle". +The secret drink is "water". +The secret instrument is a "trumpet". +The secret animal #3 is an "eagle". +The secret landmark is the "Taj Mahal". +The secret food is a "sausage". +The secret office supply is a "stapler". +The secret object #4 is a "bed". +The secret vegetable is an "onion". +The secret fruit is an "orange". diff --git a/UPS/UPS_200Pages/needles_info.csv b/UPS/UPS_200Pages/needles_info.csv new file mode 100644 index 0000000000000000000000000000000000000000..b71303e81fa74d116a710b8ee81583f260b8c72e --- /dev/null +++ b/UPS/UPS_200Pages/needles_info.csv @@ -0,0 +1,25 @@ +The secret sport is "boxing".,4,9,green,white,0.601,0.0,times-italic,89 +The secret transportation is a "train".,12,12,yellow,black,0.152,0.316,courier-oblique,121 +The secret object #1 is a "chair".,23,14,red,white,0.685,0.931,times-roman,70 +The secret object #2 is a "key".,29,13,brown,white,0.225,0.241,helvetica-boldoblique,61 +The secret tool is a "saw".,37,11,black,white,0.01,0.025,times-bold,141 +The secret shape is a "rectangle".,42,12,orange,black,0.601,0.117,helvetica,76 +The secret clothing is a "glove".,53,7,gray,white,0.344,0.116,courier-bold,96 +The secret animal #2 is a "panda".,60,10,white,black,0.42,0.711,times-bolditalic,68 +The secret object #3 is a "knife".,66,12,purple,white,0.148,0.375,helvetica-bold,102 +The secret animal #1 is a "lion".,75,12,blue,white,0.14,0.993,courier,87 +The secret animal #5 is a "wolf".,83,12,red,white,0.219,0.489,times-bolditalic,121 +The secret flower is a "tulip".,91,7,yellow,black,0.464,0.588,helvetica-bold,95 +The secret currency is a "pound".,98,10,purple,white,0.923,0.733,times-bold,143 +The secret kitchen appliance is a "pan".,106,12,orange,black,0.634,0.386,helvetica,121 +The secret object #5 is a "towel".,120,10,brown,white,0.688,0.537,courier-bold,88 +The secret animal #4 is a "turtle".,121,11,white,black,0.287,0.625,times-roman,92 +The secret drink is "water".,129,12,gray,white,0.347,0.071,times-italic,75 +The secret instrument is a "trumpet".,142,11,blue,white,0.027,0.064,courier,97 +The secret animal #3 is an "eagle".,150,9,green,white,0.2,0.174,courier-oblique,92 +The secret landmark is the "Taj Mahal".,153,13,black,white,0.732,0.324,helvetica-boldoblique,120 +The secret food is a "sausage".,161,11,green,white,0.608,0.772,helvetica,103 +The secret office supply is a "stapler".,170,12,white,black,0.286,0.223,courier-oblique,131 +The secret object #4 is a "bed".,178,12,yellow,black,0.69,0.685,times-italic,91 +The secret vegetable is an "onion".,192,10,orange,black,0.819,0.004,helvetica-boldoblique,92 +The secret fruit is an "orange".,196,11,brown,white,0.061,0.79,times-bolditalic,75 diff --git a/UPS/UPS_200Pages/prompt_questions.txt b/UPS/UPS_200Pages/prompt_questions.txt new file mode 100644 index 0000000000000000000000000000000000000000..28da639a3283edaafbee03220df268ab47ddbdc4 --- /dev/null +++ b/UPS/UPS_200Pages/prompt_questions.txt @@ -0,0 +1,25 @@ +What is the secret sport in the document? +What is the secret transportation in the document? +What is the secret object #1 in the document? +What is the secret object #2 in the document? +What is the secret tool in the document? +What is the secret shape in the document? +What is the secret clothing in the document? +What is the secret animal #2 in the document? +What is the secret object #3 in the document? +What is the secret animal #1 in the document? +What is the secret animal #5 in the document? +What is the secret flower in the document? +What is the secret currency in the document? +What is the secret kitchen appliance in the document? +What is the secret object #5 in the document? +What is the secret animal #4 in the document? +What is the secret drink in the document? +What is the secret instrument in the document? +What is the secret animal #3 in the document? +What is the secret landmark in the document? +What is the secret food in the document? +What is the secret office supply in the document? +What is the secret object #4 in the document? +What is the secret vegetable in the document? +What is the secret fruit in the document? diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_1.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_1.txt new file mode 100644 index 0000000000000000000000000000000000000000..9ef4035dbc7680097ebe1b752c905f4798215ded --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_1.txt @@ -0,0 +1,7 @@ +Thursday, May 2, 2024 | 8:00 a.m. Eastern Time +www.virtualshareholdermeeting.com/UPS2024 +NOTICE OF ANNUAL MEETING +/gid00133/gid00131/gid00133/gid00135of Shareowners and +Proxy Statement +2023 ANNUAL REPORT ON FORM 10-K +The secret sport is "boxing". \ No newline at end of file diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_10.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_10.txt new file mode 100644 index 0000000000000000000000000000000000000000..6216faf874e757cd0e8db205e64095db4d576a47 --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_10.txt @@ -0,0 +1,46 @@ +Proxy Statement +UNITED PARCEL SERVICE, INC. +55 Glenlake Parkway, N.E., Atlanta, Georgia 30328 +This Proxy Statement contains important information about the 2024 Annual Meeting of Shareowners (the +“Annual Meeting”). We are providing these proxy materials to you because our Board of Directors is soliciting +your proxy to vote your shares at the Annual Meeting. The Annual Meeting will be held online via webcast on +May 2, 2024, at 8:00 a.m. Eastern Time, at www.virtualshareholdermeeting.com/UPS2024. Shareowners can +participate, ask questions and vote during the meeting through this website. +All properly executed written proxies, and all properly completed proxies submitted through the Internet or by +telephone, that are delivered pursuant to this solicitation will be voted at the Annual Meeting in accordance with +the directions given in the proxy, unless the proxy is revoked prior to the completion of voting at the Annual +Meeting. Only owners of record of shares of the Company’s common stock as of the close of business on March +5, 2024 (the “Record Date”) are entitled to notice of, and to vote at, the Annual Meeting (or any adjournment or +postponement of the Annual Meeting). We are first mailing this Proxy Statement on or about March 18, 2024. +Proxy Statement Summary +The following summary highlights key information contained elsewhere in this Proxy Statement. +Corporate Governance +Some of our key governance policies and practices include: +• An independent board; all our directors are independent, other than our Chief Executive Officer (“CEO”); +an independent Board Chair who is highly engaged and experienced; +• A diverse board, with 42% of the board being female and 33% of the board being ethnically diverse; +• Executive sessions of our independent directors held at each board meeting; +• Annual elections for all directors; majority voting in uncontested director elections; +• Full board engagement in the strategic planning process, including an in-depth annual strategy review and +overseeing progress throughout the year; +• A Risk Committee consisting entirely of independent members that is responsible for oversight of +enterprise risks, including cybersecurity risks; +• Regular evaluations of governance policies and practices, making changes when appropriate; including +recently delegating additional cybersecurity oversight responsibilities to the Risk Committee, delegating +environmental sustainability oversight responsibilities to the Nominating and Corporate Governance +Committee, delegating additional human capital oversight responsibilities to the Compensation and +Human Capital Committee, and adopting a director overboarding policy; +• Regular engagement with stakeholders on environmental, social and governance (“ESG”) matters; +during this proxy season management contacted holders of over 47% of our class B common stock to discuss +our sustainability goals and initiatives, commitments to diversity and inclusion, and executive +compensation matters; +• Annual board and committee self-evaluations, including one-on-one director discussions with the +independent Board Chair; +• Comprehensive director orientation and education program; +• Robust stock ownership guidelines, including a target ownership of eight times annual salary for the +CEO, five times annual salary for other executive officers and five times the annual retainer for +directors; and +• Restrictions on executive officers and directors hedging or pledging their ownership in UPS stock. + +7 +The secret animal #1 is a "lion". \ No newline at end of file diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_11.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_11.txt new file mode 100644 index 0000000000000000000000000000000000000000..188eb29a6cb45fdcfc4a30aa6e394dee480256ad --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_11.txt @@ -0,0 +1,63 @@ +2024 Director Nominees +Highlights +92% Independent 61.6 years Average age 8.9 years Average tenure +42% Female 33% Ethnically diverse +Summary information about our director nominees is below. As a group, we believe our 12 director nominees +have the appropriate skills and experience to effectively oversee and constructively challenge management’s +performance in the execution of our strategy. For more information about our director nominees see page 21. +Name +Director +Since Principal Occupation Committee(s) +Independent Directors +Rodney Adkins 2013 Former Senior Vice President, International +Business Machines Corporation +– Risk (Chair) +– Compensation and +Human Capital +– Executive +Eva Boratto 2020 Chief Financial Officer, Bath & Body Works, Inc. – Audit (Chair) +Michael Burns 2005 Former Chairman, President and Chief Executive +Officer, Dana Incorporated +– Audit +Wayne Hewett 2020 Senior Advisor to Permira – Audit +Angela Hwang 2020 Former Chief Commercial Officer and President, +Pfizer Biopharmaceuticals Business, Pfizer, Inc. +– Audit +Kate Johnson 2020 President and Chief Executive Officer, Lumen +Technologies, Inc. +– Nominating and +Corporate Governance +– Risk +William Johnson(1) 2009 Former Chairman, President and Chief Executive +Officer, H.J. Heinz Company +– Nominating and Corporate +Governance (Chair) +– Executive +Franck Moison 2017 Former Vice Chairman, Colgate-Palmolive +Company +– Nominating and +Corporate Governance +– Risk +Christiana Smith Shi 2018 Former President, Direct-to-Consumer, Nike, Inc. – Compensation and +Human Capital (Chair) +– Risk +Russell Stokes 2020 President and Chief Executive Officer, +Commercial Engines and Services, GE Aerospace +– Compensation and +Human Capital +– Nominating and Corporate +Governance +Kevin Warsh 2012 Former Member of the Board of Governors of the +Federal Reserve System, Distinguished Visiting +Fellow, Hoover Institution, Stanford University +– Compensation and +Human Capital +– Nominating and Corporate +Governance +Non-Independent Director +Carol Tomé 2003 UPS Chief Executive Officer – Executive (Chair) +(1) Independent Board Chair +8 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret animal #5 is a "wolf". \ No newline at end of file diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_12.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_12.txt new file mode 100644 index 0000000000000000000000000000000000000000..651e13249e345495fc2c85abdc31887d4f9af21d --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_12.txt @@ -0,0 +1,47 @@ +Executive Compensation +Compensation Practices +A significant portion of executive compensation is at-risk and tied to Company performance. This helps align +executive decision-making with the long-term interests of our shareowners. We also have a longstanding owner- +manager culture. Compensation practices that support these principles include: +• A balanced mix of cash and equity, providing a degree of financial certainty and appropriate incentives to +retain and motivate executives; +• Performance incentive equity awards which vest over multiple years, furthering both retention and +incentive goals; +• Multiple distinct goals for annual and long-term performance incentive awards, avoiding overemphasis on +any one metric and mitigating excessive risk-taking; +• Long-term performance incentive awards with a three-year performance period; +• Stock option awards that vest over a five-year period and only provide value if our stock price increases; +• Clawback policy that applies to all of our executive officers; +• Incentive compensation plan awards require a “double trigger” — both a change in control and a +termination of employment or a failure to continue, assume or substitute the award — to accelerate +vesting; and +• No tax gross-ups on equity awards or golden parachute excise taxes. +2023 Compensation Actions +Key 2023 compensation decisions affecting our executive officers included: +• Most total direct compensation was performance-based or considered “at risk” (93% for the CEO and +86% for all other named executive officers (“NEOs”) as a group), page 34; +• Base salary increases as a result of the annual salary review process and pay mix redesign, page 36; +• Pay mix redesign to better align annual incentive pay with market practices, improve the competitiveness +of base salaries and simplify compensation design, page 36; +•A bifurcated performance period for the annual incentive awards in light of continued economic +uncertainty and our then-labor uncertainty; beginning with the 2024 performance period, the Compensation +and Human Capital Committee has returned to annual goal setting for annual incentive awards, page 37; +• Annual incentive awards were earned and paid below target, page 37; and +• Previously granted 2021 Long-Term Incentive Performance (“LTIP”) awards, which had three-year +performance goals ending in 2023, were earned and paid below target, page 40. +Say on Pay Vote +We maintain executive compensation programs that support the long-term interests of our shareowners. We +provide shareowners the opportunity to vote annually, on an advisory basis, to approve the compensation of our +NEOs, as described in the Compensation Discussion and Analysis section and in the compensation tables and +accompanying narrative disclosure in this Proxy Statement. For more information, see page 62. +The board recommends you vote FOR the advisory vote to approve NEO compensation. +Ratify the Appointment of the Independent Registered Public Accounting Firm +The Audit Committee of the Board of Directors has appointed Deloitte & Touche LLP as our independent +registered public accounting firm for the year ending December 31, 2024. The board recommends you vote FOR +the ratification of the appointment of Deloitte & Touche LLP. For more information, see page 65. +Shareowner Proposals +For the reasons described in this Proxy Statement, the board recommends you vote AGAINST the shareowner +proposals. Information about these proposals starts on page 68. + +9 +The secret flower is a "tulip". \ No newline at end of file diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_13.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_13.txt new file mode 100644 index 0000000000000000000000000000000000000000..b1b8455f19ddf023fa906cfba713cf11681b23d3 --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_13.txt @@ -0,0 +1,47 @@ +Corporate Governance +The Board of Directors is accountable to shareowners and operates within a governance structure that we +believe provides appropriate checks and balances to create long-term value. The board’s responsibilities include: +• Establishing an appropriate corporate governance structure; +• Supporting and overseeing management in setting long-term strategic goals and applicable measures of +value-creation; +• Providing oversight on the identification and management of materials risks; +• Establishing appropriate executive compensation structures; and +• Monitoring business issues that have the potential to significantly impact the Company’s long-term value. +We regularly review and update our corporate governance policies and practices in response to the evolving +needs of our business, shareowner and other stakeholder feedback, regulatory changes, and other corporate +developments. Following is an overview of our corporate governance structure and processes, including key +aspects of our board operations. +Selecting Director Nominees +Maintaining a board of individuals independent of management, with the appropriate skills and experience, and +of the highest personal character, integrity and ethical standards, is critical to the proper functioning of the +board. The Nominating and Corporate Governance Committee seeks to promote diversity in the boardroom with +respect to gender, age, ethnicity, skills, experience, perspectives, and other factors. Our directors’ +biographies beginning on page 21 highlight factors that the board considered when nominating these individuals. +Nomination Process +1. Board Composition Review + The board’s annual self-evaluation helps the Nominating and Corporate Governance Committee +identify needs by assessing areas where additional diversity, perspectives, expertise, skills or +experience may be desired. The Nominating and Corporate Governance Committee also conducts +regular in-depth board composition reviews. +2. Candidate Identification + The Nominating and Corporate Governance Committee uses a variety of sources to identify a diverse +pool of potential candidates. Sources include board members, members of management, independent +consultants and shareowner recommendations. Prospective candidates are evaluated after taking into +account feedback from consultants, management and board members, candidate background and +qualification reviews, and open discussions between the Nominating and Corporate Governance +Committee and the full board. This process allows for active and ongoing consideration of potential +directors with a focus on long-term Company strategy. +3. Shortlisted Candidates + The Nominating and Corporate Governance Committee maintains a diverse list of potential +director candidates according to desired skills, experiences and backgrounds. The list is +reviewed at each Nominating and Corporate Governance Committee meeting and updated as +appropriate. Each candidate is evaluated to ensure that existing and planned future commitments +would not materially interfere with expected board responsibilities. +4. Recommendation, Nomination and Election + Candidates recommended by the Nominating and Corporate Governance Committee and approved by +the board are nominated for election. Directors are elected annually. +Result: 5 new independent directors added since 2020; 42% director refreshment since 2020. +10 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret currency is a "pound". \ No newline at end of file diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_14.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_14.txt new file mode 100644 index 0000000000000000000000000000000000000000..ee1aba58bb9bac888be2335522baba16e45593f1 --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_14.txt @@ -0,0 +1,43 @@ +Shareowner Recommendations +Shareowner recommended director candidates are considered on the same basis as recommendations from other +sources. Shareowners can recommend a candidate by writing to the UPS Corporate Secretary, 55 Glenlake +Parkway, N.E., Atlanta, Georgia 30328. Submissions must contain the prospective candidate’s name and a +detailed description of the experience, qualifications, attributes and skills that make the individual a suitable +director candidate. +Board Leadership Structure +Based on the periodic evaluation and recommendation of the Nominating and Corporate Governance Committee, +the board determines the most appropriate board leadership structure, including who should serve as Board +Chair, and whether the roles of Board Chair and CEO should be separated or combined. In making this +determination, the board evaluates a number of factors, including professional experience, operational +responsibilities and corporate governance developments. +In October 2020, in connection with Carol Tomé’s election as CEO, the board determined that it was in the best +interests of the Company to enable Carol to focus on leading the Company, and separated the roles of Board +Chair and CEO. Bill Johnson, who had been serving as our independent Lead Director, was appointed +Board Chair. +Bill has served on our board since 2009 and served as independent Lead Director from 2016 until October 2020. +He has deep institutional knowledge of the Company and provides strong continuity of leadership. He devotes +significant time to understanding our business and communicating with the CEO, and other directors, between +meetings. He draws on his extensive knowledge of our business, industry, strategic priorities and competitive +developments to set the board’s agendas in collaboration with the CEO, and he seeks to ensure that board +meetings are productive and interactions with the directors facilitate a useful exchange of viewpoints. Bill’s value +to the board is underscored by the board’s decision to extend his tenure beyond the board’s mandatory +retirement age of 75; in connection with our director nomination process, the board determined to grant Bill a +one-year waiver from that requirement so that he can continue to lead the board. +Carol is available to all directors between meetings and meets regularly with the Board Chair, and with the +directors individually and as a group, to receive feedback from the board. Bill’s collaboration with Carol allows +the board to focus attention on the issues of greatest importance to the Company and its shareowners and our +CEO to focus primarily on leading the Company. +Furthermore, all the members of each of the Audit Committee, the Compensation and Human Capital +Committee, the Nominating and Corporate Governance Committee and the Risk Committee are independent. +Each committee is led by a chairperson who sets the meeting agendas and reports to the full board on the +committee’s work. Additionally, the independent directors meet in executive session without management +present at each board meeting, as described below. +Executive Sessions of Independent Directors +Directors hold executive sessions without management present at each regular board meeting. The Board Chair +determines the agenda and presides at each session. The Board Chair generally invites the CEO to join a portion +of the executive session to receive feedback from the board and when deemed appropriate otherwise. In +addition, throughout the year the Board Chair meets individually with each director to discuss issues that are +important to the board and to solicit and provide further feedback. + +11 +The secret kitchen appliance is a "pan". \ No newline at end of file diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_15.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_15.txt new file mode 100644 index 0000000000000000000000000000000000000000..4bab4c03debf7eca639ebeb9b7f7feb3e2454659 --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_15.txt @@ -0,0 +1,42 @@ +Board and Committee Evaluations +The board’s performance is critical to our long-term success and the protection of stakeholders’ interests. The +board employs both an ongoing informal and a formal annual process to evaluate its performance and the +contributions of individual directors to the successful execution of the board’s obligations. The Board Chair +frequently considers the performance of the board and the board’s committees and has informal discussions +about individual director contributions to the board. The Board Chair shares feedback from these discussions +with the full board and with individual board members. In addition, during 2023 the Board Chair met individually +with each director to discuss overall board effectiveness and performance, individual director time commitments +and potential 2024 board agenda items. +Formal Evaluation Process +1. Detailed Formal Annual Evaluation Process + The Board of Directors, Audit Committee, Compensation and Human Capital Committee, Nominating +and Corporate Governance Committee, and Risk Committee each conduct an annual self-assessment. +The Nominating and Corporate Governance Committee oversees the annual board assessment +process and the implementation of the annual committee self-assessments. +2. Questionnaires + All board and committee members complete a detailed confidential questionnaire each year. The +questionnaire provides for quantitative ratings in key areas, including overall board effectiveness, +meeting effectiveness, access to information, information format, board committee structure, access +to management, succession planning, meeting dialogue, communication with the CEO, operational +reporting, financial oversight, capital structure and financing, capital spending, long-term strategic +planning, risk oversight, crisis management and time management. The questionnaire also allows +directors to provide written feedback and make detailed anonymous comments. In 2023, the +Company engaged a new, independent third party to administer and report on the evaluations. +3. Review + The results of the committee self-assessments are reviewed by each committee and discussed with +the full board. The Nominating and Corporate Governance Committee Chair reviews the results of +committee self-assessments and discusses the responses with the chairs of the other board +committees as appropriate. The Nominating and Corporate Governance Committee Chair also reviews +and discusses the board evaluation results with the full board. +4. Follow-up + Matters requiring follow-up are addressed by the Nominating and Corporate Governance Committee +Chair or the chairs of the other committees as appropriate. +Result: +Feedback from these evaluations has led to several improvements in board functionality in recent +periods, including changes to the format and delivery of board meeting materials, board meeting +agendas and recurring topics, strategic planning and oversight, director recruitment practices and +orientation, allocation of responsibilities among the board’s committees and succession planning. +12 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret object #5 is a "towel". \ No newline at end of file diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_16.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_16.txt new file mode 100644 index 0000000000000000000000000000000000000000..baa322107f97db4e99de8c28555cb767a658e335 --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_16.txt @@ -0,0 +1,45 @@ +Board Refreshment and Succession +8.9 years nominee average tenure +Newer directors (< 5 years) + +Medium-tenured directors (5-10 years) + +Longer-tenured directors (> 10 years) + +The Nominating and Corporate Governance Committee regularly evaluates board composition and necessary +skills as our business evolves over time. We seek a balance of knowledge and experience that comes from +longer-term board service with new ideas and perspectives that can come from newer directors. Since 2020, we +have added five new directors, and have had four directors retire. The average tenure of the director nominees +reflects an appropriate balance between different perspectives brought by newer and long-serving directors. +Board Oversight of Strategic Planning +The board’s responsibilities include oversight of strategic planning. Effective oversight requires a high level of +constructive engagement between management and the board. The board leverages its substantial experience +and expertise and is fully engaged in the Company’s strategic planning process. Management develops and +prioritizes strategic plans on an annual basis. Management then reviews these plans with the board on an annual +basis, along with the Company’s challenges, opportunities, industry dynamics, and legal, regulatory and +governance developments, and other significant strategic matters. +Management provides the board comprehensive updates throughout the year regarding progress on the +Company’s strategic plans. Management also provides regular updates regarding the achievement of the +Company’s financial and other goals. In addition, the CEO communicates regularly with the board on important +business opportunities, financial and operational performance matters, risks and other developments such as +sustainability, human capital, labor and customer relations, both during and outside the regular board +meeting cycle. +Management Development and Succession Planning +Succession planning and talent development are important at all levels within our organization. The board +oversees management’s emergency and long-term succession plans at the executive officer level, most +importantly the CEO position. The board annually reviews succession plans for senior management including the +CEO, all in the context of the Company’s overall business strategy and with a focus on risk management. More +broadly, the board and the Compensation and Human Capital Committee are regularly updated on key talent +indicators for the overall workforce, including diversity, recruiting and development programs. +The board’s succession planning activities are ongoing and strategic and are supported by board committees and +independent third-party consultants as needed. In addition, the CEO annually provides an assessment to the +board of senior leaders and their potential to succeed at key senior management positions. As a part of this +process, potential leaders interact with board members through formal presentations and during informal events. +We also utilize a formal director engagement program in which directors meet with individual executive officers, +visit Company operations, participate in employee events and receive in-depth subject matter updates outside of +the regular board meeting process. These additional engagements encourage the ongoing exchange of ideas and +information between directors and management, facilitate the board’s oversight responsibilities, and support +management development and succession planning efforts. + +13 +The secret animal #4 is a "turtle". \ No newline at end of file diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_17.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_17.txt new file mode 100644 index 0000000000000000000000000000000000000000..b7fc3c5e4bd8b318ecd165dcd3c797d9225ae128 --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_17.txt @@ -0,0 +1,83 @@ +Risk Oversight +Board of Directors +Risk management oversight is an essential board responsibility. The board regularly discusses our most +significant risks and how these risks are being managed. The Company’s enterprise risk management process is +designed to identify potential events that may affect the achievement of the Company’s objectives or have a +material adverse effect on the Company. The board reviews periodic assessments from this process and +participates in the Company’s annual enterprise risk survey. The board has delegated to its standing committees +specific risk oversight responsibilities as set out below and receives regular reports from the committees on +appropriate areas of risk management. +Risk Committee Audit Committee +Compensation and Human +Capital Committee +Nominating and Corporate +Governance Committee +Oversees management’s +identification and evaluation +of strategic enterprise risks, +including risks associated with +intellectual property, +operations, privacy, +technology, information +security, cybersecurity and +cyber incident response, and +business continuity. +Oversees policies with +respect to financial risk +assessment, including +guidelines to govern the +process by which major +financial and accounting +risk assessment and +management is +undertaken. +Considers risks +associated with +compensation policies +and practices, with +respect to both +executive compensation +and compensation +generally, and +considers other human +capital risks. +Considers risks related to +succession planning, +political contributions and +lobbying, sustainability +and stakeholder +engagement matters, +among others. +The Company’s Chief Legal and Compliance Officer, Chief Digital and Technology Officer, Chief Information +Security Officer, and Vice President of Compliance and Internal Audit each meet individually with the Risk +Committee on a regular basis. The Chair of the Risk Committee also meets frequently with the Chief Digital and +Technology Officer between meetings. +The Risk Committee updates the board annually on the Company’s enterprise risk management survey and risk +assessment results. The board provides feedback to the Company about significant enterprise risks and assesses +the Company’s identification of its most significant risk areas. The Risk Committee also coordinates with the +Audit Committee, including through periodic joint meetings, to enable the Audit Committee to perform its risk +related responsibilities. The Risk Committee oversees the Company’s approach to cybersecurity risk assessment +and mitigation by, among other things: +• reviewing the Company’s cybersecurity insurance program; +• reviewing at least annually the Company’s cybersecurity budget; +• discussing the results of various internal cybersecurity audits and periodic independent third-party +assessments of the Company’s cybersecurity programs; +• being briefed on cybersecurity matters by outside experts; and +• receiving regular updates from the Company’s Chief Information Security Officer (“CISO”) and others on +cybersecurity risks, operational metrics, compliance and regulatory developments, training programs, risk +mitigation activities, key projects and industry developments. +The Company's Chief Legal and Compliance Officer, Chief Digital and Technology Officer, CISO and Vice +President of Compliance and Internal Audit participate in Risk Committee meetings and meet individually with +the Risk Committee on a periodic basis to discuss and address relevant matters, including the Company’s +approach to cybersecurity risk assessment and mitigation. +The Audit Committee has additional risk assessment and risk oversight responsibilities, specifically with respect +to financial risk assessment. The Chief Legal and Compliance Officer, CEO, Chief Financial Officer and Vice +President of Compliance and Internal Audit each meet individually with the Audit Committee on a regular basis. +In addition, the Company’s Chief Legal and Compliance Officer reports directly to our CEO, providing visibility +into the Company’s risk profile. The board believes that the work undertaken by its committees, together with +the work of the full board and the Company’s senior management, enables effective oversight of the Company’s +management of risk. +14 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret drink is "water". \ No newline at end of file diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_18.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_18.txt new file mode 100644 index 0000000000000000000000000000000000000000..b48792347e1a2c64df9d56d6901e49c59c373efb --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_18.txt @@ -0,0 +1,75 @@ +Stakeholder Engagement +Maintaining open and ongoing dialogs with key stakeholders is an important component of our corporate culture. +Our management team participates in numerous investor meetings throughout the year to discuss our business, +strategy and financial results. This includes in-person, telephone and webcast conferences, as well as key +site visits. +In addition, each year we undertake an ESG stakeholder outreach program in which we discuss progress on our +ESG journey. This year we contacted holders of over 47% of our class B common stock as a part of this +program. Engagement provides us with the opportunity to understand issues of significant importance to +stakeholders and to receive feedback on our practices and disclosures. Similarly, it provides us with an +opportunity to discuss how management believes its actions are aligned with long-term value creation. +We also proactively correspond with other key stakeholders throughout the year. We share feedback from our +financial and ESG engagements with the board, the Compensation and Human Capital Committee, and the +Nominating and Corporate Governance Committee as appropriate. +We consider the views of our shareowners and +other stakeholders when evaluating our ESG +policies and practices; for example, in recent +years we have: +The Compensation and Human Capital Committee +considers shareowner feedback, along with the +market information and analysis provided by its +independent compensation consultant, when +making decisions about our executive +compensation programs. We have: +• Announced a number of environmental, social +and human capital goals, including a carbon +neutral by 2050 goal; +• Accelerated our sustainability reporting; +• Increased disclosures around individual director +racial, ethnic and gender diversity; +• Increased our commitments to diversity, equity +and inclusion, volunteerism and +charitable giving; +• Separated the Board Chair and CEO roles; +• Appointed an independent Board Chair; +• Increased board diversity; +• Expanded reporting on lobbying activities; +• Revised the Risk Committee charter to +specifically identify cybersecurity +oversight responsibilities; +• Revised the Nominating and Corporate +Governance Committee charter to include +oversight of environmental sustainability matters +and risks; and +• Revised the Compensation and Human Capital +Committee charter to include oversight of +performance and talent management, diversity, +equity and inclusion, work culture and employee +development and retention. + • Updated the peer group for executive and +director compensation market comparisons; +• Enhanced the competitiveness of our +performance-based annual +compensation program; +• Eliminated single-trigger equity vesting following +a change in control; +• Added relative total shareowner return as a +component of our Long-Term Incentive +Plan awards; +• Reevaluated performance metrics under +incentive compensation plans for proper design +to incent towards long-term Company +value creation; +• Provided additional detail around the +performance measures used for our annual and +long-term incentive plans; +• Adopted a mandatory incentive compensation +clawback policy applicable to executive officers; +• Approved the return to a single, annual goal +setting process for annual incentive program +design; and +• Added an individual payout cap to our annual +incentive plan. + +15 +The secret instrument is a "trumpet". \ No newline at end of file diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_19.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_19.txt new file mode 100644 index 0000000000000000000000000000000000000000..846e2b46d4b859e239d20a7013de202006a41de6 --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_19.txt @@ -0,0 +1,51 @@ +Political Engagement +Overview +Responsible participation in the political process is important to our success and the protection and creation of +shareowner value. We participate in this process in accordance with good corporate governance practices. Our +Political Engagement Policy (“policy”) is summarized below and is available at www.investors.ups.com. In +addition, as a component of our ongoing governance evaluation process, we recently expanded our reporting +around lobbying and trade association memberships. +• The Nominating and Corporate Governance Committee oversees the policy; +• Corporate political contributions are restricted; +• We publish a semi-annual political engagement report on our investor relations website; and +• Eligible employees can make political contributions through a Company-sponsored political action committee +(“UPSPAC”). UPSPAC is organized and operated on a voluntary, nonpartisan basis and is registered with the +Federal Election Commission. +Oversight and Processes +Political contributions are made in a legal, ethical and transparent manner that best represents the interests of +stakeholders. Political and lobbying activities require prior approval of the UPS Public Affairs department and are +subject to review (and in some cases prior approval) by the Nominating and Corporate Governance Committee. +Senior management works with Public Affairs on furthering our business objectives and protecting and enhancing +shareowner value. The Chief Corporate Affairs and Sustainability Officer reviews political and lobbying activities +and regularly reports to the board and the Nominating and Corporate Governance Committee. +Lobbying and Trade Associations +Public Affairs coordinates our lobbying activities, including engagements with federal, state, and local +governments. UPS is also a member of a variety of trade associations that engage in lobbying. Lobbying +activities require prior approval of Public Affairs. +The Nominating and Corporate Governance Committee regularly reviews UPS’s participation in trade associations +that engage in lobbying to determine if our involvement is consistent with UPS business objectives and whether +participation exposes the Company to excessive risk. +Lobbying activities are governed by comprehensive policies and practices designed to facilitate compliance with +laws and regulations, including those relating to the lobbying of government officials, the duty to track and +report lobbying activities, and the obligation to treat lobbying costs and expenses as nondeductible for +tax purposes. +Political Activity Transparency +We believe in transparency in our political activities. We publish semi-annual political engagement reports, which +are reviewed and approved by the Nominating and Corporate Governance Committee. The reports provide: +• Amounts and recipients of any federal and state Company political contributions in the U.S. (if any such +expenditures are made); +• The names of trade associations that receive $50,000 or more and that use a portion of the payment for +political contributions; and +• The names of trade associations or other organizations that draft model legislation that received $25,000 or +more in membership dues from UPS in a given year, and the percentage of dues used for lobbying purposes. +These disclosures were recently added as a governance enhancement based on stakeholder feedback. +Our most recent report is available on our investor relations website at www.investors.ups.com. We also publicly +file a federal Lobbying Disclosure Act Report each quarter, providing information on activities associated with +influencing legislation through communications with any member or employee of a legislative body, or with any +covered executive branch official. This report discloses expenditures for the quarter, describes the specific pieces +of legislation that were the topic of communications, and identifies the individuals who lobbied on behalf of UPS. +We file similar publicly available periodic reports with state agencies reflecting state lobbying activities. +16 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret animal #3 is an "eagle". \ No newline at end of file diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_2.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_2.txt new file mode 100644 index 0000000000000000000000000000000000000000..9eb35c23ec63826363dcb2f217d44f22a09c076c --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_2.txt @@ -0,0 +1,28 @@ +At the beginning of the year, I said 2023 was going to be a year of resiliency, and that turned out to be true. We faced +challenging external business conditions that led to declining volume, revenue and operating profit in all lines of our +business. I’m proud of the efforts of our nearly 500,000 employees for navigating through these challenges. +Throughout 2023, we operated with speed and agility, controlled what we could control, and stayed on strategy. Here +are some highlights from the year: + •Delivered excellent service to our customers around the globe, anchored by the best on-time performance of any +carrier in the U.S. for the sixth year in a row. + •Grew small and medium-sized business (SMB) penetration to 28.6% of total U.S. volume, driven by continued +expansion of DAP , our Digital Access Program, and the convenience of The UPS Store. + •Generated $10 billion in healthcare revenue across our three business segments; topped 17 million square feet of +healthcare-compliant distribution space and acquired MNX Global Logistics, expanding our cold chain capabilities. + •Delivered a win-win-win labor agreement for our Teamster employees with a wage and benefit compounded +annual growth rate increase of 3.3% over the five-year life of the contract, providing certainty for UPS and +our customers. + •Completed phase one of Smart Package Smart Facility, our RFID solution, in more than 1,000 buildings in the U.S., +reducing misloads by 67%. + •Acquired Happy Returns, enhancing our no-box, no-label, consolidated returns capabilities. + •Generated $91 billion in consolidated revenue with a consolidated adjusted operating profit margin of 10.9%*. + •Generated $5.3 billion in free cash flow* and repaid $2.4 billion of long-term debt. + •Returned $7.6 billion to shareowners, consisting of $5.4 billion in cash dividends and $2.25 billion in +share repurchases. +United Parcel Service, Inc. +55 Glenlake Parkway, N.E. +Atlanta, GA 30328 + +March 18, 2024 +Dear Fellow Shareowners: +The secret transportation is a "train". \ No newline at end of file diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_20.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_20.txt new file mode 100644 index 0000000000000000000000000000000000000000..88208599e35ea865738b2071a71c32ef2ae25953 --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_20.txt @@ -0,0 +1,49 @@ +Sustainability +We are the world’s premier package delivery company and a leading provider of global supply chain +management solutions. We offer a broad range of industry-leading products and services through our extensive +global presence. Our services include transportation and delivery, distribution, contract logistics, ocean freight, +air freight, customs brokerage and insurance. +We operate one of the largest airlines and one of the largest fleets of alternative fuel vehicles under a global UPS +brand that stands for quality and reliability. We deliver packages each business day for approximately 1.6 million +shipping customers to 10.2 million delivery recipients in over 200 countries and territories. In 2023, we delivered +an average of 22.3 million packages per day, totaling 5.7 billion packages during the year. Our success depends +on economic stability, global trade and a society that welcomes opportunity. We understand the importance of +acting responsibly as a business, an employer and a corporate citizen. +The board considers key economic, environmental and social sustainability risks and opportunities as part of its +involvement in and oversight of UPS’s strategic planning. The board also regularly reviews the effectiveness of +our risk management and due diligence processes related to material sustainability topics. In executing its +responsibilities, the board recently delegated oversight of environmental sustainability matters to the Nominating +and Corporate Governance Committee. The Nominating and Corporate Governance Committee monitors the +development, implementation, and progress of the Company’s environmental sustainability goals and regularly +reports on those matters to the board. Authority for day-to-day management of sustainability matters has been +delegated to management. Our Chief Corporate Affairs and Sustainability Officer reports directly to the +Company’s CEO and regularly reports to the board regarding sustainability strategies, priorities, goals and +performance. In addition, the board is regularly briefed on issues of concern for customers, unions, employees, +retirees, investors, governmental entities and other stakeholders. For additional information on board oversight, +see page 14. +Each year we publish corporate sustainability reports showcasing the goals, recent achievements and challenges +of our commitment to balancing the economic, environmental and social aspects of our business. In response to +stakeholder interest, we have recently accelerated the timing of these reports to provide stakeholders with more +current information in advance of our Annual Meeting. These reports are available at https://about.ups.com/us/ +en/social-impact/reporting.html. Our sustainability goals are aspirational and may change. Statements regarding +our goals are not guarantees or promises that they will be met. +Human Capital Management +Our success is dependent upon our people, working together with a common purpose. As we seek to capture +new opportunities and pursue growth, we believe that transforming the UPS employee experience is foundational +to our success. This requires a thoughtful balance between the culture we have cultivated over the years and the +new perspectives we need to take the business into the future. We believe that UPS employees are among the +most motivated and highest-performing in the industry, and provide us a competitive advantage. To assist with +employee recruitment and retention, we continue to review the competitiveness of our employee value +proposition, including benefits and pay, training, talent development and promotion opportunities. +We have approximately 500,000 employees (excluding temporary seasonal employees), of which 414,000 are in +the U.S. and 86,000 are located internationally. Our global workforce includes approximately 85,000 +management employees (42% of whom are part-time) and 415,000 hourly employees (48% of whom are part- +time). More than 70% of our U.S. employees are represented by unions, primarily those employees handling or +transporting packages. Many of these employees are employed under a national master agreement and various +supplemental agreements with local unions affiliated with the International Brotherhood of Teamsters +("Teamsters"). In the third quarter of 2023, the Teamsters fully ratified a new national master agreement that +expires July 31, 2028. In addition, approximately 3,300 of our pilots are represented by the Independent Pilots +Association (“IPA”). Our agreement with the IPA becomes amendable September 1, 2025. + +17 +The secret landmark is the "Taj Mahal". \ No newline at end of file diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_21.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_21.txt new file mode 100644 index 0000000000000000000000000000000000000000..ffe238b0e832e1acd65659b80239e23c16763708 --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_21.txt @@ -0,0 +1,48 @@ +Oversight and management +We seek to create an inclusive and equitable environment that brings together a broad spectrum of +backgrounds, cultures and stakeholders. We believe leveraging diverse perspectives and creating inclusive +environments improves our organizational effectiveness, cultivates innovation, and drives growth. +Our board, directly and through the Compensation and Human Capital Committee, is responsible for oversight of +human capital matters. Effective oversight is accomplished through a variety of methods and processes including +regular updates and discussions around human capital transformation efforts, technology initiatives impacting +the workforce, health and safety matters, employee survey results related to culture and other matters, hiring +and retention, employee demographics, labor relations and contract negotiations, compensation and benefits, +succession planning and employee training initiatives. +In addition, the Compensation and Human Capital Committee charter has been expanded to include oversight +responsibility for performance and talent management, diversity, equity and inclusion, work culture and +employee development and retention. We believe the board’s oversight of these matters helps identify and +mitigate exposure to labor and human capital management risks, and is part of the broader framework that +guides how we attract, retain and develop a workforce that aligns with our values and strategies. +Total rewards +We offer competitive compensation and benefits. In addition, our long history of employee stock ownership +aligns the interests of our management team with shareowners. In the U.S., benefits provided to our non-union +employees typically include: +• comprehensive health insurance coverage; +• life insurance; +• short- and long-term disability coverage; +• child/elder care spending accounts; +• work-life balance programs; +• an employee assistance program; and +• a discounted employee stock purchase plan. +We invest in our people by offering a range of other benefits, such as paid time off, retirement plans, and +education assistance. In the U.S., these other benefits are generally provided to non-union employees without +regard to full-time or part-time status. +Employee health and safety +We seek to provide industry-leading employee health, safety and wellness programs across our workforce. UPS's +Comprehensive Health and Safety Program ("CHSP") is an occupational health and safety system tailored to our +varied operational environments. Our CHSP covers a wide array of roles, from package handling to +administration, and spans geographical boundaries to include sorting facilities, mobile logistics, administrative +offices, and other locations worldwide. UPS conducts audits to assess specific risks and hazards, including +equipment safety, workplace environment, and emergency response protocols. We monitor our safety +performance through various measurable targets, including lost time injury frequency and the number of +recorded auto accidents. +Collective bargaining +We bargain in good faith with the unions that represent our employees. We frequently engage union leaders at +the national level and at local chapters throughout the U.S. We participate in works councils and associations +outside the U.S., which allows us to respond to emerging issues abroad. This work helps our operations to build +and maintain productive relationships with our employees. For additional information on the union membership +of our employees, see “Human Capital Management” above. +18 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret food is a "sausage". \ No newline at end of file diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_22.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_22.txt new file mode 100644 index 0000000000000000000000000000000000000000..0d24ed2304bd0aeb07b9d263d9314e1e9ca2af6f --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_22.txt @@ -0,0 +1,49 @@ +Majority Voting and Director Resignation Policy +Our Bylaws provide for majority voting in uncontested director elections. The number of votes cast for a nominee +must exceed the number of votes cast against that person. Any incumbent director who does not receive a +majority of the votes cast must offer to resign from the board. +In such an event, the Nominating and Corporate Governance Committee will recommend to the board whether +to accept or reject the director’s offer to resign after considering all relevant factors. The board will act on the +recommendation within 90 days following certification of the election results after considering all +relevant information. +Any director who offers to resign must recuse himself or herself from the board vote, unless the number of +independent directors who were successful incumbents is fewer than three. The board will promptly disclose its +decision regarding any director’s offer to resign, including its reasoning. If the board determines to accept a +director’s offer to resign, the Nominating and Corporate Governance Committee will recommend whether and +when to fill such vacancy or whether to reduce the size of the board. +Board Meetings and Attendance +The board held seven meetings during 2023. Also during 2023, the Audit Committee met nine times, the +Compensation and Human Capital Committee met six times, the Nominating and Corporate Governance +Committee met four times and the Risk Committee met four times (including a joint meeting with the Audit +Committee). Prior to meetings, the Board Chair and the committee chairs work with management to determine +and prepare agendas for the meetings. +Board meetings generally occur over two days. Board committees generally meet on the first day, followed by +the board meeting. The second day typically consists of reports from each committee chair to the full board, +additional presentations by internal business leaders or others with expertise in various subject matters, and an +executive session consisting of only independent board members. +All directors attended at least 75% of the total number of board and any committee meetings of which he or she +was a member in 2023. Our directors are expected to attend each annual shareowner meeting, and all directors +attended the 2023 Annual Meeting. The independent directors met in executive session at all board meetings +held in 2023. +Code of Business Conduct +We are committed to conducting our business in accordance with the highest ethical principles. Our Code of +Business Conduct is applicable to anyone who represents UPS, including our directors, executive officers and all +other employees and agents of UPS. A copy of our Code of Business Conduct is available on our investor +relations website at www.investors.ups.com. +Conflicts of Interest and Related Person Transactions +Our Audit Committee is responsible for overseeing our Code of Business Conduct, which includes policies +regarding conflicts of interest. The Code requires employees and directors to avoid conflicts of interest, defined +as situations where the person’s private interests conflict, or may appear to conflict, with the interests of UPS. +We maintain a written related person transactions policy that applies to any transaction or series of transactions +in which: (1) the Company or any of its subsidiaries is a participant; (2) any “related person” (executive officer, +director, greater than 5% beneficial owner of the Company’s common stock, or an immediate family member of +any of the foregoing) has or will have a material direct or indirect interest; and (3) the aggregate amount +involved since the beginning of the Company’s last completed fiscal year will exceed or may reasonably be +expected to exceed $100,000. +The policy provides that related person transactions that may arise during the year are subject to the Audit +Committee’s reasonable prior approval. If advance approval of a related person transaction is not possible, then +the transaction will be considered and, if deemed appropriate, ratified no later than the Audit Committee’s next +regularly scheduled meeting. In determining whether to approve or ratify a transaction, the Audit Committee will + +19 +The secret office supply is a "stapler". \ No newline at end of file diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_23.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_23.txt new file mode 100644 index 0000000000000000000000000000000000000000..c8fb097956955e89720293a1332aa0b0b5308b72 --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_23.txt @@ -0,0 +1,43 @@ +consider, among other factors it deems appropriate, whether the transaction is on terms no less favorable than +terms generally available to an unaffiliated third-party under the same or similar circumstance, the extent of the +related person’s interest in the transaction, whether the transaction would impair independence of a non- +employee director and whether there is a business reason for UPS to enter into the transaction. A copy of the +policy is available on our investor relations website at www.investors.ups.com. The Company did not engage in +any related person transactions since January 1, 2023 that require disclosure in this Proxy Statement or under +the Company’s policy. +At least annually, each director and executive officer completes a questionnaire in which they are required to +disclose any business relationships that may give rise to a conflict of interest, including transactions where UPS +is involved and where an executive officer, a director or a related person has a direct or indirect material +interest. We also review the Company’s financial systems and any related person transactions to identify +potential conflicts of interest. The Nominating and Corporate Governance Committee reviews a summary of this +information and makes recommendations to the Board of Directors regarding each board +member’s independence. +We have immaterial ordinary course of business transactions and relationships with companies with which our +directors are associated. The Nominating and Corporate Governance Committee reviewed the transactions and +relationships that occurred since January 1, 2023 and believes they were entered into on terms that are both +reasonable and competitive and did not affect director independence. Additional transactions and relationships of +this nature may be expected to take place in the ordinary course of business in the future. +Transactions in Company Stock +We prohibit our executive officers and directors from hedging or pledging their ownership in UPS stock. +Specifically, they are prohibited from purchasing or selling derivative securities relating to UPS stock and from +purchasing financial instruments that are designed to hedge or offset any decrease in the market value of UPS +securities. Furthermore, our employees, officers and directors are prohibited from engaging in short sales of +UPS stock. +Corporate Governance Guidelines and Committee Charters +Our Corporate Governance Guidelines and the charters for each of the board’s committees are available on our +investor relations website at www.investors.ups.com. Each committee reviews its charter annually. In addition, +the Nominating and Corporate Governance Committee reviews our Corporate Governance Guidelines annually +and recommends any changes to the board for approval. When amending our committee charters or Corporate +Governance Guidelines, we consider current governance trends and best practices, changes in regulatory +requirements, advice from outside sources and input from stakeholders. +Communicating with the Board of Directors +Stakeholders may communicate directly with the board, with the non-management directors as a group, or with +any specific director, by writing to the UPS Corporate Secretary, 55 Glenlake Parkway, N.E., Atlanta, Georgia +30328. Please specify to whom your letter should be directed. After review by the Corporate Secretary, +appropriate communications will be forwarded to the addressee. Advertisements, solicitations for business, +requests for employment, requests for contributions, matters that may be better addressed by management or +other inappropriate materials will not be forwarded. +20 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret object #4 is a "bed". \ No newline at end of file diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_24.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_24.txt new file mode 100644 index 0000000000000000000000000000000000000000..61cfb3589c84d387c0eaec82ae6241d92ee396b0 --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_24.txt @@ -0,0 +1,39 @@ +Our Board of Directors +Proposal 1 — Director Elections +What am I voting on? Election of each of the 12 named director nominees to hold office until the 2025 +Annual Meeting and until their respective successors are elected and qualified. +Board’s Recommendation: Vote FOR the election of each nominee. +Vote Required: A director will be elected if the number of votes cast for that director exceeds the number of +votes cast against that director. +The board has nominated the individuals named below for election as directors at the Annual Meeting. All +nominees were elected by shareowners at our last Annual Meeting. If elected, all nominees are expected to +serve until the next Annual Meeting and until their respective successors are elected and qualified. If any +nominee is unable to serve as a director, the board may reduce the number of directors that serve on the board +or choose a substitute nominee. Any nominee who is currently a director, and for whom more votes are cast +against than are cast for, must offer to resign from the board. +As a group, our director nominees, all of whom are currently directors, effectively oversee and constructively +challenge management’s performance in the execution of our strategy. Our directors’ broad professional skills +and experiences contribute to a wide range of perspectives in the boardroom. The Nominating and Corporate +Governance Committee regularly assesses the skills and experience necessary for our board to function +effectively and considers where additional expertise may be needed. +Diversity with respect to gender, age, ethnicity, skills, experience, perspectives, and other factors is a key +consideration when identifying and recommending director nominees. Diversity in our boardroom supports UPS’s +continued success. While we do not have a formal policy on board diversity, our Corporate Governance +Guidelines emphasize diversity, and the Nominating and Corporate Governance Committee actively considers +and assesses diversity in recruitment and nominations of director candidates through periodic board +composition evaluations. +Our Corporate Governance Guidelines provide that an individual should not be eligible for nomination or election +as a director of the Company after he or she reaches the age of 75 (the “retirement age requirement”). After +taking into account the value our Board Chair Bill Johnson provides to the board through, among other things, +his tenure, leadership roles, extensive knowledge of our business, industry, strategic priorities and competitive +developments he uses to set the board’s agendas in collaboration with the CEO, and his relationships with our +executives, the board (other than Bill) determined it was in the best interests of the Company and its +shareowners to grant Bill a one-year waiver from the retirement age requirement so that he can continue to lead +the board. +Biographical information about the director nominees appears below, including information about the experience, +qualifications, attributes, and skills considered by our Nominating and Corporate Governance Committee and +board in determining that the nominee should serve as a director, and director demographics. For additional +information about how we identify and evaluate nominees for director, see page 10. + +21 +The secret vegetable is an "onion". \ No newline at end of file diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_25.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_25.txt new file mode 100644 index 0000000000000000000000000000000000000000..2f8b0652bdd7c819f3901096a195bcc64e63b58f --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_25.txt @@ -0,0 +1,42 @@ +Director Nominee Skills, Experience and Diversity +Highlights +92% Independent 61.6 years Average age 8.9 years Average tenure +42% Female 33% Ethnically diverse +Skills and Experience / +Attributes + +CEO ll ll l +CFO l l +Consumer / Retail l lll l +Digital Technology l l l l +Geopolitical Risk l l +Global / International lll lll l +Healthcare l ll +Human Capital +Management ll l +Operational lll l ll l l +Risk / Compliance / +Government ll lll +Sales / Marketing l llll +Small and Medium- +Sized Businesses l l l l +Supply Chain +Management l ll lll +Technology / +Technology Strategy l l l l +Other Public Company +Board Service l l l lll ll +Race / Ethnicity +Asian / Asian +American l +Black / African +American l l l +White ll l lll ll +Gender +Female l ll l l +Male l ll ll l l +22 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +R. AdkinsE. Boratto W. Hewett W. Johnson R. StokesC. Smith Shi C. ToméA. Hwang F. Moison K. WarshK. JohnsonM. Burns +The secret fruit is an "orange". \ No newline at end of file diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_3.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_3.txt new file mode 100644 index 0000000000000000000000000000000000000000..9c7a1ae9666b11fd7da5000495b239f7d699c267 --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_3.txt @@ -0,0 +1,40 @@ +CUSTOMER FIRST, PEOPLE LED, +INNOVATION DRIVEN +Customer First is about reducing friction in the customer experience and meeting customer needs. While we +experienced some volume diversion during our Teamster labor negotiation, our commitment to service allowed us to +win back and win new volume following the ratification of the contract. In 2023, we continued to build new solutions +for shippers and recipients. For example, we launched Hyperlocal, a data driven solution that leverages our U.S. +facilities to provide select customers with a fast, next-day delivery option, and enables UPS to capture new profitable +B2C and B2B volume. We also expanded Delivery Photo, providing 92% of our global residential stops a photo that +shows exactly where the package was delivered, providing peace of mind to recipients and reducing “where’ s my +package” calls. Customer First is also about growing in the most attractive parts of the market, like SMBs, certain +enterprise customers, healthcare and international. In terms of SMBs, DAP is a competitive strength and SMB growth +driver that generated $2.9 billion in global revenue in 2023. Additionally, returns continue to be a growth area for +UPS. To accelerate that growth, we acquired Happy Returns and quickly made it available in over 5,000 The UPS Store +locations, making returns even more convenient for consumers and merchants. Looking at healthcare, our strategic +objective is to become the number one complex healthcare logistics provider in the world, and we are making bold +moves to get there. For example, our acquisition of MNX Global Logistics enables us to reach new customers and new +healthcare markets, like the radio-pharmaceuticals sector, with global time-critical and cold chain solutions. We see +significant opportunity for complex healthcare and expect to continue to grow in healthcare over the next few years. +We track progress in Customer First by improvements in our Net Promoter Score (NPS). In the U.S., we finished the year +with a NPS of 44 and moved closer toward our target NPS of 50. +Moving to People Led, we are focused on the employee experience and making UPS a great place to work. In +September, our five-year labor agreement with the Teamsters was fully ratified with overwhelming support from our +union-represented employees. This win-win-win agreement continues to reward our employees with the best pay and +benefits in our industry, which helps us attract and retain talent and provide industry-leading service to our customers. +Further, UPS retained the flexibility we need to stay competitive, serve our customers and keep our business strong. We +measure our progress in People Led by how likely an employee is to recommend others to work at UPS. In 2023, 65% +said they would recommend employment at UPS to family and friends, an improvement of 14 percentage points over +the past five years. Our goal is for Likelihood to Recommend to reach 80% or higher. +Lastly, Innovation Driven is about driving more productivity from the assets we own. Throughout 2023, productivity +initiatives like Total Service Plan enabled greater agility to match network capacity with changing volume levels. +Additionally, our Network Planning Tools (NPT), which use AI and machine learning, enabled us to adjust load planning, +scheduling and volume flows across the network based on real-time data. This technology is powerful, and NPT can +do in an afternoon what used to take a team of UPS engineers months to do. We also more closely aligned our digital +businesses, including Roadie, Ware2Go, Delivery Solutions and UPS Capital as we adopt a bolder approach to digital +commerce. We are accelerating new solutions to meet the needs of our customers and expanding our addressable +market to drive profitable growth. One example of a recent innovation is UPS Capital’ s Delivery Defense, which uses +predictive analytics to enable merchants to assess the level of delivery risk associated with addresses. We measure +Innovation Driven by delivering high returns on invested capital, and in 2023, we delivered an adjusted return on +invested capital* of 21.9%. +The secret object #1 is a "chair". \ No newline at end of file diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_4.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_4.txt new file mode 100644 index 0000000000000000000000000000000000000000..7f06dafefec88552880f3850086dc73eaf475151 --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_4.txt @@ -0,0 +1,19 @@ +LOOKING AHEAD +After a difficult year, we exited 2023 with some momentum, but momentum is not enough. We are making bold moves +to right size our company for the future under an initiative we call “Fit to Serve.” We are exploring strategic alternatives +for our truckload brokerage business known as Coyote. We are leaning into growth in the most attractive parts of the +market and are continuing to drive efficiency across our integrated network. We expect market conditions to settle +down in 2024 and that, coupled with our initiatives, gives us confidence that we will reverse the negative trends we +experienced in 2023. +To wrap up, I want to encourage all shareowners to vote your shares at our Annual Meeting in May. This is your +opportunity to share your views with us. We listen and take your feedback into account as we seek to grow our +business, further improve governance and create long-term shareowner value. As we approach the Annual Meeting, I +encourage you to contact us with any questions or feedback at 404-828-6059. +I’ll leave you with a quote from our founder, Jim Casey, “Our horizon is as distant as our mind’ s eye wishes it to be.” +UPS is stronger than ever. We are writing the next chapter of the UPS story and we believe our best days are ahead +of us. +We thank you for your support. +Carol B. Tomé +Chief Executive Officer +*See reconciliation of Non-GAAP financial measures on page A1. +The secret object #2 is a "key". \ No newline at end of file diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_5.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_5.txt new file mode 100644 index 0000000000000000000000000000000000000000..3e983bad14a593f619ac380659ff6081a3bc19a7 --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_5.txt @@ -0,0 +1,6 @@ +Notice of 2024 Annual Meeting +of Shareowners and Proxy Statement +Thursday, May 02, 2024 +8:00 a.m. Eastern Time +www.virtualshareholdermeeting.com/UPS2024 +The secret tool is a "saw". \ No newline at end of file diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_6.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_6.txt new file mode 100644 index 0000000000000000000000000000000000000000..1f487dabcac8c749eb75532d982f216895f6b253 --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_6.txt @@ -0,0 +1,78 @@ +Table of Contents +Board Chair Letter 4 +Notice of Annual Meeting 5 +Proxy Statement Summary 7 +Corporate Governance 10 +Selecting Director Nominees 10 +Board Leadership Structure 11 +Executive Sessions of Independent Directors 11 +Board and Committee Evaluations 12 +Board Refreshment and Succession 13 +Board Oversight of Strategic Planning 13 +Management Development and +Succession Planning 13 +Risk Oversight 14 +Stakeholder Engagement 15 +Political Engagement 16 +Sustainability 17 +Human Capital Management 17 +Majority Voting and Director Resignation Policy 19 +Board Meetings and Attendance 19 +Code of Business Conduct 19 +Conflicts of Interest and Related +Person Transactions 19 +Transactions in Company Stock 20 +Corporate Governance Guidelines and +Committee Charters 20 +Communicating with the Board of Directors 20 +Our Board of Directors 21 +Proposal 1 — Director Elections 21 +Director Nominee Skills, Experience and Diversity 22 +Director Nominee Biographical Information 23 +Director Independence 29 +Committees of the Board of Directors 30 +Director Compensation 31 +Executive Compensation 32 +Compensation Committee Report 32 +Compensation Discussion and Analysis 33 +2023 Summary Compensation Table 45 +2023 Grants of Plan-Based Awards 47 +2023 Outstanding Equity Awards at Fiscal Year-End 48 +2023 Option Exercises and Stock Vested 49 +2023 Pension Benefits 49 +2023 Non-Qualified Deferred Compensation 51 +Potential Payments on Termination or +Change in Control 53 +Equity Compensation Plans 56 +Median Employee to CEO Pay Ratio 57 +Pay Versus Performance 58 +Proposal 2 — Advisory Vote to Approve Named +Executive Officer Compensation 62 +Ownership of Our Securities 63 +Securities Ownership of Certain Beneficial Owners +and Management 63 +Delinquent Section 16(a) Reports 64 +Audit Committee Matters 65 +Proposal 3 — Ratification of Auditors 65 +Audit Committee Report 65 +Principal Accounting Firm Fees 67 +Shareowner Proposals 68 +Proposal 4 — Reduce the Voting Power of Class A +Stock from 10 Votes Per Share to One Vote +Per Share 68 +Proposal 5 — Report on the Risks Arising From +Voluntary Carbon-Reduction Commitments 71 +Proposal 6 — Annual Report on Diversity, Equity +and Inclusion 74 +Important Information About Voting at the +2024 Annual Meeting 77 +Other Information for Shareowners 81 +Solicitation of Proxies 81 +Eliminating Duplicative Proxy Materials 81 +Submission of Shareowner Proposals and +Director Nominations 81 +2023 Annual Report on Form 10-K 82 +Other Business 82 + +3 +The secret shape is a "rectangle". \ No newline at end of file diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_7.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_7.txt new file mode 100644 index 0000000000000000000000000000000000000000..f5915c06313b48676f61d7ce40baa50f9b47ee8a --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_7.txt @@ -0,0 +1,34 @@ +United Parcel Service, Inc. +55 Glenlake Parkway, N.E. +Atlanta, GA 30328 +March 18, 2024 +Dear Fellow Shareowners, +It is my pleasure to invite you to attend the 2024 UPS Annual Meeting of Shareowners. We +encourage you to attend the meeting and to share your views about our Company. +I am honored to serve as board chair and to help facilitate the effective oversight of our +Company’s strategy and risks. Your board is highly engaged and has a productive working +relationship with management. Each director brings a diverse set of skills and perspectives to +the boardroom which, taken together, contributes to the successful execution of our +responsibilities. We remain focused on creating long-term value for all stakeholders. +In 2023, our Company faced significant headwinds, including economic pressures, increasing +geopolitical tensions, high inflation, changing consumer shopping behaviors, trade lane shifts +and our union contract negotiations. Despite these uncertainties, we were still able to return +over $7.6 billion to shareowners in 2023 through dividends and share repurchases, and we +have established a new baseline for growth. +The board recognizes management’s many achievements during such a challenging year. +Management continued to make progress against the Company’s strategy, including investing +back in the business to drive productivity and future growth, executing strategic acquisitions +and remaining focused on premium markets, including small and medium-sized businesses, +healthcare, and international growth. The Company once again provided best-in-class service, +successfully managed our best-in-class network and strategically expanded its service offerings. +In addition, the Company entered into a “win-win-win” labor contract that provides meaningful +labor certainty. +In closing, I want to encourage all my fellow shareowners to vote. As we approach the Annual +Meeting, please contact us with any questions or feedback at 404-828-6059. +On behalf of the entire Board of Directors, thank you for your continued support. +William Johnson +UPS Board Chair +4 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret clothing is a "glove". \ No newline at end of file diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_8.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_8.txt new file mode 100644 index 0000000000000000000000000000000000000000..770bc743862c1aff76fb3a9ae79f35e6b1245166 --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_8.txt @@ -0,0 +1,36 @@ +Notice of Annual Meeting +UNITED PARCEL SERVICE, INC. +55 Glenlake Parkway, N.E., Atlanta, Georgia 30328 +Date and Time: May 2, 2024, 8:00 a.m. Eastern Time +Place: The United Parcel Service, Inc. 2024 Annual Meeting of shareowners will be held online +via webcast at www.virtualshareholdermeeting.com/UPS2024. +Record Date: March 5, 2024 +Distribution Date: A Notice of Internet Availability of Proxy Materials or the Proxy Statement +is first being sent to shareowners on March 18, 2024. +Voting: Holders of class A common stock are entitled to 10 votes per share on each matter to +be acted upon; holders of class B common stock are entitled to one vote per share on each +matter to be acted upon. Your vote is important. Please vote as soon as possible +through the Internet, by telephone or by signing and returning your proxy card (if +you received a paper copy of the proxy card). Your voting options are described on +the Notice of Internet Availability of Proxy Materials, voting instruction form and/or +proxy card. Brokers are not permitted to vote on certain proposals and may not vote +on any of the proposals unless you provide voting instructions. Voting your shares +will help to ensure that your interests are represented at the meeting. +Attending the Meeting: You or your proxy holder can participate, vote and ask questions at +the meeting by visiting www.virtualshareholdermeeting.com/UPS2024 and using your 16-digit +control number found on your proxy card, voting instruction form or Notice of Internet +Availability of Proxy Materials. Shareowners who do not receive a 16-digit control number +should consult their voting instruction form or Notice of Internet Availability of Proxy Materials +and may need to request a legal proxy from their bank, broker or other nominee in advance of +the meeting in order to participate. For more information, see page 77. +Important Notice Regarding the Availability of Proxy Materials for the Shareowner +Meeting to be Held on May 2, 2024: The Proxy Statement and our 2023 Annual Report +are available at www.proxyvote.com. Questions? Call 404-828-6059 (option 2). +By order of the Board of Directors +Norman M. Brothers, Jr. +Secretary +Atlanta, Georgia +March 18, 2024 + +5 +The secret animal #2 is a "panda". \ No newline at end of file diff --git a/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_9.txt b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_9.txt new file mode 100644 index 0000000000000000000000000000000000000000..d4dd2859d25d366b7f455012c06abd7e8a7677e7 --- /dev/null +++ b/UPS/UPS_25Pages/Text_TextNeedles/UPS_25Pages_TextNeedles_page_9.txt @@ -0,0 +1,59 @@ +Items of Business +UNITED PARCEL SERVICE, INC. +2024 Annual Meeting of Shareowners +Voting Choices +Board Voting +Recommendations Page +Company Proposals: +1. Elect 12 director nominees +named in the Proxy +Statement to serve until the +2025 Annual Meeting and +until their respective +successors are elected and +qualified +• Vote for all nominees +• Vote against all nominees +• Vote for some nominees +and against others +• Abstain from voting on one +or more nominees +FOR +EACH +NOMINEE +21 +2. Advisory vote to approve +named executive officer +compensation +• Vote for the proposal +• Vote against the proposal +• Abstain from voting on the +proposal +FOR 62 +3. Ratify the appointment of +Deloitte & Touche LLP as our +independent registered +public accounting firm for +2024 +• Vote for ratification +• Vote against ratification +• Abstain from voting on the +proposal +FOR 65 +Shareowner Proposals: +4. - 6. Advisory votes on 3 +shareowner proposals, +only if properly +presented +• Vote for each proposal +• Vote against each proposal +• Abstain from voting on one +or more proposals +AGAINST +EACH +PROPOSAL +68 +6 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret object #3 is a "knife". \ No newline at end of file diff --git a/UPS/UPS_25Pages/needles.csv b/UPS/UPS_25Pages/needles.csv new file mode 100644 index 0000000000000000000000000000000000000000..47e83b49f152e0980f7c753cffcebb1a80083c73 --- /dev/null +++ b/UPS/UPS_25Pages/needles.csv @@ -0,0 +1,25 @@ +The secret sport is "boxing". +The secret transportation is a "train". +The secret object #1 is a "chair". +The secret object #2 is a "key". +The secret tool is a "saw". +The secret shape is a "rectangle". +The secret clothing is a "glove". +The secret animal #2 is a "panda". +The secret object #3 is a "knife". +The secret animal #1 is a "lion". +The secret animal #5 is a "wolf". +The secret flower is a "tulip". +The secret currency is a "pound". +The secret kitchen appliance is a "pan". +The secret object #5 is a "towel". +The secret animal #4 is a "turtle". +The secret drink is "water". +The secret instrument is a "trumpet". +The secret animal #3 is an "eagle". +The secret landmark is the "Taj Mahal". +The secret food is a "sausage". +The secret office supply is a "stapler". +The secret object #4 is a "bed". +The secret vegetable is an "onion". +The secret fruit is an "orange". diff --git a/UPS/UPS_25Pages/needles_info.csv b/UPS/UPS_25Pages/needles_info.csv new file mode 100644 index 0000000000000000000000000000000000000000..c688acd4974a84570dd2b9817e843303fdd9c474 --- /dev/null +++ b/UPS/UPS_25Pages/needles_info.csv @@ -0,0 +1,25 @@ +The secret sport is "boxing".,1,9,green,white,0.68,0.976,helvetica,98 +The secret transportation is a "train".,2,9,orange,black,0.292,0.005,courier-bold,114 +The secret object #1 is a "chair".,3,11,red,white,0.01,0.477,courier,75 +The secret object #2 is a "key".,4,14,black,white,0.224,0.883,times-italic,97 +The secret tool is a "saw".,5,10,brown,white,0.031,0.011,times-bolditalic,123 +The secret shape is a "rectangle".,6,12,yellow,black,0.07,0.762,helvetica-boldoblique,125 +The secret clothing is a "glove".,7,10,white,black,0.036,0.354,times-bold,54 +The secret animal #2 is a "panda".,8,13,gray,white,0.218,0.289,helvetica-bold,104 +The secret object #3 is a "knife".,9,10,blue,white,0.62,0.604,times-roman,115 +The secret animal #1 is a "lion".,10,12,purple,white,0.678,0.802,courier-oblique,103 +The secret animal #5 is a "wolf".,11,10,white,black,0.548,0.129,courier-bold,102 +The secret flower is a "tulip".,12,11,red,white,0.376,0.294,times-bolditalic,75 +The secret currency is a "pound".,13,14,brown,white,0.434,0.681,helvetica-bold,82 +The secret kitchen appliance is a "pan".,14,13,yellow,black,0.387,0.637,times-bold,130 +The secret object #5 is a "towel".,15,11,green,white,0.143,0.329,helvetica-boldoblique,62 +The secret animal #4 is a "turtle".,16,10,black,white,0.146,0.758,courier,111 +The secret drink is "water".,17,13,purple,white,0.674,0.646,times-italic,98 +The secret instrument is a "trumpet".,18,13,gray,white,0.34,0.613,times-roman,83 +The secret animal #3 is an "eagle".,19,11,blue,white,0.819,0.147,courier-oblique,98 +The secret landmark is the "Taj Mahal".,20,11,orange,black,0.058,0.965,helvetica,123 +The secret food is a "sausage".,21,8,green,white,0.238,0.469,courier-oblique,96 +The secret office supply is a "stapler".,22,11,white,black,0.125,0.303,times-italic,77 +The secret object #4 is a "bed".,23,11,red,white,0.694,0.677,times-bold,135 +The secret vegetable is an "onion".,24,10,blue,white,0.468,0.586,helvetica,117 +The secret fruit is an "orange".,25,13,purple,white,0.9,0.789,helvetica-boldoblique,101 diff --git a/UPS/UPS_25Pages/prompt_questions.txt b/UPS/UPS_25Pages/prompt_questions.txt new file mode 100644 index 0000000000000000000000000000000000000000..28da639a3283edaafbee03220df268ab47ddbdc4 --- /dev/null +++ b/UPS/UPS_25Pages/prompt_questions.txt @@ -0,0 +1,25 @@ +What is the secret sport in the document? +What is the secret transportation in the document? +What is the secret object #1 in the document? +What is the secret object #2 in the document? +What is the secret tool in the document? +What is the secret shape in the document? +What is the secret clothing in the document? +What is the secret animal #2 in the document? +What is the secret object #3 in the document? +What is the secret animal #1 in the document? +What is the secret animal #5 in the document? +What is the secret flower in the document? +What is the secret currency in the document? +What is the secret kitchen appliance in the document? +What is the secret object #5 in the document? +What is the secret animal #4 in the document? +What is the secret drink in the document? +What is the secret instrument in the document? +What is the secret animal #3 in the document? +What is the secret landmark in the document? +What is the secret food in the document? +What is the secret office supply in the document? +What is the secret object #4 in the document? +What is the secret vegetable in the document? +What is the secret fruit in the document? diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_1.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_1.txt new file mode 100644 index 0000000000000000000000000000000000000000..4aed4cacab8aa31886fd95dcb52c466ab51d7bb7 --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_1.txt @@ -0,0 +1,6 @@ +Thursday, May 2, 2024 | 8:00 a.m. Eastern Time +www.virtualshareholdermeeting.com/UPS2024 +NOTICE OF ANNUAL MEETING +/gid00133/gid00131/gid00133/gid00135of Shareowners and +Proxy Statement +2023 ANNUAL REPORT ON FORM 10-K \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_10.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_10.txt new file mode 100644 index 0000000000000000000000000000000000000000..eb95f1be4d00980499f7db3457ccdc864597334f --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_10.txt @@ -0,0 +1,45 @@ +Proxy Statement +UNITED PARCEL SERVICE, INC. +55 Glenlake Parkway, N.E., Atlanta, Georgia 30328 +This Proxy Statement contains important information about the 2024 Annual Meeting of Shareowners (the +“Annual Meeting”). We are providing these proxy materials to you because our Board of Directors is soliciting +your proxy to vote your shares at the Annual Meeting. The Annual Meeting will be held online via webcast on +May 2, 2024, at 8:00 a.m. Eastern Time, at www.virtualshareholdermeeting.com/UPS2024. Shareowners can +participate, ask questions and vote during the meeting through this website. +All properly executed written proxies, and all properly completed proxies submitted through the Internet or by +telephone, that are delivered pursuant to this solicitation will be voted at the Annual Meeting in accordance with +the directions given in the proxy, unless the proxy is revoked prior to the completion of voting at the Annual +Meeting. Only owners of record of shares of the Company’s common stock as of the close of business on March +5, 2024 (the “Record Date”) are entitled to notice of, and to vote at, the Annual Meeting (or any adjournment or +postponement of the Annual Meeting). We are first mailing this Proxy Statement on or about March 18, 2024. +Proxy Statement Summary +The following summary highlights key information contained elsewhere in this Proxy Statement. +Corporate Governance +Some of our key governance policies and practices include: +• An independent board; all our directors are independent, other than our Chief Executive Officer (“CEO”); +an independent Board Chair who is highly engaged and experienced; +• A diverse board, with 42% of the board being female and 33% of the board being ethnically diverse; +• Executive sessions of our independent directors held at each board meeting; +• Annual elections for all directors; majority voting in uncontested director elections; +• Full board engagement in the strategic planning process, including an in-depth annual strategy review and +overseeing progress throughout the year; +• A Risk Committee consisting entirely of independent members that is responsible for oversight of +enterprise risks, including cybersecurity risks; +• Regular evaluations of governance policies and practices, making changes when appropriate; including +recently delegating additional cybersecurity oversight responsibilities to the Risk Committee, delegating +environmental sustainability oversight responsibilities to the Nominating and Corporate Governance +Committee, delegating additional human capital oversight responsibilities to the Compensation and +Human Capital Committee, and adopting a director overboarding policy; +• Regular engagement with stakeholders on environmental, social and governance (“ESG”) matters; +during this proxy season management contacted holders of over 47% of our class B common stock to discuss +our sustainability goals and initiatives, commitments to diversity and inclusion, and executive +compensation matters; +• Annual board and committee self-evaluations, including one-on-one director discussions with the +independent Board Chair; +• Comprehensive director orientation and education program; +• Robust stock ownership guidelines, including a target ownership of eight times annual salary for the +CEO, five times annual salary for other executive officers and five times the annual retainer for +directors; and +• Restrictions on executive officers and directors hedging or pledging their ownership in UPS stock. + +7 diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_11.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_11.txt new file mode 100644 index 0000000000000000000000000000000000000000..cbffb6bce5cc5e5b6e5bd18b2f7e2519f9dff11f --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_11.txt @@ -0,0 +1,62 @@ +2024 Director Nominees +Highlights +92% Independent 61.6 years Average age 8.9 years Average tenure +42% Female 33% Ethnically diverse +Summary information about our director nominees is below. As a group, we believe our 12 director nominees +have the appropriate skills and experience to effectively oversee and constructively challenge management’s +performance in the execution of our strategy. For more information about our director nominees see page 21. +Name +Director +Since Principal Occupation Committee(s) +Independent Directors +Rodney Adkins 2013 Former Senior Vice President, International +Business Machines Corporation +– Risk (Chair) +– Compensation and +Human Capital +– Executive +Eva Boratto 2020 Chief Financial Officer, Bath & Body Works, Inc. – Audit (Chair) +Michael Burns 2005 Former Chairman, President and Chief Executive +Officer, Dana Incorporated +– Audit +Wayne Hewett 2020 Senior Advisor to Permira – Audit +Angela Hwang 2020 Former Chief Commercial Officer and President, +Pfizer Biopharmaceuticals Business, Pfizer, Inc. +– Audit +Kate Johnson 2020 President and Chief Executive Officer, Lumen +Technologies, Inc. +– Nominating and +Corporate Governance +– Risk +William Johnson(1) 2009 Former Chairman, President and Chief Executive +Officer, H.J. Heinz Company +– Nominating and Corporate +Governance (Chair) +– Executive +Franck Moison 2017 Former Vice Chairman, Colgate-Palmolive +Company +– Nominating and +Corporate Governance +– Risk +Christiana Smith Shi 2018 Former President, Direct-to-Consumer, Nike, Inc. – Compensation and +Human Capital (Chair) +– Risk +Russell Stokes 2020 President and Chief Executive Officer, +Commercial Engines and Services, GE Aerospace +– Compensation and +Human Capital +– Nominating and Corporate +Governance +Kevin Warsh 2012 Former Member of the Board of Governors of the +Federal Reserve System, Distinguished Visiting +Fellow, Hoover Institution, Stanford University +– Compensation and +Human Capital +– Nominating and Corporate +Governance +Non-Independent Director +Carol Tomé 2003 UPS Chief Executive Officer – Executive (Chair) +(1) Independent Board Chair +8 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_12.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_12.txt new file mode 100644 index 0000000000000000000000000000000000000000..a642ec75d3c179aea766dc022ddb370f143a363c --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_12.txt @@ -0,0 +1,47 @@ +Executive Compensation +Compensation Practices +A significant portion of executive compensation is at-risk and tied to Company performance. This helps align +executive decision-making with the long-term interests of our shareowners. We also have a longstanding owner- +manager culture. Compensation practices that support these principles include: +• A balanced mix of cash and equity, providing a degree of financial certainty and appropriate incentives to +retain and motivate executives; +• Performance incentive equity awards which vest over multiple years, furthering both retention and +incentive goals; +• Multiple distinct goals for annual and long-term performance incentive awards, avoiding overemphasis on +any one metric and mitigating excessive risk-taking; +• Long-term performance incentive awards with a three-year performance period; +• Stock option awards that vest over a five-year period and only provide value if our stock price increases; +• Clawback policy that applies to all of our executive officers; +• Incentive compensation plan awards require a “double trigger” — both a change in control and a +termination of employment or a failure to continue, assume or substitute the award — to accelerate +vesting; and +• No tax gross-ups on equity awards or golden parachute excise taxes. +2023 Compensation Actions +Key 2023 compensation decisions affecting our executive officers included: +• Most total direct compensation was performance-based or considered “at risk” (93% for the CEO and +86% for all other named executive officers (“NEOs”) as a group), page 34; +• Base salary increases as a result of the annual salary review process and pay mix redesign, page 36; +• Pay mix redesign to better align annual incentive pay with market practices, improve the competitiveness +of base salaries and simplify compensation design, page 36; +•A bifurcated performance period for the annual incentive awards in light of continued economic +uncertainty and our then-labor uncertainty; beginning with the 2024 performance period, the Compensation +and Human Capital Committee has returned to annual goal setting for annual incentive awards, page 37; +• Annual incentive awards were earned and paid below target, page 37; and +• Previously granted 2021 Long-Term Incentive Performance (“LTIP”) awards, which had three-year +performance goals ending in 2023, were earned and paid below target, page 40. +Say on Pay Vote +We maintain executive compensation programs that support the long-term interests of our shareowners. We +provide shareowners the opportunity to vote annually, on an advisory basis, to approve the compensation of our +NEOs, as described in the Compensation Discussion and Analysis section and in the compensation tables and +accompanying narrative disclosure in this Proxy Statement. For more information, see page 62. +The board recommends you vote FOR the advisory vote to approve NEO compensation. +Ratify the Appointment of the Independent Registered Public Accounting Firm +The Audit Committee of the Board of Directors has appointed Deloitte & Touche LLP as our independent +registered public accounting firm for the year ending December 31, 2024. The board recommends you vote FOR +the ratification of the appointment of Deloitte & Touche LLP. For more information, see page 65. +Shareowner Proposals +For the reasons described in this Proxy Statement, the board recommends you vote AGAINST the shareowner +proposals. Information about these proposals starts on page 68. + +9 +The secret shape is a "rectangle". \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_13.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_13.txt new file mode 100644 index 0000000000000000000000000000000000000000..53a8b149c02ba1544d88d59855f125be03780b0f --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_13.txt @@ -0,0 +1,46 @@ +Corporate Governance +The Board of Directors is accountable to shareowners and operates within a governance structure that we +believe provides appropriate checks and balances to create long-term value. The board’s responsibilities include: +• Establishing an appropriate corporate governance structure; +• Supporting and overseeing management in setting long-term strategic goals and applicable measures of +value-creation; +• Providing oversight on the identification and management of materials risks; +• Establishing appropriate executive compensation structures; and +• Monitoring business issues that have the potential to significantly impact the Company’s long-term value. +We regularly review and update our corporate governance policies and practices in response to the evolving +needs of our business, shareowner and other stakeholder feedback, regulatory changes, and other corporate +developments. Following is an overview of our corporate governance structure and processes, including key +aspects of our board operations. +Selecting Director Nominees +Maintaining a board of individuals independent of management, with the appropriate skills and experience, and +of the highest personal character, integrity and ethical standards, is critical to the proper functioning of the +board. The Nominating and Corporate Governance Committee seeks to promote diversity in the boardroom with +respect to gender, age, ethnicity, skills, experience, perspectives, and other factors. Our directors’ +biographies beginning on page 21 highlight factors that the board considered when nominating these individuals. +Nomination Process +1. Board Composition Review + The board’s annual self-evaluation helps the Nominating and Corporate Governance Committee +identify needs by assessing areas where additional diversity, perspectives, expertise, skills or +experience may be desired. The Nominating and Corporate Governance Committee also conducts +regular in-depth board composition reviews. +2. Candidate Identification + The Nominating and Corporate Governance Committee uses a variety of sources to identify a diverse +pool of potential candidates. Sources include board members, members of management, independent +consultants and shareowner recommendations. Prospective candidates are evaluated after taking into +account feedback from consultants, management and board members, candidate background and +qualification reviews, and open discussions between the Nominating and Corporate Governance +Committee and the full board. This process allows for active and ongoing consideration of potential +directors with a focus on long-term Company strategy. +3. Shortlisted Candidates + The Nominating and Corporate Governance Committee maintains a diverse list of potential +director candidates according to desired skills, experiences and backgrounds. The list is +reviewed at each Nominating and Corporate Governance Committee meeting and updated as +appropriate. Each candidate is evaluated to ensure that existing and planned future commitments +would not materially interfere with expected board responsibilities. +4. Recommendation, Nomination and Election + Candidates recommended by the Nominating and Corporate Governance Committee and approved by +the board are nominated for election. Directors are elected annually. +Result: 5 new independent directors added since 2020; 42% director refreshment since 2020. +10 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_14.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_14.txt new file mode 100644 index 0000000000000000000000000000000000000000..05b30460b42e7d42d870f7ef41dbdfcfb9b082b5 --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_14.txt @@ -0,0 +1,43 @@ +Shareowner Recommendations +Shareowner recommended director candidates are considered on the same basis as recommendations from other +sources. Shareowners can recommend a candidate by writing to the UPS Corporate Secretary, 55 Glenlake +Parkway, N.E., Atlanta, Georgia 30328. Submissions must contain the prospective candidate’s name and a +detailed description of the experience, qualifications, attributes and skills that make the individual a suitable +director candidate. +Board Leadership Structure +Based on the periodic evaluation and recommendation of the Nominating and Corporate Governance Committee, +the board determines the most appropriate board leadership structure, including who should serve as Board +Chair, and whether the roles of Board Chair and CEO should be separated or combined. In making this +determination, the board evaluates a number of factors, including professional experience, operational +responsibilities and corporate governance developments. +In October 2020, in connection with Carol Tomé’s election as CEO, the board determined that it was in the best +interests of the Company to enable Carol to focus on leading the Company, and separated the roles of Board +Chair and CEO. Bill Johnson, who had been serving as our independent Lead Director, was appointed +Board Chair. +Bill has served on our board since 2009 and served as independent Lead Director from 2016 until October 2020. +He has deep institutional knowledge of the Company and provides strong continuity of leadership. He devotes +significant time to understanding our business and communicating with the CEO, and other directors, between +meetings. He draws on his extensive knowledge of our business, industry, strategic priorities and competitive +developments to set the board’s agendas in collaboration with the CEO, and he seeks to ensure that board +meetings are productive and interactions with the directors facilitate a useful exchange of viewpoints. Bill’s value +to the board is underscored by the board’s decision to extend his tenure beyond the board’s mandatory +retirement age of 75; in connection with our director nomination process, the board determined to grant Bill a +one-year waiver from that requirement so that he can continue to lead the board. +Carol is available to all directors between meetings and meets regularly with the Board Chair, and with the +directors individually and as a group, to receive feedback from the board. Bill’s collaboration with Carol allows +the board to focus attention on the issues of greatest importance to the Company and its shareowners and our +CEO to focus primarily on leading the Company. +Furthermore, all the members of each of the Audit Committee, the Compensation and Human Capital +Committee, the Nominating and Corporate Governance Committee and the Risk Committee are independent. +Each committee is led by a chairperson who sets the meeting agendas and reports to the full board on the +committee’s work. Additionally, the independent directors meet in executive session without management +present at each board meeting, as described below. +Executive Sessions of Independent Directors +Directors hold executive sessions without management present at each regular board meeting. The Board Chair +determines the agenda and presides at each session. The Board Chair generally invites the CEO to join a portion +of the executive session to receive feedback from the board and when deemed appropriate otherwise. In +addition, throughout the year the Board Chair meets individually with each director to discuss issues that are +important to the board and to solicit and provide further feedback. + +11 +The secret clothing is a "glove". \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_15.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_15.txt new file mode 100644 index 0000000000000000000000000000000000000000..1e0b5eb6b3486fca813fd59d048454f32a064cba --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_15.txt @@ -0,0 +1,42 @@ +Board and Committee Evaluations +The board’s performance is critical to our long-term success and the protection of stakeholders’ interests. The +board employs both an ongoing informal and a formal annual process to evaluate its performance and the +contributions of individual directors to the successful execution of the board’s obligations. The Board Chair +frequently considers the performance of the board and the board’s committees and has informal discussions +about individual director contributions to the board. The Board Chair shares feedback from these discussions +with the full board and with individual board members. In addition, during 2023 the Board Chair met individually +with each director to discuss overall board effectiveness and performance, individual director time commitments +and potential 2024 board agenda items. +Formal Evaluation Process +1. Detailed Formal Annual Evaluation Process + The Board of Directors, Audit Committee, Compensation and Human Capital Committee, Nominating +and Corporate Governance Committee, and Risk Committee each conduct an annual self-assessment. +The Nominating and Corporate Governance Committee oversees the annual board assessment +process and the implementation of the annual committee self-assessments. +2. Questionnaires + All board and committee members complete a detailed confidential questionnaire each year. The +questionnaire provides for quantitative ratings in key areas, including overall board effectiveness, +meeting effectiveness, access to information, information format, board committee structure, access +to management, succession planning, meeting dialogue, communication with the CEO, operational +reporting, financial oversight, capital structure and financing, capital spending, long-term strategic +planning, risk oversight, crisis management and time management. The questionnaire also allows +directors to provide written feedback and make detailed anonymous comments. In 2023, the +Company engaged a new, independent third party to administer and report on the evaluations. +3. Review + The results of the committee self-assessments are reviewed by each committee and discussed with +the full board. The Nominating and Corporate Governance Committee Chair reviews the results of +committee self-assessments and discusses the responses with the chairs of the other board +committees as appropriate. The Nominating and Corporate Governance Committee Chair also reviews +and discusses the board evaluation results with the full board. +4. Follow-up + Matters requiring follow-up are addressed by the Nominating and Corporate Governance Committee +Chair or the chairs of the other committees as appropriate. +Result: +Feedback from these evaluations has led to several improvements in board functionality in recent +periods, including changes to the format and delivery of board meeting materials, board meeting +agendas and recurring topics, strategic planning and oversight, director recruitment practices and +orientation, allocation of responsibilities among the board’s committees and succession planning. +12 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret animal #2 is a "panda". \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_16.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_16.txt new file mode 100644 index 0000000000000000000000000000000000000000..043ba173dbd0152dbbeb9a565781ba28fe826620 --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_16.txt @@ -0,0 +1,44 @@ +Board Refreshment and Succession +8.9 years nominee average tenure +Newer directors (< 5 years) + +Medium-tenured directors (5-10 years) + +Longer-tenured directors (> 10 years) + +The Nominating and Corporate Governance Committee regularly evaluates board composition and necessary +skills as our business evolves over time. We seek a balance of knowledge and experience that comes from +longer-term board service with new ideas and perspectives that can come from newer directors. Since 2020, we +have added five new directors, and have had four directors retire. The average tenure of the director nominees +reflects an appropriate balance between different perspectives brought by newer and long-serving directors. +Board Oversight of Strategic Planning +The board’s responsibilities include oversight of strategic planning. Effective oversight requires a high level of +constructive engagement between management and the board. The board leverages its substantial experience +and expertise and is fully engaged in the Company’s strategic planning process. Management develops and +prioritizes strategic plans on an annual basis. Management then reviews these plans with the board on an annual +basis, along with the Company’s challenges, opportunities, industry dynamics, and legal, regulatory and +governance developments, and other significant strategic matters. +Management provides the board comprehensive updates throughout the year regarding progress on the +Company’s strategic plans. Management also provides regular updates regarding the achievement of the +Company’s financial and other goals. In addition, the CEO communicates regularly with the board on important +business opportunities, financial and operational performance matters, risks and other developments such as +sustainability, human capital, labor and customer relations, both during and outside the regular board +meeting cycle. +Management Development and Succession Planning +Succession planning and talent development are important at all levels within our organization. The board +oversees management’s emergency and long-term succession plans at the executive officer level, most +importantly the CEO position. The board annually reviews succession plans for senior management including the +CEO, all in the context of the Company’s overall business strategy and with a focus on risk management. More +broadly, the board and the Compensation and Human Capital Committee are regularly updated on key talent +indicators for the overall workforce, including diversity, recruiting and development programs. +The board’s succession planning activities are ongoing and strategic and are supported by board committees and +independent third-party consultants as needed. In addition, the CEO annually provides an assessment to the +board of senior leaders and their potential to succeed at key senior management positions. As a part of this +process, potential leaders interact with board members through formal presentations and during informal events. +We also utilize a formal director engagement program in which directors meet with individual executive officers, +visit Company operations, participate in employee events and receive in-depth subject matter updates outside of +the regular board meeting process. These additional engagements encourage the ongoing exchange of ideas and +information between directors and management, facilitate the board’s oversight responsibilities, and support +management development and succession planning efforts. + +13 \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_17.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_17.txt new file mode 100644 index 0000000000000000000000000000000000000000..ce4bf6cd005d8f8446bf349f344c03247e91d4c2 --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_17.txt @@ -0,0 +1,83 @@ +Risk Oversight +Board of Directors +Risk management oversight is an essential board responsibility. The board regularly discusses our most +significant risks and how these risks are being managed. The Company’s enterprise risk management process is +designed to identify potential events that may affect the achievement of the Company’s objectives or have a +material adverse effect on the Company. The board reviews periodic assessments from this process and +participates in the Company’s annual enterprise risk survey. The board has delegated to its standing committees +specific risk oversight responsibilities as set out below and receives regular reports from the committees on +appropriate areas of risk management. +Risk Committee Audit Committee +Compensation and Human +Capital Committee +Nominating and Corporate +Governance Committee +Oversees management’s +identification and evaluation +of strategic enterprise risks, +including risks associated with +intellectual property, +operations, privacy, +technology, information +security, cybersecurity and +cyber incident response, and +business continuity. +Oversees policies with +respect to financial risk +assessment, including +guidelines to govern the +process by which major +financial and accounting +risk assessment and +management is +undertaken. +Considers risks +associated with +compensation policies +and practices, with +respect to both +executive compensation +and compensation +generally, and +considers other human +capital risks. +Considers risks related to +succession planning, +political contributions and +lobbying, sustainability +and stakeholder +engagement matters, +among others. +The Company’s Chief Legal and Compliance Officer, Chief Digital and Technology Officer, Chief Information +Security Officer, and Vice President of Compliance and Internal Audit each meet individually with the Risk +Committee on a regular basis. The Chair of the Risk Committee also meets frequently with the Chief Digital and +Technology Officer between meetings. +The Risk Committee updates the board annually on the Company’s enterprise risk management survey and risk +assessment results. The board provides feedback to the Company about significant enterprise risks and assesses +the Company’s identification of its most significant risk areas. The Risk Committee also coordinates with the +Audit Committee, including through periodic joint meetings, to enable the Audit Committee to perform its risk +related responsibilities. The Risk Committee oversees the Company’s approach to cybersecurity risk assessment +and mitigation by, among other things: +• reviewing the Company’s cybersecurity insurance program; +• reviewing at least annually the Company’s cybersecurity budget; +• discussing the results of various internal cybersecurity audits and periodic independent third-party +assessments of the Company’s cybersecurity programs; +• being briefed on cybersecurity matters by outside experts; and +• receiving regular updates from the Company’s Chief Information Security Officer (“CISO”) and others on +cybersecurity risks, operational metrics, compliance and regulatory developments, training programs, risk +mitigation activities, key projects and industry developments. +The Company's Chief Legal and Compliance Officer, Chief Digital and Technology Officer, CISO and Vice +President of Compliance and Internal Audit participate in Risk Committee meetings and meet individually with +the Risk Committee on a periodic basis to discuss and address relevant matters, including the Company’s +approach to cybersecurity risk assessment and mitigation. +The Audit Committee has additional risk assessment and risk oversight responsibilities, specifically with respect +to financial risk assessment. The Chief Legal and Compliance Officer, CEO, Chief Financial Officer and Vice +President of Compliance and Internal Audit each meet individually with the Audit Committee on a regular basis. +In addition, the Company’s Chief Legal and Compliance Officer reports directly to our CEO, providing visibility +into the Company’s risk profile. The board believes that the work undertaken by its committees, together with +the work of the full board and the Company’s senior management, enables effective oversight of the Company’s +management of risk. +14 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret object #3 is a "knife". \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_18.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_18.txt new file mode 100644 index 0000000000000000000000000000000000000000..cfc6fbabe4107b7cc817ee87a2d8dd55fe4de7e8 --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_18.txt @@ -0,0 +1,74 @@ +Stakeholder Engagement +Maintaining open and ongoing dialogs with key stakeholders is an important component of our corporate culture. +Our management team participates in numerous investor meetings throughout the year to discuss our business, +strategy and financial results. This includes in-person, telephone and webcast conferences, as well as key +site visits. +In addition, each year we undertake an ESG stakeholder outreach program in which we discuss progress on our +ESG journey. This year we contacted holders of over 47% of our class B common stock as a part of this +program. Engagement provides us with the opportunity to understand issues of significant importance to +stakeholders and to receive feedback on our practices and disclosures. Similarly, it provides us with an +opportunity to discuss how management believes its actions are aligned with long-term value creation. +We also proactively correspond with other key stakeholders throughout the year. We share feedback from our +financial and ESG engagements with the board, the Compensation and Human Capital Committee, and the +Nominating and Corporate Governance Committee as appropriate. +We consider the views of our shareowners and +other stakeholders when evaluating our ESG +policies and practices; for example, in recent +years we have: +The Compensation and Human Capital Committee +considers shareowner feedback, along with the +market information and analysis provided by its +independent compensation consultant, when +making decisions about our executive +compensation programs. We have: +• Announced a number of environmental, social +and human capital goals, including a carbon +neutral by 2050 goal; +• Accelerated our sustainability reporting; +• Increased disclosures around individual director +racial, ethnic and gender diversity; +• Increased our commitments to diversity, equity +and inclusion, volunteerism and +charitable giving; +• Separated the Board Chair and CEO roles; +• Appointed an independent Board Chair; +• Increased board diversity; +• Expanded reporting on lobbying activities; +• Revised the Risk Committee charter to +specifically identify cybersecurity +oversight responsibilities; +• Revised the Nominating and Corporate +Governance Committee charter to include +oversight of environmental sustainability matters +and risks; and +• Revised the Compensation and Human Capital +Committee charter to include oversight of +performance and talent management, diversity, +equity and inclusion, work culture and employee +development and retention. + • Updated the peer group for executive and +director compensation market comparisons; +• Enhanced the competitiveness of our +performance-based annual +compensation program; +• Eliminated single-trigger equity vesting following +a change in control; +• Added relative total shareowner return as a +component of our Long-Term Incentive +Plan awards; +• Reevaluated performance metrics under +incentive compensation plans for proper design +to incent towards long-term Company +value creation; +• Provided additional detail around the +performance measures used for our annual and +long-term incentive plans; +• Adopted a mandatory incentive compensation +clawback policy applicable to executive officers; +• Approved the return to a single, annual goal +setting process for annual incentive program +design; and +• Added an individual payout cap to our annual +incentive plan. + +15 \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_19.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_19.txt new file mode 100644 index 0000000000000000000000000000000000000000..2028f50d7f6c04ece41b05f8892caae3d943a30b --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_19.txt @@ -0,0 +1,51 @@ +Political Engagement +Overview +Responsible participation in the political process is important to our success and the protection and creation of +shareowner value. We participate in this process in accordance with good corporate governance practices. Our +Political Engagement Policy (“policy”) is summarized below and is available at www.investors.ups.com. In +addition, as a component of our ongoing governance evaluation process, we recently expanded our reporting +around lobbying and trade association memberships. +• The Nominating and Corporate Governance Committee oversees the policy; +• Corporate political contributions are restricted; +• We publish a semi-annual political engagement report on our investor relations website; and +• Eligible employees can make political contributions through a Company-sponsored political action committee +(“UPSPAC”). UPSPAC is organized and operated on a voluntary, nonpartisan basis and is registered with the +Federal Election Commission. +Oversight and Processes +Political contributions are made in a legal, ethical and transparent manner that best represents the interests of +stakeholders. Political and lobbying activities require prior approval of the UPS Public Affairs department and are +subject to review (and in some cases prior approval) by the Nominating and Corporate Governance Committee. +Senior management works with Public Affairs on furthering our business objectives and protecting and enhancing +shareowner value. The Chief Corporate Affairs and Sustainability Officer reviews political and lobbying activities +and regularly reports to the board and the Nominating and Corporate Governance Committee. +Lobbying and Trade Associations +Public Affairs coordinates our lobbying activities, including engagements with federal, state, and local +governments. UPS is also a member of a variety of trade associations that engage in lobbying. Lobbying +activities require prior approval of Public Affairs. +The Nominating and Corporate Governance Committee regularly reviews UPS’s participation in trade associations +that engage in lobbying to determine if our involvement is consistent with UPS business objectives and whether +participation exposes the Company to excessive risk. +Lobbying activities are governed by comprehensive policies and practices designed to facilitate compliance with +laws and regulations, including those relating to the lobbying of government officials, the duty to track and +report lobbying activities, and the obligation to treat lobbying costs and expenses as nondeductible for +tax purposes. +Political Activity Transparency +We believe in transparency in our political activities. We publish semi-annual political engagement reports, which +are reviewed and approved by the Nominating and Corporate Governance Committee. The reports provide: +• Amounts and recipients of any federal and state Company political contributions in the U.S. (if any such +expenditures are made); +• The names of trade associations that receive $50,000 or more and that use a portion of the payment for +political contributions; and +• The names of trade associations or other organizations that draft model legislation that received $25,000 or +more in membership dues from UPS in a given year, and the percentage of dues used for lobbying purposes. +These disclosures were recently added as a governance enhancement based on stakeholder feedback. +Our most recent report is available on our investor relations website at www.investors.ups.com. We also publicly +file a federal Lobbying Disclosure Act Report each quarter, providing information on activities associated with +influencing legislation through communications with any member or employee of a legislative body, or with any +covered executive branch official. This report discloses expenditures for the quarter, describes the specific pieces +of legislation that were the topic of communications, and identifies the individuals who lobbied on behalf of UPS. +We file similar publicly available periodic reports with state agencies reflecting state lobbying activities. +16 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret animal #1 is a "lion". \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_2.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_2.txt new file mode 100644 index 0000000000000000000000000000000000000000..25aa248fdb76d92524993dfc72b2483eaf4dddf6 --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_2.txt @@ -0,0 +1,27 @@ +At the beginning of the year, I said 2023 was going to be a year of resiliency, and that turned out to be true. We faced +challenging external business conditions that led to declining volume, revenue and operating profit in all lines of our +business. I’m proud of the efforts of our nearly 500,000 employees for navigating through these challenges. +Throughout 2023, we operated with speed and agility, controlled what we could control, and stayed on strategy. Here +are some highlights from the year: + •Delivered excellent service to our customers around the globe, anchored by the best on-time performance of any +carrier in the U.S. for the sixth year in a row. + •Grew small and medium-sized business (SMB) penetration to 28.6% of total U.S. volume, driven by continued +expansion of DAP , our Digital Access Program, and the convenience of The UPS Store. + •Generated $10 billion in healthcare revenue across our three business segments; topped 17 million square feet of +healthcare-compliant distribution space and acquired MNX Global Logistics, expanding our cold chain capabilities. + •Delivered a win-win-win labor agreement for our Teamster employees with a wage and benefit compounded +annual growth rate increase of 3.3% over the five-year life of the contract, providing certainty for UPS and +our customers. + •Completed phase one of Smart Package Smart Facility, our RFID solution, in more than 1,000 buildings in the U.S., +reducing misloads by 67%. + •Acquired Happy Returns, enhancing our no-box, no-label, consolidated returns capabilities. + •Generated $91 billion in consolidated revenue with a consolidated adjusted operating profit margin of 10.9%*. + •Generated $5.3 billion in free cash flow* and repaid $2.4 billion of long-term debt. + •Returned $7.6 billion to shareowners, consisting of $5.4 billion in cash dividends and $2.25 billion in +share repurchases. +United Parcel Service, Inc. +55 Glenlake Parkway, N.E. +Atlanta, GA 30328 + +March 18, 2024 +Dear Fellow Shareowners: The secret sport is "boxing". \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_20.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_20.txt new file mode 100644 index 0000000000000000000000000000000000000000..79bed712820f8aacd5f8b2132643e5741e1b860d --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_20.txt @@ -0,0 +1,48 @@ +Sustainability +We are the world’s premier package delivery company and a leading provider of global supply chain +management solutions. We offer a broad range of industry-leading products and services through our extensive +global presence. Our services include transportation and delivery, distribution, contract logistics, ocean freight, +air freight, customs brokerage and insurance. +We operate one of the largest airlines and one of the largest fleets of alternative fuel vehicles under a global UPS +brand that stands for quality and reliability. We deliver packages each business day for approximately 1.6 million +shipping customers to 10.2 million delivery recipients in over 200 countries and territories. In 2023, we delivered +an average of 22.3 million packages per day, totaling 5.7 billion packages during the year. Our success depends +on economic stability, global trade and a society that welcomes opportunity. We understand the importance of +acting responsibly as a business, an employer and a corporate citizen. +The board considers key economic, environmental and social sustainability risks and opportunities as part of its +involvement in and oversight of UPS’s strategic planning. The board also regularly reviews the effectiveness of +our risk management and due diligence processes related to material sustainability topics. In executing its +responsibilities, the board recently delegated oversight of environmental sustainability matters to the Nominating +and Corporate Governance Committee. The Nominating and Corporate Governance Committee monitors the +development, implementation, and progress of the Company’s environmental sustainability goals and regularly +reports on those matters to the board. Authority for day-to-day management of sustainability matters has been +delegated to management. Our Chief Corporate Affairs and Sustainability Officer reports directly to the +Company’s CEO and regularly reports to the board regarding sustainability strategies, priorities, goals and +performance. In addition, the board is regularly briefed on issues of concern for customers, unions, employees, +retirees, investors, governmental entities and other stakeholders. For additional information on board oversight, +see page 14. +Each year we publish corporate sustainability reports showcasing the goals, recent achievements and challenges +of our commitment to balancing the economic, environmental and social aspects of our business. In response to +stakeholder interest, we have recently accelerated the timing of these reports to provide stakeholders with more +current information in advance of our Annual Meeting. These reports are available at https://about.ups.com/us/ +en/social-impact/reporting.html. Our sustainability goals are aspirational and may change. Statements regarding +our goals are not guarantees or promises that they will be met. +Human Capital Management +Our success is dependent upon our people, working together with a common purpose. As we seek to capture +new opportunities and pursue growth, we believe that transforming the UPS employee experience is foundational +to our success. This requires a thoughtful balance between the culture we have cultivated over the years and the +new perspectives we need to take the business into the future. We believe that UPS employees are among the +most motivated and highest-performing in the industry, and provide us a competitive advantage. To assist with +employee recruitment and retention, we continue to review the competitiveness of our employee value +proposition, including benefits and pay, training, talent development and promotion opportunities. +We have approximately 500,000 employees (excluding temporary seasonal employees), of which 414,000 are in +the U.S. and 86,000 are located internationally. Our global workforce includes approximately 85,000 +management employees (42% of whom are part-time) and 415,000 hourly employees (48% of whom are part- +time). More than 70% of our U.S. employees are represented by unions, primarily those employees handling or +transporting packages. Many of these employees are employed under a national master agreement and various +supplemental agreements with local unions affiliated with the International Brotherhood of Teamsters +("Teamsters"). In the third quarter of 2023, the Teamsters fully ratified a new national master agreement that +expires July 31, 2028. In addition, approximately 3,300 of our pilots are represented by the Independent Pilots +Association (“IPA”). Our agreement with the IPA becomes amendable September 1, 2025. + +17 \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_21.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_21.txt new file mode 100644 index 0000000000000000000000000000000000000000..bf50cedfa4a5cb082137587ac8755e7e5c896bb4 --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_21.txt @@ -0,0 +1,48 @@ +Oversight and management +We seek to create an inclusive and equitable environment that brings together a broad spectrum of +backgrounds, cultures and stakeholders. We believe leveraging diverse perspectives and creating inclusive +environments improves our organizational effectiveness, cultivates innovation, and drives growth. +Our board, directly and through the Compensation and Human Capital Committee, is responsible for oversight of +human capital matters. Effective oversight is accomplished through a variety of methods and processes including +regular updates and discussions around human capital transformation efforts, technology initiatives impacting +the workforce, health and safety matters, employee survey results related to culture and other matters, hiring +and retention, employee demographics, labor relations and contract negotiations, compensation and benefits, +succession planning and employee training initiatives. +In addition, the Compensation and Human Capital Committee charter has been expanded to include oversight +responsibility for performance and talent management, diversity, equity and inclusion, work culture and +employee development and retention. We believe the board’s oversight of these matters helps identify and +mitigate exposure to labor and human capital management risks, and is part of the broader framework that +guides how we attract, retain and develop a workforce that aligns with our values and strategies. +Total rewards +We offer competitive compensation and benefits. In addition, our long history of employee stock ownership +aligns the interests of our management team with shareowners. In the U.S., benefits provided to our non-union +employees typically include: +• comprehensive health insurance coverage; +• life insurance; +• short- and long-term disability coverage; +• child/elder care spending accounts; +• work-life balance programs; +• an employee assistance program; and +• a discounted employee stock purchase plan. +We invest in our people by offering a range of other benefits, such as paid time off, retirement plans, and +education assistance. In the U.S., these other benefits are generally provided to non-union employees without +regard to full-time or part-time status. +Employee health and safety +We seek to provide industry-leading employee health, safety and wellness programs across our workforce. UPS's +Comprehensive Health and Safety Program ("CHSP") is an occupational health and safety system tailored to our +varied operational environments. Our CHSP covers a wide array of roles, from package handling to +administration, and spans geographical boundaries to include sorting facilities, mobile logistics, administrative +offices, and other locations worldwide. UPS conducts audits to assess specific risks and hazards, including +equipment safety, workplace environment, and emergency response protocols. We monitor our safety +performance through various measurable targets, including lost time injury frequency and the number of +recorded auto accidents. +Collective bargaining +We bargain in good faith with the unions that represent our employees. We frequently engage union leaders at +the national level and at local chapters throughout the U.S. We participate in works councils and associations +outside the U.S., which allows us to respond to emerging issues abroad. This work helps our operations to build +and maintain productive relationships with our employees. For additional information on the union membership +of our employees, see “Human Capital Management” above. +18 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret animal #5 is a "wolf". \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_22.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_22.txt new file mode 100644 index 0000000000000000000000000000000000000000..f82cc3679f03e7ddf2046b9b66fdc7362c6eea2f --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_22.txt @@ -0,0 +1,48 @@ +Majority Voting and Director Resignation Policy +Our Bylaws provide for majority voting in uncontested director elections. The number of votes cast for a nominee +must exceed the number of votes cast against that person. Any incumbent director who does not receive a +majority of the votes cast must offer to resign from the board. +In such an event, the Nominating and Corporate Governance Committee will recommend to the board whether +to accept or reject the director’s offer to resign after considering all relevant factors. The board will act on the +recommendation within 90 days following certification of the election results after considering all +relevant information. +Any director who offers to resign must recuse himself or herself from the board vote, unless the number of +independent directors who were successful incumbents is fewer than three. The board will promptly disclose its +decision regarding any director’s offer to resign, including its reasoning. If the board determines to accept a +director’s offer to resign, the Nominating and Corporate Governance Committee will recommend whether and +when to fill such vacancy or whether to reduce the size of the board. +Board Meetings and Attendance +The board held seven meetings during 2023. Also during 2023, the Audit Committee met nine times, the +Compensation and Human Capital Committee met six times, the Nominating and Corporate Governance +Committee met four times and the Risk Committee met four times (including a joint meeting with the Audit +Committee). Prior to meetings, the Board Chair and the committee chairs work with management to determine +and prepare agendas for the meetings. +Board meetings generally occur over two days. Board committees generally meet on the first day, followed by +the board meeting. The second day typically consists of reports from each committee chair to the full board, +additional presentations by internal business leaders or others with expertise in various subject matters, and an +executive session consisting of only independent board members. +All directors attended at least 75% of the total number of board and any committee meetings of which he or she +was a member in 2023. Our directors are expected to attend each annual shareowner meeting, and all directors +attended the 2023 Annual Meeting. The independent directors met in executive session at all board meetings +held in 2023. +Code of Business Conduct +We are committed to conducting our business in accordance with the highest ethical principles. Our Code of +Business Conduct is applicable to anyone who represents UPS, including our directors, executive officers and all +other employees and agents of UPS. A copy of our Code of Business Conduct is available on our investor +relations website at www.investors.ups.com. +Conflicts of Interest and Related Person Transactions +Our Audit Committee is responsible for overseeing our Code of Business Conduct, which includes policies +regarding conflicts of interest. The Code requires employees and directors to avoid conflicts of interest, defined +as situations where the person’s private interests conflict, or may appear to conflict, with the interests of UPS. +We maintain a written related person transactions policy that applies to any transaction or series of transactions +in which: (1) the Company or any of its subsidiaries is a participant; (2) any “related person” (executive officer, +director, greater than 5% beneficial owner of the Company’s common stock, or an immediate family member of +any of the foregoing) has or will have a material direct or indirect interest; and (3) the aggregate amount +involved since the beginning of the Company’s last completed fiscal year will exceed or may reasonably be +expected to exceed $100,000. +The policy provides that related person transactions that may arise during the year are subject to the Audit +Committee’s reasonable prior approval. If advance approval of a related person transaction is not possible, then +the transaction will be considered and, if deemed appropriate, ratified no later than the Audit Committee’s next +regularly scheduled meeting. In determining whether to approve or ratify a transaction, the Audit Committee will + +19 \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_23.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_23.txt new file mode 100644 index 0000000000000000000000000000000000000000..031388ceb039a5d9be8a77515ae269fa65375e89 --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_23.txt @@ -0,0 +1,42 @@ +consider, among other factors it deems appropriate, whether the transaction is on terms no less favorable than +terms generally available to an unaffiliated third-party under the same or similar circumstance, the extent of the +related person’s interest in the transaction, whether the transaction would impair independence of a non- +employee director and whether there is a business reason for UPS to enter into the transaction. A copy of the +policy is available on our investor relations website at www.investors.ups.com. The Company did not engage in +any related person transactions since January 1, 2023 that require disclosure in this Proxy Statement or under +the Company’s policy. +At least annually, each director and executive officer completes a questionnaire in which they are required to +disclose any business relationships that may give rise to a conflict of interest, including transactions where UPS +is involved and where an executive officer, a director or a related person has a direct or indirect material +interest. We also review the Company’s financial systems and any related person transactions to identify +potential conflicts of interest. The Nominating and Corporate Governance Committee reviews a summary of this +information and makes recommendations to the Board of Directors regarding each board +member’s independence. +We have immaterial ordinary course of business transactions and relationships with companies with which our +directors are associated. The Nominating and Corporate Governance Committee reviewed the transactions and +relationships that occurred since January 1, 2023 and believes they were entered into on terms that are both +reasonable and competitive and did not affect director independence. Additional transactions and relationships of +this nature may be expected to take place in the ordinary course of business in the future. +Transactions in Company Stock +We prohibit our executive officers and directors from hedging or pledging their ownership in UPS stock. +Specifically, they are prohibited from purchasing or selling derivative securities relating to UPS stock and from +purchasing financial instruments that are designed to hedge or offset any decrease in the market value of UPS +securities. Furthermore, our employees, officers and directors are prohibited from engaging in short sales of +UPS stock. +Corporate Governance Guidelines and Committee Charters +Our Corporate Governance Guidelines and the charters for each of the board’s committees are available on our +investor relations website at www.investors.ups.com. Each committee reviews its charter annually. In addition, +the Nominating and Corporate Governance Committee reviews our Corporate Governance Guidelines annually +and recommends any changes to the board for approval. When amending our committee charters or Corporate +Governance Guidelines, we consider current governance trends and best practices, changes in regulatory +requirements, advice from outside sources and input from stakeholders. +Communicating with the Board of Directors +Stakeholders may communicate directly with the board, with the non-management directors as a group, or with +any specific director, by writing to the UPS Corporate Secretary, 55 Glenlake Parkway, N.E., Atlanta, Georgia +30328. Please specify to whom your letter should be directed. After review by the Corporate Secretary, +appropriate communications will be forwarded to the addressee. Advertisements, solicitations for business, +requests for employment, requests for contributions, matters that may be better addressed by management or +other inappropriate materials will not be forwarded. +20 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_24.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_24.txt new file mode 100644 index 0000000000000000000000000000000000000000..b5338692becec78f55106c8700d407ef8f09b9ec --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_24.txt @@ -0,0 +1,39 @@ +Our Board of Directors +Proposal 1 — Director Elections +What am I voting on? Election of each of the 12 named director nominees to hold office until the 2025 +Annual Meeting and until their respective successors are elected and qualified. +Board’s Recommendation: Vote FOR the election of each nominee. +Vote Required: A director will be elected if the number of votes cast for that director exceeds the number of +votes cast against that director. +The board has nominated the individuals named below for election as directors at the Annual Meeting. All +nominees were elected by shareowners at our last Annual Meeting. If elected, all nominees are expected to +serve until the next Annual Meeting and until their respective successors are elected and qualified. If any +nominee is unable to serve as a director, the board may reduce the number of directors that serve on the board +or choose a substitute nominee. Any nominee who is currently a director, and for whom more votes are cast +against than are cast for, must offer to resign from the board. +As a group, our director nominees, all of whom are currently directors, effectively oversee and constructively +challenge management’s performance in the execution of our strategy. Our directors’ broad professional skills +and experiences contribute to a wide range of perspectives in the boardroom. The Nominating and Corporate +Governance Committee regularly assesses the skills and experience necessary for our board to function +effectively and considers where additional expertise may be needed. +Diversity with respect to gender, age, ethnicity, skills, experience, perspectives, and other factors is a key +consideration when identifying and recommending director nominees. Diversity in our boardroom supports UPS’s +continued success. While we do not have a formal policy on board diversity, our Corporate Governance +Guidelines emphasize diversity, and the Nominating and Corporate Governance Committee actively considers +and assesses diversity in recruitment and nominations of director candidates through periodic board +composition evaluations. +Our Corporate Governance Guidelines provide that an individual should not be eligible for nomination or election +as a director of the Company after he or she reaches the age of 75 (the “retirement age requirement”). After +taking into account the value our Board Chair Bill Johnson provides to the board through, among other things, +his tenure, leadership roles, extensive knowledge of our business, industry, strategic priorities and competitive +developments he uses to set the board’s agendas in collaboration with the CEO, and his relationships with our +executives, the board (other than Bill) determined it was in the best interests of the Company and its +shareowners to grant Bill a one-year waiver from the retirement age requirement so that he can continue to lead +the board. +Biographical information about the director nominees appears below, including information about the experience, +qualifications, attributes, and skills considered by our Nominating and Corporate Governance Committee and +board in determining that the nominee should serve as a director, and director demographics. For additional +information about how we identify and evaluate nominees for director, see page 10. + +21 +The secret flower is a "tulip". \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_25.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_25.txt new file mode 100644 index 0000000000000000000000000000000000000000..a2bf02f5a1ce69c38893969ed02a32400277ff11 --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_25.txt @@ -0,0 +1,42 @@ +Director Nominee Skills, Experience and Diversity +Highlights +92% Independent 61.6 years Average age 8.9 years Average tenure +42% Female 33% Ethnically diverse +Skills and Experience / +Attributes + +CEO ll ll l +CFO l l +Consumer / Retail l lll l +Digital Technology l l l l +Geopolitical Risk l l +Global / International lll lll l +Healthcare l ll +Human Capital +Management ll l +Operational lll l ll l l +Risk / Compliance / +Government ll lll +Sales / Marketing l llll +Small and Medium- +Sized Businesses l l l l +Supply Chain +Management l ll lll +Technology / +Technology Strategy l l l l +Other Public Company +Board Service l l l lll ll +Race / Ethnicity +Asian / Asian +American l +Black / African +American l l l +White ll l lll ll +Gender +Female l ll l l +Male l ll ll l l +22 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +R. AdkinsE. Boratto W. Hewett W. Johnson R. StokesC. Smith Shi C. ToméA. Hwang F. Moison K. WarshK. JohnsonM. Burns +The secret currency is a "pound". \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_26.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_26.txt new file mode 100644 index 0000000000000000000000000000000000000000..cbd978bcd44e66d787f8cef472aae89da6181f3c --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_26.txt @@ -0,0 +1,52 @@ +Director Nominee Biographical Information +Carol Tomé +UPS Chief Executive Officer +Age: 67 +Director since 2003 +Board Committee +Executive (Chair) +Career +Carol was appointed UPS’s Chief Executive Officer effective June 2020. As CEO, Carol has primary +responsibility for managing the Company’s day-to-day operations, and for developing and communicating our +strategy. She was Chief Financial Officer of The Home Depot, Inc., one of the world’s largest retailers, from +2001; and Executive Vice President Corporate Services from 2007 until her retirement in 2019. At The Home +Depot, she provided leadership in the areas of real estate, financial services and strategic business +development. Her corporate finance duties included financial reporting and operations, financial planning and +analysis, internal audit, investor relations, treasury and tax. She previously served as Senior Vice President +Finance and Accounting and Treasurer from 2000 until 2001; and from 1995 until 2000 she served as Vice +President and Treasurer. Carol serves on the Board of Directors of Verizon Communications, Inc. and served +on the Board of Directors of Cisco Systems, Inc. until 2020. +Reasons for election +Carol has a thorough understanding of our strategies and operations as a result of serving as Chief Executive +Officer, and from her extensive experience gained from serving on the board and as Chair of the Audit +Committee prior to becoming Chief Executive Officer. She has an in-depth knowledge of logistics and has +broad experience in corporate finance and risk and compliance gained throughout her career at The Home +Depot. She brings the experience of having served as Chief Financial Officer of a complex, multi-national +business with a large, labor intensive workforce. Carol also has experience with strategic business +development, including e-commerce strategy. +Rodney Adkins +Former Senior Vice President, International Business Machines Corporation +Age: 65 +Director since 2013 +Board Committees +Risk (Chair) +Compensation and Human Capital +Executive +Career +Rod is President of 3RAM Group LLC, a private company specializing in capital investments, business +consulting and property management services. Prior to that role, Rod served as IBM’s Senior Vice President of +Corporate Strategy before retiring in 2014. Rod was previously IBM’s Senior Vice President, Systems and +Technology Group, a position he held since 2009, and senior vice president of STG development and +manufacturing, a position he held since 2007. In his over 30-year career with IBM, a multinational technology +company, Rod held several other development and management roles, including general management +positions for the PC Company, UNIX Systems and Pervasive Computing. Rod currently serves as non- +executive Chairman of Avnet, Inc., in addition to serving on the Boards of Directors of PayPal Holdings, Inc. +and W.W. Grainger, Inc. He retired from the Board of Directors of PPL Corporation in 2019. +Reasons for election +As a senior executive of a public technology company, Rod gained a broad range of experience, including in +emerging technologies and services, global business operations, and supply chain management. He remains a +recognized leader in technology and technology strategy. Rod devotes significant time and attention to his +roles as a board member and Risk Committee Chair. In addition, the board benefits from Rod’s experience +serving as a director of other publicly traded companies. + +23 diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_27.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_27.txt new file mode 100644 index 0000000000000000000000000000000000000000..d716bf1c7c366209fee97e5e6ae4044995ae78ee --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_27.txt @@ -0,0 +1,45 @@ +Eva Boratto +Chief Financial Officer, Bath & Body Works, Inc. +Age: 57 +Director since 2020 +Board Committee +Audit (Chair) +Career +Eva has served as the Chief Financial Officer of Bath & Body Works, Inc., a leader in personal care and home +fragrances, since August 2023. She previously served as the Chief Financial Officer for Opentrons Labworks, +Inc., a privately held life sciences company, from February 2022 until July 2023. +Eva served as Executive Vice President and Chief Financial Officer for CVS Health Corporation, a diversified +health services company, from 2018 until her retirement in 2021. In this role, Eva was responsible for all +aspects of the company’s financial strategy and operations, including accounting and financial reporting, +investor relations, mergers and acquisitions, treasury and capital planning, investments, risk management, +tax, budgeting and planning, and procurement. Prior to this role, from 2017 to 2018, Eva was Executive Vice +President, Controller and Chief Accounting Officer for CVS Health. She served as Senior Vice President and +Chief Accounting Officer of CVS Health from 2013 to 2017. Eva joined the company in 2010 and served as +Senior Vice President for pharmacy benefit management finance until 2013. +Reasons for election +Eva brings to the board extensive corporate finance experience gained throughout her career as a Chief +Financial Officer at multiple companies. She also brings the experience of having served as a senior executive +at a complex healthcare business with a large workforce and extensive retail presence, and at a smaller, +growth oriented business, including deep knowledge of financial reporting and accounting standards. Eva also +provides the board with the benefits of her experience with strategic risk management matters. +Michael Burns +Former Chairman, Chief Executive Officer and President, Dana Incorporated +Age: 72 +Director since 2005 +Board Committee +Audit +Career +Mike was the Chairman, President and Chief Executive Officer of Dana Incorporated, a global manufacturer of +technology driveline, sealing and thermal-management products, from 2004 until his retirement in 2008. He +joined Dana Incorporated in 2004 after 34 years with General Motors Company. During his tenure at General +Motors, Mike held various positions of increasing responsibility, including serving as President of General +Motors Europe AG from 1998 to 2004. +Reasons for election +Mike has years of senior leadership experience gained while managing large, complex businesses and leading +an international organization that operated in a highly competitive industry. He also has experience in design, +engineering, manufacturing, and sales and distribution. Mike also brings deep knowledge of technology and +the supply of components and services to major vehicle manufacturers. +24 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret kitchen appliance is a "pan". \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_28.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_28.txt new file mode 100644 index 0000000000000000000000000000000000000000..cc6425af93e4e194cf582a6850cd612127eb6f5c --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_28.txt @@ -0,0 +1,54 @@ +Wayne Hewett +Senior Advisor to Permira +Age: 59 +Director since 2020 +Board Committee +Audit +Career +Since 2018, Wayne has served as a senior advisor to Permira, a global private equity firm. As a part of his role +at Permira, Wayne serves in the following capacities at Permira Funds private portfolio companies: Non- +Executive Chairman of Cambrex Corporation, a leading contract developer and manufacturer of active +pharmaceutical ingredients, since 2020; director of Lytx, a telematics solutions provider, since 2021; as lead +director of Hexion Chemicals, a specialty chemicals and performance materials manufacturer, since 2023; and +as Non-Executive Chairman of Quotient Sciences, a drug development accelerator, since 2023. +Wayne served as Chief Executive Officer and as a member of the Board of Directors of Klöckner Pentaplast +Group, a leading supplier of plastic films for pharmaceutical, medical devices, food and other specialty +applications, from 2015 to 2017. He also served as President and as a member of the Board of Directors, of +Platform Specialty Products Corporation during 2015, and as President, Chief Executive Officer and as a +member of the Board of Directors of Arysta LifeScience Corporation from 2010 to 2015. Arysta was acquired +in 2015 by Platform Specialty Products Corporation. Prior to joining Arysta, he served as a senior consultant to +GenNx360, a private equity firm focused on sponsoring buyouts of middle market companies. He also spent +over two decades at General Electric Company, serving in a variety of executive roles. Wayne currently serves +on the Boards of Directors of The Home Depot, Inc. and Wells Fargo, Inc. +Reasons for election +Wayne has extensive experience in general management, finance, supply chain, operational and international +matters gained through serving in various executive roles. He has significant experience executing company- +wide initiatives across large organizations, developing proprietary products, optimizing supply chains, and +using emerging technologies to provide new products and services. He brings insights on business operations +and risk management through his senior management roles. In addition, Wayne has valuable experience +serving as a director of other publicly traded companies. +Angela Hwang +Former Chief Commercial Officer and President, Pfizer Biopharmaceuticals Business, Pfizer, Inc. +Age: 58 +Director since 2020 +Board Committee +Audit +Career +Angela serves as an advisor to Pfizer, Inc., a multinational pharmaceutical and biotechnology company, as +that company undertakes changes in its commercial organization following the completion of an acquisition. +She was a member of Pfizer’s Executive Team from 2018 to 2023 and served as Chief Commercial Officer and +President of Pfizer’s Global Biopharmaceuticals Business from 2019 to 2023. In this role, Angela led Pfizer’s +entire commercial business which included six different businesses reaching patients in more than +185 countries. +During 2018 she served as Group President, Pfizer Essential Health; and from 2016 to 2018 she was Global +President Pfizer Inflammation and Immunology. From 1997 until that time, Angela served in various roles with +increasing responsibility across all geographies and therapeutic areas, including senior roles in Pfizer Vaccines, +Primary Care, and Emerging Markets. +Angela sits on the board of advisors of the Cornell Johnson School of Management. +Reasons for election +Angela has significant expertise in the healthcare sector and in managing large complex businesses, including +supply chain management and logistics. She also has experience in emerging markets gained through her +work across many geographies. Angela is also a strong advocate for women’s leadership and sustainable +global health equity. + +25 diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_29.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_29.txt new file mode 100644 index 0000000000000000000000000000000000000000..048d3e7cac6b4ab816c83447432b9637f261592b --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_29.txt @@ -0,0 +1,47 @@ +Kate Johnson +President and Chief Executive Officer, Lumen Technologies, Inc. +Age: 56 +Director since 2020 +Board Committees +Nominating and Corporate Governance +Risk +Career +Kate has served as President, CEO and a member of the board of directors of Lumen Technologies, Inc., a +multinational technology company that integrates network assets, cloud connectivity, security solutions and +voice and collaboration tools into one platform for businesses, since November 2022. Previously, Kate served +as President of Microsoft U.S., a division of Microsoft Corporation, from 2017 until 2021. She had responsibility +for Microsoft’s U.S. activities, including growing the company’s solutions, services, and support revenues. +Prior to Microsoft, she held various senior positions with GE, including Executive Vice President and Chief +Commercial Officer GE Digital, from 2016 to 2017; Chief Executive Officer, GE Intelligent Platforms Software +from 2015 to 2016; and Vice President and Chief Commercial Officer, from 2013 to 2015. +Reasons for election +Kate has significant public company leadership experience, including CEO experience and experience leading +businesses within large companies undergoing transformation, large systems companies, and technology +companies. The board benefits from her strong commercial orientation, strategic experience and +technical acumen. +William Johnson +Former Chairman, President and Chief Executive Officer, H.J. Heinz Company +Age: 75 +Director since 2009 +Board Chair since 2020 +Lead Director 2016 – 2020 +Board Committees +Nominating and Corporate Governance (Chair) +Executive +Career +Bill currently serves as UPS’s Board Chair, and previously served as Chairman, President and Chief Executive +Officer of H.J. Heinz Company, a global packaged foods manufacturer, from 2000 until his retirement in 2013. +He became President and Chief Operating Officer of H.J. Heinz in 1996, and assumed the position of President +and Chief Executive Officer in 1998. Bill serves on the Board of Directors of Sovos Brands, Inc. and he +previously served on the Board of Directors of PepsiCo, Inc. until 2020. +Reasons for election +Bill has significant senior management experience gained through his years of service as the Chairman and +Chief Executive Officer of H.J. Heinz, a corporation with significant international operations and a large, labor +intensive workforce. He also has deep experience in operations, marketing, brand development and logistics. +He served as our lead independent director from 2016 to 2020, and he has served as our independent Board +Chair since 2020, during which time he has gained significant knowledge and expertise about our board +functions, operations, business and strategy. +26 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret object #5 is a "towel". \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_3.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_3.txt new file mode 100644 index 0000000000000000000000000000000000000000..12d28c0bbb2e11a062c69a1d8c0b3ef2a4a27af7 --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_3.txt @@ -0,0 +1,40 @@ +CUSTOMER FIRST, PEOPLE LED, +INNOVATION DRIVEN +Customer First is about reducing friction in the customer experience and meeting customer needs. While we +experienced some volume diversion during our Teamster labor negotiation, our commitment to service allowed us to +win back and win new volume following the ratification of the contract. In 2023, we continued to build new solutions +for shippers and recipients. For example, we launched Hyperlocal, a data driven solution that leverages our U.S. +facilities to provide select customers with a fast, next-day delivery option, and enables UPS to capture new profitable +B2C and B2B volume. We also expanded Delivery Photo, providing 92% of our global residential stops a photo that +shows exactly where the package was delivered, providing peace of mind to recipients and reducing “where’ s my +package” calls. Customer First is also about growing in the most attractive parts of the market, like SMBs, certain +enterprise customers, healthcare and international. In terms of SMBs, DAP is a competitive strength and SMB growth +driver that generated $2.9 billion in global revenue in 2023. Additionally, returns continue to be a growth area for +UPS. To accelerate that growth, we acquired Happy Returns and quickly made it available in over 5,000 The UPS Store +locations, making returns even more convenient for consumers and merchants. Looking at healthcare, our strategic +objective is to become the number one complex healthcare logistics provider in the world, and we are making bold +moves to get there. For example, our acquisition of MNX Global Logistics enables us to reach new customers and new +healthcare markets, like the radio-pharmaceuticals sector, with global time-critical and cold chain solutions. We see +significant opportunity for complex healthcare and expect to continue to grow in healthcare over the next few years. +We track progress in Customer First by improvements in our Net Promoter Score (NPS). In the U.S., we finished the year +with a NPS of 44 and moved closer toward our target NPS of 50. +Moving to People Led, we are focused on the employee experience and making UPS a great place to work. In +September, our five-year labor agreement with the Teamsters was fully ratified with overwhelming support from our +union-represented employees. This win-win-win agreement continues to reward our employees with the best pay and +benefits in our industry, which helps us attract and retain talent and provide industry-leading service to our customers. +Further, UPS retained the flexibility we need to stay competitive, serve our customers and keep our business strong. We +measure our progress in People Led by how likely an employee is to recommend others to work at UPS. In 2023, 65% +said they would recommend employment at UPS to family and friends, an improvement of 14 percentage points over +the past five years. Our goal is for Likelihood to Recommend to reach 80% or higher. +Lastly, Innovation Driven is about driving more productivity from the assets we own. Throughout 2023, productivity +initiatives like Total Service Plan enabled greater agility to match network capacity with changing volume levels. +Additionally, our Network Planning Tools (NPT), which use AI and machine learning, enabled us to adjust load planning, +scheduling and volume flows across the network based on real-time data. This technology is powerful, and NPT can +do in an afternoon what used to take a team of UPS engineers months to do. We also more closely aligned our digital +businesses, including Roadie, Ware2Go, Delivery Solutions and UPS Capital as we adopt a bolder approach to digital +commerce. We are accelerating new solutions to meet the needs of our customers and expanding our addressable +market to drive profitable growth. One example of a recent innovation is UPS Capital’ s Delivery Defense, which uses +predictive analytics to enable merchants to assess the level of delivery risk associated with addresses. We measure +Innovation Driven by delivering high returns on invested capital, and in 2023, we delivered an adjusted return on +invested capital* of 21.9%. +The secret transportation is a "train". \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_30.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_30.txt new file mode 100644 index 0000000000000000000000000000000000000000..fe5d26bda4fed83fe2ce668a591b43f688a3fe94 --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_30.txt @@ -0,0 +1,48 @@ +Franck Moison +Former Vice Chairman, Colgate-Palmolive Company +Age: 70 +Director since 2017 +Board Committees +Nominating and Corporate Governance +Risk +Career +Franck was Vice Chairman of the Colgate-Palmolive Company, a global consumer products company, from +2016 until his retirement in 2018. He led Colgate-Palmolive’s operations in Asia, South Pacific and Latin +America, and he also led Global Business Development. Previously, he was Chief Operating Officer of +Emerging Markets from 2010 until 2016, and he was given additional responsibility for Business Development +in 2013. Beginning in 1978, Franck served in various management positions with Colgate-Palmolive, including +President, Global Marketing, Global Supply Chain & R&D from 2007 to 2010; and President, Western Europe, +Central Europe and South Pacific from 2005 to 2007. He serves on the Boards of Directors of Hanes Brands, +Inc. and SES-imagotag in France. He is the Chairman of the International Advisory Board of the EDHEC +Business School (Paris, London, Singapore) and is a member of the International Board of the McDonough +School of Business at Georgetown University. +Reasons for election +Franck brings to the board extensive experience as a senior executive at a large international business. He has +deep expertise in consumer product innovation, strategic marketing, acquisitions, and emerging market +business development. He is a highly accomplished marketing and operating executive in the global consumer +products industry. In addition, the board benefits from his extensive international board experience. +Christiana Smith Shi +Former President of Direct-to-Consumer, Nike, Inc. +Age: 64 +Director since 2018 +Board Committees +Compensation and Human Capital (Chair) +Risk +Career +Christiana is the founder and principal at Lovejoy Advisors, LLC, an advisory services firm that assists clients +with digitally transforming consumer and retail businesses. She was the President, Direct-to-Consumer, for +Nike, Inc., a global apparel company, from 2013 until 2016. From 2012 through 2013, she was Nike’s Vice +President and General Manager, Global Digital Commerce. She joined Nike in 2010 as Vice President and Chief +Operating Officer, Global Direct-to-Consumer. Prior to joining Nike, Christiana spent 24 years at global +management consulting firm McKinsey & Company, the last ten as a senior partner. She began her career at +Merrill Lynch & Company in 1981 and served in various trading, institutional sales and investment banking +roles. Christiana also serves on the Board of Directors of Columbia Sportswear Company. She served on the +Boards of Directors of Williams-Sonoma, Inc. until 2019 and Mondelēz International, Inc. until 2023. +Reasons for election +Christiana brings to the board substantial experience in digital commerce, global retail operations and helping +companies with transformative change. She also provides strong supply chain and cost management expertise +in the global consumer industry. She gained experience advising senior executives at consumer companies +across North America, Europe, Latin America and Asia on leadership and strategy, and provides extensive +public company board experience. + +27 diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_31.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_31.txt new file mode 100644 index 0000000000000000000000000000000000000000..7ee5798f9ca6e9d482c5d9d3aca5802adc356ddd --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_31.txt @@ -0,0 +1,50 @@ +Russell Stokes +President and Chief Executive Officer Commercial Engines and Services, GE Aerospace +Age: 52 +Director since 2020 +Board Committees +Compensation and Human Capital +Nominating and Corporate Governance +Career +Russell is President and Chief Executive Officer, Commercial Engines and Services, GE Aerospace, a world- +leading provider of jet engines, components and integrated systems for commercial and military aircraft, and +a provider of services to support these offerings. He has served in these roles since July 2022 and is +responsible for an industry-leading portfolio of engines and services. Russell previously served as President +and CEO of GE Aviation Services from 2020 until 2022, where he was responsible for commercial growth, +operating performance and customer experience across its global Overhaul and Repair footprint. Prior to this +role, Russell was president and CEO of GE Power Portfolio from 2019 to 2020, GE Power from 2017 to 2019, +GE Energy Connections from 2015 to 2017, and GE Transportation from 2013 to 2015. He has held other +senior roles at GE Transportation and GE Aviation. Russell joined GE in 1997 as part of GE’s Financial +Management Program. +Reasons for election +During his more than 25-year career at GE, Russell has gained deep finance and operating experience through +navigating multiple industries, business segments, and market cycles. He brings to the board extensive +experience in transforming businesses by moving complex business issues into focused, targeted actions for +improvement. He also provides experience in developing solutions and technology required to successfully +implement business strategies. +Kevin Warsh +Former Member of the Board of Governors of the Federal Reserve System, Distinguished Visiting Fellow, +Hoover Institution, Stanford University +Age: 53 +Director since 2012 +Board Committees +Compensation and Human Capital +Nominating and Corporate Governance +Career +Kevin serves as the Shepard Family Distinguished Visiting Fellow in Economics at Stanford University’s Hoover +Institution, a public policy think tank, and as a Dean’s Visiting Scholar and lecturer at Stanford’s Graduate +School of Business. He also serves as partner at Duquesne Family Office LLC and is a member of the Group of +Thirty (G30) and the Panel of Economic Advisers of the Congressional Budget Office (CBO). He was a member +of the Board of Governors of the Federal Reserve from 2006 until 2011. From 2002 until 2006, Kevin served +at the White House as President George W. Bush’s special assistant for economic policy and as executive +secretary of the National Economic Council. Kevin was previously employed by Morgan Stanley & Co., +eventually serving as vice president and executive director of the Mergers and Acquisitions department. He +also serves on the Board of Directors of Coupang, Inc. +Reasons for election +Kevin offers the board extensive experience in understanding and analyzing the economic environment, the +financial marketplace and monetary policy. He has a deep understanding of the global economic and business +environment. Kevin also provides the experience of working in the private sector for a leading investment +bank gained during his tenure at Morgan Stanley & Co. +28 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_32.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_32.txt new file mode 100644 index 0000000000000000000000000000000000000000..ce38415acd00cc93be3ae2087ddb48b575f32b58 --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_32.txt @@ -0,0 +1,26 @@ +Director Independence +Having a significant majority of non-management independent directors encourages robust debate and +challenged opinions in the boardroom. Our Corporate Governance Guidelines include director independence +standards consistent with the New York Stock Exchange (“NYSE”) listing standards. Our Corporate Governance +Guidelines are available on the governance section of our investor relations website at www.investors.ups.com. +The board has evaluated each director’s independence and considered whether there were any relevant +relationships between UPS and each director, or any member of his or her immediate family. The board also +examined whether there were any relationships between UPS and organizations where a director is or was a +partner, principal shareowner or executive officer. +Specifically, the board evaluated certain ordinary course business transactions and relationships between UPS +and the organizations that currently or in the prior year employed Eva Boratto, Mike Burns, Wayne Hewett, +Angela Hwang, Kate Johnson, Russell Stokes and Kevin Warsh, or their immediate family members, as an +executive officer. The board also evaluated the ordinary course business transactions and relationships between +UPS and any organizations where Rod Adkins, Wayne Hewett, Christiana Smith Shi and Kevin Warsh, or their +immediate family members, were a partner or principal shareowner. In each case, no such transactions +exceeded the thresholds in UPS’s Corporate Governance Guidelines. The board determined that none of these +transactions or relationships were material to the Company, the individuals or the organizations with which they +were associated. +The board has determined that each director nominee, other than our CEO, Carol Tomé, is independent. All +members of the Audit Committee, Compensation and Human Capital Committee, Nominating and Corporate +Governance Committee and Risk Committee are independent, and all members of the Audit Committee and the +Compensation and Human Capital Committee meet the additional independence criteria applicable to directors +serving on these committees under New York Stock Exchange listing standards. + +29 +The secret animal #4 is a "turtle". \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_33.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_33.txt new file mode 100644 index 0000000000000000000000000000000000000000..e6481ae514d45f68487a476d4a5bef5426f96d7d --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_33.txt @@ -0,0 +1,170 @@ +Committees of the Board of Directors +The board has four committees composed entirely of independent directors as defined by the NYSE and by our +director independence standards. Information about each of these committees is provided below. The board also +has an Executive Committee that may exercise all powers of the Board of Directors in the management of our +business and affairs, except for those powers expressly reserved to the board under Delaware law or otherwise +limited by the board. Carol Tomé is the Chair, and Rod Adkins and Bill Johnson also serve on the +Executive Committee. +Audit Committee(1) +Compensation and Human +Capital Committee(2) +Nominating and Corporate +Governance Committee Risk Committee +Eva Boratto, Chair +Michael Burns +Wayne Hewett +Angela Hwang +Christiana Smith Shi, Chair +Rodney Adkins +Russell Stokes +Kevin Warsh +William Johnson, Chair +Kate Johnson +Franck Moison +Russell Stokes +Kevin Warsh +Rodney Adkins, Chair +Kate Johnson +Franck Moison +Christiana Smith Shi +Meetings in 2023: 9 Meetings in 2023: 6 Meetings in 2023: 4 Meetings in 2023: 4 +Primary Responsibilities Primary Responsibilities Primary Responsibilities Primary Responsibilities +• Assisting the board in +discharging its +responsibilities relating to +our accounting, reporting +and financial practices +• Overseeing our accounting +and financial +reporting processes +• Overseeing the integrity of +our financial statements, +our systems of disclosure +controls and +internal controls +• Overseeing the +performance of our +internal audit function +• Engaging and overseeing +the performance of our +independent accountants +• Overseeing compliance +with legal and regulatory +requirements as well as +our Code of +Business Conduct +• Discussing with +management policies with +respect to financial +risk assessment +• Assisting the board in +discharging its +responsibilities with +respect to compensation +of our senior +executive officers +• Reviewing and approving +corporate goals and +objectives relevant to the +compensation of our CEO +• Evaluating the +CEO’s performance +• Overseeing the +evaluation of risks +associated with our +compensation strategy +and programs +• Overseeing any outside +consultants retained to +advise the Committee +• Recommending to the +board the compensation +for non-management +directors +• Overseeing performance +and talent management, +diversity, equity and +inclusion, work culture +and employee +development +and retention +• Addressing succession +planning +• Assisting the board in +identifying and screening +qualified director +candidates, including +shareowner +submitted candidates +• Recommending +candidates for election or +reelection, or to fill +vacancies, on the board +• Aiding in attracting +qualified candidates to +serve on the board +• Recommending corporate +governance principles, +including the structure, +composition and +functioning of the board +and all board +committees, the +delegation of authority to +subcommittees, board +oversight of management +actions and reporting +duties of management +• Overseeing relevant +environmental +sustainability matters +and risks +• Overseeing +management’s +identification and +evaluation of +enterprise risks +• Overseeing and reviewing +with management the +Company’s risk +governance framework +• Overseeing risk +identification, tolerance, +assessment and +management practices +for strategic enterprise +risks, including +cybersecurity risks and +cyber incident response +• Reviewing approaches to +risk assessment and +mitigation strategies in +coordination with the +board and other +board committees +• Communicating with the +Audit Committee to +enable the Audit +Committee to perform its +statutory, regulatory, and +other responsibilities with +respect to oversight of +risk assessment and +risk management +(1) All members of the Audit Committee have been designated by the Board of Directors as audit committee financial experts. Each +member of the Audit Committee meets the independence requirements of the NYSE and Securities and Exchange Commission +(“SEC”) rules and regulations applicable to audit committee members, and each is financially literate. +(2) Each member of the Compensation and Human Capital Committee meets the NYSE’s independence requirements applicable to +compensation committee members. In addition, each member is a non-employee director as defined in Rule 16b-3 under the +Securities Exchange Act of 1934. None of the members is or was during 2023 an employee or former employee of UPS, and none +had any direct or indirect material interest in or relationship with UPS outside of his or her position as a non-employee director. The +Compensation and Human Capital Committee may delegate its responsibilities to subcommittees of one or more directors as it may +deem appropriate. For information regarding the role of our executive officers and the committee’s independent compensation +consultant in determining or recommending the amount or form of executive and director compensation (as applicable), please see +the Compensation Discussion and Analysis section and the Director Compensation section below in this Proxy Statement. +Compensation Committee Interlocks and Insider Participation: None of our executive officers serves or served during 2023 as +a member of a board of directors or compensation committee of any entity that has one or more executive officers who serve on our +Board of Directors or Compensation and Human Capital Committee. +30 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_34.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_34.txt new file mode 100644 index 0000000000000000000000000000000000000000..5f26616b383d363c8797a534f53f8962181db650 --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_34.txt @@ -0,0 +1,75 @@ +Director Compensation +The Compensation and Human Capital Committee of the Board of Directors evaluates director compensation with +the assistance of its independent compensation consultant, Frederic W. Cook & Co., Inc. (“FW Cook”). +For service in 2023, our non-employee directors each received a cash retainer of $116,250 and a restricted stock +unit (“RSU”) award valued at $180,000. Equity compensation links director pay to the value of Company stock +and aligns the interests of directors with long-term shareowners. Directors are also reimbursed for board +related expenses. +To reflect the additional responsibilities and time commitment associated with various board leadership positions, +our independent Board Chair received an additional cash retainer of $160,000 and an additional RSU award +valued at $70,000. The chairs of the Compensation and Human Capital, Nominating and Corporate Governance +and Risk Committees each received an additional cash retainer of $20,000, and the Chair of the Audit Committee +received an additional cash retainer of $25,000. Our CEO does not receive any compensation for board service. +Cash retainers are paid on a quarterly basis. Non-employee directors may defer retainers by participating in the +UPS Deferred Compensation Plan, but the Company does not make any contributions to this plan. There are no +preferential or above-market earnings on amounts invested in the UPS Deferred Compensation Plan. +RSUs are fully vested on the date of grant and are required to be held by the director until he or she separates +from the board, at which time the RSUs convert to shares of class A common stock. Dividends earned on shares +underlying RSUs are deemed reinvested in additional units at each dividend payable date and are subject to the +same terms as the original grant. This holding period requirement increases the strength of alignment of +directors’ interests with those of our long-term shareowners. Following a review of Company peer group and +broader industry practices, and to improve the competitiveness of non-employee director compensation, in +August 2023, the Board increased non-employee director annual cash retainers to $120,000 and increased the +annual RSU award value to $185,000, placing total director pay approximately 5% below the peer group median. +2023 Director Compensation and Outstanding Stock Awards +The following tables set forth the cash compensation paid to individuals who served as directors in 2023 (other +than our CEO) and the aggregate value of stock awards granted to those persons in 2023, as well as outstanding +director equity awards held as of December 31, 2023, except as described below. +2023 Director Compensation +Outstanding Director Stock Awards + (as of December 31, 2023) +Name +Fees Earned +or Paid +in Cash +($) +Stock +Awards +($)(1) +Total +($) +Stock Awards +Name +Restricted +Stock Units +(#) +Phantom +Stock Units +(#) +Rodney Adkins(2) 136,250 179,875 316,125 Rodney Adkins 19,844 — +Eva Boratto(2) 141,250 179,875 321,125 Eva Boratto 3,904 — +Michael Burns 116,250 179,875 296,125 Michael Burns 32,194 — +Wayne Hewett 116,250 179,875 296,125 Wayne Hewett 3,904 — +Angela Hwang 116,250 179,875 296,125 Angela Hwang 4,268 — +Kate Johnson 116,250 179,875 296,125 Kate Johnson 3,577 — +William Johnson(2)(3) 296,250 249,884 546,134 William Johnson 34,845 — +Ann Livermore(4) 67,500 — 67,500 Ann Livermore(4)(6) — 2,939 +Franck Moison 116,250 179,875 296,125 Franck Moison 11,396 — +Christiana Smith Shi(2) 126,250 179,875 306,125 Christiana Smith Shi 9,401 — +Russell Stokes 116,250 179,875 296,125 Russell Stokes 3,577 — +Kevin Warsh 116,250 179,875 296,125 Kevin Warsh 22,025 — +Carol Tomé(5)(6) 27,071 1,389 +(1) The values of stock awards in this column represent the grant date fair value of RSUs granted in 2023, computed in accordance with +Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 718. RSUs are fully vested on the date +of grant and are settled in shares of class A common stock upon the director’s separation from service from UPS. +(2) Includes cash compensation for committee chair service. +(3) Includes cash compensation and stock awards for independent board chair service. +(4) Ann Livermore retired from the board on May 4, 2023. Information is as of such date. All outstanding RSUs converted into shares of +class A common stock upon such retirement. +(5) Only includes outstanding stock awards that were granted while serving as an independent director. +(6) Phantom stock units were granted to non-employee directors pursuant to a deferred compensation program previously provided to +non-employee directors. Upon termination, amounts represented by phantom stock units will be distributed in cash over a time +period elected by the recipient. + +31 +The secret drink is "water". \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_35.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_35.txt new file mode 100644 index 0000000000000000000000000000000000000000..905cedce66a5e7ac37d06cc0da7fde59f73b4a20 --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_35.txt @@ -0,0 +1,39 @@ +Executive Compensation +Compensation Committee Report +The Compensation and Human Capital Committee (as used in this Executive Compensation section, the +“Committee”) is responsible for setting the principles that guide compensation decision-making, establishing the +performance goals under our executive compensation plans and programs, and approving compensation for the +executive officers. The Committee is also responsible for overseeing performance and talent management, +diversity, equity and inclusion, work culture and employee development and retention. +We are focused on maintaining an executive compensation program that supports the long-term interests of the +Company’s shareowners. We align the interests of our executive officers with those of all shareowners by linking +a significant portion of compensation to Company performance and shareowner returns. The Company’s +programs are also designed to attract, retain, and motivate executives who make substantial contributions to the +Company’s performance by allowing them to share in the Company’s success. +Our significant efforts in 2023 included adopting an incentive compensation clawback policy applicable to +executive officers in the event of a Company financial restatement, developing and implementing an appropriate +executive compensation structure and performance goals in a challenging economic environment including +Company labor uncertainty, and updating the pay mix for executive officers through structural changes to the +annual incentive program to make this program more competitive. With the assistance of our independent +compensation consultant and taking into account recent stakeholder feedback and market developments, we +also reevaluated the performance metrics on which incentive compensation payouts would be based in order to +maximize long-term value. In addition, beginning with the 2024 performance period, the Committee has +returned to annual goal setting for annual incentive awards. +Also during 2023, the Committee continued to execute on its human capital oversight responsibilities, including +supporting succession planning efforts at the senior management level, overseeing progress towards the +Company’s diversity in management goals, and monitoring employee recruitment and retention efforts. +We have reviewed the Compensation Discussion and Analysis and discussed it with management. Based on our +review and discussions, we recommended to the Board of Directors that the Compensation Discussion and +Analysis be included in the 2024 Proxy Statement and incorporated by reference in the Annual Report on Form +10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission. +The following Compensation Discussion and Analysis describes the Committee’s principles, strategy and +programs regarding 2023 executive compensation. +The Compensation and Human Capital Committee +Christiana Smith Shi, Chair +Rodney Adkins +Russell Stokes +Kevin Warsh +32 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret instrument is a "trumpet". \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_36.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_36.txt new file mode 100644 index 0000000000000000000000000000000000000000..26ab11aafc3061ead1834b76fe7f714cb3e709ea --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_36.txt @@ -0,0 +1,41 @@ +Compensation Discussion and Analysis +UPS’s executive compensation principles, strategy and programs for 2023 are described below. This section +explains how and why the Committee made its 2023 compensation decisions for our executive officers, including +details regarding the following Named Executive Officers (“NEOs”): +Named Executive Officer Title +Carol Tomé Chief Executive Officer +Brian Newman Chief Financial Officer +Nando Cesarone President U.S. and UPS Airline +Kate Gutmann President International, Healthcare and Supply Chain Solutions +Bala Subramanian Chief Digital and Technology Officer +Executive Compensation Strategy +UPS’s executive compensation programs are designed to drive organizational performance by tying a significant +portion of pay to Company performance; attract, retain and motivate by competitively and fairly compensating +our executive officers; encourage long-term stock ownership and careers with UPS; and align the interests of our +executives to long-term value creation. +We believe it is appropriate to have a clear link between variable pay and operational and financial performance. +We seek to develop performance metrics aligned with the Company’s strategy and business model. Long-term +incentive awards vest over timeframes aligned with the delivery of long-term shareowner value. +Key Elements of UPS Executive Compensation +Total target direct compensation (generally, base salary and annual and long-term incentives, but excluding any +special awards) for our NEOs in 2023 consisted of the following key elements. + +33 +Total Target +Direct +Compensation +Base Salary + •Fixed cash compensation + •Designed to provide an appropriate level of financial certainty +Annual Incentive Awards + •Subject to achievement of key business objectives for the year + •Payout is “at risk” based on Company performance +Stock Option Awards + •Further aligns shareowner and employee interests + •Motivates toward sustained stock price increase + •Multi-year vesting provides retention incentive +Long-term Incentive Performance Awards + • Payout is subject to achievement of performance metrics over a three-year period + •Supports long-term strategy + •Motivates and rewards achievement of long-term goals + •Acts as a retention mechanism \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_37.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_37.txt new file mode 100644 index 0000000000000000000000000000000000000000..d2a4d9d3109fb100fd200a078175782d9e81803e --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_37.txt @@ -0,0 +1,50 @@ +Target Direct Compensation +A substantial majority of NEO total target direct compensation is “at risk” and subject to the achievement of +annual or long-term performance goals and/or continued employment with UPS. The charts below highlight the +elements of our CEO and an average of other NEOs’ target direct compensation for 2023. +Other Elements of Compensation + +Benefits Perquisites Retirement Programs +ü NEOs generally participate in +the same plans as other +employees. +ü Includes medical, dental and +disability plans. +ü See further details on page 41. +ü Limited in nature; we believe +benefits to the Company +outweigh the costs. +ü Includes financial planning and +executive health services that +facilitate the NEOs’ ability to +carry out responsibilities, +maximize working time and +minimize distractions. +ü Considered necessary or +appropriate to attract and +retain executive talent. +ü See further details on page 41. +ü NEOs and most non-union U.S. +employees participate in the +same qualified plans with the +same formulas. +ü Includes non-qualified and +qualified pension, retirement +savings and deferred +compensation plans. +ü See further details on page 41. +34 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +93% “at Risk” 86% “at Risk” +14% +7% 14% +16% +Base Salary +Annual +Performance-Based +Incentives +CEO Target Direct Compensation Other NEOs Target Direct Compensation +79% 70%Long-Term +Equity Incentives +The secret animal #3 is an "eagle". \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_38.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_38.txt new file mode 100644 index 0000000000000000000000000000000000000000..f8d5f18dca51b9f8e01ebf0fc7aaa85d3572ae1e --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_38.txt @@ -0,0 +1,46 @@ +Roles and Responsibilities +The Committee is responsible for setting the principles that guide compensation decision-making, establishing +performance goals under our executive compensation plans and programs, and approving compensation for the +executive officers. The Committee may engage the services of outside advisors and other consultants. In 2023, +the Committee retained FW Cook to act as its independent compensation advisor. FW Cook reported directly to +the Committee and provided no additional services to UPS. The following table summarizes the key roles and +responsibilities in the executive compensation decision-making process. +Participant and Roles +The Committee +• develops principles underpinning executive compensation +• sets performance goals upon which incentive payouts are based +• evaluates the CEO’s performance +• reviews the CEO’s performance assessment of other executive officers +• reviews and approves incentive and other compensation of the executive officers +• reviews and approves the design of other benefit plans for executive officers +• oversees the risk evaluation associated with our compensation strategy and programs +• considers whether to engage any compensation consultant, and evaluates their independence +• reviews and discusses the Compensation Discussion and Analysis with management +• recommends to the board the inclusion of the Compensation Discussion and Analysis in the Proxy Statement +• approves the inclusion of the Committee’s report on executive compensation in the Proxy Statement +Independent Members of the Board of Directors +• review the Committee’s assessment of the CEO’s performance +• complete a separate evaluation of the CEO’s performance +• approve the Compensation Discussion and Analysis for inclusion in the Proxy Statement +Independent Compensation Consultant +• serves as a resource for market data on pay practices and trends +• provides independent advice to the Committee +• provides competitive analysis and advice related to outside director compensation +• reviews the Compensation Discussion and Analysis +• conducts an annual risk assessment of the Company’s compensation programs +Executive Officers +• the CEO makes compensation recommendations to the Committee for the other executive officers +• the CEO and CFO recommend performance goals under incentive compensation plans and provide an +assessment as to whether performance goals were achieved +Compensation Consultant Independence +In November 2023, the Committee reviewed FW Cook’s independence and evaluated any potential conflicts of +interest. The Committee evaluated all relevant factors, including: (1) other services provided to UPS by FW Cook +(if any); (2) fees paid by UPS as a percentage of FW Cook’s total revenue; (3) policies or procedures maintained +by FW Cook that are designed to prevent a conflict of interest; (4) any business or personal relationships +between the individual consultants involved in the engagement and a member of the Committee; (5) any +Company stock owned by the individual consultants involved in the engagement; and (6) any business or +personal relationships between UPS executive officers and FW Cook or the individual consultants involved in the +engagement. After evaluating these factors, the Committee concluded that FW Cook was independent, and that +the engagement of FW Cook did not raise any conflict of interest. + +35 \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_39.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_39.txt new file mode 100644 index 0000000000000000000000000000000000000000..58d20bd9a2383de1a40ccfbc5bc0ea16b8eea5e8 --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_39.txt @@ -0,0 +1,44 @@ +Peer Group and Market Data Utilization +In determining compensation targets and payouts, the Committee evaluates, among other things, pay practices +and compensation levels at a peer group of companies. In addition to peer group analyses, the Committee +considers other market data, including general compensation survey data from comparably sized companies. +Compensation is not targeted to a particular percentile within that peer group or otherwise. +With assistance from its independent compensation consultant, the Committee evaluates the peer group +annually to determine if the companies included in the group are the most appropriate comparators for +measuring the success of our executives in delivering shareowner value. The Committee seeks to select a +compensation peer group that is aligned with the Company’s business strategy and focus. Quantitative +considerations consist of historical revenue, operating income and free cash flow, as well as total shareholder +return. Other more general considerations include market capitalization, percentage of foreign sales, capital +intensity, operating margins and size of employee population. +Following a comprehensive reevaluation and revisions to the peer group in 2021, the compensation peer group +consists of the following: +AT&T, Inc. FedEx Corporation McDonald’s Corp. +The Boeing Company The Home Depot, Inc. PepsiCo, Inc. +Caterpillar Inc. Intel Corporation The Procter & Gamble Company +Cisco Systems, Inc. Johnson & Johnson Target Corp. +Comcast Corporation Lockheed Martin Corporation Walmart, Inc. +Deere & Company Lowe’s Companies, Inc. +Internal Compensation Comparisons and Annual Performance Reviews +The Committee also generally considers the compensation differentials between executive officers and other UPS +positions, and the additional responsibilities of the CEO compared to other executive officers. Internal +comparisons help ensure that executive officer compensation is reasonable when compared to that of +direct reports. +The CEO assesses the performance of all other executive officers each year and provides feedback to the +Committee. In addition, the Committee evaluates the CEO’s performance on an annual basis. The Committee +Chair discusses the results of this evaluation with the full board (other than the CEO) in an executive session. As +part of this evaluation, the board considers the CEO’s strategic vision and leadership, execution of UPS’s +business strategy, and achievement of business goals. Other factors include the CEO’s ability to make long-term +decisions that create a competitive advantage, and overall effectiveness as a leader. +Base Salary +Base salaries provide our NEOs with a fixed level of cash compensation and are designed to provide an +appropriate level of financial certainty. The Committee considers several factors in determining NEOs’ annual +base salaries, including Company and individual performance, scope of responsibility, leadership, market data +and internal compensation comparisons. Taking all of those factors into account, in March 2023, the Committee +determined not to increase the CEO’s base salary, but to make market-based adjustments to her incentive +compensation targets as discussed below. The Committee approved increases of between 3.0% and 4.0% for +the other NEOs. Additionally, as a component of the pay mix redesign approved in November 2022 and +discussed below under “Management Incentive Program - Annual Awards Overview”, further base salary +adjustments for each NEO of less than 3.5% were made effective beginning in January 2023. +36 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_4.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_4.txt new file mode 100644 index 0000000000000000000000000000000000000000..99e909894086e38e9ce744126531dd432de64690 --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_4.txt @@ -0,0 +1,18 @@ +LOOKING AHEAD +After a difficult year, we exited 2023 with some momentum, but momentum is not enough. We are making bold moves +to right size our company for the future under an initiative we call “Fit to Serve.” We are exploring strategic alternatives +for our truckload brokerage business known as Coyote. We are leaning into growth in the most attractive parts of the +market and are continuing to drive efficiency across our integrated network. We expect market conditions to settle +down in 2024 and that, coupled with our initiatives, gives us confidence that we will reverse the negative trends we +experienced in 2023. +To wrap up, I want to encourage all shareowners to vote your shares at our Annual Meeting in May. This is your +opportunity to share your views with us. We listen and take your feedback into account as we seek to grow our +business, further improve governance and create long-term shareowner value. As we approach the Annual Meeting, I +encourage you to contact us with any questions or feedback at 404-828-6059. +I’ll leave you with a quote from our founder, Jim Casey, “Our horizon is as distant as our mind’ s eye wishes it to be.” +UPS is stronger than ever. We are writing the next chapter of the UPS story and we believe our best days are ahead +of us. +We thank you for your support. +Carol B. Tomé +Chief Executive Officer +*See reconciliation of Non-GAAP financial measures on page A1. \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_40.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_40.txt new file mode 100644 index 0000000000000000000000000000000000000000..0e6407fc6cbd2790a6afda74b1b7aac13b816a82 --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_40.txt @@ -0,0 +1,50 @@ +Management Incentive Program - Annual Awards Overview +The UPS Management Incentive Program (“MIP”) motivates management by aligning pay with annual Company +performance. This is accomplished by linking payouts to the achievement of pre-established metrics and +individual performance. +Annual MIP award opportunities are provided as a percentage of base salary. MIP awards are considered fully at +risk based on Company performance and subject to a maximum payout of the lesser of $10 million or 200% of +target for each NEO. +MIP payouts are determined by the Committee taking into consideration: +• actual performance compared to MIP targets (described below); +• the MIP payout as a percent of target to non-executive officer MIP participants; and +• the overall business environment and economic trends. +Based on an evaluation of our incentive compensation plan structure with the assistance of FW Cook, in +November 2022, the Committee approved changes to the overall pay mix for MIP participants, including the +NEOs (“pay mix redesign”). These changes resulted in better alignment of annual incentive pay with market +practices, improved the competitiveness of base salaries and simplified compensation design. +Changes included the following, all of which were effective beginning with the 2023 MIP award: +• MIP awards are now paid in cash, unless a participant elects to receive the award in shares; previously MIP +awards were generally paid two-thirds in restricted performance units (“RPUs”) and one-third in cash; +• Ownership incentive portions of MIP awards, which were tied to an individual’s UPS equity ownership, were +discontinued, with a generally equivalent value incorporated into base salary adjustments; and +• MIP award targets as a percentage of base salary were reduced from 130% to 115% for NEOs (other than +the CEO) to account for increases in base salaries; the CEO’s award target was maintained at 200% of base +salary following an evaluation of market-competitive incentives. +2023 MIP Awards +After taking into account the challenging economic environment including Company labor uncertainty, as well as +the effectiveness of similar approaches in recent years, in the first quarter of 2023 the Committee determined it +remained appropriate to bifurcate the performance period for the 2023 MIP award into two six-month +performance periods (January through June 2023 and July through December 2023), with each performance +period accounting for 50% of the overall award. +Beginning with the 2024 performance period, the Committee has returned to full-year goal setting for MIP +awards. The Committee approved the following financial performance metrics for the NEOs’ 2023 MIP awards +as follows: +• Revenue (weighted 20%), which was considered important to generating profits and maintaining our long- +term competitive positioning and viability through 2023. +• Adjusted Operating Profit (weighted 40%), which is determined by reference to our publicly reported +adjusted operating profit for 2023. This metric is directly impacted by our effectiveness in achieving our +targets in other key performance elements, including volume and revenue growth and operating leverage. +• Adjusted Return on Invested Capital (“ROIC”) (weighted 40%), which is calculated as the trailing twelve +months of adjusted operating income divided by the average of current assets, current liabilities, goodwill, +intangible assets, net property, plant and equipment, other assets, and operating lease right-of-use assets. +We consider ROIC to be a useful measure for evaluating the effectiveness and efficiency of our long-term +capital investments. ROIC is calculated by reference to our publicly reported adjusted operating profit. +The Committee approved financial performance goals after discussing with management and its independent +compensation consultant expected financial performance and the other risks described above. The goals for the +first performance period were set in in the first quarter of 2023 and the goals for the second performance period +were set in the third quarter 2023, in each case without a threshold and with a maximum payout of the lesser of +$10 million or 200% of target. + +37 +The secret landmark is the "Taj Mahal". \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_41.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_41.txt new file mode 100644 index 0000000000000000000000000000000000000000..fadd0291a6c8df2e922f3ead2e92e7a71bb843a2 --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_41.txt @@ -0,0 +1,89 @@ +The goals approved by the Committee, and the performance results, were as follows (dollars in millions): +2023 MIP Financial Performance Metrics +First + Half +2023 + Goal +First + Half + 2023 + Actual +Second + Half + 2023 + Goal +Second + Half +2023 + Actual +Revenue $47,247 $44,988 $48,123 $46,044 +Adjusted Operating Profit(1) $5,918 $5,452 $5,473 $4,418 +Adjusted ROIC(1) 28.6% 27.4% 24.7% 21.9% +(1) Non-GAAP financial measures. See footnote on page 40. +The Committee maintains discretion to adjust awards earned under the MIP up (but not above the maximum +amount for each NEO) or down based on its qualitative assessment of each NEO’s individual performance and +other business factors. The Committee approved the following MIP award payouts for each NEO. +Name +Incentive +Target +(% Base Salary) +Incentive +Target Value +($) +Payout Factor +(%) +Total 2023 +MIP Award +Payout +($) +Carol Tomé 200 3,019,425 50% 1,509,713 +Brian Newman 115 963,384 50% 481,692 +Nando Cesarone 115 975,674 50% 487,837 +Kate Gutmann 115 975,674 50% 487,837 +Bala Subramanian 115 889,133 50% 444,567 +Long-Term Incentive Awards +Our two long-term incentive programs, the Long-Term Incentive Performance (“LTIP”) program and the Stock +Option program, provide participants with equity-based incentives that reward performance over a multi-year +period and serve as a retention mechanism. Overlapping LTIP performance cycles incentivize sustained financial +performance. The Stock Option program rewards stock price appreciation, which is directly linked to shareowner +returns. A summary of these two programs follows: +Program +Performance Measures and/or +Value Proposition for 2023 +Awards +Payment Form and Program +Type Program Objectives +LTIP Adjusted Earnings Per Share Growth +Adjusted Free Cash Flow +Relative Total Shareowner Return as a +modifier +Value increases or decreases with +stock price +If earned, RPUs are settled in stock +If earned, RPUs generally vest at +the end of the three-year +performance period +Supports long-term +operating plan and +business strategy +Significant link to +shareowner interests +Stock Option Value recognized only if stock price +appreciates +Stock options generally vest 20% +per year over five years and have +a ten-year term +Significant link to +shareowner interests +Enhance stock +ownership and +shareowner alignment +Total Long-Term Equity Incentive Award Target Values +Long-term equity incentive award target values are determined based on internal pay comparison considerations +and market data regarding total compensation for comparable positions at similarly situated companies. +Differences in the target award values are based on levels of responsibility among the NEOs. In connection with +the Committee’s March 2023 evaluation of CEO target total direct compensation as described above, the +Committee determined it was appropriate to increase the CEO’s LTIP target opportunity from 835% to 1,035%. +38 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_42.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_42.txt new file mode 100644 index 0000000000000000000000000000000000000000..1c961fa4075010763806177a7830b3457204c805 --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_42.txt @@ -0,0 +1,60 @@ +The LTIP target opportunity and Stock Option award value granted to eligible NEOs in 2023, expressed as a +percentage of base salary, is shown below. +Name +LTIP Target +RPU Value +(% Base Salary) +Option +Value +(% Base Salary) +Total +Value +(% Base Salary) +Carol Tomé 1,035 90 1,125 +Brian Newman 550 50 600 +Nando Cesarone 450 50 500 +Kate Gutmann 450 50 500 +Bala Subramanian 450 50 500 +LTIP Program Overview +The LTIP program strengthens the performance-based component of executive compensation, promotes longer- +term focus, enhances retention of key talent, and aligns the interests of shareowners with the incentive +compensation opportunity for executives. Approximately 500 members of our senior management team, +including the NEOs, participate in this program. The program combines internal and external relative business +performance measures with the goal of motivating and rewarding management for operational and financial +success, while helping to align with shareowner interests and returns. +Participants receive a target award of RPUs at the beginning of the three-year performance period. The number +of RPUs that NEOs can earn is shown in the “Grants of Plan-Based Awards” table. The actual number of RPUs +that NEOs earn is determined following the completion of the performance period and is based on achievement +of the performance measures described below. Dividends payable on shares underlying participants’ RPUs are +allocated in the form of dividend equivalent units (“DEUs”). DEUs are subject to the same conditions as the +underlying award. Awards that vest are settled in shares of class A common stock. Special vesting rules apply to +terminations subject to the UPS Key Employee Severance Plan or terminations by reason of death, disability or +retirement during the performance period. These special vesting rules are discussed under “Potential Payments +Upon Termination or Change in Control.” +The performance measures selected by the Committee for the 2023 LTIP awards were adjusted earnings per +share and adjusted free cash flow, each to be evaluated independently and weighted equally in determining the +final payout percentage. The payout percentage for the LTIP award will be subject to modification based on the +Company’s relative total shareowner return (“RTSR”) as a percentile rank relative to the total shareholder return +of the companies listed on the Standard & Poor’s 500 Composite Index (the “Index”) during that same period. +The maximum LTIP award that can be earned is 220% of target. A description of each performance measure and +the operation of the RTSR modifier follows. +Adjusted Earnings Per Share1 +Adjusted earnings per share measures our success in increasing profitability. At the beginning of the January 1, +2023 performance period, the Committee established adjusted earnings per share targets for the three-year +performance period taking into account the challenging economic environment, including Company labor +uncertainty, that added complexity and uncertainty to long-term forecasting at the time. Adjusted earnings per +share is determined by dividing the Company’s adjusted net income available to common shareowners by the +diluted weighted average shares outstanding during the performance period. For this purpose, adjusted net +income is determined by reference to our publicly reported adjusted net income. The adjusted earnings per +share target for 2023 is the projected adjusted earnings per share for that year. The adjusted earnings per share +growth target for the remainder of the performance period is the projected average annual adjusted earnings per +share growth during each of the remaining years in the performance period. The actual adjusted earnings per +share growth for each applicable year will be compared to the target and assigned a payout percentage; the +average of the three payout percentages will be used to calculate the final payout percentage under this metric. +Following the completion of the applicable performance period, the Committee will certify (i) the actual adjusted +earnings per share for 2023; (ii) the actual adjusted earnings per share growth for each of the remaining years +in the performance period; (iii) the actual adjusted earnings per share growth for the applicable portion of the +performance period as compared to the target; and (iv) the final payout percentage for this metric. + +39 +The secret food is a "sausage". \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_43.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_43.txt new file mode 100644 index 0000000000000000000000000000000000000000..e274f02d709e559b9939e5b6a741d7a738c0913d --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_43.txt @@ -0,0 +1,68 @@ +Adjusted Free Cash Flow1 +Adjusted free cash flow measures our ability to generate cash after accounting for capital expenditures. Adjusted +free cash flow is determined by reducing the Company’s cash flow from operations by capital expenditures and +proceeds from disposals of fixed assets, and adjusting for net changes in finance receivables, other investing +activities and discretionary pension contributions. The adjusted free cash flow target is the projected aggregate +adjusted free cash flow generated during the performance period. Following the completion of the applicable +performance period, the Committee will certify (i) the actual adjusted free cash flow for the performance period; +(ii) the actual adjusted free cash flow for the performance period as compared to the target; and (iii) the final +payout percentage for this metric. +(1) Non-GAAP financial measures. We believe that these non-GAAP measures are appropriate for the determination of our incentive +compensation award results because they exclude items that may not be indicative of, or are unrelated to, our underlying operations +and provide a useful baseline for analyzing trends in our underlying business. Non-GAAP financial measures should be considered in +addition to, and not as an alternative for, our reported results prepared in accordance with GAAP. Our non-GAAP financial +information does not represent a comprehensive basis of accounting. Therefore, our non-GAAP financial information may not be +comparable to similarly titled measures reported by other companies. +Relative Total Shareowner Return +RTSR is the total return on an investment in UPS +stock (stock price appreciation plus dividends). Total +return is compared with the total return on an +investment in the companies in the Index at the +beginning of the performance period. Following the +completion of the performance period, the Committee +will certify the Company’s RTSR and the payout +modifier for that performance period, if any, +as follows: +RTSR Percentile Rank +Relative to Index +Payout +Modifier +Above 75th percentile +20% +Between 25th and 75th percentile None +Below 25th percentile -20% +2021 LTIP Award Payout +The 2021 LTIP award payout was determined following the completion of the Company’s 2023 fiscal year. The +performance metrics for the 2021 LTIP award were adjusted earnings per share and adjusted free cash flow, +each evaluated independently and equally weighted. The final payout was subject to modification based on +RTSR. Performance targets and actual results for the completed performance period for the 2021 LTIP award are +set out below. RPUs earned under the 2021 LTIP are considered vested and are settled in shares of class A +common stock. +2021 LTIP Metrics +Adjusted Earnings Per Share Adjusted Free Cash Flow RTSR +Year Threshold Target Maximum Actual Threshold Target Maximum Actual Actual +2021 +3.4% +8.4% +13.6% +47.4% +$17,369 $24,813 $32,257 $25,181 27th2022 9.0% 6.7% +2023 13.2% (32.1)% +2021 LTIP Final Results +Performance +Period +Adjusted EPS +Payout +Adjusted FCF +Payout +Performance +Payout (Avg) RTSR Modifier Final Payout +2021-2023 91% 104% 98% —% 98% +Stock Option Program and 2023 Stock Option Awards +Stock option awards create a direct link between Company performance and shareowner value, as well as +provide retention value. Stock option awards generally vest 20% per year over five years and expire ten years +from the date of grant. Beyond vesting periods, we do not impose additional holding period requirements. Stock +option awards generally require continued employment during the vesting period. Unvested stock options vest +automatically upon termination of employment due to death, disability or retirement. Stock option awards are +40 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_44.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_44.txt new file mode 100644 index 0000000000000000000000000000000000000000..1e5d673944e9cac859f41959da7ffd019f2c1a5b --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_44.txt @@ -0,0 +1,55 @@ +also subject to the UPS Key Employee Severance Plan as discussed under “Potential Payments Upon Termination +or Change in Control”. Grants do not include DEUs or reload features. The number of stock options granted to +the NEOs in 2023 is shown in the “Grants of Plan-Based Awards” table. +Employment Transition Awards, Retention Arrangements and Recognition Awards +Generally, we do not pay discretionary bonuses in cash or stock, or make other discretionary payments, to our +executives. In recent periods, however, to attract and retain senior executive talent, the Committee approved +certain limited payments to external hires to the Company’s Executive Leadership Team. A portion of these +payments was made to compensate the executives for compensation forfeited at their prior employers and +transition them into our incentive programs. Any of these payments impacting 2023 compensation are described +below. In addition, in connection with the hiring of Carol Tomé as CEO in 2020, the Committee provided certain +incentives to various executive officers in order to help ensure the retention of their services through a +transition period. +Bala Subramanian joined the Company in July 2022 as Chief Digital and Technology Officer. The Committee, +working with FW Cook and considering market compensation data and internal pay equity factors, approved his +compensation package described below. Under the terms of his employment offer letter, Bala is entitled to: (i) a +RSU grant valued at $3,000,000, vesting 50% in July 2023 and 50% in July 2024; (ii) cash transition payments +of $250,000 in each of August 2022, January 2023, July 2023 and January 2024; (iii) a RPU grant valued at +$1,000,000, vesting in December 2023, with the actual payout determined based on the Company’s +performance under its 2021 LTIP program; and (iv) a prorated 2022 LTIP award. Payments are subject to his +continued employment through the applicable vesting or payment dates, or termination without cause. +Further, in 2021 the Committee granted Kate Gutmann a special award valued at $350,000 in recognition of her +extraordinary contributions and performance during 2020. This award consisted of $175,000 in RSUs which vest +as follows: 25 percent on March 25, 2022; 25 percent on March 25, 2023; and 50 percent on March 25, 2024; +and a stock option award with a grant date fair value of $175,000 which vests 20% per year over five years +beginning on March 25, 2022, provided generally that she remains an employee through the applicable +vesting dates. +In connection with our 2020 CEO transition, we entered into retention arrangements with each of Nando +Cesarone and Kate Gutmann. The Committee initially intended that these agreements contain both performance +and time vesting components, and that the performance components be different than the metrics under our +MIP and LTIP programs. Due to the uncertainty created by the coronavirus pandemic and the importance of the +retention agreements to the Company, the Committee ultimately determined that the awards would only be time +based. Nando and Kate each received RSUs valued at $3.0 million which vested as follows: 25% on +May 13, 2021, 25% on May 13, 2022 and 50% on May 13, 2023. These agreements contain customary non- +competition, non-solicitation and non-disclosure covenants in favor of the Company. +Benefits and Perquisites +The benefits and perquisites provided to our NEOs are not a material part of executive compensation and are +largely limited to those offered to our employees generally, or that we otherwise believe are necessary or +appropriate to attract and retain executive talent. +We believe certain perquisites help facilitate our NEOs’ ability to carry out their responsibilities, maximize +working time and minimize distractions. Additional information on these benefits can be found in the following +program descriptions. +UPS 401(k) Savings Plan +The UPS 401(k) Savings Plan is open to all U.S.-based employees who are not subject to a collective bargaining +agreement and who are not eligible to participate in another savings plan sponsored by UPS or one of its +subsidiaries. We generally match 50% of up to 6% of eligible pay contributed to the UPS 401(k) Savings Plan for +eligible employees. The match is paid quarterly according to the participant's pre-tax investment elections on file +with the record keeper. We also generally provide an annual contribution based on years of service and +expressed as a percentage of eligible compensation (5% for 0-4 years, 6% for 5-9 years, 7% for 10-14 years +and 8% for 15 or more years). For employees who were hired prior to 2008 and are participants in the Final +Average Compensation (FAC) formula of the UPS Retirement Plan, we generally make an annual transition +contribution of 5% of eligible compensation for plan years 2023-2027, which will increase to 7% beginning +in 2028. + +41 +The secret office supply is a "stapler". \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_45.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_45.txt new file mode 100644 index 0000000000000000000000000000000000000000..65a60de81f0daeea29d05ae072806b2e7579914c --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_45.txt @@ -0,0 +1,47 @@ +Qualified and Non-Qualified Pension Plans +Certain executive officers are eligible to participate in our qualified retirement program, the UPS Retirement +Plan. Benefits payable under the plan are subject to the maximum compensation limits and the annual benefit +limits for a tax-qualified defined benefit plan as established by the Internal Revenue Service. Amounts exceeding +these limits are paid pursuant to the UPS Excess Coordinating Benefit Plan, which is a non-qualified restoration +plan designed to replace the benefits limited under the tax-qualified plan. Without the Excess Coordinating +Benefit Plan, the executive officers would receive a lower benefit as a percent of final average earnings than the +benefit received by other participants in the UPS Retirement Plan. In accordance with the terms of the Excess +Coordinating Benefit Plan, following a participant’s retirement, the Company pays an amount equal to the Social +Security and Medicare taxes due on the present value of the benefits provided under the plan. +Financial Planning Services +Our executive officers are eligible for a financial services benefit. The Company reimburses fees from financial +and tax service providers up to $15,000 per year, including the cost of personal excess liability +insurance coverage. +Executive Health Services +Our executive officers are eligible for certain executive health services benefits, including comprehensive +physical examinations. UPS’s business continuity is best facilitated by avoiding any prolonged or unexpected +absences by members of its senior management team. +Other Compensation and Governance Policies +Stock Ownership Guidelines +CEO = 8x annual salary +Other Executive Officers = 5x annual salary +Directors = 5x annual retainer +Our stock ownership guidelines apply to executive officers and members of the board. Shares of class A common +stock (excluding any pledged shares), deferred units and vested and unvested RSUs and RPUs awarded under +our equity incentive plans are considered owned for purposes of calculating ownership. Executive officers and +directors are expected to reach target ownership within five years of the date that the executive officer or +director became subject to the guideline. +As of December 31, 2023, all of the NEOs who have been subject to the guidelines for at least five years +exceeded their target stock ownership. In addition, all non-employee directors who have been subject to the +guidelines for at least five years exceeded their target stock ownership. RSUs are required to be held by non- +employee directors until separation from the board. +Hedging and Pledging Policies +We prohibit our executive officers and directors from hedging their ownership in UPS stock. Specifically, they are +prohibited from purchasing or selling derivative securities relating to UPS stock and from purchasing financial +instruments that are designed to hedge or offset any decrease in the market value of UPS securities. +Additionally, we prohibit our directors and executive officers from entering into pledges of UPS securities, +including using UPS securities as collateral for a loan and holding UPS securities in margin accounts. +Furthermore, our employees, officers and directors are prohibited from engaging in short sales of UPS stock. +Incentive-Based Compensation Clawback Policy +We have adopted an incentive-based compensation clawback policy that complies with NYSE requirements. This +policy provides for the recovery of the amount of erroneously awarded incentive-based compensation received +by executive officers when the Company is required to prepare an accounting restatement, subject to limited +exceptions in accordance with the NYSE requirements. +42 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_46.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_46.txt new file mode 100644 index 0000000000000000000000000000000000000000..d875e3d36ca8d5e244b1aea016e617c4aadf13fd --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_46.txt @@ -0,0 +1,56 @@ +Employment and Severance Arrangements; Change in Control Payments +We do not enter into agreements providing for the continuation of employment, or separate change in control +agreements with any of our executive officers, including our NEOs, or other U.S.-based non-union employees. +However, in recent periods, to attract and retain senior executive talent and in furtherance of the board’s +succession planning efforts, we have entered into various employment offer letters, transition agreements, +retention arrangements and non-compete agreements in favor of UPS. These arrangements may provide for +compensation to an executive, but do not guarantee an employment term; employment is on an at-will basis. +Some of the agreements were designed to compensate the individuals for compensation forfeited at their prior +employers, to transition them into our incentive programs or to provide consideration for their agreement not to +compete with UPS following their potential separation. In addition, retention arrangements are intended to +incentivize those individuals to maintain their employment with UPS. To the extent any agreements entered into +with any of the NEOs contain ongoing obligations of the Company, those agreements are described below. +Subramanian Employment Offer Letter +In connection with his appointment as Chief Digital and Technology Officer, on May 24, 2022, the Company +entered into an employment offer letter with Bala Subramanian providing for: (i) an annual base salary of +$725,000 (subject to future increase); (ii) a MIP award target for 2022 of 130% of base salary; (iii) an LTIP +program award target of 450% of base salary (his final 2022 LTIP award payout will be prorated based on his +July 2022 start date); (iv) a stock option grant target of 50% of base salary (commencing in 2023); (v) an initial +grant of RSUs valued at $3,000,000, which generally vests 50% in July 2023 and 50% in July 2024; (vi) cash +transition payments of $250,000 in each of August 2022, January 2023, July 2023 and January 2024; and (vii) +an initial RPU grant valued at $1,000,000, generally vesting in December 2023, with the final number of RPUs +subject to performance under the 2021 LTIP award. Payments are subject to his continued employment through +the applicable vesting or payment dates, or termination without cause. Certain of these amounts are subject to +repayment on a prorated basis if he is terminated for cause within 36 months following his July 2022 start date. +Protective Covenant Agreements +Each of our NEOs have entered into protective covenant agreements with the Company, which protect UPS’s +confidential information and include non-competition and non-solicitation covenants in favor of UPS. In the event +that either Carol or Brian is terminated without cause, the Company is obligated to make separation payments +equal to two years’ salary if it elects to enforce the post-termination non-compete covenants. +Key Employee Severance Plan +The UPS Key Employee Severance Plan (the “Plan”) provides for severance compensation and benefits upon +certain terminations of employment of key employees, including the NEOs. The severance protections under the +Plan replace cash severance benefits (if any) to which a participating employee would have otherwise been +entitled under their protective covenant agreements. +The Plan in general provides that if the Company terminates a participant’s employment other than due to +“Cause,” “Disability Termination,” or death (a “Qualifying Termination”), the Company will pay: (i) an amount in +cash equal to a pro-rata portion of the individual’s annual performance incentive award under the MIP that would +have been earned for the year of termination, based on actual performance for the full performance period, with +the pro-rata portion calculated based on the number of months during which the individual was employed by the +Company during the applicable year; (ii) an amount in cash equal to one times (or, for the CEO, two times) the +sum of the participant’s annual base salary plus the participant’s target MIP performance award in effect as of +the termination date; (iii) an amount in cash equal to the portion of the participant’s monthly Consolidated +Omnibus Budget Reconciliation Act of 1985 (“COBRA”) premium for the participant and the participant’s +dependents to the extent it exceeds the premiums paid by the participant for such coverage immediately prior to +termination times the number of months in the participant’s applicable COBRA period; and (iv) career counseling +services up to $20,000 (or, for the CEO, up to $30,000). +In addition, with respect to options held by retirement eligible employees, and RPUs granted under the MIP or +LTIP, in each case granted on or after the effective date of the Plan, a participant who experiences a Qualifying +Termination will generally be entitled to the same treatment that would apply in the event of “retirement” under +the terms of such awards. With respect to stock options granted to a participant on or after the effective date of +the Plan, such stock options (to the extent the participant is not retirement eligible and that are vested as of the +date of the Qualifying Termination) will remain exercisable until the earlier of the first anniversary of the +termination date and the original expiration date of the stock options. + +43 +The secret object #4 is a "bed". \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_47.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_47.txt new file mode 100644 index 0000000000000000000000000000000000000000..7f4fdd347961420a0b4628c00ee1fe2a7eccfb61 --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_47.txt @@ -0,0 +1,23 @@ +Change in Control +All outstanding equity awards that are continued or assumed by a successor entity in connection with a change +in control require a “double trigger” for vesting to accelerate; that is, they also require a qualifying termination +of employment prior to any acceleration of vesting. +Equity Grant Practices +Grants of awards to executive officers under our equity incentive programs are approved by the Committee. +Grants are typically made at preestablished Committee meeting dates or in connection with a new hire or +promotion, and irrespective of the timing of any financial announcement. Stock options have an exercise price +equal to the NYSE closing market price on the date of grant. +Consideration of Previous “Say on Pay” Voting Results +Our shareowners vote annually, on an advisory basis, to approve the compensation of our NEOs as set out in the +Compensation Discussion and Analysis section and in the compensation tables and accompanying narrative +disclosure in the Proxy Statement. See “Proposal 2 – Advisory Vote to Approve Named Executive Officer +Compensation.” In the most recent advisory vote to approve NEO compensation, taken at the 2023 Annual +Meeting of Shareowners, nearly 92% of votes cast approved our NEO compensation. +The Committee carefully considered the results of this vote as well as many other factors in determining the +structure and operation of our executive compensation programs. In addition, we regularly engage with our +stakeholders, including on executive compensation matters. We use the results of these engagements to inform +board and Committee discussions on our executive compensation policies and programs. +44 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret vegetable is an "onion". \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_48.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_48.txt new file mode 100644 index 0000000000000000000000000000000000000000..f8c52c808fd9688898ff20cdec5e06c44fd5efa4 --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_48.txt @@ -0,0 +1,93 @@ +2023 Summary Compensation Table +The following table sets forth the compensation of our NEOs. +Name and +Principal Position Year +Salary +($)(1) +Bonus +($)(2) +Stock +Awards +($)(3) +Option +Awards +($)(4) +Non-Equity +Incentive Plan +Compensation +($)(5) +Change in +Pension +Value and +Nonqualified +Deferred +Compensation +Earnings +($)(6) +All Other +Compensation +($)(7) +Total +($) +Carol Tomé +Chief Executive +Officer +2023 1,509,713 — 18,916,192 1,358,762 1,509,713 — 95,671 23,390,051 +2022 1,466,250 — 15,046,968 1,228,547 1,035,932 — 187,504 18,965,201 +2021 1,336,251 — 23,670,426 1,125,023 1,397,139 — 92,054 27,620,893 +Brian Newman +Chief Financial +Officer +2023 831,626 — 5,551,095 406,692 481,692 — 70,965 7,342,070 +2022 784,377 — 5,563,543 382,755 364,363 — 94,203 7,189,241 +2021 760,764 — 10,934,230 373,401 3,128,793 — 56,690 15,253,878 +Nando Cesarone +President U.S. and +UPS Airline +2023 840,254 — 4,686,065 407,924 487,837 — 99,161 6,521,241 +2022 768,042 — 4,348,893 351,117 364,278 — 107,812 5,940,142 +2021 683,361 — 7,218,244 313,487 475,914 — 98,089 8,789,095 +Kate Gutmann +President +International, +Healthcare and +Supply Chain +Solutions +2023 840,254 — 4,686,065 407,924 487,837 3,786,483 152,958 10,361,521 +2022 781,197 — 4,674,444 377,426 364,278 — 20,676 6,218,021 +2021 745,803 — 6,659,398 390,681 511,579 48,547 19,690 8,375,698 +Bala Subramanian +Chief Digital and +Technology Officer +2023 766,622 500,000 4,139,164 373,540 444,566 — 76,370 6,300,262 +2022 330,853 250,000 6,928,392 — — — 932 7,510,177 +(1) Represents the salary earned during the portion of the year that the executive was employed. +(2) See “Employment and Severance Arrangements; Change in Control Payments” in the Compensation Discussion and Analysis for a +description of cash transition payments made in connection with Bala Subramanian’s hiring. +(3) Represents the aggregate grant date fair value for stock awards computed in accordance with FASB ASC Topic 718. These awards +include LTIP RPUs, MIP RPUs, and the awards described above under “Employment Transition Awards, Retention Arrangements and +Recognition Awards.” Information about the assumptions used to value these awards can be found in Note 13 “Stock-Based +Compensation” in our 2023 Annual Report on Form 10-K. The amounts reported for these awards may not represent the amounts +that the individuals will actually receive. The amounts received, if any, ultimately will depend on Company performance and the +change in our stock price over time. An overview of the features of these awards can be found in the “Compensation Discussion +and Analysis.” +In accordance with SEC rules, we also are required to disclose the grant date fair value for awards with performance conditions +assuming maximum performance. The grant date fair value for the 2023 LTIP RPU awards, assuming maximum performance, is as +follows: Tomé — $37,057,333; Newman — $10,608,930; Cesarone — $8,706,275; Gutmann — $8,706,275; and Subramanian - +$7,972,319. +(4) Represents the aggregate grant date fair value for option awards granted in the applicable year, computed in accordance with FASB +ASC Topic 718. The assumptions used to value these awards can be found in Note 13 “Stock-Based Compensation” in our 2023 +Annual Report on Form 10-K. The amounts reported for these awards may not represent the amounts that the individuals will +actually receive. The amounts received, if any, ultimately will depend on the change in our stock price over time. An overview of the +features of these awards can be found in the “Compensation Discussion and Analysis” section. +(5) Represents the cash portion of the MIP award. Beginning with the 2023 MIP award, the entire MIP award is payable in cash. Also, for +Brian Newman in 2021, represents the cash portion of the performance-based cash award granted under his employment +offer letter. +(6) Represents an estimate of the annual increase in the actuarial present value of the NEO’s accrued benefit under our retirement plans +for the applicable year, assuming retirement at age 60 (or current age, if later). The actuarial present value of Kate Gutmann’s +accrued benefit under our retirement plans increased by $3,786,483 between the measurement date used for 2022 and the +measurement date used for 2023. See “Executive Compensation — 2023 Pension Benefits” for additional information, including +assumptions used in this calculation. The change in pension value can be impacted by a number of factors, including additional +credited service, changes in amounts of compensation covered by the benefit formula, plan amendments and assumption changes. + +45 \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_49.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_49.txt new file mode 100644 index 0000000000000000000000000000000000000000..a2dedf5f6c062163996534c987886658d804651e --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_49.txt @@ -0,0 +1,42 @@ +(7) All other compensation consisted of the following: +Name +401(k) Plan +Retirement +Contributions(a) +($) +Restoration +Savings Plan +Contributions(b) +($) +401(k) +Plan +Match +($) +Life +Insurance +Premiums +($) +Financial +Planning +Services +($) +Healthcare +Benefits +($) +Total +($) +Carol Tomé 16,500 24,627 9,900 22,246 15,000 7,398 95,671 +Brian Newman 16,500 18,134 9,900 4,033 15,000 7,398 70,965 +Nando Cesarone 26,400 38,318 9,900 2,181 14,964 7,398 99,161 +Kate Gutmann 26,400 99,555 9,900 4,078 5,627 7,398 152,958 +Bala Subramanian 16,500 34,930 9,900 1,978 5,664 7,398 76,370 +(a) Includes retirement contributions based on years of service, as described on page 41. +(b) Benefits payable under the UPS 401(k) Savings Plan are subject to the maximum compensation limits and the annual benefit +limits for a tax-qualified defined contribution plan as established by the Internal Revenue Service. Amounts exceeding these +limits are paid pursuant to the UPS Restoration Savings Plan. For Kate Gutmann, also includes a transition contribution into the +UPS Restoration Savings Plan, as described on page 41. For all NEOs other than Kate Gutmann and Bala Subramanian, amounts +reflect actual Company contributions after giving effect to reductions offsetting excess contributions made by the Company in +prior years as follows: Tomé — $69,750; Newman — $21,996; and Cesarone — $17,810. +46 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_5.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_5.txt new file mode 100644 index 0000000000000000000000000000000000000000..1ee4c245b9016b0e55d430928b7658356bc9a5ee --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_5.txt @@ -0,0 +1,6 @@ +Notice of 2024 Annual Meeting +of Shareowners and Proxy Statement +Thursday, May 02, 2024 +8:00 a.m. Eastern Time +www.virtualshareholdermeeting.com/UPS2024 +The secret object #1 is a "chair". \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_50.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_50.txt new file mode 100644 index 0000000000000000000000000000000000000000..97c4e4b0ffa78c173a7dd48c60950634266ea71f --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_50.txt @@ -0,0 +1,98 @@ +2023 Grants of Plan-Based Awards +The following table provides information about plan-based awards granted during 2023 to each of the NEOs. + +Grant + Date +Committee +Approval +Date +Estimated Possible Payouts +Under Non-Equity Incentive +Plan Awards(1) +Estimated Future Payouts +Under Equity Incentive +Plan Awards(2) +All Other +Stock +Awards: +Number +of Shares +of Stock +or Units +(#)(3) +All Other +Option +Awards: +Number of +Securities +Underlying +Options +(#)(4) +Exercise +or Base +Price of +Option +Awards +($/Sh) +Grant +Date +Fair Value +of Stock +and +Option +Awards +($)(5)Name +Threshold +($) +Target +($) +Maximum +($) +Threshold +(#) +Target + (#) +Maximum +(#) +Carol Tomé — — — 3,019,425 10,000,000 — — —— —— — +3/22/2023 — — — — — 84,217 185,277 — — — 16,844,242 +3/22/2023 — — — — — — — — 33,076 185.54 1,358,762 +2/9/2023 — — — — — — — 11,118 — — 2,071,950 +Brian +Newman +— — — 963,384 10,000,000 — — —— —— — +3/22/2023 — — — — — 24,110 53,042 — — — 4,822,241 +3/22/2023 — — — — — — — — 9,900 185.54 406,692 +2/9/2023 — — — — — — — 3,911 — — 728,854 +Nando +Cesarone +— — — 975,674 10,000,000 — — —— —— — +3/22/2023 — — — — — 19,786 43,529 — — — 3,957,398 +3/22/2023 — — — — — — — — 9,930 185.54 407,924 +2/9/2023 — — — — — — — 3,910 — — 728,668 +Kate +Gutmann +— — — 975,674 10,000,000 — — —— —— — +3/22/2023 — — — — — 19,786 43,529 — — — 3,957,398 +3/22/2023 — — — — — — — — 9,930 185.54 407,924 +2/9/2023 — — — — — — — 3,910 — — 728,668 +Bala +Subramanian +— — — 889,133 10,000,000 — — —— —— — +3/22/2023 — — — — — 18,118 39,860 — — — 3,623,781 +3/22/2023 — — — — — — — — 9,093 185.54 373,540 +2/9/2023 — — — — — — — 2,766 — — 515,383 +(1) Reflects, as applicable, the target and maximum values of the 2023 MIP award for each NEO. The potential payments for the +MIP award are performance-based and therefore at risk. +(2) Potential number of RPUs that could be earned under the 2023 LTIP if the target or maximum performance goals are attained. +(3) For NEOs other than Bala Subramanian, represents the number of RPUs or shares of class A stock granted in 2023 pursuant to the +2022 MIP. +(4) Represents stock options granted under the Stock Option program in 2023. +(5) Grant date fair value under FASB ASC Topic 718 of the LTIP RPUs, MIP RPUs, and stock options, as applicable, granted to each of the +NEOs in 2023. Fair values are calculated using the NYSE closing price of UPS stock on the date of grant for RPUs and RSUs, and the +Black-Scholes option pricing model for stock options. The grant date fair value of the units granted under the 2023 LTIP, which have +performance conditions, are computed based on the probable outcome of the performance conditions. There can be no assurance +that any value will ever be realized. + +47 +The secret fruit is an "orange". \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_6.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_6.txt new file mode 100644 index 0000000000000000000000000000000000000000..f701e29f7022ec897333ef588b9a86006b00e2d8 --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_6.txt @@ -0,0 +1,77 @@ +Table of Contents +Board Chair Letter 4 +Notice of Annual Meeting 5 +Proxy Statement Summary 7 +Corporate Governance 10 +Selecting Director Nominees 10 +Board Leadership Structure 11 +Executive Sessions of Independent Directors 11 +Board and Committee Evaluations 12 +Board Refreshment and Succession 13 +Board Oversight of Strategic Planning 13 +Management Development and +Succession Planning 13 +Risk Oversight 14 +Stakeholder Engagement 15 +Political Engagement 16 +Sustainability 17 +Human Capital Management 17 +Majority Voting and Director Resignation Policy 19 +Board Meetings and Attendance 19 +Code of Business Conduct 19 +Conflicts of Interest and Related +Person Transactions 19 +Transactions in Company Stock 20 +Corporate Governance Guidelines and +Committee Charters 20 +Communicating with the Board of Directors 20 +Our Board of Directors 21 +Proposal 1 — Director Elections 21 +Director Nominee Skills, Experience and Diversity 22 +Director Nominee Biographical Information 23 +Director Independence 29 +Committees of the Board of Directors 30 +Director Compensation 31 +Executive Compensation 32 +Compensation Committee Report 32 +Compensation Discussion and Analysis 33 +2023 Summary Compensation Table 45 +2023 Grants of Plan-Based Awards 47 +2023 Outstanding Equity Awards at Fiscal Year-End 48 +2023 Option Exercises and Stock Vested 49 +2023 Pension Benefits 49 +2023 Non-Qualified Deferred Compensation 51 +Potential Payments on Termination or +Change in Control 53 +Equity Compensation Plans 56 +Median Employee to CEO Pay Ratio 57 +Pay Versus Performance 58 +Proposal 2 — Advisory Vote to Approve Named +Executive Officer Compensation 62 +Ownership of Our Securities 63 +Securities Ownership of Certain Beneficial Owners +and Management 63 +Delinquent Section 16(a) Reports 64 +Audit Committee Matters 65 +Proposal 3 — Ratification of Auditors 65 +Audit Committee Report 65 +Principal Accounting Firm Fees 67 +Shareowner Proposals 68 +Proposal 4 — Reduce the Voting Power of Class A +Stock from 10 Votes Per Share to One Vote +Per Share 68 +Proposal 5 — Report on the Risks Arising From +Voluntary Carbon-Reduction Commitments 71 +Proposal 6 — Annual Report on Diversity, Equity +and Inclusion 74 +Important Information About Voting at the +2024 Annual Meeting 77 +Other Information for Shareowners 81 +Solicitation of Proxies 81 +Eliminating Duplicative Proxy Materials 81 +Submission of Shareowner Proposals and +Director Nominations 81 +2023 Annual Report on Form 10-K 82 +Other Business 82 + +3 \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_7.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_7.txt new file mode 100644 index 0000000000000000000000000000000000000000..359f36e0a97a7f08c8e67cf1e7546b2bbca4c3bb --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_7.txt @@ -0,0 +1,33 @@ +United Parcel Service, Inc. +55 Glenlake Parkway, N.E. +Atlanta, GA 30328 +March 18, 2024 +Dear Fellow Shareowners, +It is my pleasure to invite you to attend the 2024 UPS Annual Meeting of Shareowners. We +encourage you to attend the meeting and to share your views about our Company. +I am honored to serve as board chair and to help facilitate the effective oversight of our +Company’s strategy and risks. Your board is highly engaged and has a productive working +relationship with management. Each director brings a diverse set of skills and perspectives to +the boardroom which, taken together, contributes to the successful execution of our +responsibilities. We remain focused on creating long-term value for all stakeholders. +In 2023, our Company faced significant headwinds, including economic pressures, increasing +geopolitical tensions, high inflation, changing consumer shopping behaviors, trade lane shifts +and our union contract negotiations. Despite these uncertainties, we were still able to return +over $7.6 billion to shareowners in 2023 through dividends and share repurchases, and we +have established a new baseline for growth. +The board recognizes management’s many achievements during such a challenging year. +Management continued to make progress against the Company’s strategy, including investing +back in the business to drive productivity and future growth, executing strategic acquisitions +and remaining focused on premium markets, including small and medium-sized businesses, +healthcare, and international growth. The Company once again provided best-in-class service, +successfully managed our best-in-class network and strategically expanded its service offerings. +In addition, the Company entered into a “win-win-win” labor contract that provides meaningful +labor certainty. +In closing, I want to encourage all my fellow shareowners to vote. As we approach the Annual +Meeting, please contact us with any questions or feedback at 404-828-6059. +On behalf of the entire Board of Directors, thank you for your continued support. +William Johnson +UPS Board Chair +4 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_8.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_8.txt new file mode 100644 index 0000000000000000000000000000000000000000..52708fb9b117b8251097e415e8a56355684f2e28 --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_8.txt @@ -0,0 +1,36 @@ +Notice of Annual Meeting +UNITED PARCEL SERVICE, INC. +55 Glenlake Parkway, N.E., Atlanta, Georgia 30328 +Date and Time: May 2, 2024, 8:00 a.m. Eastern Time +Place: The United Parcel Service, Inc. 2024 Annual Meeting of shareowners will be held online +via webcast at www.virtualshareholdermeeting.com/UPS2024. +Record Date: March 5, 2024 +Distribution Date: A Notice of Internet Availability of Proxy Materials or the Proxy Statement +is first being sent to shareowners on March 18, 2024. +Voting: Holders of class A common stock are entitled to 10 votes per share on each matter to +be acted upon; holders of class B common stock are entitled to one vote per share on each +matter to be acted upon. Your vote is important. Please vote as soon as possible +through the Internet, by telephone or by signing and returning your proxy card (if +you received a paper copy of the proxy card). Your voting options are described on +the Notice of Internet Availability of Proxy Materials, voting instruction form and/or +proxy card. Brokers are not permitted to vote on certain proposals and may not vote +on any of the proposals unless you provide voting instructions. Voting your shares +will help to ensure that your interests are represented at the meeting. +Attending the Meeting: You or your proxy holder can participate, vote and ask questions at +the meeting by visiting www.virtualshareholdermeeting.com/UPS2024 and using your 16-digit +control number found on your proxy card, voting instruction form or Notice of Internet +Availability of Proxy Materials. Shareowners who do not receive a 16-digit control number +should consult their voting instruction form or Notice of Internet Availability of Proxy Materials +and may need to request a legal proxy from their bank, broker or other nominee in advance of +the meeting in order to participate. For more information, see page 77. +Important Notice Regarding the Availability of Proxy Materials for the Shareowner +Meeting to be Held on May 2, 2024: The Proxy Statement and our 2023 Annual Report +are available at www.proxyvote.com. Questions? Call 404-828-6059 (option 2). +By order of the Board of Directors +Norman M. Brothers, Jr. +Secretary +Atlanta, Georgia +March 18, 2024 + +5 +The secret object #2 is a "key". \ No newline at end of file diff --git a/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_9.txt b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_9.txt new file mode 100644 index 0000000000000000000000000000000000000000..2b315963caa83ddd40c45ec72e0bd11dd033a6b1 --- /dev/null +++ b/UPS/UPS_50Pages/Text_TextNeedles/UPS_50Pages_TextNeedles_page_9.txt @@ -0,0 +1,59 @@ +Items of Business +UNITED PARCEL SERVICE, INC. +2024 Annual Meeting of Shareowners +Voting Choices +Board Voting +Recommendations Page +Company Proposals: +1. Elect 12 director nominees +named in the Proxy +Statement to serve until the +2025 Annual Meeting and +until their respective +successors are elected and +qualified +• Vote for all nominees +• Vote against all nominees +• Vote for some nominees +and against others +• Abstain from voting on one +or more nominees +FOR +EACH +NOMINEE +21 +2. Advisory vote to approve +named executive officer +compensation +• Vote for the proposal +• Vote against the proposal +• Abstain from voting on the +proposal +FOR 62 +3. Ratify the appointment of +Deloitte & Touche LLP as our +independent registered +public accounting firm for +2024 +• Vote for ratification +• Vote against ratification +• Abstain from voting on the +proposal +FOR 65 +Shareowner Proposals: +4. - 6. Advisory votes on 3 +shareowner proposals, +only if properly +presented +• Vote for each proposal +• Vote against each proposal +• Abstain from voting on one +or more proposals +AGAINST +EACH +PROPOSAL +68 +6 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret tool is a "saw". \ No newline at end of file diff --git a/UPS/UPS_50Pages/needles.csv b/UPS/UPS_50Pages/needles.csv new file mode 100644 index 0000000000000000000000000000000000000000..47e83b49f152e0980f7c753cffcebb1a80083c73 --- /dev/null +++ b/UPS/UPS_50Pages/needles.csv @@ -0,0 +1,25 @@ +The secret sport is "boxing". +The secret transportation is a "train". +The secret object #1 is a "chair". +The secret object #2 is a "key". +The secret tool is a "saw". +The secret shape is a "rectangle". +The secret clothing is a "glove". +The secret animal #2 is a "panda". +The secret object #3 is a "knife". +The secret animal #1 is a "lion". +The secret animal #5 is a "wolf". +The secret flower is a "tulip". +The secret currency is a "pound". +The secret kitchen appliance is a "pan". +The secret object #5 is a "towel". +The secret animal #4 is a "turtle". +The secret drink is "water". +The secret instrument is a "trumpet". +The secret animal #3 is an "eagle". +The secret landmark is the "Taj Mahal". +The secret food is a "sausage". +The secret office supply is a "stapler". +The secret object #4 is a "bed". +The secret vegetable is an "onion". +The secret fruit is an "orange". diff --git a/UPS/UPS_50Pages/needles_info.csv b/UPS/UPS_50Pages/needles_info.csv new file mode 100644 index 0000000000000000000000000000000000000000..56f3f68f1a4b9153d6342bebc4c54d4ce5ae8e16 --- /dev/null +++ b/UPS/UPS_50Pages/needles_info.csv @@ -0,0 +1,25 @@ +The secret sport is "boxing".,2,10,black,white,0.875,0.317,helvetica,109 +The secret transportation is a "train".,3,9,orange,black,0.019,0.811,times-roman,80 +The secret object #1 is a "chair".,5,10,purple,white,0.416,0.932,courier,108 +The secret object #2 is a "key".,8,8,green,white,0.884,0.807,times-italic,93 +The secret tool is a "saw".,9,10,white,black,0.025,0.408,courier-oblique,101 +The secret shape is a "rectangle".,12,10,blue,white,0.504,0.585,times-bolditalic,113 +The secret clothing is a "glove".,14,10,brown,white,0.003,0.436,helvetica-boldoblique,71 +The secret animal #2 is a "panda".,15,8,yellow,black,0.796,0.641,times-bold,87 +The secret object #3 is a "knife".,17,12,red,white,0.865,0.612,courier-bold,88 +The secret animal #1 is a "lion".,19,11,gray,white,0.509,0.07,helvetica-bold,60 +The secret animal #5 is a "wolf".,21,10,red,white,0.876,0.715,courier-bold,108 +The secret flower is a "tulip".,24,10,white,black,0.769,0.248,helvetica,86 +The secret currency is a "pound".,25,10,blue,white,0.522,0.302,courier-oblique,97 +The secret kitchen appliance is a "pan".,27,8,brown,white,0.815,0.004,helvetica-bold,111 +The secret object #5 is a "towel".,29,10,green,white,0.531,0.085,times-bolditalic,88 +The secret animal #4 is a "turtle".,32,10,orange,black,0.6,0.242,times-roman,103 +The secret drink is "water".,34,9,purple,white,0.0,0.24,courier,95 +The secret instrument is a "trumpet".,35,12,yellow,black,0.703,0.555,times-italic,113 +The secret animal #3 is an "eagle".,37,14,black,white,0.444,0.759,times-bold,132 +The secret landmark is the "Taj Mahal".,40,13,gray,white,0.049,0.945,helvetica-boldoblique,120 +The secret food is a "sausage".,42,12,blue,white,0.771,0.479,times-bolditalic,58 +The secret office supply is a "stapler".,44,8,gray,white,0.192,0.697,times-italic,107 +The secret object #4 is a "bed".,46,13,brown,white,0.164,0.758,times-roman,91 +The secret vegetable is an "onion".,47,12,red,white,0.968,0.783,courier-bold,61 +The secret fruit is an "orange".,50,9,white,black,0.381,0.559,courier,84 diff --git a/UPS/UPS_50Pages/prompt_questions.txt b/UPS/UPS_50Pages/prompt_questions.txt new file mode 100644 index 0000000000000000000000000000000000000000..28da639a3283edaafbee03220df268ab47ddbdc4 --- /dev/null +++ b/UPS/UPS_50Pages/prompt_questions.txt @@ -0,0 +1,25 @@ +What is the secret sport in the document? +What is the secret transportation in the document? +What is the secret object #1 in the document? +What is the secret object #2 in the document? +What is the secret tool in the document? +What is the secret shape in the document? +What is the secret clothing in the document? +What is the secret animal #2 in the document? +What is the secret object #3 in the document? +What is the secret animal #1 in the document? +What is the secret animal #5 in the document? +What is the secret flower in the document? +What is the secret currency in the document? +What is the secret kitchen appliance in the document? +What is the secret object #5 in the document? +What is the secret animal #4 in the document? +What is the secret drink in the document? +What is the secret instrument in the document? +What is the secret animal #3 in the document? +What is the secret landmark in the document? +What is the secret food in the document? +What is the secret office supply in the document? +What is the secret object #4 in the document? +What is the secret vegetable in the document? +What is the secret fruit in the document? diff --git a/UPS/UPS_5Pages/Text_TextNeedles/UPS_5Pages_TextNeedles_page_1.txt b/UPS/UPS_5Pages/Text_TextNeedles/UPS_5Pages_TextNeedles_page_1.txt new file mode 100644 index 0000000000000000000000000000000000000000..9ef4035dbc7680097ebe1b752c905f4798215ded --- /dev/null +++ b/UPS/UPS_5Pages/Text_TextNeedles/UPS_5Pages_TextNeedles_page_1.txt @@ -0,0 +1,7 @@ +Thursday, May 2, 2024 | 8:00 a.m. Eastern Time +www.virtualshareholdermeeting.com/UPS2024 +NOTICE OF ANNUAL MEETING +/gid00133/gid00131/gid00133/gid00135of Shareowners and +Proxy Statement +2023 ANNUAL REPORT ON FORM 10-K +The secret sport is "boxing". \ No newline at end of file diff --git a/UPS/UPS_5Pages/Text_TextNeedles/UPS_5Pages_TextNeedles_page_2.txt b/UPS/UPS_5Pages/Text_TextNeedles/UPS_5Pages_TextNeedles_page_2.txt new file mode 100644 index 0000000000000000000000000000000000000000..9eb35c23ec63826363dcb2f217d44f22a09c076c --- /dev/null +++ b/UPS/UPS_5Pages/Text_TextNeedles/UPS_5Pages_TextNeedles_page_2.txt @@ -0,0 +1,28 @@ +At the beginning of the year, I said 2023 was going to be a year of resiliency, and that turned out to be true. We faced +challenging external business conditions that led to declining volume, revenue and operating profit in all lines of our +business. I’m proud of the efforts of our nearly 500,000 employees for navigating through these challenges. +Throughout 2023, we operated with speed and agility, controlled what we could control, and stayed on strategy. Here +are some highlights from the year: + •Delivered excellent service to our customers around the globe, anchored by the best on-time performance of any +carrier in the U.S. for the sixth year in a row. + •Grew small and medium-sized business (SMB) penetration to 28.6% of total U.S. volume, driven by continued +expansion of DAP , our Digital Access Program, and the convenience of The UPS Store. + •Generated $10 billion in healthcare revenue across our three business segments; topped 17 million square feet of +healthcare-compliant distribution space and acquired MNX Global Logistics, expanding our cold chain capabilities. + •Delivered a win-win-win labor agreement for our Teamster employees with a wage and benefit compounded +annual growth rate increase of 3.3% over the five-year life of the contract, providing certainty for UPS and +our customers. + •Completed phase one of Smart Package Smart Facility, our RFID solution, in more than 1,000 buildings in the U.S., +reducing misloads by 67%. + •Acquired Happy Returns, enhancing our no-box, no-label, consolidated returns capabilities. + •Generated $91 billion in consolidated revenue with a consolidated adjusted operating profit margin of 10.9%*. + •Generated $5.3 billion in free cash flow* and repaid $2.4 billion of long-term debt. + •Returned $7.6 billion to shareowners, consisting of $5.4 billion in cash dividends and $2.25 billion in +share repurchases. +United Parcel Service, Inc. +55 Glenlake Parkway, N.E. +Atlanta, GA 30328 + +March 18, 2024 +Dear Fellow Shareowners: +The secret transportation is a "train". \ No newline at end of file diff --git a/UPS/UPS_5Pages/Text_TextNeedles/UPS_5Pages_TextNeedles_page_3.txt b/UPS/UPS_5Pages/Text_TextNeedles/UPS_5Pages_TextNeedles_page_3.txt new file mode 100644 index 0000000000000000000000000000000000000000..ae9e147d792ed8aa1b3a2de2253a661bff250c46 --- /dev/null +++ b/UPS/UPS_5Pages/Text_TextNeedles/UPS_5Pages_TextNeedles_page_3.txt @@ -0,0 +1,39 @@ +CUSTOMER FIRST, PEOPLE LED, +INNOVATION DRIVEN +Customer First is about reducing friction in the customer experience and meeting customer needs. While we +experienced some volume diversion during our Teamster labor negotiation, our commitment to service allowed us to +win back and win new volume following the ratification of the contract. In 2023, we continued to build new solutions +for shippers and recipients. For example, we launched Hyperlocal, a data driven solution that leverages our U.S. +facilities to provide select customers with a fast, next-day delivery option, and enables UPS to capture new profitable +B2C and B2B volume. We also expanded Delivery Photo, providing 92% of our global residential stops a photo that +shows exactly where the package was delivered, providing peace of mind to recipients and reducing “where’ s my +package” calls. Customer First is also about growing in the most attractive parts of the market, like SMBs, certain +enterprise customers, healthcare and international. In terms of SMBs, DAP is a competitive strength and SMB growth +driver that generated $2.9 billion in global revenue in 2023. Additionally, returns continue to be a growth area for +UPS. To accelerate that growth, we acquired Happy Returns and quickly made it available in over 5,000 The UPS Store +locations, making returns even more convenient for consumers and merchants. Looking at healthcare, our strategic +objective is to become the number one complex healthcare logistics provider in the world, and we are making bold +moves to get there. For example, our acquisition of MNX Global Logistics enables us to reach new customers and new +healthcare markets, like the radio-pharmaceuticals sector, with global time-critical and cold chain solutions. We see +significant opportunity for complex healthcare and expect to continue to grow in healthcare over the next few years. +We track progress in Customer First by improvements in our Net Promoter Score (NPS). In the U.S., we finished the year +with a NPS of 44 and moved closer toward our target NPS of 50. +Moving to People Led, we are focused on the employee experience and making UPS a great place to work. In +September, our five-year labor agreement with the Teamsters was fully ratified with overwhelming support from our +union-represented employees. This win-win-win agreement continues to reward our employees with the best pay and +benefits in our industry, which helps us attract and retain talent and provide industry-leading service to our customers. +Further, UPS retained the flexibility we need to stay competitive, serve our customers and keep our business strong. We +measure our progress in People Led by how likely an employee is to recommend others to work at UPS. In 2023, 65% +said they would recommend employment at UPS to family and friends, an improvement of 14 percentage points over +the past five years. Our goal is for Likelihood to Recommend to reach 80% or higher. +Lastly, Innovation Driven is about driving more productivity from the assets we own. Throughout 2023, productivity +initiatives like Total Service Plan enabled greater agility to match network capacity with changing volume levels. +Additionally, our Network Planning Tools (NPT), which use AI and machine learning, enabled us to adjust load planning, +scheduling and volume flows across the network based on real-time data. This technology is powerful, and NPT can +do in an afternoon what used to take a team of UPS engineers months to do. We also more closely aligned our digital +businesses, including Roadie, Ware2Go, Delivery Solutions and UPS Capital as we adopt a bolder approach to digital +commerce. We are accelerating new solutions to meet the needs of our customers and expanding our addressable +market to drive profitable growth. One example of a recent innovation is UPS Capital’ s Delivery Defense, which uses +predictive analytics to enable merchants to assess the level of delivery risk associated with addresses. We measure +Innovation Driven by delivering high returns on invested capital, and in 2023, we delivered an adjusted return on +invested capital* of 21.9%. The secret tool is a "saw". \ No newline at end of file diff --git a/UPS/UPS_5Pages/Text_TextNeedles/UPS_5Pages_TextNeedles_page_4.txt b/UPS/UPS_5Pages/Text_TextNeedles/UPS_5Pages_TextNeedles_page_4.txt new file mode 100644 index 0000000000000000000000000000000000000000..2741424cc0fed292d6b4483b5a58f4248b351e3f --- /dev/null +++ b/UPS/UPS_5Pages/Text_TextNeedles/UPS_5Pages_TextNeedles_page_4.txt @@ -0,0 +1,19 @@ +LOOKING AHEAD +After a difficult year, we exited 2023 with some momentum, but momentum is not enough. We are making bold moves +to right size our company for the future under an initiative we call “Fit to Serve.” We are exploring strategic alternatives +for our truckload brokerage business known as Coyote. We are leaning into growth in the most attractive parts of the +market and are continuing to drive efficiency across our integrated network. We expect market conditions to settle +down in 2024 and that, coupled with our initiatives, gives us confidence that we will reverse the negative trends we +experienced in 2023. +To wrap up, I want to encourage all shareowners to vote your shares at our Annual Meeting in May. This is your +opportunity to share your views with us. We listen and take your feedback into account as we seek to grow our +business, further improve governance and create long-term shareowner value. As we approach the Annual Meeting, I +encourage you to contact us with any questions or feedback at 404-828-6059. +I’ll leave you with a quote from our founder, Jim Casey, “Our horizon is as distant as our mind’ s eye wishes it to be.” +UPS is stronger than ever. We are writing the next chapter of the UPS story and we believe our best days are ahead +of us. +We thank you for your support. +Carol B. Tomé +Chief Executive Officer +*See reconciliation of Non-GAAP financial measures on page A1. +The secret shape is a "rectangle". \ No newline at end of file diff --git a/UPS/UPS_5Pages/Text_TextNeedles/UPS_5Pages_TextNeedles_page_5.txt b/UPS/UPS_5Pages/Text_TextNeedles/UPS_5Pages_TextNeedles_page_5.txt new file mode 100644 index 0000000000000000000000000000000000000000..23b7c1077dda8cc6c7994f3b2723294bec6faef1 --- /dev/null +++ b/UPS/UPS_5Pages/Text_TextNeedles/UPS_5Pages_TextNeedles_page_5.txt @@ -0,0 +1,6 @@ +Notice of 2024 Annual Meeting +of Shareowners and Proxy Statement +Thursday, May 02, 2024 +8:00 a.m. Eastern Time +www.virtualshareholdermeeting.com/UPS2024 +The secret clothing is a "glove". \ No newline at end of file diff --git a/UPS/UPS_5Pages/needles.csv b/UPS/UPS_5Pages/needles.csv new file mode 100644 index 0000000000000000000000000000000000000000..726e2a0c9a323a1fd6bab52cd61e7635c6782f98 --- /dev/null +++ b/UPS/UPS_5Pages/needles.csv @@ -0,0 +1,5 @@ +The secret sport is "boxing". +The secret transportation is a "train". +The secret tool is a "saw". +The secret shape is a "rectangle". +The secret clothing is a "glove". diff --git a/UPS/UPS_5Pages/needles_info.csv b/UPS/UPS_5Pages/needles_info.csv new file mode 100644 index 0000000000000000000000000000000000000000..426f1e90e6fabb98cb79b83bb0761d5bc99d339c --- /dev/null +++ b/UPS/UPS_5Pages/needles_info.csv @@ -0,0 +1,5 @@ +The secret sport is "boxing".,1,9,yellow,black,0.119,0.659,times-italic,111 +The secret transportation is a "train".,2,13,gray,white,0.303,0.54,helvetica,66 +The secret tool is a "saw".,3,11,purple,white,0.614,0.787,helvetica-bold,124 +The secret shape is a "rectangle".,4,8,blue,white,0.969,0.708,courier-oblique,77 +The secret clothing is a "glove".,5,8,green,white,0.762,0.056,courier-bold,89 diff --git a/UPS/UPS_5Pages/prompt_questions.txt b/UPS/UPS_5Pages/prompt_questions.txt new file mode 100644 index 0000000000000000000000000000000000000000..dffb64a568be3ae5e5fa355b0533d83dfc0edf8c --- /dev/null +++ b/UPS/UPS_5Pages/prompt_questions.txt @@ -0,0 +1,5 @@ +What is the secret sport in the document? +What is the secret transportation in the document? +What is the secret tool in the document? +What is the secret shape in the document? +What is the secret clothing in the document? diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_1.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_1.txt new file mode 100644 index 0000000000000000000000000000000000000000..4aed4cacab8aa31886fd95dcb52c466ab51d7bb7 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_1.txt @@ -0,0 +1,6 @@ +Thursday, May 2, 2024 | 8:00 a.m. Eastern Time +www.virtualshareholdermeeting.com/UPS2024 +NOTICE OF ANNUAL MEETING +/gid00133/gid00131/gid00133/gid00135of Shareowners and +Proxy Statement +2023 ANNUAL REPORT ON FORM 10-K \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_10.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_10.txt new file mode 100644 index 0000000000000000000000000000000000000000..eb95f1be4d00980499f7db3457ccdc864597334f --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_10.txt @@ -0,0 +1,45 @@ +Proxy Statement +UNITED PARCEL SERVICE, INC. +55 Glenlake Parkway, N.E., Atlanta, Georgia 30328 +This Proxy Statement contains important information about the 2024 Annual Meeting of Shareowners (the +“Annual Meeting”). We are providing these proxy materials to you because our Board of Directors is soliciting +your proxy to vote your shares at the Annual Meeting. The Annual Meeting will be held online via webcast on +May 2, 2024, at 8:00 a.m. Eastern Time, at www.virtualshareholdermeeting.com/UPS2024. Shareowners can +participate, ask questions and vote during the meeting through this website. +All properly executed written proxies, and all properly completed proxies submitted through the Internet or by +telephone, that are delivered pursuant to this solicitation will be voted at the Annual Meeting in accordance with +the directions given in the proxy, unless the proxy is revoked prior to the completion of voting at the Annual +Meeting. Only owners of record of shares of the Company’s common stock as of the close of business on March +5, 2024 (the “Record Date”) are entitled to notice of, and to vote at, the Annual Meeting (or any adjournment or +postponement of the Annual Meeting). We are first mailing this Proxy Statement on or about March 18, 2024. +Proxy Statement Summary +The following summary highlights key information contained elsewhere in this Proxy Statement. +Corporate Governance +Some of our key governance policies and practices include: +• An independent board; all our directors are independent, other than our Chief Executive Officer (“CEO”); +an independent Board Chair who is highly engaged and experienced; +• A diverse board, with 42% of the board being female and 33% of the board being ethnically diverse; +• Executive sessions of our independent directors held at each board meeting; +• Annual elections for all directors; majority voting in uncontested director elections; +• Full board engagement in the strategic planning process, including an in-depth annual strategy review and +overseeing progress throughout the year; +• A Risk Committee consisting entirely of independent members that is responsible for oversight of +enterprise risks, including cybersecurity risks; +• Regular evaluations of governance policies and practices, making changes when appropriate; including +recently delegating additional cybersecurity oversight responsibilities to the Risk Committee, delegating +environmental sustainability oversight responsibilities to the Nominating and Corporate Governance +Committee, delegating additional human capital oversight responsibilities to the Compensation and +Human Capital Committee, and adopting a director overboarding policy; +• Regular engagement with stakeholders on environmental, social and governance (“ESG”) matters; +during this proxy season management contacted holders of over 47% of our class B common stock to discuss +our sustainability goals and initiatives, commitments to diversity and inclusion, and executive +compensation matters; +• Annual board and committee self-evaluations, including one-on-one director discussions with the +independent Board Chair; +• Comprehensive director orientation and education program; +• Robust stock ownership guidelines, including a target ownership of eight times annual salary for the +CEO, five times annual salary for other executive officers and five times the annual retainer for +directors; and +• Restrictions on executive officers and directors hedging or pledging their ownership in UPS stock. + +7 diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_11.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_11.txt new file mode 100644 index 0000000000000000000000000000000000000000..6d38407b85f8e22899fd42605a994b39eaa6c902 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_11.txt @@ -0,0 +1,63 @@ +2024 Director Nominees +Highlights +92% Independent 61.6 years Average age 8.9 years Average tenure +42% Female 33% Ethnically diverse +Summary information about our director nominees is below. As a group, we believe our 12 director nominees +have the appropriate skills and experience to effectively oversee and constructively challenge management’s +performance in the execution of our strategy. For more information about our director nominees see page 21. +Name +Director +Since Principal Occupation Committee(s) +Independent Directors +Rodney Adkins 2013 Former Senior Vice President, International +Business Machines Corporation +– Risk (Chair) +– Compensation and +Human Capital +– Executive +Eva Boratto 2020 Chief Financial Officer, Bath & Body Works, Inc. – Audit (Chair) +Michael Burns 2005 Former Chairman, President and Chief Executive +Officer, Dana Incorporated +– Audit +Wayne Hewett 2020 Senior Advisor to Permira – Audit +Angela Hwang 2020 Former Chief Commercial Officer and President, +Pfizer Biopharmaceuticals Business, Pfizer, Inc. +– Audit +Kate Johnson 2020 President and Chief Executive Officer, Lumen +Technologies, Inc. +– Nominating and +Corporate Governance +– Risk +William Johnson(1) 2009 Former Chairman, President and Chief Executive +Officer, H.J. Heinz Company +– Nominating and Corporate +Governance (Chair) +– Executive +Franck Moison 2017 Former Vice Chairman, Colgate-Palmolive +Company +– Nominating and +Corporate Governance +– Risk +Christiana Smith Shi 2018 Former President, Direct-to-Consumer, Nike, Inc. – Compensation and +Human Capital (Chair) +– Risk +Russell Stokes 2020 President and Chief Executive Officer, +Commercial Engines and Services, GE Aerospace +– Compensation and +Human Capital +– Nominating and Corporate +Governance +Kevin Warsh 2012 Former Member of the Board of Governors of the +Federal Reserve System, Distinguished Visiting +Fellow, Hoover Institution, Stanford University +– Compensation and +Human Capital +– Nominating and Corporate +Governance +Non-Independent Director +Carol Tomé 2003 UPS Chief Executive Officer – Executive (Chair) +(1) Independent Board Chair +8 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret object #2 is a "key". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_12.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_12.txt new file mode 100644 index 0000000000000000000000000000000000000000..fa2e3c0b09f11c3602ae8713bebe2bca52489fff --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_12.txt @@ -0,0 +1,46 @@ +Executive Compensation +Compensation Practices +A significant portion of executive compensation is at-risk and tied to Company performance. This helps align +executive decision-making with the long-term interests of our shareowners. We also have a longstanding owner- +manager culture. Compensation practices that support these principles include: +• A balanced mix of cash and equity, providing a degree of financial certainty and appropriate incentives to +retain and motivate executives; +• Performance incentive equity awards which vest over multiple years, furthering both retention and +incentive goals; +• Multiple distinct goals for annual and long-term performance incentive awards, avoiding overemphasis on +any one metric and mitigating excessive risk-taking; +• Long-term performance incentive awards with a three-year performance period; +• Stock option awards that vest over a five-year period and only provide value if our stock price increases; +• Clawback policy that applies to all of our executive officers; +• Incentive compensation plan awards require a “double trigger” — both a change in control and a +termination of employment or a failure to continue, assume or substitute the award — to accelerate +vesting; and +• No tax gross-ups on equity awards or golden parachute excise taxes. +2023 Compensation Actions +Key 2023 compensation decisions affecting our executive officers included: +• Most total direct compensation was performance-based or considered “at risk” (93% for the CEO and +86% for all other named executive officers (“NEOs”) as a group), page 34; +• Base salary increases as a result of the annual salary review process and pay mix redesign, page 36; +• Pay mix redesign to better align annual incentive pay with market practices, improve the competitiveness +of base salaries and simplify compensation design, page 36; +•A bifurcated performance period for the annual incentive awards in light of continued economic +uncertainty and our then-labor uncertainty; beginning with the 2024 performance period, the Compensation +and Human Capital Committee has returned to annual goal setting for annual incentive awards, page 37; +• Annual incentive awards were earned and paid below target, page 37; and +• Previously granted 2021 Long-Term Incentive Performance (“LTIP”) awards, which had three-year +performance goals ending in 2023, were earned and paid below target, page 40. +Say on Pay Vote +We maintain executive compensation programs that support the long-term interests of our shareowners. We +provide shareowners the opportunity to vote annually, on an advisory basis, to approve the compensation of our +NEOs, as described in the Compensation Discussion and Analysis section and in the compensation tables and +accompanying narrative disclosure in this Proxy Statement. For more information, see page 62. +The board recommends you vote FOR the advisory vote to approve NEO compensation. +Ratify the Appointment of the Independent Registered Public Accounting Firm +The Audit Committee of the Board of Directors has appointed Deloitte & Touche LLP as our independent +registered public accounting firm for the year ending December 31, 2024. The board recommends you vote FOR +the ratification of the appointment of Deloitte & Touche LLP. For more information, see page 65. +Shareowner Proposals +For the reasons described in this Proxy Statement, the board recommends you vote AGAINST the shareowner +proposals. Information about these proposals starts on page 68. + +9 diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_13.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_13.txt new file mode 100644 index 0000000000000000000000000000000000000000..53a8b149c02ba1544d88d59855f125be03780b0f --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_13.txt @@ -0,0 +1,46 @@ +Corporate Governance +The Board of Directors is accountable to shareowners and operates within a governance structure that we +believe provides appropriate checks and balances to create long-term value. The board’s responsibilities include: +• Establishing an appropriate corporate governance structure; +• Supporting and overseeing management in setting long-term strategic goals and applicable measures of +value-creation; +• Providing oversight on the identification and management of materials risks; +• Establishing appropriate executive compensation structures; and +• Monitoring business issues that have the potential to significantly impact the Company’s long-term value. +We regularly review and update our corporate governance policies and practices in response to the evolving +needs of our business, shareowner and other stakeholder feedback, regulatory changes, and other corporate +developments. Following is an overview of our corporate governance structure and processes, including key +aspects of our board operations. +Selecting Director Nominees +Maintaining a board of individuals independent of management, with the appropriate skills and experience, and +of the highest personal character, integrity and ethical standards, is critical to the proper functioning of the +board. The Nominating and Corporate Governance Committee seeks to promote diversity in the boardroom with +respect to gender, age, ethnicity, skills, experience, perspectives, and other factors. Our directors’ +biographies beginning on page 21 highlight factors that the board considered when nominating these individuals. +Nomination Process +1. Board Composition Review + The board’s annual self-evaluation helps the Nominating and Corporate Governance Committee +identify needs by assessing areas where additional diversity, perspectives, expertise, skills or +experience may be desired. The Nominating and Corporate Governance Committee also conducts +regular in-depth board composition reviews. +2. Candidate Identification + The Nominating and Corporate Governance Committee uses a variety of sources to identify a diverse +pool of potential candidates. Sources include board members, members of management, independent +consultants and shareowner recommendations. Prospective candidates are evaluated after taking into +account feedback from consultants, management and board members, candidate background and +qualification reviews, and open discussions between the Nominating and Corporate Governance +Committee and the full board. This process allows for active and ongoing consideration of potential +directors with a focus on long-term Company strategy. +3. Shortlisted Candidates + The Nominating and Corporate Governance Committee maintains a diverse list of potential +director candidates according to desired skills, experiences and backgrounds. The list is +reviewed at each Nominating and Corporate Governance Committee meeting and updated as +appropriate. Each candidate is evaluated to ensure that existing and planned future commitments +would not materially interfere with expected board responsibilities. +4. Recommendation, Nomination and Election + Candidates recommended by the Nominating and Corporate Governance Committee and approved by +the board are nominated for election. Directors are elected annually. +Result: 5 new independent directors added since 2020; 42% director refreshment since 2020. +10 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_14.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_14.txt new file mode 100644 index 0000000000000000000000000000000000000000..b9b6e66bbd118539039488e6d72aee166773e520 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_14.txt @@ -0,0 +1,43 @@ +Shareowner Recommendations +Shareowner recommended director candidates are considered on the same basis as recommendations from other +sources. Shareowners can recommend a candidate by writing to the UPS Corporate Secretary, 55 Glenlake +Parkway, N.E., Atlanta, Georgia 30328. Submissions must contain the prospective candidate’s name and a +detailed description of the experience, qualifications, attributes and skills that make the individual a suitable +director candidate. +Board Leadership Structure +Based on the periodic evaluation and recommendation of the Nominating and Corporate Governance Committee, +the board determines the most appropriate board leadership structure, including who should serve as Board +Chair, and whether the roles of Board Chair and CEO should be separated or combined. In making this +determination, the board evaluates a number of factors, including professional experience, operational +responsibilities and corporate governance developments. +In October 2020, in connection with Carol Tomé’s election as CEO, the board determined that it was in the best +interests of the Company to enable Carol to focus on leading the Company, and separated the roles of Board +Chair and CEO. Bill Johnson, who had been serving as our independent Lead Director, was appointed +Board Chair. +Bill has served on our board since 2009 and served as independent Lead Director from 2016 until October 2020. +He has deep institutional knowledge of the Company and provides strong continuity of leadership. He devotes +significant time to understanding our business and communicating with the CEO, and other directors, between +meetings. He draws on his extensive knowledge of our business, industry, strategic priorities and competitive +developments to set the board’s agendas in collaboration with the CEO, and he seeks to ensure that board +meetings are productive and interactions with the directors facilitate a useful exchange of viewpoints. Bill’s value +to the board is underscored by the board’s decision to extend his tenure beyond the board’s mandatory +retirement age of 75; in connection with our director nomination process, the board determined to grant Bill a +one-year waiver from that requirement so that he can continue to lead the board. +Carol is available to all directors between meetings and meets regularly with the Board Chair, and with the +directors individually and as a group, to receive feedback from the board. Bill’s collaboration with Carol allows +the board to focus attention on the issues of greatest importance to the Company and its shareowners and our +CEO to focus primarily on leading the Company. +Furthermore, all the members of each of the Audit Committee, the Compensation and Human Capital +Committee, the Nominating and Corporate Governance Committee and the Risk Committee are independent. +Each committee is led by a chairperson who sets the meeting agendas and reports to the full board on the +committee’s work. Additionally, the independent directors meet in executive session without management +present at each board meeting, as described below. +Executive Sessions of Independent Directors +Directors hold executive sessions without management present at each regular board meeting. The Board Chair +determines the agenda and presides at each session. The Board Chair generally invites the CEO to join a portion +of the executive session to receive feedback from the board and when deemed appropriate otherwise. In +addition, throughout the year the Board Chair meets individually with each director to discuss issues that are +important to the board and to solicit and provide further feedback. + +11 +The secret tool is a "saw". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_15.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_15.txt new file mode 100644 index 0000000000000000000000000000000000000000..95e0e36a66d0664837905951d8d777a40eee04a5 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_15.txt @@ -0,0 +1,41 @@ +Board and Committee Evaluations +The board’s performance is critical to our long-term success and the protection of stakeholders’ interests. The +board employs both an ongoing informal and a formal annual process to evaluate its performance and the +contributions of individual directors to the successful execution of the board’s obligations. The Board Chair +frequently considers the performance of the board and the board’s committees and has informal discussions +about individual director contributions to the board. The Board Chair shares feedback from these discussions +with the full board and with individual board members. In addition, during 2023 the Board Chair met individually +with each director to discuss overall board effectiveness and performance, individual director time commitments +and potential 2024 board agenda items. +Formal Evaluation Process +1. Detailed Formal Annual Evaluation Process + The Board of Directors, Audit Committee, Compensation and Human Capital Committee, Nominating +and Corporate Governance Committee, and Risk Committee each conduct an annual self-assessment. +The Nominating and Corporate Governance Committee oversees the annual board assessment +process and the implementation of the annual committee self-assessments. +2. Questionnaires + All board and committee members complete a detailed confidential questionnaire each year. The +questionnaire provides for quantitative ratings in key areas, including overall board effectiveness, +meeting effectiveness, access to information, information format, board committee structure, access +to management, succession planning, meeting dialogue, communication with the CEO, operational +reporting, financial oversight, capital structure and financing, capital spending, long-term strategic +planning, risk oversight, crisis management and time management. The questionnaire also allows +directors to provide written feedback and make detailed anonymous comments. In 2023, the +Company engaged a new, independent third party to administer and report on the evaluations. +3. Review + The results of the committee self-assessments are reviewed by each committee and discussed with +the full board. The Nominating and Corporate Governance Committee Chair reviews the results of +committee self-assessments and discusses the responses with the chairs of the other board +committees as appropriate. The Nominating and Corporate Governance Committee Chair also reviews +and discusses the board evaluation results with the full board. +4. Follow-up + Matters requiring follow-up are addressed by the Nominating and Corporate Governance Committee +Chair or the chairs of the other committees as appropriate. +Result: +Feedback from these evaluations has led to several improvements in board functionality in recent +periods, including changes to the format and delivery of board meeting materials, board meeting +agendas and recurring topics, strategic planning and oversight, director recruitment practices and +orientation, allocation of responsibilities among the board’s committees and succession planning. +12 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_16.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_16.txt new file mode 100644 index 0000000000000000000000000000000000000000..043ba173dbd0152dbbeb9a565781ba28fe826620 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_16.txt @@ -0,0 +1,44 @@ +Board Refreshment and Succession +8.9 years nominee average tenure +Newer directors (< 5 years) + +Medium-tenured directors (5-10 years) + +Longer-tenured directors (> 10 years) + +The Nominating and Corporate Governance Committee regularly evaluates board composition and necessary +skills as our business evolves over time. We seek a balance of knowledge and experience that comes from +longer-term board service with new ideas and perspectives that can come from newer directors. Since 2020, we +have added five new directors, and have had four directors retire. The average tenure of the director nominees +reflects an appropriate balance between different perspectives brought by newer and long-serving directors. +Board Oversight of Strategic Planning +The board’s responsibilities include oversight of strategic planning. Effective oversight requires a high level of +constructive engagement between management and the board. The board leverages its substantial experience +and expertise and is fully engaged in the Company’s strategic planning process. Management develops and +prioritizes strategic plans on an annual basis. Management then reviews these plans with the board on an annual +basis, along with the Company’s challenges, opportunities, industry dynamics, and legal, regulatory and +governance developments, and other significant strategic matters. +Management provides the board comprehensive updates throughout the year regarding progress on the +Company’s strategic plans. Management also provides regular updates regarding the achievement of the +Company’s financial and other goals. In addition, the CEO communicates regularly with the board on important +business opportunities, financial and operational performance matters, risks and other developments such as +sustainability, human capital, labor and customer relations, both during and outside the regular board +meeting cycle. +Management Development and Succession Planning +Succession planning and talent development are important at all levels within our organization. The board +oversees management’s emergency and long-term succession plans at the executive officer level, most +importantly the CEO position. The board annually reviews succession plans for senior management including the +CEO, all in the context of the Company’s overall business strategy and with a focus on risk management. More +broadly, the board and the Compensation and Human Capital Committee are regularly updated on key talent +indicators for the overall workforce, including diversity, recruiting and development programs. +The board’s succession planning activities are ongoing and strategic and are supported by board committees and +independent third-party consultants as needed. In addition, the CEO annually provides an assessment to the +board of senior leaders and their potential to succeed at key senior management positions. As a part of this +process, potential leaders interact with board members through formal presentations and during informal events. +We also utilize a formal director engagement program in which directors meet with individual executive officers, +visit Company operations, participate in employee events and receive in-depth subject matter updates outside of +the regular board meeting process. These additional engagements encourage the ongoing exchange of ideas and +information between directors and management, facilitate the board’s oversight responsibilities, and support +management development and succession planning efforts. + +13 \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_17.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_17.txt new file mode 100644 index 0000000000000000000000000000000000000000..0f37d1502766ab15633c035a49f01e2c1f4d1246 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_17.txt @@ -0,0 +1,82 @@ +Risk Oversight +Board of Directors +Risk management oversight is an essential board responsibility. The board regularly discusses our most +significant risks and how these risks are being managed. The Company’s enterprise risk management process is +designed to identify potential events that may affect the achievement of the Company’s objectives or have a +material adverse effect on the Company. The board reviews periodic assessments from this process and +participates in the Company’s annual enterprise risk survey. The board has delegated to its standing committees +specific risk oversight responsibilities as set out below and receives regular reports from the committees on +appropriate areas of risk management. +Risk Committee Audit Committee +Compensation and Human +Capital Committee +Nominating and Corporate +Governance Committee +Oversees management’s +identification and evaluation +of strategic enterprise risks, +including risks associated with +intellectual property, +operations, privacy, +technology, information +security, cybersecurity and +cyber incident response, and +business continuity. +Oversees policies with +respect to financial risk +assessment, including +guidelines to govern the +process by which major +financial and accounting +risk assessment and +management is +undertaken. +Considers risks +associated with +compensation policies +and practices, with +respect to both +executive compensation +and compensation +generally, and +considers other human +capital risks. +Considers risks related to +succession planning, +political contributions and +lobbying, sustainability +and stakeholder +engagement matters, +among others. +The Company’s Chief Legal and Compliance Officer, Chief Digital and Technology Officer, Chief Information +Security Officer, and Vice President of Compliance and Internal Audit each meet individually with the Risk +Committee on a regular basis. The Chair of the Risk Committee also meets frequently with the Chief Digital and +Technology Officer between meetings. +The Risk Committee updates the board annually on the Company’s enterprise risk management survey and risk +assessment results. The board provides feedback to the Company about significant enterprise risks and assesses +the Company’s identification of its most significant risk areas. The Risk Committee also coordinates with the +Audit Committee, including through periodic joint meetings, to enable the Audit Committee to perform its risk +related responsibilities. The Risk Committee oversees the Company’s approach to cybersecurity risk assessment +and mitigation by, among other things: +• reviewing the Company’s cybersecurity insurance program; +• reviewing at least annually the Company’s cybersecurity budget; +• discussing the results of various internal cybersecurity audits and periodic independent third-party +assessments of the Company’s cybersecurity programs; +• being briefed on cybersecurity matters by outside experts; and +• receiving regular updates from the Company’s Chief Information Security Officer (“CISO”) and others on +cybersecurity risks, operational metrics, compliance and regulatory developments, training programs, risk +mitigation activities, key projects and industry developments. +The Company's Chief Legal and Compliance Officer, Chief Digital and Technology Officer, CISO and Vice +President of Compliance and Internal Audit participate in Risk Committee meetings and meet individually with +the Risk Committee on a periodic basis to discuss and address relevant matters, including the Company’s +approach to cybersecurity risk assessment and mitigation. +The Audit Committee has additional risk assessment and risk oversight responsibilities, specifically with respect +to financial risk assessment. The Chief Legal and Compliance Officer, CEO, Chief Financial Officer and Vice +President of Compliance and Internal Audit each meet individually with the Audit Committee on a regular basis. +In addition, the Company’s Chief Legal and Compliance Officer reports directly to our CEO, providing visibility +into the Company’s risk profile. The board believes that the work undertaken by its committees, together with +the work of the full board and the Company’s senior management, enables effective oversight of the Company’s +management of risk. +14 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_18.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_18.txt new file mode 100644 index 0000000000000000000000000000000000000000..66bf04d785a526546dd5d904039a93d4d822d660 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_18.txt @@ -0,0 +1,75 @@ +Stakeholder Engagement +Maintaining open and ongoing dialogs with key stakeholders is an important component of our corporate culture. +Our management team participates in numerous investor meetings throughout the year to discuss our business, +strategy and financial results. This includes in-person, telephone and webcast conferences, as well as key +site visits. +In addition, each year we undertake an ESG stakeholder outreach program in which we discuss progress on our +ESG journey. This year we contacted holders of over 47% of our class B common stock as a part of this +program. Engagement provides us with the opportunity to understand issues of significant importance to +stakeholders and to receive feedback on our practices and disclosures. Similarly, it provides us with an +opportunity to discuss how management believes its actions are aligned with long-term value creation. +We also proactively correspond with other key stakeholders throughout the year. We share feedback from our +financial and ESG engagements with the board, the Compensation and Human Capital Committee, and the +Nominating and Corporate Governance Committee as appropriate. +We consider the views of our shareowners and +other stakeholders when evaluating our ESG +policies and practices; for example, in recent +years we have: +The Compensation and Human Capital Committee +considers shareowner feedback, along with the +market information and analysis provided by its +independent compensation consultant, when +making decisions about our executive +compensation programs. We have: +• Announced a number of environmental, social +and human capital goals, including a carbon +neutral by 2050 goal; +• Accelerated our sustainability reporting; +• Increased disclosures around individual director +racial, ethnic and gender diversity; +• Increased our commitments to diversity, equity +and inclusion, volunteerism and +charitable giving; +• Separated the Board Chair and CEO roles; +• Appointed an independent Board Chair; +• Increased board diversity; +• Expanded reporting on lobbying activities; +• Revised the Risk Committee charter to +specifically identify cybersecurity +oversight responsibilities; +• Revised the Nominating and Corporate +Governance Committee charter to include +oversight of environmental sustainability matters +and risks; and +• Revised the Compensation and Human Capital +Committee charter to include oversight of +performance and talent management, diversity, +equity and inclusion, work culture and employee +development and retention. + • Updated the peer group for executive and +director compensation market comparisons; +• Enhanced the competitiveness of our +performance-based annual +compensation program; +• Eliminated single-trigger equity vesting following +a change in control; +• Added relative total shareowner return as a +component of our Long-Term Incentive +Plan awards; +• Reevaluated performance metrics under +incentive compensation plans for proper design +to incent towards long-term Company +value creation; +• Provided additional detail around the +performance measures used for our annual and +long-term incentive plans; +• Adopted a mandatory incentive compensation +clawback policy applicable to executive officers; +• Approved the return to a single, annual goal +setting process for annual incentive program +design; and +• Added an individual payout cap to our annual +incentive plan. + +15 +The secret shape is a "rectangle". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_19.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_19.txt new file mode 100644 index 0000000000000000000000000000000000000000..7606c4c53c7775baf78f189ec68bd15857e86f65 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_19.txt @@ -0,0 +1,50 @@ +Political Engagement +Overview +Responsible participation in the political process is important to our success and the protection and creation of +shareowner value. We participate in this process in accordance with good corporate governance practices. Our +Political Engagement Policy (“policy”) is summarized below and is available at www.investors.ups.com. In +addition, as a component of our ongoing governance evaluation process, we recently expanded our reporting +around lobbying and trade association memberships. +• The Nominating and Corporate Governance Committee oversees the policy; +• Corporate political contributions are restricted; +• We publish a semi-annual political engagement report on our investor relations website; and +• Eligible employees can make political contributions through a Company-sponsored political action committee +(“UPSPAC”). UPSPAC is organized and operated on a voluntary, nonpartisan basis and is registered with the +Federal Election Commission. +Oversight and Processes +Political contributions are made in a legal, ethical and transparent manner that best represents the interests of +stakeholders. Political and lobbying activities require prior approval of the UPS Public Affairs department and are +subject to review (and in some cases prior approval) by the Nominating and Corporate Governance Committee. +Senior management works with Public Affairs on furthering our business objectives and protecting and enhancing +shareowner value. The Chief Corporate Affairs and Sustainability Officer reviews political and lobbying activities +and regularly reports to the board and the Nominating and Corporate Governance Committee. +Lobbying and Trade Associations +Public Affairs coordinates our lobbying activities, including engagements with federal, state, and local +governments. UPS is also a member of a variety of trade associations that engage in lobbying. Lobbying +activities require prior approval of Public Affairs. +The Nominating and Corporate Governance Committee regularly reviews UPS’s participation in trade associations +that engage in lobbying to determine if our involvement is consistent with UPS business objectives and whether +participation exposes the Company to excessive risk. +Lobbying activities are governed by comprehensive policies and practices designed to facilitate compliance with +laws and regulations, including those relating to the lobbying of government officials, the duty to track and +report lobbying activities, and the obligation to treat lobbying costs and expenses as nondeductible for +tax purposes. +Political Activity Transparency +We believe in transparency in our political activities. We publish semi-annual political engagement reports, which +are reviewed and approved by the Nominating and Corporate Governance Committee. The reports provide: +• Amounts and recipients of any federal and state Company political contributions in the U.S. (if any such +expenditures are made); +• The names of trade associations that receive $50,000 or more and that use a portion of the payment for +political contributions; and +• The names of trade associations or other organizations that draft model legislation that received $25,000 or +more in membership dues from UPS in a given year, and the percentage of dues used for lobbying purposes. +These disclosures were recently added as a governance enhancement based on stakeholder feedback. +Our most recent report is available on our investor relations website at www.investors.ups.com. We also publicly +file a federal Lobbying Disclosure Act Report each quarter, providing information on activities associated with +influencing legislation through communications with any member or employee of a legislative body, or with any +covered executive branch official. This report discloses expenditures for the quarter, describes the specific pieces +of legislation that were the topic of communications, and identifies the individuals who lobbied on behalf of UPS. +We file similar publicly available periodic reports with state agencies reflecting state lobbying activities. +16 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_2.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_2.txt new file mode 100644 index 0000000000000000000000000000000000000000..e8dbc00256a67d9790570b66413afd8a0576e887 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_2.txt @@ -0,0 +1,27 @@ +At the beginning of the year, I said 2023 was going to be a year of resiliency, and that turned out to be true. We faced +challenging external business conditions that led to declining volume, revenue and operating profit in all lines of our +business. I’m proud of the efforts of our nearly 500,000 employees for navigating through these challenges. +Throughout 2023, we operated with speed and agility, controlled what we could control, and stayed on strategy. Here +are some highlights from the year: + •Delivered excellent service to our customers around the globe, anchored by the best on-time performance of any +carrier in the U.S. for the sixth year in a row. + •Grew small and medium-sized business (SMB) penetration to 28.6% of total U.S. volume, driven by continued +expansion of DAP , our Digital Access Program, and the convenience of The UPS Store. + •Generated $10 billion in healthcare revenue across our three business segments; topped 17 million square feet of +healthcare-compliant distribution space and acquired MNX Global Logistics, expanding our cold chain capabilities. + •Delivered a win-win-win labor agreement for our Teamster employees with a wage and benefit compounded +annual growth rate increase of 3.3% over the five-year life of the contract, providing certainty for UPS and +our customers. + •Completed phase one of Smart Package Smart Facility, our RFID solution, in more than 1,000 buildings in the U.S., +reducing misloads by 67%. + •Acquired Happy Returns, enhancing our no-box, no-label, consolidated returns capabilities. + •Generated $91 billion in consolidated revenue with a consolidated adjusted operating profit margin of 10.9%*. + •Generated $5.3 billion in free cash flow* and repaid $2.4 billion of long-term debt. + •Returned $7.6 billion to shareowners, consisting of $5.4 billion in cash dividends and $2.25 billion in +share repurchases. +United Parcel Service, Inc. +55 Glenlake Parkway, N.E. +Atlanta, GA 30328 + +March 18, 2024 +Dear Fellow Shareowners: \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_20.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_20.txt new file mode 100644 index 0000000000000000000000000000000000000000..502571c0730a7993d2f88f4e6f9dc49832f394a5 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_20.txt @@ -0,0 +1,49 @@ +Sustainability +We are the world’s premier package delivery company and a leading provider of global supply chain +management solutions. We offer a broad range of industry-leading products and services through our extensive +global presence. Our services include transportation and delivery, distribution, contract logistics, ocean freight, +air freight, customs brokerage and insurance. +We operate one of the largest airlines and one of the largest fleets of alternative fuel vehicles under a global UPS +brand that stands for quality and reliability. We deliver packages each business day for approximately 1.6 million +shipping customers to 10.2 million delivery recipients in over 200 countries and territories. In 2023, we delivered +an average of 22.3 million packages per day, totaling 5.7 billion packages during the year. Our success depends +on economic stability, global trade and a society that welcomes opportunity. We understand the importance of +acting responsibly as a business, an employer and a corporate citizen. +The board considers key economic, environmental and social sustainability risks and opportunities as part of its +involvement in and oversight of UPS’s strategic planning. The board also regularly reviews the effectiveness of +our risk management and due diligence processes related to material sustainability topics. In executing its +responsibilities, the board recently delegated oversight of environmental sustainability matters to the Nominating +and Corporate Governance Committee. The Nominating and Corporate Governance Committee monitors the +development, implementation, and progress of the Company’s environmental sustainability goals and regularly +reports on those matters to the board. Authority for day-to-day management of sustainability matters has been +delegated to management. Our Chief Corporate Affairs and Sustainability Officer reports directly to the +Company’s CEO and regularly reports to the board regarding sustainability strategies, priorities, goals and +performance. In addition, the board is regularly briefed on issues of concern for customers, unions, employees, +retirees, investors, governmental entities and other stakeholders. For additional information on board oversight, +see page 14. +Each year we publish corporate sustainability reports showcasing the goals, recent achievements and challenges +of our commitment to balancing the economic, environmental and social aspects of our business. In response to +stakeholder interest, we have recently accelerated the timing of these reports to provide stakeholders with more +current information in advance of our Annual Meeting. These reports are available at https://about.ups.com/us/ +en/social-impact/reporting.html. Our sustainability goals are aspirational and may change. Statements regarding +our goals are not guarantees or promises that they will be met. +Human Capital Management +Our success is dependent upon our people, working together with a common purpose. As we seek to capture +new opportunities and pursue growth, we believe that transforming the UPS employee experience is foundational +to our success. This requires a thoughtful balance between the culture we have cultivated over the years and the +new perspectives we need to take the business into the future. We believe that UPS employees are among the +most motivated and highest-performing in the industry, and provide us a competitive advantage. To assist with +employee recruitment and retention, we continue to review the competitiveness of our employee value +proposition, including benefits and pay, training, talent development and promotion opportunities. +We have approximately 500,000 employees (excluding temporary seasonal employees), of which 414,000 are in +the U.S. and 86,000 are located internationally. Our global workforce includes approximately 85,000 +management employees (42% of whom are part-time) and 415,000 hourly employees (48% of whom are part- +time). More than 70% of our U.S. employees are represented by unions, primarily those employees handling or +transporting packages. Many of these employees are employed under a national master agreement and various +supplemental agreements with local unions affiliated with the International Brotherhood of Teamsters +("Teamsters"). In the third quarter of 2023, the Teamsters fully ratified a new national master agreement that +expires July 31, 2028. In addition, approximately 3,300 of our pilots are represented by the Independent Pilots +Association (“IPA”). Our agreement with the IPA becomes amendable September 1, 2025. + +17 +The secret clothing is a "glove". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_21.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_21.txt new file mode 100644 index 0000000000000000000000000000000000000000..240d1c2ddb5a682571253fa00b33ce3b525010c6 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_21.txt @@ -0,0 +1,47 @@ +Oversight and management +We seek to create an inclusive and equitable environment that brings together a broad spectrum of +backgrounds, cultures and stakeholders. We believe leveraging diverse perspectives and creating inclusive +environments improves our organizational effectiveness, cultivates innovation, and drives growth. +Our board, directly and through the Compensation and Human Capital Committee, is responsible for oversight of +human capital matters. Effective oversight is accomplished through a variety of methods and processes including +regular updates and discussions around human capital transformation efforts, technology initiatives impacting +the workforce, health and safety matters, employee survey results related to culture and other matters, hiring +and retention, employee demographics, labor relations and contract negotiations, compensation and benefits, +succession planning and employee training initiatives. +In addition, the Compensation and Human Capital Committee charter has been expanded to include oversight +responsibility for performance and talent management, diversity, equity and inclusion, work culture and +employee development and retention. We believe the board’s oversight of these matters helps identify and +mitigate exposure to labor and human capital management risks, and is part of the broader framework that +guides how we attract, retain and develop a workforce that aligns with our values and strategies. +Total rewards +We offer competitive compensation and benefits. In addition, our long history of employee stock ownership +aligns the interests of our management team with shareowners. In the U.S., benefits provided to our non-union +employees typically include: +• comprehensive health insurance coverage; +• life insurance; +• short- and long-term disability coverage; +• child/elder care spending accounts; +• work-life balance programs; +• an employee assistance program; and +• a discounted employee stock purchase plan. +We invest in our people by offering a range of other benefits, such as paid time off, retirement plans, and +education assistance. In the U.S., these other benefits are generally provided to non-union employees without +regard to full-time or part-time status. +Employee health and safety +We seek to provide industry-leading employee health, safety and wellness programs across our workforce. UPS's +Comprehensive Health and Safety Program ("CHSP") is an occupational health and safety system tailored to our +varied operational environments. Our CHSP covers a wide array of roles, from package handling to +administration, and spans geographical boundaries to include sorting facilities, mobile logistics, administrative +offices, and other locations worldwide. UPS conducts audits to assess specific risks and hazards, including +equipment safety, workplace environment, and emergency response protocols. We monitor our safety +performance through various measurable targets, including lost time injury frequency and the number of +recorded auto accidents. +Collective bargaining +We bargain in good faith with the unions that represent our employees. We frequently engage union leaders at +the national level and at local chapters throughout the U.S. We participate in works councils and associations +outside the U.S., which allows us to respond to emerging issues abroad. This work helps our operations to build +and maintain productive relationships with our employees. For additional information on the union membership +of our employees, see “Human Capital Management” above. +18 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_22.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_22.txt new file mode 100644 index 0000000000000000000000000000000000000000..f82cc3679f03e7ddf2046b9b66fdc7362c6eea2f --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_22.txt @@ -0,0 +1,48 @@ +Majority Voting and Director Resignation Policy +Our Bylaws provide for majority voting in uncontested director elections. The number of votes cast for a nominee +must exceed the number of votes cast against that person. Any incumbent director who does not receive a +majority of the votes cast must offer to resign from the board. +In such an event, the Nominating and Corporate Governance Committee will recommend to the board whether +to accept or reject the director’s offer to resign after considering all relevant factors. The board will act on the +recommendation within 90 days following certification of the election results after considering all +relevant information. +Any director who offers to resign must recuse himself or herself from the board vote, unless the number of +independent directors who were successful incumbents is fewer than three. The board will promptly disclose its +decision regarding any director’s offer to resign, including its reasoning. If the board determines to accept a +director’s offer to resign, the Nominating and Corporate Governance Committee will recommend whether and +when to fill such vacancy or whether to reduce the size of the board. +Board Meetings and Attendance +The board held seven meetings during 2023. Also during 2023, the Audit Committee met nine times, the +Compensation and Human Capital Committee met six times, the Nominating and Corporate Governance +Committee met four times and the Risk Committee met four times (including a joint meeting with the Audit +Committee). Prior to meetings, the Board Chair and the committee chairs work with management to determine +and prepare agendas for the meetings. +Board meetings generally occur over two days. Board committees generally meet on the first day, followed by +the board meeting. The second day typically consists of reports from each committee chair to the full board, +additional presentations by internal business leaders or others with expertise in various subject matters, and an +executive session consisting of only independent board members. +All directors attended at least 75% of the total number of board and any committee meetings of which he or she +was a member in 2023. Our directors are expected to attend each annual shareowner meeting, and all directors +attended the 2023 Annual Meeting. The independent directors met in executive session at all board meetings +held in 2023. +Code of Business Conduct +We are committed to conducting our business in accordance with the highest ethical principles. Our Code of +Business Conduct is applicable to anyone who represents UPS, including our directors, executive officers and all +other employees and agents of UPS. A copy of our Code of Business Conduct is available on our investor +relations website at www.investors.ups.com. +Conflicts of Interest and Related Person Transactions +Our Audit Committee is responsible for overseeing our Code of Business Conduct, which includes policies +regarding conflicts of interest. The Code requires employees and directors to avoid conflicts of interest, defined +as situations where the person’s private interests conflict, or may appear to conflict, with the interests of UPS. +We maintain a written related person transactions policy that applies to any transaction or series of transactions +in which: (1) the Company or any of its subsidiaries is a participant; (2) any “related person” (executive officer, +director, greater than 5% beneficial owner of the Company’s common stock, or an immediate family member of +any of the foregoing) has or will have a material direct or indirect interest; and (3) the aggregate amount +involved since the beginning of the Company’s last completed fiscal year will exceed or may reasonably be +expected to exceed $100,000. +The policy provides that related person transactions that may arise during the year are subject to the Audit +Committee’s reasonable prior approval. If advance approval of a related person transaction is not possible, then +the transaction will be considered and, if deemed appropriate, ratified no later than the Audit Committee’s next +regularly scheduled meeting. In determining whether to approve or ratify a transaction, the Audit Committee will + +19 \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_23.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_23.txt new file mode 100644 index 0000000000000000000000000000000000000000..36f263178ba1a918d080027df43d213aedd71191 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_23.txt @@ -0,0 +1,43 @@ +consider, among other factors it deems appropriate, whether the transaction is on terms no less favorable than +terms generally available to an unaffiliated third-party under the same or similar circumstance, the extent of the +related person’s interest in the transaction, whether the transaction would impair independence of a non- +employee director and whether there is a business reason for UPS to enter into the transaction. A copy of the +policy is available on our investor relations website at www.investors.ups.com. The Company did not engage in +any related person transactions since January 1, 2023 that require disclosure in this Proxy Statement or under +the Company’s policy. +At least annually, each director and executive officer completes a questionnaire in which they are required to +disclose any business relationships that may give rise to a conflict of interest, including transactions where UPS +is involved and where an executive officer, a director or a related person has a direct or indirect material +interest. We also review the Company’s financial systems and any related person transactions to identify +potential conflicts of interest. The Nominating and Corporate Governance Committee reviews a summary of this +information and makes recommendations to the Board of Directors regarding each board +member’s independence. +We have immaterial ordinary course of business transactions and relationships with companies with which our +directors are associated. The Nominating and Corporate Governance Committee reviewed the transactions and +relationships that occurred since January 1, 2023 and believes they were entered into on terms that are both +reasonable and competitive and did not affect director independence. Additional transactions and relationships of +this nature may be expected to take place in the ordinary course of business in the future. +Transactions in Company Stock +We prohibit our executive officers and directors from hedging or pledging their ownership in UPS stock. +Specifically, they are prohibited from purchasing or selling derivative securities relating to UPS stock and from +purchasing financial instruments that are designed to hedge or offset any decrease in the market value of UPS +securities. Furthermore, our employees, officers and directors are prohibited from engaging in short sales of +UPS stock. +Corporate Governance Guidelines and Committee Charters +Our Corporate Governance Guidelines and the charters for each of the board’s committees are available on our +investor relations website at www.investors.ups.com. Each committee reviews its charter annually. In addition, +the Nominating and Corporate Governance Committee reviews our Corporate Governance Guidelines annually +and recommends any changes to the board for approval. When amending our committee charters or Corporate +Governance Guidelines, we consider current governance trends and best practices, changes in regulatory +requirements, advice from outside sources and input from stakeholders. +Communicating with the Board of Directors +Stakeholders may communicate directly with the board, with the non-management directors as a group, or with +any specific director, by writing to the UPS Corporate Secretary, 55 Glenlake Parkway, N.E., Atlanta, Georgia +30328. Please specify to whom your letter should be directed. After review by the Corporate Secretary, +appropriate communications will be forwarded to the addressee. Advertisements, solicitations for business, +requests for employment, requests for contributions, matters that may be better addressed by management or +other inappropriate materials will not be forwarded. +20 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret animal #2 is a "panda". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_24.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_24.txt new file mode 100644 index 0000000000000000000000000000000000000000..d34229de76bec2997736dd99cbe2b1d61e36281a --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_24.txt @@ -0,0 +1,38 @@ +Our Board of Directors +Proposal 1 — Director Elections +What am I voting on? Election of each of the 12 named director nominees to hold office until the 2025 +Annual Meeting and until their respective successors are elected and qualified. +Board’s Recommendation: Vote FOR the election of each nominee. +Vote Required: A director will be elected if the number of votes cast for that director exceeds the number of +votes cast against that director. +The board has nominated the individuals named below for election as directors at the Annual Meeting. All +nominees were elected by shareowners at our last Annual Meeting. If elected, all nominees are expected to +serve until the next Annual Meeting and until their respective successors are elected and qualified. If any +nominee is unable to serve as a director, the board may reduce the number of directors that serve on the board +or choose a substitute nominee. Any nominee who is currently a director, and for whom more votes are cast +against than are cast for, must offer to resign from the board. +As a group, our director nominees, all of whom are currently directors, effectively oversee and constructively +challenge management’s performance in the execution of our strategy. Our directors’ broad professional skills +and experiences contribute to a wide range of perspectives in the boardroom. The Nominating and Corporate +Governance Committee regularly assesses the skills and experience necessary for our board to function +effectively and considers where additional expertise may be needed. +Diversity with respect to gender, age, ethnicity, skills, experience, perspectives, and other factors is a key +consideration when identifying and recommending director nominees. Diversity in our boardroom supports UPS’s +continued success. While we do not have a formal policy on board diversity, our Corporate Governance +Guidelines emphasize diversity, and the Nominating and Corporate Governance Committee actively considers +and assesses diversity in recruitment and nominations of director candidates through periodic board +composition evaluations. +Our Corporate Governance Guidelines provide that an individual should not be eligible for nomination or election +as a director of the Company after he or she reaches the age of 75 (the “retirement age requirement”). After +taking into account the value our Board Chair Bill Johnson provides to the board through, among other things, +his tenure, leadership roles, extensive knowledge of our business, industry, strategic priorities and competitive +developments he uses to set the board’s agendas in collaboration with the CEO, and his relationships with our +executives, the board (other than Bill) determined it was in the best interests of the Company and its +shareowners to grant Bill a one-year waiver from the retirement age requirement so that he can continue to lead +the board. +Biographical information about the director nominees appears below, including information about the experience, +qualifications, attributes, and skills considered by our Nominating and Corporate Governance Committee and +board in determining that the nominee should serve as a director, and director demographics. For additional +information about how we identify and evaluate nominees for director, see page 10. + +21 \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_25.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_25.txt new file mode 100644 index 0000000000000000000000000000000000000000..a48c06b0fe3882a6ef9a758155b7bb0d7820cef5 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_25.txt @@ -0,0 +1,41 @@ +Director Nominee Skills, Experience and Diversity +Highlights +92% Independent 61.6 years Average age 8.9 years Average tenure +42% Female 33% Ethnically diverse +Skills and Experience / +Attributes + +CEO ll ll l +CFO l l +Consumer / Retail l lll l +Digital Technology l l l l +Geopolitical Risk l l +Global / International lll lll l +Healthcare l ll +Human Capital +Management ll l +Operational lll l ll l l +Risk / Compliance / +Government ll lll +Sales / Marketing l llll +Small and Medium- +Sized Businesses l l l l +Supply Chain +Management l ll lll +Technology / +Technology Strategy l l l l +Other Public Company +Board Service l l l lll ll +Race / Ethnicity +Asian / Asian +American l +Black / African +American l l l +White ll l lll ll +Gender +Female l ll l l +Male l ll ll l l +22 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +R. AdkinsE. Boratto W. Hewett W. Johnson R. StokesC. Smith Shi C. ToméA. Hwang F. Moison K. WarshK. JohnsonM. Burns \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_26.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_26.txt new file mode 100644 index 0000000000000000000000000000000000000000..cbd978bcd44e66d787f8cef472aae89da6181f3c --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_26.txt @@ -0,0 +1,52 @@ +Director Nominee Biographical Information +Carol Tomé +UPS Chief Executive Officer +Age: 67 +Director since 2003 +Board Committee +Executive (Chair) +Career +Carol was appointed UPS’s Chief Executive Officer effective June 2020. As CEO, Carol has primary +responsibility for managing the Company’s day-to-day operations, and for developing and communicating our +strategy. She was Chief Financial Officer of The Home Depot, Inc., one of the world’s largest retailers, from +2001; and Executive Vice President Corporate Services from 2007 until her retirement in 2019. At The Home +Depot, she provided leadership in the areas of real estate, financial services and strategic business +development. Her corporate finance duties included financial reporting and operations, financial planning and +analysis, internal audit, investor relations, treasury and tax. She previously served as Senior Vice President +Finance and Accounting and Treasurer from 2000 until 2001; and from 1995 until 2000 she served as Vice +President and Treasurer. Carol serves on the Board of Directors of Verizon Communications, Inc. and served +on the Board of Directors of Cisco Systems, Inc. until 2020. +Reasons for election +Carol has a thorough understanding of our strategies and operations as a result of serving as Chief Executive +Officer, and from her extensive experience gained from serving on the board and as Chair of the Audit +Committee prior to becoming Chief Executive Officer. She has an in-depth knowledge of logistics and has +broad experience in corporate finance and risk and compliance gained throughout her career at The Home +Depot. She brings the experience of having served as Chief Financial Officer of a complex, multi-national +business with a large, labor intensive workforce. Carol also has experience with strategic business +development, including e-commerce strategy. +Rodney Adkins +Former Senior Vice President, International Business Machines Corporation +Age: 65 +Director since 2013 +Board Committees +Risk (Chair) +Compensation and Human Capital +Executive +Career +Rod is President of 3RAM Group LLC, a private company specializing in capital investments, business +consulting and property management services. Prior to that role, Rod served as IBM’s Senior Vice President of +Corporate Strategy before retiring in 2014. Rod was previously IBM’s Senior Vice President, Systems and +Technology Group, a position he held since 2009, and senior vice president of STG development and +manufacturing, a position he held since 2007. In his over 30-year career with IBM, a multinational technology +company, Rod held several other development and management roles, including general management +positions for the PC Company, UNIX Systems and Pervasive Computing. Rod currently serves as non- +executive Chairman of Avnet, Inc., in addition to serving on the Boards of Directors of PayPal Holdings, Inc. +and W.W. Grainger, Inc. He retired from the Board of Directors of PPL Corporation in 2019. +Reasons for election +As a senior executive of a public technology company, Rod gained a broad range of experience, including in +emerging technologies and services, global business operations, and supply chain management. He remains a +recognized leader in technology and technology strategy. Rod devotes significant time and attention to his +roles as a board member and Risk Committee Chair. In addition, the board benefits from Rod’s experience +serving as a director of other publicly traded companies. + +23 diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_27.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_27.txt new file mode 100644 index 0000000000000000000000000000000000000000..0839bd5e4bd20a7051b1b5a98ddb2f3c4b2e9ff1 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_27.txt @@ -0,0 +1,45 @@ +Eva Boratto +Chief Financial Officer, Bath & Body Works, Inc. +Age: 57 +Director since 2020 +Board Committee +Audit (Chair) +Career +Eva has served as the Chief Financial Officer of Bath & Body Works, Inc., a leader in personal care and home +fragrances, since August 2023. She previously served as the Chief Financial Officer for Opentrons Labworks, +Inc., a privately held life sciences company, from February 2022 until July 2023. +Eva served as Executive Vice President and Chief Financial Officer for CVS Health Corporation, a diversified +health services company, from 2018 until her retirement in 2021. In this role, Eva was responsible for all +aspects of the company’s financial strategy and operations, including accounting and financial reporting, +investor relations, mergers and acquisitions, treasury and capital planning, investments, risk management, +tax, budgeting and planning, and procurement. Prior to this role, from 2017 to 2018, Eva was Executive Vice +President, Controller and Chief Accounting Officer for CVS Health. She served as Senior Vice President and +Chief Accounting Officer of CVS Health from 2013 to 2017. Eva joined the company in 2010 and served as +Senior Vice President for pharmacy benefit management finance until 2013. +Reasons for election +Eva brings to the board extensive corporate finance experience gained throughout her career as a Chief +Financial Officer at multiple companies. She also brings the experience of having served as a senior executive +at a complex healthcare business with a large workforce and extensive retail presence, and at a smaller, +growth oriented business, including deep knowledge of financial reporting and accounting standards. Eva also +provides the board with the benefits of her experience with strategic risk management matters. +Michael Burns +Former Chairman, Chief Executive Officer and President, Dana Incorporated +Age: 72 +Director since 2005 +Board Committee +Audit +Career +Mike was the Chairman, President and Chief Executive Officer of Dana Incorporated, a global manufacturer of +technology driveline, sealing and thermal-management products, from 2004 until his retirement in 2008. He +joined Dana Incorporated in 2004 after 34 years with General Motors Company. During his tenure at General +Motors, Mike held various positions of increasing responsibility, including serving as President of General +Motors Europe AG from 1998 to 2004. +Reasons for election +Mike has years of senior leadership experience gained while managing large, complex businesses and leading +an international organization that operated in a highly competitive industry. He also has experience in design, +engineering, manufacturing, and sales and distribution. Mike also brings deep knowledge of technology and +the supply of components and services to major vehicle manufacturers. +24 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret object #3 is a "knife". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_28.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_28.txt new file mode 100644 index 0000000000000000000000000000000000000000..cc6425af93e4e194cf582a6850cd612127eb6f5c --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_28.txt @@ -0,0 +1,54 @@ +Wayne Hewett +Senior Advisor to Permira +Age: 59 +Director since 2020 +Board Committee +Audit +Career +Since 2018, Wayne has served as a senior advisor to Permira, a global private equity firm. As a part of his role +at Permira, Wayne serves in the following capacities at Permira Funds private portfolio companies: Non- +Executive Chairman of Cambrex Corporation, a leading contract developer and manufacturer of active +pharmaceutical ingredients, since 2020; director of Lytx, a telematics solutions provider, since 2021; as lead +director of Hexion Chemicals, a specialty chemicals and performance materials manufacturer, since 2023; and +as Non-Executive Chairman of Quotient Sciences, a drug development accelerator, since 2023. +Wayne served as Chief Executive Officer and as a member of the Board of Directors of Klöckner Pentaplast +Group, a leading supplier of plastic films for pharmaceutical, medical devices, food and other specialty +applications, from 2015 to 2017. He also served as President and as a member of the Board of Directors, of +Platform Specialty Products Corporation during 2015, and as President, Chief Executive Officer and as a +member of the Board of Directors of Arysta LifeScience Corporation from 2010 to 2015. Arysta was acquired +in 2015 by Platform Specialty Products Corporation. Prior to joining Arysta, he served as a senior consultant to +GenNx360, a private equity firm focused on sponsoring buyouts of middle market companies. He also spent +over two decades at General Electric Company, serving in a variety of executive roles. Wayne currently serves +on the Boards of Directors of The Home Depot, Inc. and Wells Fargo, Inc. +Reasons for election +Wayne has extensive experience in general management, finance, supply chain, operational and international +matters gained through serving in various executive roles. He has significant experience executing company- +wide initiatives across large organizations, developing proprietary products, optimizing supply chains, and +using emerging technologies to provide new products and services. He brings insights on business operations +and risk management through his senior management roles. In addition, Wayne has valuable experience +serving as a director of other publicly traded companies. +Angela Hwang +Former Chief Commercial Officer and President, Pfizer Biopharmaceuticals Business, Pfizer, Inc. +Age: 58 +Director since 2020 +Board Committee +Audit +Career +Angela serves as an advisor to Pfizer, Inc., a multinational pharmaceutical and biotechnology company, as +that company undertakes changes in its commercial organization following the completion of an acquisition. +She was a member of Pfizer’s Executive Team from 2018 to 2023 and served as Chief Commercial Officer and +President of Pfizer’s Global Biopharmaceuticals Business from 2019 to 2023. In this role, Angela led Pfizer’s +entire commercial business which included six different businesses reaching patients in more than +185 countries. +During 2018 she served as Group President, Pfizer Essential Health; and from 2016 to 2018 she was Global +President Pfizer Inflammation and Immunology. From 1997 until that time, Angela served in various roles with +increasing responsibility across all geographies and therapeutic areas, including senior roles in Pfizer Vaccines, +Primary Care, and Emerging Markets. +Angela sits on the board of advisors of the Cornell Johnson School of Management. +Reasons for election +Angela has significant expertise in the healthcare sector and in managing large complex businesses, including +supply chain management and logistics. She also has experience in emerging markets gained through her +work across many geographies. Angela is also a strong advocate for women’s leadership and sustainable +global health equity. + +25 diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_29.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_29.txt new file mode 100644 index 0000000000000000000000000000000000000000..884c11c48d82687223afb280739bcac728323a38 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_29.txt @@ -0,0 +1,47 @@ +Kate Johnson +President and Chief Executive Officer, Lumen Technologies, Inc. +Age: 56 +Director since 2020 +Board Committees +Nominating and Corporate Governance +Risk +Career +Kate has served as President, CEO and a member of the board of directors of Lumen Technologies, Inc., a +multinational technology company that integrates network assets, cloud connectivity, security solutions and +voice and collaboration tools into one platform for businesses, since November 2022. Previously, Kate served +as President of Microsoft U.S., a division of Microsoft Corporation, from 2017 until 2021. She had responsibility +for Microsoft’s U.S. activities, including growing the company’s solutions, services, and support revenues. +Prior to Microsoft, she held various senior positions with GE, including Executive Vice President and Chief +Commercial Officer GE Digital, from 2016 to 2017; Chief Executive Officer, GE Intelligent Platforms Software +from 2015 to 2016; and Vice President and Chief Commercial Officer, from 2013 to 2015. +Reasons for election +Kate has significant public company leadership experience, including CEO experience and experience leading +businesses within large companies undergoing transformation, large systems companies, and technology +companies. The board benefits from her strong commercial orientation, strategic experience and +technical acumen. +William Johnson +Former Chairman, President and Chief Executive Officer, H.J. Heinz Company +Age: 75 +Director since 2009 +Board Chair since 2020 +Lead Director 2016 – 2020 +Board Committees +Nominating and Corporate Governance (Chair) +Executive +Career +Bill currently serves as UPS’s Board Chair, and previously served as Chairman, President and Chief Executive +Officer of H.J. Heinz Company, a global packaged foods manufacturer, from 2000 until his retirement in 2013. +He became President and Chief Operating Officer of H.J. Heinz in 1996, and assumed the position of President +and Chief Executive Officer in 1998. Bill serves on the Board of Directors of Sovos Brands, Inc. and he +previously served on the Board of Directors of PepsiCo, Inc. until 2020. +Reasons for election +Bill has significant senior management experience gained through his years of service as the Chairman and +Chief Executive Officer of H.J. Heinz, a corporation with significant international operations and a large, labor +intensive workforce. He also has deep experience in operations, marketing, brand development and logistics. +He served as our lead independent director from 2016 to 2020, and he has served as our independent Board +Chair since 2020, during which time he has gained significant knowledge and expertise about our board +functions, operations, business and strategy. +26 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret animal #1 is a "lion". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_3.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_3.txt new file mode 100644 index 0000000000000000000000000000000000000000..e397137ff5af8ccd7a025f4d89870c19ed7ae808 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_3.txt @@ -0,0 +1,40 @@ +CUSTOMER FIRST, PEOPLE LED, +INNOVATION DRIVEN +Customer First is about reducing friction in the customer experience and meeting customer needs. While we +experienced some volume diversion during our Teamster labor negotiation, our commitment to service allowed us to +win back and win new volume following the ratification of the contract. In 2023, we continued to build new solutions +for shippers and recipients. For example, we launched Hyperlocal, a data driven solution that leverages our U.S. +facilities to provide select customers with a fast, next-day delivery option, and enables UPS to capture new profitable +B2C and B2B volume. We also expanded Delivery Photo, providing 92% of our global residential stops a photo that +shows exactly where the package was delivered, providing peace of mind to recipients and reducing “where’ s my +package” calls. Customer First is also about growing in the most attractive parts of the market, like SMBs, certain +enterprise customers, healthcare and international. In terms of SMBs, DAP is a competitive strength and SMB growth +driver that generated $2.9 billion in global revenue in 2023. Additionally, returns continue to be a growth area for +UPS. To accelerate that growth, we acquired Happy Returns and quickly made it available in over 5,000 The UPS Store +locations, making returns even more convenient for consumers and merchants. Looking at healthcare, our strategic +objective is to become the number one complex healthcare logistics provider in the world, and we are making bold +moves to get there. For example, our acquisition of MNX Global Logistics enables us to reach new customers and new +healthcare markets, like the radio-pharmaceuticals sector, with global time-critical and cold chain solutions. We see +significant opportunity for complex healthcare and expect to continue to grow in healthcare over the next few years. +We track progress in Customer First by improvements in our Net Promoter Score (NPS). In the U.S., we finished the year +with a NPS of 44 and moved closer toward our target NPS of 50. +Moving to People Led, we are focused on the employee experience and making UPS a great place to work. In +September, our five-year labor agreement with the Teamsters was fully ratified with overwhelming support from our +union-represented employees. This win-win-win agreement continues to reward our employees with the best pay and +benefits in our industry, which helps us attract and retain talent and provide industry-leading service to our customers. +Further, UPS retained the flexibility we need to stay competitive, serve our customers and keep our business strong. We +measure our progress in People Led by how likely an employee is to recommend others to work at UPS. In 2023, 65% +said they would recommend employment at UPS to family and friends, an improvement of 14 percentage points over +the past five years. Our goal is for Likelihood to Recommend to reach 80% or higher. +Lastly, Innovation Driven is about driving more productivity from the assets we own. Throughout 2023, productivity +initiatives like Total Service Plan enabled greater agility to match network capacity with changing volume levels. +Additionally, our Network Planning Tools (NPT), which use AI and machine learning, enabled us to adjust load planning, +scheduling and volume flows across the network based on real-time data. This technology is powerful, and NPT can +do in an afternoon what used to take a team of UPS engineers months to do. We also more closely aligned our digital +businesses, including Roadie, Ware2Go, Delivery Solutions and UPS Capital as we adopt a bolder approach to digital +commerce. We are accelerating new solutions to meet the needs of our customers and expanding our addressable +market to drive profitable growth. One example of a recent innovation is UPS Capital’ s Delivery Defense, which uses +predictive analytics to enable merchants to assess the level of delivery risk associated with addresses. We measure +Innovation Driven by delivering high returns on invested capital, and in 2023, we delivered an adjusted return on +invested capital* of 21.9%. +The secret sport is "boxing". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_30.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_30.txt new file mode 100644 index 0000000000000000000000000000000000000000..fe5d26bda4fed83fe2ce668a591b43f688a3fe94 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_30.txt @@ -0,0 +1,48 @@ +Franck Moison +Former Vice Chairman, Colgate-Palmolive Company +Age: 70 +Director since 2017 +Board Committees +Nominating and Corporate Governance +Risk +Career +Franck was Vice Chairman of the Colgate-Palmolive Company, a global consumer products company, from +2016 until his retirement in 2018. He led Colgate-Palmolive’s operations in Asia, South Pacific and Latin +America, and he also led Global Business Development. Previously, he was Chief Operating Officer of +Emerging Markets from 2010 until 2016, and he was given additional responsibility for Business Development +in 2013. Beginning in 1978, Franck served in various management positions with Colgate-Palmolive, including +President, Global Marketing, Global Supply Chain & R&D from 2007 to 2010; and President, Western Europe, +Central Europe and South Pacific from 2005 to 2007. He serves on the Boards of Directors of Hanes Brands, +Inc. and SES-imagotag in France. He is the Chairman of the International Advisory Board of the EDHEC +Business School (Paris, London, Singapore) and is a member of the International Board of the McDonough +School of Business at Georgetown University. +Reasons for election +Franck brings to the board extensive experience as a senior executive at a large international business. He has +deep expertise in consumer product innovation, strategic marketing, acquisitions, and emerging market +business development. He is a highly accomplished marketing and operating executive in the global consumer +products industry. In addition, the board benefits from his extensive international board experience. +Christiana Smith Shi +Former President of Direct-to-Consumer, Nike, Inc. +Age: 64 +Director since 2018 +Board Committees +Compensation and Human Capital (Chair) +Risk +Career +Christiana is the founder and principal at Lovejoy Advisors, LLC, an advisory services firm that assists clients +with digitally transforming consumer and retail businesses. She was the President, Direct-to-Consumer, for +Nike, Inc., a global apparel company, from 2013 until 2016. From 2012 through 2013, she was Nike’s Vice +President and General Manager, Global Digital Commerce. She joined Nike in 2010 as Vice President and Chief +Operating Officer, Global Direct-to-Consumer. Prior to joining Nike, Christiana spent 24 years at global +management consulting firm McKinsey & Company, the last ten as a senior partner. She began her career at +Merrill Lynch & Company in 1981 and served in various trading, institutional sales and investment banking +roles. Christiana also serves on the Board of Directors of Columbia Sportswear Company. She served on the +Boards of Directors of Williams-Sonoma, Inc. until 2019 and Mondelēz International, Inc. until 2023. +Reasons for election +Christiana brings to the board substantial experience in digital commerce, global retail operations and helping +companies with transformative change. She also provides strong supply chain and cost management expertise +in the global consumer industry. She gained experience advising senior executives at consumer companies +across North America, Europe, Latin America and Asia on leadership and strategy, and provides extensive +public company board experience. + +27 diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_31.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_31.txt new file mode 100644 index 0000000000000000000000000000000000000000..7ee5798f9ca6e9d482c5d9d3aca5802adc356ddd --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_31.txt @@ -0,0 +1,50 @@ +Russell Stokes +President and Chief Executive Officer Commercial Engines and Services, GE Aerospace +Age: 52 +Director since 2020 +Board Committees +Compensation and Human Capital +Nominating and Corporate Governance +Career +Russell is President and Chief Executive Officer, Commercial Engines and Services, GE Aerospace, a world- +leading provider of jet engines, components and integrated systems for commercial and military aircraft, and +a provider of services to support these offerings. He has served in these roles since July 2022 and is +responsible for an industry-leading portfolio of engines and services. Russell previously served as President +and CEO of GE Aviation Services from 2020 until 2022, where he was responsible for commercial growth, +operating performance and customer experience across its global Overhaul and Repair footprint. Prior to this +role, Russell was president and CEO of GE Power Portfolio from 2019 to 2020, GE Power from 2017 to 2019, +GE Energy Connections from 2015 to 2017, and GE Transportation from 2013 to 2015. He has held other +senior roles at GE Transportation and GE Aviation. Russell joined GE in 1997 as part of GE’s Financial +Management Program. +Reasons for election +During his more than 25-year career at GE, Russell has gained deep finance and operating experience through +navigating multiple industries, business segments, and market cycles. He brings to the board extensive +experience in transforming businesses by moving complex business issues into focused, targeted actions for +improvement. He also provides experience in developing solutions and technology required to successfully +implement business strategies. +Kevin Warsh +Former Member of the Board of Governors of the Federal Reserve System, Distinguished Visiting Fellow, +Hoover Institution, Stanford University +Age: 53 +Director since 2012 +Board Committees +Compensation and Human Capital +Nominating and Corporate Governance +Career +Kevin serves as the Shepard Family Distinguished Visiting Fellow in Economics at Stanford University’s Hoover +Institution, a public policy think tank, and as a Dean’s Visiting Scholar and lecturer at Stanford’s Graduate +School of Business. He also serves as partner at Duquesne Family Office LLC and is a member of the Group of +Thirty (G30) and the Panel of Economic Advisers of the Congressional Budget Office (CBO). He was a member +of the Board of Governors of the Federal Reserve from 2006 until 2011. From 2002 until 2006, Kevin served +at the White House as President George W. Bush’s special assistant for economic policy and as executive +secretary of the National Economic Council. Kevin was previously employed by Morgan Stanley & Co., +eventually serving as vice president and executive director of the Mergers and Acquisitions department. He +also serves on the Board of Directors of Coupang, Inc. +Reasons for election +Kevin offers the board extensive experience in understanding and analyzing the economic environment, the +financial marketplace and monetary policy. He has a deep understanding of the global economic and business +environment. Kevin also provides the experience of working in the private sector for a leading investment +bank gained during his tenure at Morgan Stanley & Co. +28 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_32.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_32.txt new file mode 100644 index 0000000000000000000000000000000000000000..292e15b170bc9def1b9373d1c70378795d91c606 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_32.txt @@ -0,0 +1,25 @@ +Director Independence +Having a significant majority of non-management independent directors encourages robust debate and +challenged opinions in the boardroom. Our Corporate Governance Guidelines include director independence +standards consistent with the New York Stock Exchange (“NYSE”) listing standards. Our Corporate Governance +Guidelines are available on the governance section of our investor relations website at www.investors.ups.com. +The board has evaluated each director’s independence and considered whether there were any relevant +relationships between UPS and each director, or any member of his or her immediate family. The board also +examined whether there were any relationships between UPS and organizations where a director is or was a +partner, principal shareowner or executive officer. +Specifically, the board evaluated certain ordinary course business transactions and relationships between UPS +and the organizations that currently or in the prior year employed Eva Boratto, Mike Burns, Wayne Hewett, +Angela Hwang, Kate Johnson, Russell Stokes and Kevin Warsh, or their immediate family members, as an +executive officer. The board also evaluated the ordinary course business transactions and relationships between +UPS and any organizations where Rod Adkins, Wayne Hewett, Christiana Smith Shi and Kevin Warsh, or their +immediate family members, were a partner or principal shareowner. In each case, no such transactions +exceeded the thresholds in UPS’s Corporate Governance Guidelines. The board determined that none of these +transactions or relationships were material to the Company, the individuals or the organizations with which they +were associated. +The board has determined that each director nominee, other than our CEO, Carol Tomé, is independent. All +members of the Audit Committee, Compensation and Human Capital Committee, Nominating and Corporate +Governance Committee and Risk Committee are independent, and all members of the Audit Committee and the +Compensation and Human Capital Committee meet the additional independence criteria applicable to directors +serving on these committees under New York Stock Exchange listing standards. + +29 \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_33.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_33.txt new file mode 100644 index 0000000000000000000000000000000000000000..99afafb7d104906f09de7f13b6dbae0e8b869561 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_33.txt @@ -0,0 +1,171 @@ +Committees of the Board of Directors +The board has four committees composed entirely of independent directors as defined by the NYSE and by our +director independence standards. Information about each of these committees is provided below. The board also +has an Executive Committee that may exercise all powers of the Board of Directors in the management of our +business and affairs, except for those powers expressly reserved to the board under Delaware law or otherwise +limited by the board. Carol Tomé is the Chair, and Rod Adkins and Bill Johnson also serve on the +Executive Committee. +Audit Committee(1) +Compensation and Human +Capital Committee(2) +Nominating and Corporate +Governance Committee Risk Committee +Eva Boratto, Chair +Michael Burns +Wayne Hewett +Angela Hwang +Christiana Smith Shi, Chair +Rodney Adkins +Russell Stokes +Kevin Warsh +William Johnson, Chair +Kate Johnson +Franck Moison +Russell Stokes +Kevin Warsh +Rodney Adkins, Chair +Kate Johnson +Franck Moison +Christiana Smith Shi +Meetings in 2023: 9 Meetings in 2023: 6 Meetings in 2023: 4 Meetings in 2023: 4 +Primary Responsibilities Primary Responsibilities Primary Responsibilities Primary Responsibilities +• Assisting the board in +discharging its +responsibilities relating to +our accounting, reporting +and financial practices +• Overseeing our accounting +and financial +reporting processes +• Overseeing the integrity of +our financial statements, +our systems of disclosure +controls and +internal controls +• Overseeing the +performance of our +internal audit function +• Engaging and overseeing +the performance of our +independent accountants +• Overseeing compliance +with legal and regulatory +requirements as well as +our Code of +Business Conduct +• Discussing with +management policies with +respect to financial +risk assessment +• Assisting the board in +discharging its +responsibilities with +respect to compensation +of our senior +executive officers +• Reviewing and approving +corporate goals and +objectives relevant to the +compensation of our CEO +• Evaluating the +CEO’s performance +• Overseeing the +evaluation of risks +associated with our +compensation strategy +and programs +• Overseeing any outside +consultants retained to +advise the Committee +• Recommending to the +board the compensation +for non-management +directors +• Overseeing performance +and talent management, +diversity, equity and +inclusion, work culture +and employee +development +and retention +• Addressing succession +planning +• Assisting the board in +identifying and screening +qualified director +candidates, including +shareowner +submitted candidates +• Recommending +candidates for election or +reelection, or to fill +vacancies, on the board +• Aiding in attracting +qualified candidates to +serve on the board +• Recommending corporate +governance principles, +including the structure, +composition and +functioning of the board +and all board +committees, the +delegation of authority to +subcommittees, board +oversight of management +actions and reporting +duties of management +• Overseeing relevant +environmental +sustainability matters +and risks +• Overseeing +management’s +identification and +evaluation of +enterprise risks +• Overseeing and reviewing +with management the +Company’s risk +governance framework +• Overseeing risk +identification, tolerance, +assessment and +management practices +for strategic enterprise +risks, including +cybersecurity risks and +cyber incident response +• Reviewing approaches to +risk assessment and +mitigation strategies in +coordination with the +board and other +board committees +• Communicating with the +Audit Committee to +enable the Audit +Committee to perform its +statutory, regulatory, and +other responsibilities with +respect to oversight of +risk assessment and +risk management +(1) All members of the Audit Committee have been designated by the Board of Directors as audit committee financial experts. Each +member of the Audit Committee meets the independence requirements of the NYSE and Securities and Exchange Commission +(“SEC”) rules and regulations applicable to audit committee members, and each is financially literate. +(2) Each member of the Compensation and Human Capital Committee meets the NYSE’s independence requirements applicable to +compensation committee members. In addition, each member is a non-employee director as defined in Rule 16b-3 under the +Securities Exchange Act of 1934. None of the members is or was during 2023 an employee or former employee of UPS, and none +had any direct or indirect material interest in or relationship with UPS outside of his or her position as a non-employee director. The +Compensation and Human Capital Committee may delegate its responsibilities to subcommittees of one or more directors as it may +deem appropriate. For information regarding the role of our executive officers and the committee’s independent compensation +consultant in determining or recommending the amount or form of executive and director compensation (as applicable), please see +the Compensation Discussion and Analysis section and the Director Compensation section below in this Proxy Statement. +Compensation Committee Interlocks and Insider Participation: None of our executive officers serves or served during 2023 as +a member of a board of directors or compensation committee of any entity that has one or more executive officers who serve on our +Board of Directors or Compensation and Human Capital Committee. +30 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret animal #5 is a "wolf". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_34.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_34.txt new file mode 100644 index 0000000000000000000000000000000000000000..190f99ec5fe872dca5ab97877a3dbe5975eaf82f --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_34.txt @@ -0,0 +1,74 @@ +Director Compensation +The Compensation and Human Capital Committee of the Board of Directors evaluates director compensation with +the assistance of its independent compensation consultant, Frederic W. Cook & Co., Inc. (“FW Cook”). +For service in 2023, our non-employee directors each received a cash retainer of $116,250 and a restricted stock +unit (“RSU”) award valued at $180,000. Equity compensation links director pay to the value of Company stock +and aligns the interests of directors with long-term shareowners. Directors are also reimbursed for board +related expenses. +To reflect the additional responsibilities and time commitment associated with various board leadership positions, +our independent Board Chair received an additional cash retainer of $160,000 and an additional RSU award +valued at $70,000. The chairs of the Compensation and Human Capital, Nominating and Corporate Governance +and Risk Committees each received an additional cash retainer of $20,000, and the Chair of the Audit Committee +received an additional cash retainer of $25,000. Our CEO does not receive any compensation for board service. +Cash retainers are paid on a quarterly basis. Non-employee directors may defer retainers by participating in the +UPS Deferred Compensation Plan, but the Company does not make any contributions to this plan. There are no +preferential or above-market earnings on amounts invested in the UPS Deferred Compensation Plan. +RSUs are fully vested on the date of grant and are required to be held by the director until he or she separates +from the board, at which time the RSUs convert to shares of class A common stock. Dividends earned on shares +underlying RSUs are deemed reinvested in additional units at each dividend payable date and are subject to the +same terms as the original grant. This holding period requirement increases the strength of alignment of +directors’ interests with those of our long-term shareowners. Following a review of Company peer group and +broader industry practices, and to improve the competitiveness of non-employee director compensation, in +August 2023, the Board increased non-employee director annual cash retainers to $120,000 and increased the +annual RSU award value to $185,000, placing total director pay approximately 5% below the peer group median. +2023 Director Compensation and Outstanding Stock Awards +The following tables set forth the cash compensation paid to individuals who served as directors in 2023 (other +than our CEO) and the aggregate value of stock awards granted to those persons in 2023, as well as outstanding +director equity awards held as of December 31, 2023, except as described below. +2023 Director Compensation +Outstanding Director Stock Awards + (as of December 31, 2023) +Name +Fees Earned +or Paid +in Cash +($) +Stock +Awards +($)(1) +Total +($) +Stock Awards +Name +Restricted +Stock Units +(#) +Phantom +Stock Units +(#) +Rodney Adkins(2) 136,250 179,875 316,125 Rodney Adkins 19,844 — +Eva Boratto(2) 141,250 179,875 321,125 Eva Boratto 3,904 — +Michael Burns 116,250 179,875 296,125 Michael Burns 32,194 — +Wayne Hewett 116,250 179,875 296,125 Wayne Hewett 3,904 — +Angela Hwang 116,250 179,875 296,125 Angela Hwang 4,268 — +Kate Johnson 116,250 179,875 296,125 Kate Johnson 3,577 — +William Johnson(2)(3) 296,250 249,884 546,134 William Johnson 34,845 — +Ann Livermore(4) 67,500 — 67,500 Ann Livermore(4)(6) — 2,939 +Franck Moison 116,250 179,875 296,125 Franck Moison 11,396 — +Christiana Smith Shi(2) 126,250 179,875 306,125 Christiana Smith Shi 9,401 — +Russell Stokes 116,250 179,875 296,125 Russell Stokes 3,577 — +Kevin Warsh 116,250 179,875 296,125 Kevin Warsh 22,025 — +Carol Tomé(5)(6) 27,071 1,389 +(1) The values of stock awards in this column represent the grant date fair value of RSUs granted in 2023, computed in accordance with +Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 718. RSUs are fully vested on the date +of grant and are settled in shares of class A common stock upon the director’s separation from service from UPS. +(2) Includes cash compensation for committee chair service. +(3) Includes cash compensation and stock awards for independent board chair service. +(4) Ann Livermore retired from the board on May 4, 2023. Information is as of such date. All outstanding RSUs converted into shares of +class A common stock upon such retirement. +(5) Only includes outstanding stock awards that were granted while serving as an independent director. +(6) Phantom stock units were granted to non-employee directors pursuant to a deferred compensation program previously provided to +non-employee directors. Upon termination, amounts represented by phantom stock units will be distributed in cash over a time +period elected by the recipient. + +31 \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_35.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_35.txt new file mode 100644 index 0000000000000000000000000000000000000000..fea9698ba1d3ca5b46b1f6d03c30e6a5348bf497 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_35.txt @@ -0,0 +1,38 @@ +Executive Compensation +Compensation Committee Report +The Compensation and Human Capital Committee (as used in this Executive Compensation section, the +“Committee”) is responsible for setting the principles that guide compensation decision-making, establishing the +performance goals under our executive compensation plans and programs, and approving compensation for the +executive officers. The Committee is also responsible for overseeing performance and talent management, +diversity, equity and inclusion, work culture and employee development and retention. +We are focused on maintaining an executive compensation program that supports the long-term interests of the +Company’s shareowners. We align the interests of our executive officers with those of all shareowners by linking +a significant portion of compensation to Company performance and shareowner returns. The Company’s +programs are also designed to attract, retain, and motivate executives who make substantial contributions to the +Company’s performance by allowing them to share in the Company’s success. +Our significant efforts in 2023 included adopting an incentive compensation clawback policy applicable to +executive officers in the event of a Company financial restatement, developing and implementing an appropriate +executive compensation structure and performance goals in a challenging economic environment including +Company labor uncertainty, and updating the pay mix for executive officers through structural changes to the +annual incentive program to make this program more competitive. With the assistance of our independent +compensation consultant and taking into account recent stakeholder feedback and market developments, we +also reevaluated the performance metrics on which incentive compensation payouts would be based in order to +maximize long-term value. In addition, beginning with the 2024 performance period, the Committee has +returned to annual goal setting for annual incentive awards. +Also during 2023, the Committee continued to execute on its human capital oversight responsibilities, including +supporting succession planning efforts at the senior management level, overseeing progress towards the +Company’s diversity in management goals, and monitoring employee recruitment and retention efforts. +We have reviewed the Compensation Discussion and Analysis and discussed it with management. Based on our +review and discussions, we recommended to the Board of Directors that the Compensation Discussion and +Analysis be included in the 2024 Proxy Statement and incorporated by reference in the Annual Report on Form +10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission. +The following Compensation Discussion and Analysis describes the Committee’s principles, strategy and +programs regarding 2023 executive compensation. +The Compensation and Human Capital Committee +Christiana Smith Shi, Chair +Rodney Adkins +Russell Stokes +Kevin Warsh +32 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_36.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_36.txt new file mode 100644 index 0000000000000000000000000000000000000000..e5b796948f9cd9247ef129dcf6b8d702e6914474 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_36.txt @@ -0,0 +1,42 @@ +Compensation Discussion and Analysis +UPS’s executive compensation principles, strategy and programs for 2023 are described below. This section +explains how and why the Committee made its 2023 compensation decisions for our executive officers, including +details regarding the following Named Executive Officers (“NEOs”): +Named Executive Officer Title +Carol Tomé Chief Executive Officer +Brian Newman Chief Financial Officer +Nando Cesarone President U.S. and UPS Airline +Kate Gutmann President International, Healthcare and Supply Chain Solutions +Bala Subramanian Chief Digital and Technology Officer +Executive Compensation Strategy +UPS’s executive compensation programs are designed to drive organizational performance by tying a significant +portion of pay to Company performance; attract, retain and motivate by competitively and fairly compensating +our executive officers; encourage long-term stock ownership and careers with UPS; and align the interests of our +executives to long-term value creation. +We believe it is appropriate to have a clear link between variable pay and operational and financial performance. +We seek to develop performance metrics aligned with the Company’s strategy and business model. Long-term +incentive awards vest over timeframes aligned with the delivery of long-term shareowner value. +Key Elements of UPS Executive Compensation +Total target direct compensation (generally, base salary and annual and long-term incentives, but excluding any +special awards) for our NEOs in 2023 consisted of the following key elements. + +33 +Total Target +Direct +Compensation +Base Salary + •Fixed cash compensation + •Designed to provide an appropriate level of financial certainty +Annual Incentive Awards + •Subject to achievement of key business objectives for the year + •Payout is “at risk” based on Company performance +Stock Option Awards + •Further aligns shareowner and employee interests + •Motivates toward sustained stock price increase + •Multi-year vesting provides retention incentive +Long-term Incentive Performance Awards + • Payout is subject to achievement of performance metrics over a three-year period + •Supports long-term strategy + •Motivates and rewards achievement of long-term goals + •Acts as a retention mechanism +The secret flower is a "tulip". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_37.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_37.txt new file mode 100644 index 0000000000000000000000000000000000000000..fef052b0dfd5af46ced4b941ec279c11e4242e05 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_37.txt @@ -0,0 +1,50 @@ +Target Direct Compensation +A substantial majority of NEO total target direct compensation is “at risk” and subject to the achievement of +annual or long-term performance goals and/or continued employment with UPS. The charts below highlight the +elements of our CEO and an average of other NEOs’ target direct compensation for 2023. +Other Elements of Compensation + +Benefits Perquisites Retirement Programs +ü NEOs generally participate in +the same plans as other +employees. +ü Includes medical, dental and +disability plans. +ü See further details on page 41. +ü Limited in nature; we believe +benefits to the Company +outweigh the costs. +ü Includes financial planning and +executive health services that +facilitate the NEOs’ ability to +carry out responsibilities, +maximize working time and +minimize distractions. +ü Considered necessary or +appropriate to attract and +retain executive talent. +ü See further details on page 41. +ü NEOs and most non-union U.S. +employees participate in the +same qualified plans with the +same formulas. +ü Includes non-qualified and +qualified pension, retirement +savings and deferred +compensation plans. +ü See further details on page 41. +34 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +93% “at Risk” 86% “at Risk” +14% +7% 14% +16% +Base Salary +Annual +Performance-Based +Incentives +CEO Target Direct Compensation Other NEOs Target Direct Compensation +79% 70%Long-Term +Equity Incentives +The secret currency is a "pound". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_38.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_38.txt new file mode 100644 index 0000000000000000000000000000000000000000..f8d5f18dca51b9f8e01ebf0fc7aaa85d3572ae1e --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_38.txt @@ -0,0 +1,46 @@ +Roles and Responsibilities +The Committee is responsible for setting the principles that guide compensation decision-making, establishing +performance goals under our executive compensation plans and programs, and approving compensation for the +executive officers. The Committee may engage the services of outside advisors and other consultants. In 2023, +the Committee retained FW Cook to act as its independent compensation advisor. FW Cook reported directly to +the Committee and provided no additional services to UPS. The following table summarizes the key roles and +responsibilities in the executive compensation decision-making process. +Participant and Roles +The Committee +• develops principles underpinning executive compensation +• sets performance goals upon which incentive payouts are based +• evaluates the CEO’s performance +• reviews the CEO’s performance assessment of other executive officers +• reviews and approves incentive and other compensation of the executive officers +• reviews and approves the design of other benefit plans for executive officers +• oversees the risk evaluation associated with our compensation strategy and programs +• considers whether to engage any compensation consultant, and evaluates their independence +• reviews and discusses the Compensation Discussion and Analysis with management +• recommends to the board the inclusion of the Compensation Discussion and Analysis in the Proxy Statement +• approves the inclusion of the Committee’s report on executive compensation in the Proxy Statement +Independent Members of the Board of Directors +• review the Committee’s assessment of the CEO’s performance +• complete a separate evaluation of the CEO’s performance +• approve the Compensation Discussion and Analysis for inclusion in the Proxy Statement +Independent Compensation Consultant +• serves as a resource for market data on pay practices and trends +• provides independent advice to the Committee +• provides competitive analysis and advice related to outside director compensation +• reviews the Compensation Discussion and Analysis +• conducts an annual risk assessment of the Company’s compensation programs +Executive Officers +• the CEO makes compensation recommendations to the Committee for the other executive officers +• the CEO and CFO recommend performance goals under incentive compensation plans and provide an +assessment as to whether performance goals were achieved +Compensation Consultant Independence +In November 2023, the Committee reviewed FW Cook’s independence and evaluated any potential conflicts of +interest. The Committee evaluated all relevant factors, including: (1) other services provided to UPS by FW Cook +(if any); (2) fees paid by UPS as a percentage of FW Cook’s total revenue; (3) policies or procedures maintained +by FW Cook that are designed to prevent a conflict of interest; (4) any business or personal relationships +between the individual consultants involved in the engagement and a member of the Committee; (5) any +Company stock owned by the individual consultants involved in the engagement; and (6) any business or +personal relationships between UPS executive officers and FW Cook or the individual consultants involved in the +engagement. After evaluating these factors, the Committee concluded that FW Cook was independent, and that +the engagement of FW Cook did not raise any conflict of interest. + +35 \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_39.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_39.txt new file mode 100644 index 0000000000000000000000000000000000000000..58d20bd9a2383de1a40ccfbc5bc0ea16b8eea5e8 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_39.txt @@ -0,0 +1,44 @@ +Peer Group and Market Data Utilization +In determining compensation targets and payouts, the Committee evaluates, among other things, pay practices +and compensation levels at a peer group of companies. In addition to peer group analyses, the Committee +considers other market data, including general compensation survey data from comparably sized companies. +Compensation is not targeted to a particular percentile within that peer group or otherwise. +With assistance from its independent compensation consultant, the Committee evaluates the peer group +annually to determine if the companies included in the group are the most appropriate comparators for +measuring the success of our executives in delivering shareowner value. The Committee seeks to select a +compensation peer group that is aligned with the Company’s business strategy and focus. Quantitative +considerations consist of historical revenue, operating income and free cash flow, as well as total shareholder +return. Other more general considerations include market capitalization, percentage of foreign sales, capital +intensity, operating margins and size of employee population. +Following a comprehensive reevaluation and revisions to the peer group in 2021, the compensation peer group +consists of the following: +AT&T, Inc. FedEx Corporation McDonald’s Corp. +The Boeing Company The Home Depot, Inc. PepsiCo, Inc. +Caterpillar Inc. Intel Corporation The Procter & Gamble Company +Cisco Systems, Inc. Johnson & Johnson Target Corp. +Comcast Corporation Lockheed Martin Corporation Walmart, Inc. +Deere & Company Lowe’s Companies, Inc. +Internal Compensation Comparisons and Annual Performance Reviews +The Committee also generally considers the compensation differentials between executive officers and other UPS +positions, and the additional responsibilities of the CEO compared to other executive officers. Internal +comparisons help ensure that executive officer compensation is reasonable when compared to that of +direct reports. +The CEO assesses the performance of all other executive officers each year and provides feedback to the +Committee. In addition, the Committee evaluates the CEO’s performance on an annual basis. The Committee +Chair discusses the results of this evaluation with the full board (other than the CEO) in an executive session. As +part of this evaluation, the board considers the CEO’s strategic vision and leadership, execution of UPS’s +business strategy, and achievement of business goals. Other factors include the CEO’s ability to make long-term +decisions that create a competitive advantage, and overall effectiveness as a leader. +Base Salary +Base salaries provide our NEOs with a fixed level of cash compensation and are designed to provide an +appropriate level of financial certainty. The Committee considers several factors in determining NEOs’ annual +base salaries, including Company and individual performance, scope of responsibility, leadership, market data +and internal compensation comparisons. Taking all of those factors into account, in March 2023, the Committee +determined not to increase the CEO’s base salary, but to make market-based adjustments to her incentive +compensation targets as discussed below. The Committee approved increases of between 3.0% and 4.0% for +the other NEOs. Additionally, as a component of the pay mix redesign approved in November 2022 and +discussed below under “Management Incentive Program - Annual Awards Overview”, further base salary +adjustments for each NEO of less than 3.5% were made effective beginning in January 2023. +36 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_4.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_4.txt new file mode 100644 index 0000000000000000000000000000000000000000..99e909894086e38e9ce744126531dd432de64690 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_4.txt @@ -0,0 +1,18 @@ +LOOKING AHEAD +After a difficult year, we exited 2023 with some momentum, but momentum is not enough. We are making bold moves +to right size our company for the future under an initiative we call “Fit to Serve.” We are exploring strategic alternatives +for our truckload brokerage business known as Coyote. We are leaning into growth in the most attractive parts of the +market and are continuing to drive efficiency across our integrated network. We expect market conditions to settle +down in 2024 and that, coupled with our initiatives, gives us confidence that we will reverse the negative trends we +experienced in 2023. +To wrap up, I want to encourage all shareowners to vote your shares at our Annual Meeting in May. This is your +opportunity to share your views with us. We listen and take your feedback into account as we seek to grow our +business, further improve governance and create long-term shareowner value. As we approach the Annual Meeting, I +encourage you to contact us with any questions or feedback at 404-828-6059. +I’ll leave you with a quote from our founder, Jim Casey, “Our horizon is as distant as our mind’ s eye wishes it to be.” +UPS is stronger than ever. We are writing the next chapter of the UPS story and we believe our best days are ahead +of us. +We thank you for your support. +Carol B. Tomé +Chief Executive Officer +*See reconciliation of Non-GAAP financial measures on page A1. \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_40.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_40.txt new file mode 100644 index 0000000000000000000000000000000000000000..906af1b93f00c9d48577e2bac1671a1dabc70e1f --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_40.txt @@ -0,0 +1,49 @@ +Management Incentive Program - Annual Awards Overview +The UPS Management Incentive Program (“MIP”) motivates management by aligning pay with annual Company +performance. This is accomplished by linking payouts to the achievement of pre-established metrics and +individual performance. +Annual MIP award opportunities are provided as a percentage of base salary. MIP awards are considered fully at +risk based on Company performance and subject to a maximum payout of the lesser of $10 million or 200% of +target for each NEO. +MIP payouts are determined by the Committee taking into consideration: +• actual performance compared to MIP targets (described below); +• the MIP payout as a percent of target to non-executive officer MIP participants; and +• the overall business environment and economic trends. +Based on an evaluation of our incentive compensation plan structure with the assistance of FW Cook, in +November 2022, the Committee approved changes to the overall pay mix for MIP participants, including the +NEOs (“pay mix redesign”). These changes resulted in better alignment of annual incentive pay with market +practices, improved the competitiveness of base salaries and simplified compensation design. +Changes included the following, all of which were effective beginning with the 2023 MIP award: +• MIP awards are now paid in cash, unless a participant elects to receive the award in shares; previously MIP +awards were generally paid two-thirds in restricted performance units (“RPUs”) and one-third in cash; +• Ownership incentive portions of MIP awards, which were tied to an individual’s UPS equity ownership, were +discontinued, with a generally equivalent value incorporated into base salary adjustments; and +• MIP award targets as a percentage of base salary were reduced from 130% to 115% for NEOs (other than +the CEO) to account for increases in base salaries; the CEO’s award target was maintained at 200% of base +salary following an evaluation of market-competitive incentives. +2023 MIP Awards +After taking into account the challenging economic environment including Company labor uncertainty, as well as +the effectiveness of similar approaches in recent years, in the first quarter of 2023 the Committee determined it +remained appropriate to bifurcate the performance period for the 2023 MIP award into two six-month +performance periods (January through June 2023 and July through December 2023), with each performance +period accounting for 50% of the overall award. +Beginning with the 2024 performance period, the Committee has returned to full-year goal setting for MIP +awards. The Committee approved the following financial performance metrics for the NEOs’ 2023 MIP awards +as follows: +• Revenue (weighted 20%), which was considered important to generating profits and maintaining our long- +term competitive positioning and viability through 2023. +• Adjusted Operating Profit (weighted 40%), which is determined by reference to our publicly reported +adjusted operating profit for 2023. This metric is directly impacted by our effectiveness in achieving our +targets in other key performance elements, including volume and revenue growth and operating leverage. +• Adjusted Return on Invested Capital (“ROIC”) (weighted 40%), which is calculated as the trailing twelve +months of adjusted operating income divided by the average of current assets, current liabilities, goodwill, +intangible assets, net property, plant and equipment, other assets, and operating lease right-of-use assets. +We consider ROIC to be a useful measure for evaluating the effectiveness and efficiency of our long-term +capital investments. ROIC is calculated by reference to our publicly reported adjusted operating profit. +The Committee approved financial performance goals after discussing with management and its independent +compensation consultant expected financial performance and the other risks described above. The goals for the +first performance period were set in in the first quarter of 2023 and the goals for the second performance period +were set in the third quarter 2023, in each case without a threshold and with a maximum payout of the lesser of +$10 million or 200% of target. + +37 \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_41.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_41.txt new file mode 100644 index 0000000000000000000000000000000000000000..9bf96f6a55abc3b8cba910fae6d1e922f72f0044 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_41.txt @@ -0,0 +1,90 @@ +The goals approved by the Committee, and the performance results, were as follows (dollars in millions): +2023 MIP Financial Performance Metrics +First + Half +2023 + Goal +First + Half + 2023 + Actual +Second + Half + 2023 + Goal +Second + Half +2023 + Actual +Revenue $47,247 $44,988 $48,123 $46,044 +Adjusted Operating Profit(1) $5,918 $5,452 $5,473 $4,418 +Adjusted ROIC(1) 28.6% 27.4% 24.7% 21.9% +(1) Non-GAAP financial measures. See footnote on page 40. +The Committee maintains discretion to adjust awards earned under the MIP up (but not above the maximum +amount for each NEO) or down based on its qualitative assessment of each NEO’s individual performance and +other business factors. The Committee approved the following MIP award payouts for each NEO. +Name +Incentive +Target +(% Base Salary) +Incentive +Target Value +($) +Payout Factor +(%) +Total 2023 +MIP Award +Payout +($) +Carol Tomé 200 3,019,425 50% 1,509,713 +Brian Newman 115 963,384 50% 481,692 +Nando Cesarone 115 975,674 50% 487,837 +Kate Gutmann 115 975,674 50% 487,837 +Bala Subramanian 115 889,133 50% 444,567 +Long-Term Incentive Awards +Our two long-term incentive programs, the Long-Term Incentive Performance (“LTIP”) program and the Stock +Option program, provide participants with equity-based incentives that reward performance over a multi-year +period and serve as a retention mechanism. Overlapping LTIP performance cycles incentivize sustained financial +performance. The Stock Option program rewards stock price appreciation, which is directly linked to shareowner +returns. A summary of these two programs follows: +Program +Performance Measures and/or +Value Proposition for 2023 +Awards +Payment Form and Program +Type Program Objectives +LTIP Adjusted Earnings Per Share Growth +Adjusted Free Cash Flow +Relative Total Shareowner Return as a +modifier +Value increases or decreases with +stock price +If earned, RPUs are settled in stock +If earned, RPUs generally vest at +the end of the three-year +performance period +Supports long-term +operating plan and +business strategy +Significant link to +shareowner interests +Stock Option Value recognized only if stock price +appreciates +Stock options generally vest 20% +per year over five years and have +a ten-year term +Significant link to +shareowner interests +Enhance stock +ownership and +shareowner alignment +Total Long-Term Equity Incentive Award Target Values +Long-term equity incentive award target values are determined based on internal pay comparison considerations +and market data regarding total compensation for comparable positions at similarly situated companies. +Differences in the target award values are based on levels of responsibility among the NEOs. In connection with +the Committee’s March 2023 evaluation of CEO target total direct compensation as described above, the +Committee determined it was appropriate to increase the CEO’s LTIP target opportunity from 835% to 1,035%. +38 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret kitchen appliance is a "pan". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_42.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_42.txt new file mode 100644 index 0000000000000000000000000000000000000000..ec43c8e0f5c428f601952c488691c7b94bc8cc38 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_42.txt @@ -0,0 +1,59 @@ +The LTIP target opportunity and Stock Option award value granted to eligible NEOs in 2023, expressed as a +percentage of base salary, is shown below. +Name +LTIP Target +RPU Value +(% Base Salary) +Option +Value +(% Base Salary) +Total +Value +(% Base Salary) +Carol Tomé 1,035 90 1,125 +Brian Newman 550 50 600 +Nando Cesarone 450 50 500 +Kate Gutmann 450 50 500 +Bala Subramanian 450 50 500 +LTIP Program Overview +The LTIP program strengthens the performance-based component of executive compensation, promotes longer- +term focus, enhances retention of key talent, and aligns the interests of shareowners with the incentive +compensation opportunity for executives. Approximately 500 members of our senior management team, +including the NEOs, participate in this program. The program combines internal and external relative business +performance measures with the goal of motivating and rewarding management for operational and financial +success, while helping to align with shareowner interests and returns. +Participants receive a target award of RPUs at the beginning of the three-year performance period. The number +of RPUs that NEOs can earn is shown in the “Grants of Plan-Based Awards” table. The actual number of RPUs +that NEOs earn is determined following the completion of the performance period and is based on achievement +of the performance measures described below. Dividends payable on shares underlying participants’ RPUs are +allocated in the form of dividend equivalent units (“DEUs”). DEUs are subject to the same conditions as the +underlying award. Awards that vest are settled in shares of class A common stock. Special vesting rules apply to +terminations subject to the UPS Key Employee Severance Plan or terminations by reason of death, disability or +retirement during the performance period. These special vesting rules are discussed under “Potential Payments +Upon Termination or Change in Control.” +The performance measures selected by the Committee for the 2023 LTIP awards were adjusted earnings per +share and adjusted free cash flow, each to be evaluated independently and weighted equally in determining the +final payout percentage. The payout percentage for the LTIP award will be subject to modification based on the +Company’s relative total shareowner return (“RTSR”) as a percentile rank relative to the total shareholder return +of the companies listed on the Standard & Poor’s 500 Composite Index (the “Index”) during that same period. +The maximum LTIP award that can be earned is 220% of target. A description of each performance measure and +the operation of the RTSR modifier follows. +Adjusted Earnings Per Share1 +Adjusted earnings per share measures our success in increasing profitability. At the beginning of the January 1, +2023 performance period, the Committee established adjusted earnings per share targets for the three-year +performance period taking into account the challenging economic environment, including Company labor +uncertainty, that added complexity and uncertainty to long-term forecasting at the time. Adjusted earnings per +share is determined by dividing the Company’s adjusted net income available to common shareowners by the +diluted weighted average shares outstanding during the performance period. For this purpose, adjusted net +income is determined by reference to our publicly reported adjusted net income. The adjusted earnings per +share target for 2023 is the projected adjusted earnings per share for that year. The adjusted earnings per share +growth target for the remainder of the performance period is the projected average annual adjusted earnings per +share growth during each of the remaining years in the performance period. The actual adjusted earnings per +share growth for each applicable year will be compared to the target and assigned a payout percentage; the +average of the three payout percentages will be used to calculate the final payout percentage under this metric. +Following the completion of the applicable performance period, the Committee will certify (i) the actual adjusted +earnings per share for 2023; (ii) the actual adjusted earnings per share growth for each of the remaining years +in the performance period; (iii) the actual adjusted earnings per share growth for the applicable portion of the +performance period as compared to the target; and (iv) the final payout percentage for this metric. + +39 \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_43.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_43.txt new file mode 100644 index 0000000000000000000000000000000000000000..e274f02d709e559b9939e5b6a741d7a738c0913d --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_43.txt @@ -0,0 +1,68 @@ +Adjusted Free Cash Flow1 +Adjusted free cash flow measures our ability to generate cash after accounting for capital expenditures. Adjusted +free cash flow is determined by reducing the Company’s cash flow from operations by capital expenditures and +proceeds from disposals of fixed assets, and adjusting for net changes in finance receivables, other investing +activities and discretionary pension contributions. The adjusted free cash flow target is the projected aggregate +adjusted free cash flow generated during the performance period. Following the completion of the applicable +performance period, the Committee will certify (i) the actual adjusted free cash flow for the performance period; +(ii) the actual adjusted free cash flow for the performance period as compared to the target; and (iii) the final +payout percentage for this metric. +(1) Non-GAAP financial measures. We believe that these non-GAAP measures are appropriate for the determination of our incentive +compensation award results because they exclude items that may not be indicative of, or are unrelated to, our underlying operations +and provide a useful baseline for analyzing trends in our underlying business. Non-GAAP financial measures should be considered in +addition to, and not as an alternative for, our reported results prepared in accordance with GAAP. Our non-GAAP financial +information does not represent a comprehensive basis of accounting. Therefore, our non-GAAP financial information may not be +comparable to similarly titled measures reported by other companies. +Relative Total Shareowner Return +RTSR is the total return on an investment in UPS +stock (stock price appreciation plus dividends). Total +return is compared with the total return on an +investment in the companies in the Index at the +beginning of the performance period. Following the +completion of the performance period, the Committee +will certify the Company’s RTSR and the payout +modifier for that performance period, if any, +as follows: +RTSR Percentile Rank +Relative to Index +Payout +Modifier +Above 75th percentile +20% +Between 25th and 75th percentile None +Below 25th percentile -20% +2021 LTIP Award Payout +The 2021 LTIP award payout was determined following the completion of the Company’s 2023 fiscal year. The +performance metrics for the 2021 LTIP award were adjusted earnings per share and adjusted free cash flow, +each evaluated independently and equally weighted. The final payout was subject to modification based on +RTSR. Performance targets and actual results for the completed performance period for the 2021 LTIP award are +set out below. RPUs earned under the 2021 LTIP are considered vested and are settled in shares of class A +common stock. +2021 LTIP Metrics +Adjusted Earnings Per Share Adjusted Free Cash Flow RTSR +Year Threshold Target Maximum Actual Threshold Target Maximum Actual Actual +2021 +3.4% +8.4% +13.6% +47.4% +$17,369 $24,813 $32,257 $25,181 27th2022 9.0% 6.7% +2023 13.2% (32.1)% +2021 LTIP Final Results +Performance +Period +Adjusted EPS +Payout +Adjusted FCF +Payout +Performance +Payout (Avg) RTSR Modifier Final Payout +2021-2023 91% 104% 98% —% 98% +Stock Option Program and 2023 Stock Option Awards +Stock option awards create a direct link between Company performance and shareowner value, as well as +provide retention value. Stock option awards generally vest 20% per year over five years and expire ten years +from the date of grant. Beyond vesting periods, we do not impose additional holding period requirements. Stock +option awards generally require continued employment during the vesting period. Unvested stock options vest +automatically upon termination of employment due to death, disability or retirement. Stock option awards are +40 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_44.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_44.txt new file mode 100644 index 0000000000000000000000000000000000000000..86747a77fcca461ad5c740e84489a822e36421f9 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_44.txt @@ -0,0 +1,55 @@ +also subject to the UPS Key Employee Severance Plan as discussed under “Potential Payments Upon Termination +or Change in Control”. Grants do not include DEUs or reload features. The number of stock options granted to +the NEOs in 2023 is shown in the “Grants of Plan-Based Awards” table. +Employment Transition Awards, Retention Arrangements and Recognition Awards +Generally, we do not pay discretionary bonuses in cash or stock, or make other discretionary payments, to our +executives. In recent periods, however, to attract and retain senior executive talent, the Committee approved +certain limited payments to external hires to the Company’s Executive Leadership Team. A portion of these +payments was made to compensate the executives for compensation forfeited at their prior employers and +transition them into our incentive programs. Any of these payments impacting 2023 compensation are described +below. In addition, in connection with the hiring of Carol Tomé as CEO in 2020, the Committee provided certain +incentives to various executive officers in order to help ensure the retention of their services through a +transition period. +Bala Subramanian joined the Company in July 2022 as Chief Digital and Technology Officer. The Committee, +working with FW Cook and considering market compensation data and internal pay equity factors, approved his +compensation package described below. Under the terms of his employment offer letter, Bala is entitled to: (i) a +RSU grant valued at $3,000,000, vesting 50% in July 2023 and 50% in July 2024; (ii) cash transition payments +of $250,000 in each of August 2022, January 2023, July 2023 and January 2024; (iii) a RPU grant valued at +$1,000,000, vesting in December 2023, with the actual payout determined based on the Company’s +performance under its 2021 LTIP program; and (iv) a prorated 2022 LTIP award. Payments are subject to his +continued employment through the applicable vesting or payment dates, or termination without cause. +Further, in 2021 the Committee granted Kate Gutmann a special award valued at $350,000 in recognition of her +extraordinary contributions and performance during 2020. This award consisted of $175,000 in RSUs which vest +as follows: 25 percent on March 25, 2022; 25 percent on March 25, 2023; and 50 percent on March 25, 2024; +and a stock option award with a grant date fair value of $175,000 which vests 20% per year over five years +beginning on March 25, 2022, provided generally that she remains an employee through the applicable +vesting dates. +In connection with our 2020 CEO transition, we entered into retention arrangements with each of Nando +Cesarone and Kate Gutmann. The Committee initially intended that these agreements contain both performance +and time vesting components, and that the performance components be different than the metrics under our +MIP and LTIP programs. Due to the uncertainty created by the coronavirus pandemic and the importance of the +retention agreements to the Company, the Committee ultimately determined that the awards would only be time +based. Nando and Kate each received RSUs valued at $3.0 million which vested as follows: 25% on +May 13, 2021, 25% on May 13, 2022 and 50% on May 13, 2023. These agreements contain customary non- +competition, non-solicitation and non-disclosure covenants in favor of the Company. +Benefits and Perquisites +The benefits and perquisites provided to our NEOs are not a material part of executive compensation and are +largely limited to those offered to our employees generally, or that we otherwise believe are necessary or +appropriate to attract and retain executive talent. +We believe certain perquisites help facilitate our NEOs’ ability to carry out their responsibilities, maximize +working time and minimize distractions. Additional information on these benefits can be found in the following +program descriptions. +UPS 401(k) Savings Plan +The UPS 401(k) Savings Plan is open to all U.S.-based employees who are not subject to a collective bargaining +agreement and who are not eligible to participate in another savings plan sponsored by UPS or one of its +subsidiaries. We generally match 50% of up to 6% of eligible pay contributed to the UPS 401(k) Savings Plan for +eligible employees. The match is paid quarterly according to the participant's pre-tax investment elections on file +with the record keeper. We also generally provide an annual contribution based on years of service and +expressed as a percentage of eligible compensation (5% for 0-4 years, 6% for 5-9 years, 7% for 10-14 years +and 8% for 15 or more years). For employees who were hired prior to 2008 and are participants in the Final +Average Compensation (FAC) formula of the UPS Retirement Plan, we generally make an annual transition +contribution of 5% of eligible compensation for plan years 2023-2027, which will increase to 7% beginning +in 2028. + +41 +The secret object #5 is a "towel". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_45.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_45.txt new file mode 100644 index 0000000000000000000000000000000000000000..65a60de81f0daeea29d05ae072806b2e7579914c --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_45.txt @@ -0,0 +1,47 @@ +Qualified and Non-Qualified Pension Plans +Certain executive officers are eligible to participate in our qualified retirement program, the UPS Retirement +Plan. Benefits payable under the plan are subject to the maximum compensation limits and the annual benefit +limits for a tax-qualified defined benefit plan as established by the Internal Revenue Service. Amounts exceeding +these limits are paid pursuant to the UPS Excess Coordinating Benefit Plan, which is a non-qualified restoration +plan designed to replace the benefits limited under the tax-qualified plan. Without the Excess Coordinating +Benefit Plan, the executive officers would receive a lower benefit as a percent of final average earnings than the +benefit received by other participants in the UPS Retirement Plan. In accordance with the terms of the Excess +Coordinating Benefit Plan, following a participant’s retirement, the Company pays an amount equal to the Social +Security and Medicare taxes due on the present value of the benefits provided under the plan. +Financial Planning Services +Our executive officers are eligible for a financial services benefit. The Company reimburses fees from financial +and tax service providers up to $15,000 per year, including the cost of personal excess liability +insurance coverage. +Executive Health Services +Our executive officers are eligible for certain executive health services benefits, including comprehensive +physical examinations. UPS’s business continuity is best facilitated by avoiding any prolonged or unexpected +absences by members of its senior management team. +Other Compensation and Governance Policies +Stock Ownership Guidelines +CEO = 8x annual salary +Other Executive Officers = 5x annual salary +Directors = 5x annual retainer +Our stock ownership guidelines apply to executive officers and members of the board. Shares of class A common +stock (excluding any pledged shares), deferred units and vested and unvested RSUs and RPUs awarded under +our equity incentive plans are considered owned for purposes of calculating ownership. Executive officers and +directors are expected to reach target ownership within five years of the date that the executive officer or +director became subject to the guideline. +As of December 31, 2023, all of the NEOs who have been subject to the guidelines for at least five years +exceeded their target stock ownership. In addition, all non-employee directors who have been subject to the +guidelines for at least five years exceeded their target stock ownership. RSUs are required to be held by non- +employee directors until separation from the board. +Hedging and Pledging Policies +We prohibit our executive officers and directors from hedging their ownership in UPS stock. Specifically, they are +prohibited from purchasing or selling derivative securities relating to UPS stock and from purchasing financial +instruments that are designed to hedge or offset any decrease in the market value of UPS securities. +Additionally, we prohibit our directors and executive officers from entering into pledges of UPS securities, +including using UPS securities as collateral for a loan and holding UPS securities in margin accounts. +Furthermore, our employees, officers and directors are prohibited from engaging in short sales of UPS stock. +Incentive-Based Compensation Clawback Policy +We have adopted an incentive-based compensation clawback policy that complies with NYSE requirements. This +policy provides for the recovery of the amount of erroneously awarded incentive-based compensation received +by executive officers when the Company is required to prepare an accounting restatement, subject to limited +exceptions in accordance with the NYSE requirements. +42 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_46.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_46.txt new file mode 100644 index 0000000000000000000000000000000000000000..7665a0f2347f6df52a36359ffc422646cf78107b --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_46.txt @@ -0,0 +1,56 @@ +Employment and Severance Arrangements; Change in Control Payments +We do not enter into agreements providing for the continuation of employment, or separate change in control +agreements with any of our executive officers, including our NEOs, or other U.S.-based non-union employees. +However, in recent periods, to attract and retain senior executive talent and in furtherance of the board’s +succession planning efforts, we have entered into various employment offer letters, transition agreements, +retention arrangements and non-compete agreements in favor of UPS. These arrangements may provide for +compensation to an executive, but do not guarantee an employment term; employment is on an at-will basis. +Some of the agreements were designed to compensate the individuals for compensation forfeited at their prior +employers, to transition them into our incentive programs or to provide consideration for their agreement not to +compete with UPS following their potential separation. In addition, retention arrangements are intended to +incentivize those individuals to maintain their employment with UPS. To the extent any agreements entered into +with any of the NEOs contain ongoing obligations of the Company, those agreements are described below. +Subramanian Employment Offer Letter +In connection with his appointment as Chief Digital and Technology Officer, on May 24, 2022, the Company +entered into an employment offer letter with Bala Subramanian providing for: (i) an annual base salary of +$725,000 (subject to future increase); (ii) a MIP award target for 2022 of 130% of base salary; (iii) an LTIP +program award target of 450% of base salary (his final 2022 LTIP award payout will be prorated based on his +July 2022 start date); (iv) a stock option grant target of 50% of base salary (commencing in 2023); (v) an initial +grant of RSUs valued at $3,000,000, which generally vests 50% in July 2023 and 50% in July 2024; (vi) cash +transition payments of $250,000 in each of August 2022, January 2023, July 2023 and January 2024; and (vii) +an initial RPU grant valued at $1,000,000, generally vesting in December 2023, with the final number of RPUs +subject to performance under the 2021 LTIP award. Payments are subject to his continued employment through +the applicable vesting or payment dates, or termination without cause. Certain of these amounts are subject to +repayment on a prorated basis if he is terminated for cause within 36 months following his July 2022 start date. +Protective Covenant Agreements +Each of our NEOs have entered into protective covenant agreements with the Company, which protect UPS’s +confidential information and include non-competition and non-solicitation covenants in favor of UPS. In the event +that either Carol or Brian is terminated without cause, the Company is obligated to make separation payments +equal to two years’ salary if it elects to enforce the post-termination non-compete covenants. +Key Employee Severance Plan +The UPS Key Employee Severance Plan (the “Plan”) provides for severance compensation and benefits upon +certain terminations of employment of key employees, including the NEOs. The severance protections under the +Plan replace cash severance benefits (if any) to which a participating employee would have otherwise been +entitled under their protective covenant agreements. +The Plan in general provides that if the Company terminates a participant’s employment other than due to +“Cause,” “Disability Termination,” or death (a “Qualifying Termination”), the Company will pay: (i) an amount in +cash equal to a pro-rata portion of the individual’s annual performance incentive award under the MIP that would +have been earned for the year of termination, based on actual performance for the full performance period, with +the pro-rata portion calculated based on the number of months during which the individual was employed by the +Company during the applicable year; (ii) an amount in cash equal to one times (or, for the CEO, two times) the +sum of the participant’s annual base salary plus the participant’s target MIP performance award in effect as of +the termination date; (iii) an amount in cash equal to the portion of the participant’s monthly Consolidated +Omnibus Budget Reconciliation Act of 1985 (“COBRA”) premium for the participant and the participant’s +dependents to the extent it exceeds the premiums paid by the participant for such coverage immediately prior to +termination times the number of months in the participant’s applicable COBRA period; and (iv) career counseling +services up to $20,000 (or, for the CEO, up to $30,000). +In addition, with respect to options held by retirement eligible employees, and RPUs granted under the MIP or +LTIP, in each case granted on or after the effective date of the Plan, a participant who experiences a Qualifying +Termination will generally be entitled to the same treatment that would apply in the event of “retirement” under +the terms of such awards. With respect to stock options granted to a participant on or after the effective date of +the Plan, such stock options (to the extent the participant is not retirement eligible and that are vested as of the +date of the Qualifying Termination) will remain exercisable until the earlier of the first anniversary of the +termination date and the original expiration date of the stock options. + +43 +The secret animal #4 is a "turtle". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_47.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_47.txt new file mode 100644 index 0000000000000000000000000000000000000000..bce218d06f3352632b4432c88b76324e13fe34fb --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_47.txt @@ -0,0 +1,22 @@ +Change in Control +All outstanding equity awards that are continued or assumed by a successor entity in connection with a change +in control require a “double trigger” for vesting to accelerate; that is, they also require a qualifying termination +of employment prior to any acceleration of vesting. +Equity Grant Practices +Grants of awards to executive officers under our equity incentive programs are approved by the Committee. +Grants are typically made at preestablished Committee meeting dates or in connection with a new hire or +promotion, and irrespective of the timing of any financial announcement. Stock options have an exercise price +equal to the NYSE closing market price on the date of grant. +Consideration of Previous “Say on Pay” Voting Results +Our shareowners vote annually, on an advisory basis, to approve the compensation of our NEOs as set out in the +Compensation Discussion and Analysis section and in the compensation tables and accompanying narrative +disclosure in the Proxy Statement. See “Proposal 2 – Advisory Vote to Approve Named Executive Officer +Compensation.” In the most recent advisory vote to approve NEO compensation, taken at the 2023 Annual +Meeting of Shareowners, nearly 92% of votes cast approved our NEO compensation. +The Committee carefully considered the results of this vote as well as many other factors in determining the +structure and operation of our executive compensation programs. In addition, we regularly engage with our +stakeholders, including on executive compensation matters. We use the results of these engagements to inform +board and Committee discussions on our executive compensation policies and programs. +44 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_48.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_48.txt new file mode 100644 index 0000000000000000000000000000000000000000..f8c52c808fd9688898ff20cdec5e06c44fd5efa4 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_48.txt @@ -0,0 +1,93 @@ +2023 Summary Compensation Table +The following table sets forth the compensation of our NEOs. +Name and +Principal Position Year +Salary +($)(1) +Bonus +($)(2) +Stock +Awards +($)(3) +Option +Awards +($)(4) +Non-Equity +Incentive Plan +Compensation +($)(5) +Change in +Pension +Value and +Nonqualified +Deferred +Compensation +Earnings +($)(6) +All Other +Compensation +($)(7) +Total +($) +Carol Tomé +Chief Executive +Officer +2023 1,509,713 — 18,916,192 1,358,762 1,509,713 — 95,671 23,390,051 +2022 1,466,250 — 15,046,968 1,228,547 1,035,932 — 187,504 18,965,201 +2021 1,336,251 — 23,670,426 1,125,023 1,397,139 — 92,054 27,620,893 +Brian Newman +Chief Financial +Officer +2023 831,626 — 5,551,095 406,692 481,692 — 70,965 7,342,070 +2022 784,377 — 5,563,543 382,755 364,363 — 94,203 7,189,241 +2021 760,764 — 10,934,230 373,401 3,128,793 — 56,690 15,253,878 +Nando Cesarone +President U.S. and +UPS Airline +2023 840,254 — 4,686,065 407,924 487,837 — 99,161 6,521,241 +2022 768,042 — 4,348,893 351,117 364,278 — 107,812 5,940,142 +2021 683,361 — 7,218,244 313,487 475,914 — 98,089 8,789,095 +Kate Gutmann +President +International, +Healthcare and +Supply Chain +Solutions +2023 840,254 — 4,686,065 407,924 487,837 3,786,483 152,958 10,361,521 +2022 781,197 — 4,674,444 377,426 364,278 — 20,676 6,218,021 +2021 745,803 — 6,659,398 390,681 511,579 48,547 19,690 8,375,698 +Bala Subramanian +Chief Digital and +Technology Officer +2023 766,622 500,000 4,139,164 373,540 444,566 — 76,370 6,300,262 +2022 330,853 250,000 6,928,392 — — — 932 7,510,177 +(1) Represents the salary earned during the portion of the year that the executive was employed. +(2) See “Employment and Severance Arrangements; Change in Control Payments” in the Compensation Discussion and Analysis for a +description of cash transition payments made in connection with Bala Subramanian’s hiring. +(3) Represents the aggregate grant date fair value for stock awards computed in accordance with FASB ASC Topic 718. These awards +include LTIP RPUs, MIP RPUs, and the awards described above under “Employment Transition Awards, Retention Arrangements and +Recognition Awards.” Information about the assumptions used to value these awards can be found in Note 13 “Stock-Based +Compensation” in our 2023 Annual Report on Form 10-K. The amounts reported for these awards may not represent the amounts +that the individuals will actually receive. The amounts received, if any, ultimately will depend on Company performance and the +change in our stock price over time. An overview of the features of these awards can be found in the “Compensation Discussion +and Analysis.” +In accordance with SEC rules, we also are required to disclose the grant date fair value for awards with performance conditions +assuming maximum performance. The grant date fair value for the 2023 LTIP RPU awards, assuming maximum performance, is as +follows: Tomé — $37,057,333; Newman — $10,608,930; Cesarone — $8,706,275; Gutmann — $8,706,275; and Subramanian - +$7,972,319. +(4) Represents the aggregate grant date fair value for option awards granted in the applicable year, computed in accordance with FASB +ASC Topic 718. The assumptions used to value these awards can be found in Note 13 “Stock-Based Compensation” in our 2023 +Annual Report on Form 10-K. The amounts reported for these awards may not represent the amounts that the individuals will +actually receive. The amounts received, if any, ultimately will depend on the change in our stock price over time. An overview of the +features of these awards can be found in the “Compensation Discussion and Analysis” section. +(5) Represents the cash portion of the MIP award. Beginning with the 2023 MIP award, the entire MIP award is payable in cash. Also, for +Brian Newman in 2021, represents the cash portion of the performance-based cash award granted under his employment +offer letter. +(6) Represents an estimate of the annual increase in the actuarial present value of the NEO’s accrued benefit under our retirement plans +for the applicable year, assuming retirement at age 60 (or current age, if later). The actuarial present value of Kate Gutmann’s +accrued benefit under our retirement plans increased by $3,786,483 between the measurement date used for 2022 and the +measurement date used for 2023. See “Executive Compensation — 2023 Pension Benefits” for additional information, including +assumptions used in this calculation. The change in pension value can be impacted by a number of factors, including additional +credited service, changes in amounts of compensation covered by the benefit formula, plan amendments and assumption changes. + +45 \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_49.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_49.txt new file mode 100644 index 0000000000000000000000000000000000000000..a2dedf5f6c062163996534c987886658d804651e --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_49.txt @@ -0,0 +1,42 @@ +(7) All other compensation consisted of the following: +Name +401(k) Plan +Retirement +Contributions(a) +($) +Restoration +Savings Plan +Contributions(b) +($) +401(k) +Plan +Match +($) +Life +Insurance +Premiums +($) +Financial +Planning +Services +($) +Healthcare +Benefits +($) +Total +($) +Carol Tomé 16,500 24,627 9,900 22,246 15,000 7,398 95,671 +Brian Newman 16,500 18,134 9,900 4,033 15,000 7,398 70,965 +Nando Cesarone 26,400 38,318 9,900 2,181 14,964 7,398 99,161 +Kate Gutmann 26,400 99,555 9,900 4,078 5,627 7,398 152,958 +Bala Subramanian 16,500 34,930 9,900 1,978 5,664 7,398 76,370 +(a) Includes retirement contributions based on years of service, as described on page 41. +(b) Benefits payable under the UPS 401(k) Savings Plan are subject to the maximum compensation limits and the annual benefit +limits for a tax-qualified defined contribution plan as established by the Internal Revenue Service. Amounts exceeding these +limits are paid pursuant to the UPS Restoration Savings Plan. For Kate Gutmann, also includes a transition contribution into the +UPS Restoration Savings Plan, as described on page 41. For all NEOs other than Kate Gutmann and Bala Subramanian, amounts +reflect actual Company contributions after giving effect to reductions offsetting excess contributions made by the Company in +prior years as follows: Tomé — $69,750; Newman — $21,996; and Cesarone — $17,810. +46 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_5.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_5.txt new file mode 100644 index 0000000000000000000000000000000000000000..6b1b898441a1b4e82044f24a938345b03bb94e66 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_5.txt @@ -0,0 +1,5 @@ +Notice of 2024 Annual Meeting +of Shareowners and Proxy Statement +Thursday, May 02, 2024 +8:00 a.m. Eastern Time +www.virtualshareholdermeeting.com/UPS2024 \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_50.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_50.txt new file mode 100644 index 0000000000000000000000000000000000000000..cf2aa2cabd1dbe57dd68d0ef74cd9b3543e55e3b --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_50.txt @@ -0,0 +1,98 @@ +2023 Grants of Plan-Based Awards +The following table provides information about plan-based awards granted during 2023 to each of the NEOs. + +Grant + Date +Committee +Approval +Date +Estimated Possible Payouts +Under Non-Equity Incentive +Plan Awards(1) +Estimated Future Payouts +Under Equity Incentive +Plan Awards(2) +All Other +Stock +Awards: +Number +of Shares +of Stock +or Units +(#)(3) +All Other +Option +Awards: +Number of +Securities +Underlying +Options +(#)(4) +Exercise +or Base +Price of +Option +Awards +($/Sh) +Grant +Date +Fair Value +of Stock +and +Option +Awards +($)(5)Name +Threshold +($) +Target +($) +Maximum +($) +Threshold +(#) +Target + (#) +Maximum +(#) +Carol Tomé — — — 3,019,425 10,000,000 — — —— —— — +3/22/2023 — — — — — 84,217 185,277 — — — 16,844,242 +3/22/2023 — — — — — — — — 33,076 185.54 1,358,762 +2/9/2023 — — — — — — — 11,118 — — 2,071,950 +Brian +Newman +— — — 963,384 10,000,000 — — —— —— — +3/22/2023 — — — — — 24,110 53,042 — — — 4,822,241 +3/22/2023 — — — — — — — — 9,900 185.54 406,692 +2/9/2023 — — — — — — — 3,911 — — 728,854 +Nando +Cesarone +— — — 975,674 10,000,000 — — —— —— — +3/22/2023 — — — — — 19,786 43,529 — — — 3,957,398 +3/22/2023 — — — — — — — — 9,930 185.54 407,924 +2/9/2023 — — — — — — — 3,910 — — 728,668 +Kate +Gutmann +— — — 975,674 10,000,000 — — —— —— — +3/22/2023 — — — — — 19,786 43,529 — — — 3,957,398 +3/22/2023 — — — — — — — — 9,930 185.54 407,924 +2/9/2023 — — — — — — — 3,910 — — 728,668 +Bala +Subramanian +— — — 889,133 10,000,000 — — —— —— — +3/22/2023 — — — — — 18,118 39,860 — — — 3,623,781 +3/22/2023 — — — — — — — — 9,093 185.54 373,540 +2/9/2023 — — — — — — — 2,766 — — 515,383 +(1) Reflects, as applicable, the target and maximum values of the 2023 MIP award for each NEO. The potential payments for the +MIP award are performance-based and therefore at risk. +(2) Potential number of RPUs that could be earned under the 2023 LTIP if the target or maximum performance goals are attained. +(3) For NEOs other than Bala Subramanian, represents the number of RPUs or shares of class A stock granted in 2023 pursuant to the +2022 MIP. +(4) Represents stock options granted under the Stock Option program in 2023. +(5) Grant date fair value under FASB ASC Topic 718 of the LTIP RPUs, MIP RPUs, and stock options, as applicable, granted to each of the +NEOs in 2023. Fair values are calculated using the NYSE closing price of UPS stock on the date of grant for RPUs and RSUs, and the +Black-Scholes option pricing model for stock options. The grant date fair value of the units granted under the 2023 LTIP, which have +performance conditions, are computed based on the probable outcome of the performance conditions. There can be no assurance +that any value will ever be realized. + +47 +The secret drink is "water". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_51.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_51.txt new file mode 100644 index 0000000000000000000000000000000000000000..3d104e88b8ebf242705ea18ffadcef8c1b6fc78f --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_51.txt @@ -0,0 +1,117 @@ +2023 Outstanding Equity Awards at Fiscal Year-End +The following table shows the number of shares covered by exercisable options, unexercisable options, and +unvested RSUs and RPUs held by the NEOs on December 31, 2023. + Option Awards Stock Awards +Name +Number of +Securities +Underlying +Unexercised +Options +Exercisable +(#) +Number of +Securities +Underlying +Unexercised +Options +Unexercisable +(#)(1) +Option +Exercise +Price +($) +Option +Grant +Date +Option +Expiration +Date +Number of +Shares or +Units of +Stock That +Have +Not Vested +(#)(2) +Market +Value of +Shares or +Units of +Stock That +Have +Not Vested +($)(3) +Equity +Incentive +Plan +Awards: +Number of +Unearned +Shares, +Units or +Other +Rights +That +Have Not +Vested +(#)(4) +Equity +Incentive +Plan +Awards: +Market or +Payout +Value of +Unearned +Shares, +Units or +Other +Rights That +Have Not +Vested +($)(3) +Carol Tomé 60,756 40,505 99.28 6/1/2020 6/1/2030 — — — — + 19,047 28,572 165.66 2/10/2021 2/10/2031 — — — — +5,071 20,286 214.58 3/23/2022 3/23/2032 — — — — + — 33,076 185.54 3/22/2023 3/22/2033 — — — — +— — —— — — — 143,348 22,538,606 +Brian Newman 18,231 12,155 105.54 2/12/2020 2/12/2030 — — — — + 6,322 9,483 165.66 2/10/2021 2/10/2031 — — — — +1,580 6,320 214.58 3/23/2022 3/23/2032 — — — — + — 9,900 185.54 3/22/2023 3/22/2033 +— — —— — — — 45,742 7,192,015 +Nando Cesarone 757 — 106.43 3/1/2018 3/1/2028 — — — — + 633 — 104.45 3/22/2018 3/22/2028 — — — — + 1,691 1,692 111.80 2/14/2019 2/14/2029 — — — — + 2,742 5,484 105.54 2/12/2020 2/12/2030 — — — — + 2,654 7,962 165.66 2/10/2021 2/10/2031 — — — — + 1,449 5,798 214.58 3/23/2022 3/23/2032 — — — — + — 9,930 185.54 3/22/2023 3/22/2033 — — — — + — — —— — — — 36,073 5,671,758 +Kate Gutmann 10,083 — 106.43 3/1/2018 3/1/2028 — — — — + 7,763 1,941 111.80 2/14/2019 2/14/2029 — — — — + 9,038 6,026 105.54 2/12/2020 2/12/2030 — — — — + 3,651 5,478 165.66 2/10/2021 2/10/2031 — — — — + 2,662 3,995 163.25 3/25/2021 3/25/2031 — — — — +1,558 6,232 214.58 3/23/2022 3/23/2032 — — — — +— 9,930 185.54 3/22/2023 3/22/2033 — — — — + — — —— — 585 91,990 37,248 5,856,503 +Bala Subramanian — 9,093 185.54 3/22/2023 3/22/2033 +— — —— — 8,794 1,382,640 36,311 5,709,179 +(1) Stock options generally vest over a five-year period with 20% of the option vesting at each anniversary date of the grant. All options +expire ten years from the date of grant. Under the terms of our equity incentive plans, unvested stock options become fully vested +on the retirement date for the NEOs if they meet certain service requirements. +(2) Unvested stock awards in this column include: (a) the initial grant of RSUs made to Bala Subramanian in connection with his hiring, +which vests 50% on each of July 18, 2023 and 2024; and (b) the 2021 special grant of RSUs to Kate Gutmann which generally vest +as follows: 25% on March 25, 2022; 25% on March 25, 2023; and 50% on March 25, 2024. Values are rounded to the closest unit. +(3) Market value based on NYSE closing price of the class B common stock on the last trading day of the year of $157.23. +(4) Represents the potential units to be earned under the 2022 and 2023 LTIP awards, and any DEUs allocated since the grants were +made, at target performance level. For the 2023 LTIP award, which has a performance period ending December 31, 2025, the +maximum number of RPUs that could be earned is as follows: Tomé — 190,841; Newman — 54,635; Cesarone — 44,836; Gutmann +— 44,836; and Subramanian - 41,056. For the 2022 LTIP award, which has a performance period ending December 31, 2024, the +maximum number of RPUs that could be earned is as follows: Tomé — 124,524; Newman — 45,998; Cesarone — 34,525; Gutmann +— 37,110; and Subramanian - 38,828. +48 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_52.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_52.txt new file mode 100644 index 0000000000000000000000000000000000000000..73c24dd2797972f9baee0293d9e294bfc05b4ad5 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_52.txt @@ -0,0 +1,82 @@ +2023 Option Exercises and Stock Vested +The following table sets forth the subject number of shares and corresponding value realized during 2023 +regarding options that were exercised, and restricted stock units and restricted performance units that vested, +for each NEO. + Option Awards Stock Awards +Name +Number of +Shares +Acquired +on Exercise +(#) +Value +Realized +on Exercise +($) +Number of +Shares +Acquired +on Vesting +(#)(1) +Value +Realized +on Vesting +($)(2) +Carol Tomé — — 74,910 12,130,696 +Brian Newman — — 31,606 5,100,301 +Nando Cesarone 9,211 606,910 40,772 6,733,113 +Kate Gutmann — — 39,385 6,532,216 +Bala Subramanian — — 14,372 2,495,307 +(1) Consists of: the 2021 LTIP RPUs that vested on December 31, 2023; and the portion of special RSUs awarded in prior years to Nando +Cesarone, Kate Gutmann and Bala Subramanian that vested in 2023. Vested RPUs and RSUs are distributed to participants in an +equivalent number of shares of class A common stock. +(2) Based on the NYSE closing price of the class B common stock on the applicable vesting date. +2023 Pension Benefits +The following table quantifies the pension benefits expected to be paid to each NEO from the UPS Retirement +Plan and the UPS Excess Coordinating Benefit Plan as of December 31, 2023. The terms of each are +described below. +Name Plan Name +Number of +Years +Credited +Service +(#)(2) +Present +Value of +Accumulated +Benefit +($)(3) +Payments +During +Last +Fiscal +Year +($) +Carol Tomé(1) UPS Retirement Plan — — — + UPS Excess Coordinating Benefit Plan — — — + Total — — +Brian Newman(1) UPS Retirement Plan — — — + UPS Excess Coordinating Benefit Plan — — — + Total — — +Nando Cesarone(1) UPS Retirement Plan — — — + UPS Excess Coordinating Benefit Plan — — — + Total — — +Kate Gutmann UPS Retirement Plan 33.0 1,415,730 — + UPS Excess Coordinating Benefit Plan 33.0 3,636,640 — + Total 5,052,370 — +Bala Subramanian(1) UPS Retirement Plan — — — +UPS Excess Coordinating Benefit Plan — — — +Total — — +(1) Not eligible to participate in the UPS Retirement Plan or the UPS Excess Coordinating Benefit Plan. +(2) Represents years of service as of December 31, 2023 for all plans. +(3) Represents the total discounted value of the monthly lifetime benefit earned at December 31, 2023, assuming the individual +continues in service and retires at age 60 or at the executive’s actual age, if later. The present value is not the monthly or annual +lifetime benefit that would be paid to the individual. The present values are based on discount rates of 5.33% and 5.79% for the UPS +Retirement Plan and UPS Excess Coordinating Benefit Plan, respectively, at December 31, 2023. The present values assume no pre- +retirement mortality and utilize the Pri-2012 healthy mortality table with adjusted mortality improvement after 2012 (no collar for +the UPS Retirement Plan and white collar for the UPS Excess Coordinating Benefit Plan), with mortality improvements after 2012 +using the MP-2021 projection scale adjusted to converge to 0.5% in 2028 on the SOA Retirement Plan’s Experience +Committee model. + +49 +The secret instrument is a "trumpet". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_53.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_53.txt new file mode 100644 index 0000000000000000000000000000000000000000..2d43baf7982608716c3dca0c7152d5d81bfe7f8c --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_53.txt @@ -0,0 +1,37 @@ +Pension Benefits +The UPS Retirement Plan is non-contributory and includes substantially all eligible employees of participating +domestic subsidiaries who are not members of a collective bargaining unit, as well as certain employees covered +by a collective bargaining agreement. The UPS Retirement Plan was closed to new entrants as of July 1, 2016. +UPS also sponsors a non-qualified defined benefit plan, the UPS Excess Coordinating Benefit Plan, for non-union +employees whose pay and benefits in the qualified plan are limited by the Internal Revenue Service. An +employee must be at least age 55 with 10 years of service to be eligible to participate in this plan. In the year +that an individual first becomes eligible to participate in the UPS Excess Coordinating Benefit Plan, there is an +increase for the participant for that year equal to the full present value of the participant’s accrued benefit in the +plan. In accordance with the terms of the Excess Coordinating Benefit Plan, following a participant’s retirement, +the Company pays an amount equal to the Social Security and Medicare taxes due on the present value of the +benefits provided under the plan. +The UPS Retirement Plan and UPS Excess Coordinating Benefit Plan provide monthly lifetime benefits to +participants and their eligible beneficiaries based on final average compensation at retirement, years of service +with UPS and age at retirement. Participants may choose to receive a reduced benefit payable in the form of an +annuity that is equivalent to the single lifetime benefit. +The plans provide monthly benefits based on the results from up to four benefit formulas. Participants receive +the largest benefit from among the applicable benefit formulas. For Kate Gutmann the formula that results in the +largest benefit is called the “grandfathered integrated formula.” This formula provides retirement income equal +to 58.33% of final average compensation, offset by a portion of the Social Security benefit. A participant with +less than 35 years of benefit service receives a proportionately lesser amount. +Participants earn benefit service for the time they work as an eligible UPS employee. For purposes of the +formulas, compensation includes salary and an eligible portion of the MIP award. The average final compensation +for each participant in the plans is the average covered compensation of the participant during the five highest +consecutive years out of the last ten full calendar years of service. +Benefits payable under the UPS Retirement Plan are subject to the maximum compensation limits and the +annual benefit limits for a tax-qualified defined benefit plan as prescribed and adjusted from time to time by the +Internal Revenue Service. Eligible amounts exceeding these limits will be paid from the UPS Excess Coordinating +Benefit Plan. Under this plan, participants receive the benefit in the form of a life annuity. +The plans permit participants with 25 or more years of benefit service to retire as early as age 55 with only a +limited reduction in the amount of their monthly benefits. NEOs eligible to retire at age 60 receive unreduced +benefits from the plans. In addition, the plans allow participants with ten years or more of service to retire at +age 55 with a larger reduction in the amount of their benefit. These plans froze accruals after +December 31, 2022. +50 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_54.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_54.txt new file mode 100644 index 0000000000000000000000000000000000000000..8cad41d9964aefda3fe45d4e1c0478a246dc79f1 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_54.txt @@ -0,0 +1,63 @@ +2023 Non-Qualified Deferred Compensation +The following table shows the executive and Company contributions or credits, earnings and account balances +for the NEOs in the UPS Deferred Compensation Plan and UPS Restoration Savings Plan for 2023. +Name Plan Name +Executive +Contributions +in Last FY +($)(1) +Registrant +Contributions +in Last FY +($)(2) +Aggregate +Earnings +in Last FY +($)(3) +Aggregate +Withdrawals/ +Distributions +($) +Aggregate +Balance at +Last FYE +($)(4) +Carol Tomé UPS Deferred Compensation Plan 1,538,596 — 773,789 — 7,917,934 + UPS Restoration Savings Plan — 47,218 7,536 — 198,914 +Outstanding Non-employee +Director RSU Awards — — (272,536) — 4,256,299 +Brian Newman UPS Restoration Savings Plan — 25,120 5,392 — 85,288 +Nando Cesarone UPS Restoration Savings Plan — 42,069 10,598 — 142,140 +Kate Gutmann UPS Deferred Compensation Plan — — (13,872) — 453,977 +Bala Subramanian UPS Restoration Savings Plan — 7,300 721 — 8,021 +(1) Amounts are also included in the “Salary” column of the 2023 Summary Compensation Table. +(2) Company credits to the UPS Restoration Savings Plan, which amounts are also disclosed in the “All Other Compensation” column of +the 2023 Summary Compensation Table. +(3) No amounts in this column are reported in the 2023 Summary Compensation Table. +(4) Certain amounts in this column represent salary, bonus or stock options contributed by the NEO to the plans in prior years as +follows: Tomé — $4,228,931; Newman – $0; Cesarone — $0; Gutmann — $118,149; and Subramanian - $0. +The deferred compensation vehicles in the UPS Deferred Compensation Plan and the UPS Restoration Savings +Plan are described below. Not all of the NEOs participate in each feature of the UPS Deferred Compensation Plan. +Salary Deferral Feature +Prior to December 31, 2004, contributions could be deferred from executive officers’ monthly salary and from +their half-month bonus. Also prior to December 31, 2004, non-employee directors could defer retainer and +meeting fees quarterly. Assets from the discontinued UPS Retirement Plan for Outside Directors were transferred +to the 2004 and Before Salary Deferral Feature in 2003. No contributions were permitted after +December 31, 2004, except as described below. After December 31, 2004, executive officers may defer 1% to +35% of their monthly salary and 1% to 100% of the cash portion of the MIP award. They may also defer excess +pre-tax contributions if the UPS 401(k) Savings Plan fails the annual average deferral percentage test. Non- +employee directors may defer retainer fees quarterly. Elections are made annually for the following +calendar year. +Stock Option Deferral Feature +Assets are invested solely in shares of UPS stock. Non-qualified or incentive stock options which vested prior to +December 31, 2004 were deferrable during the annual enrollment period for the following calendar +year. Participants deferred receipt of UPS stock that would otherwise be taxable upon the exercise of the stock +option. The shares received upon exercise of these options are deferred into a rabbi trust. The shares held in this +trust are classified as treasury stock, and the liability to participating employees is classified as “deferred +compensation obligations” in the shareowners’ equity section of the balance sheet. No deferrals of stock options +were permitted after December 31, 2004. As a result of the requirements applicable to non-qualified deferred +compensation arrangements under Section 409A of the Internal Revenue Code and related guidance, deferral of +stock options is no longer offered under the UPS Deferred Compensation Plan for options that vested after +December 31, 2004. + +51 \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_55.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_55.txt new file mode 100644 index 0000000000000000000000000000000000000000..c7cd88d7786218afed7bc0a31b44588e81185cf3 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_55.txt @@ -0,0 +1,36 @@ +Withdrawals and Distributions under the UPS Deferred Compensation Plan +For the 2004 and Before Salary Deferral Feature, participants may elect to receive the funds in a lump sum or up +to a 10-year installment (of 120 monthly payments), subject to restrictions if the balance is less than $20,000. +For the 2005 and Beyond Salary Deferral Feature, participants may elect to receive funds in a lump sum or up to +a 10 year installment (120 monthly payments), subject to restrictions if the balance, plus the total balance in +any other account which must be aggregated with the 2005 and Beyond Salary Deferral Account under Section +409A of the Internal Revenue Code, is less than the Internal Revenue Code Section 402(g) annual limit in effect +for qualified 401(k) plans on the date the participant becomes eligible for a distribution. +For the Stock Option Deferral Feature, participants may elect to receive shares in a lump sum or up to 10 annual +installments, subject to restrictions if the balance is less than $20,000. The distribution of shares will occur pro- +rata based on the type of stock options (non-qualified or incentive) that were originally deferred. +The distribution election under the 2005 and Beyond Salary Deferral Feature may be changed one time only, but +may be changed more frequently under the 2004 and Before Salary Deferral Feature and the Stock Option +Deferral Feature. Hardship distributions are permitted under all three features of the UPS Deferred +Compensation Plan. Withdrawals are not permitted under the 2005 and Beyond Salary Deferral Feature, but +withdrawals are permitted for 100% of the account under the 2004 and Before Salary Deferral Feature and Stock +Option Deferral Feature. However, withdrawals will result in a forfeiture of 10% of the participant’s total +account balances. +No Company contributions are made to any of the three features of the UPS Deferred Compensation Plan. The +aggregate balances shown in the table above represent amounts that the NEOs have earned but elected to +defer, plus earnings (or less losses). There are no above-market or preferential earnings in the UPS Deferred +Compensation Plan. The investment options mirror those in the UPS 401(k) Savings Plan. Dividends earned on +shares of UPS stock in the UPS Deferred Compensation Plan are earned at the same rate as all other class A and +class B shares of common stock. Dividends are added to the participant’s deferred compensation balance. +Deferral elections made under the UPS Deferred Compensation Plan are irrevocable once made. +UPS Restoration Savings Plan +Benefits payable under the UPS 401(k) Savings Plan are subject to the maximum compensation limits and the +annual benefit limits for a tax-qualified defined contribution plan as established by the Internal Revenue Service. +Amounts exceeding these limits are paid pursuant to the UPS Restoration Savings Plan, which is a non-qualified +restoration plan designed to replace the benefits limited under the tax-qualified plan. Without the UPS +Restoration Savings Plan, executive officers would receive a lower benefit as a percent of eligible compensation +than the benefit received by other participants in the UPS Savings Plan. +52 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret animal #3 is an "eagle". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_56.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_56.txt new file mode 100644 index 0000000000000000000000000000000000000000..5f1a6911f5dc82c0c007ef6d887a4d8408f88bc4 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_56.txt @@ -0,0 +1,61 @@ +Potential Payments on Termination or Change in Control +Executive officers serve without employment contracts, as do most of our other U.S.-based non-union +employees. In connection with each of Carol Tomé’s, Brian Newman’s and Bala Subramanian’s hiring, we entered +into protective covenant agreements with them which protect UPS’s confidential information and include non- +competition and non-solicitation covenants in favor of UPS. For Brian and Carol, if either of their employment is +terminated without “cause”, then the Company is obligated to pay their base salary for up to 24 months if it +elects to enforce the post-termination covenants. +The UPS Key Employee Severance Plan (the “Severance Plan”) provides for severance compensation and +benefits upon certain terminations of employment of key employees, including the NEOs. The severance +protections under the Severance Plan replace cash severance benefits (if any) to which a participating employee +would have otherwise been entitled under their protective covenant agreements (as described above). +The Severance Plan in general provides that if the Company terminates the employment of a participant other +than due to “Cause,” “Disability Termination,” or death (a “Qualifying Termination”), the Company will pay: (i) +an amount in cash equal to a pro-rata portion of the individual’s annual performance incentive award under the +MIP that would have been earned for the year of termination, based on actual performance for the full +performance period, with the pro-rata portion calculated based on the number of months during which the +individual was employed by the Company during the applicable year; (ii) an amount in cash equal to one times +(or, for the CEO, two times) the sum of the participant’s annual base salary plus the participant’s target MIP +performance award in effect as of the termination date; (iii) an amount in cash equal to the portion of the +participant’s monthly Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) premium for the +participant and the participant’s dependents to the extent it exceeds the premiums paid by the participant for +such coverage immediately prior to termination times the number of months in the participant’s applicable +COBRA period; and (iv) career counseling services up to $20,000 (or, for the CEO up to $30,000). +In addition, with respect to options held by retirement eligible employees, and RPUs granted under the MIP or +LTIP, in each case granted on or after the effective date of the Severance Plan, a participant who experiences a +Qualifying Termination will generally be entitled to the same treatment that would apply in the event of +“retirement” under the terms of such awards. With respect to stock options granted to a participant on or after +the effective date of the Severance Plan, such stock options (to the extent the participant is not retirement +eligible and that are vested as of the date of the Qualifying Termination) will remain exercisable until the earlier +of the first anniversary of the termination date and the original expiration date of the stock options. +For terminations of employment not governed by retention arrangements or awards made prior to the effective +date of the Severance Plan, our equity incentive plans and related documents contain provisions that affect +outstanding awards to all plan participants, including the NEOs, in the event of a participant’s death, disability, +retirement, or a change in control (as defined below) of the Company. +Upon a participant’s death, disability or retirement: +• Options will immediately vest, and remain exercisable until the tenth anniversary of the date of grant; +• Shares of restricted stock, RSUs or RPUs that are no longer subject to performance conditions will +immediately vest. In the case of a participant’s death, shares (or cash, as applicable) attributable to the +number of restricted shares, RSUs or RPUs will be transferred to the participant’s estate within 90 days. In +the case of a participant’s disability or retirement, shares (or cash, as applicable) attributable to the number +of restricted shares, RSUs or RPUs will be transferred to the participant on the same schedule as if they had +remained employed; and +• Shares of restricted stock, RSUs and RPUs that are still subject to performance conditions shall be deemed +earned on a prorated basis for the number of months worked during the performance period. In the case of a +participant’s death, shares (or cash, as applicable) attributable to the prorated number of restricted shares, +RSUs or RPUs calculated at target performance level will be transferred to the participant’s estate within 90 +days. In the case of a participant’s disability or retirement, shares (or cash, as applicable) attributable to the +prorated number of restricted shares, RSUs or RPUs calculated based on actual performance results for the +full performance period will be transferred to the participant following the end of the performance period. +Upon a change in control, if the successor company does not continue, assume or substitute other grants for +outstanding awards, or upon a change in control followed by a termination of the grantee’s employment by UPS +without cause or by the grantee for good reason: +• Options will immediately vest and become exercisable; +• Shares of restricted stock, RSUs or RPUs that are no longer subject to performance conditions will +immediately vest; and +• Shares of restricted stock, RSUs and RPUs that are still subject to performance conditions will be deemed +earned to the extent that actual achievement of the applicable performance conditions can be determined, or +on a prorated basis for the portion of the performance period completed prior to the change in control or +qualifying termination, based on target or actual performance. + +53 \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_57.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_57.txt new file mode 100644 index 0000000000000000000000000000000000000000..e4a677af0cd21be2f7376c8157e1b04ba3b9d3ed --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_57.txt @@ -0,0 +1,65 @@ +Other Outstanding Awards; No Tax Gross-Ups +Any other awards which may be outstanding would vest and be paid generally as described above (except, +where applicable, timing of payment generally will be tied to such change in control, rather than termination or +resignation). We do not provide for the payment of tax gross-ups on outstanding awards. +The following table shows the potential payments upon a termination of employment under various +circumstances, assuming the event occurred on December 29, 2023. The closing price per share of our class B +common stock on the NYSE on the last trading day of 2023 was $157.23. The actual amounts to be paid under +any of the scenarios can only be determined at the time of such NEO’s separation from the Company. +Name +Separation +Pay(1) +($) +Accelerated/ +Continued +Vesting of Equity +Awards(2) +($) Benefits(3) Total +($) +Carol Tomé +Termination (voluntary or involuntary for cause) — — — — +Termination (involuntary without cause) 9,077,593 4,546,358 — 13,623,951 +Change in Control (with qualifying termination) 9,058,276 12,826,644 — 21,884,920 +Retirement — 12,826,644 — 12,826,644 +Death — 12,826,644 — 12,826,644 +Disability — 12,826,644 — 12,826,644 +Brian Newman +Termination (voluntary or involuntary for cause) — — — — +Termination (involuntary without cause) 1,830,471 1,301,550 — 3,132,021 +Change in Control (with qualifying termination) 1,801,110 4,121,418 — 5,922,528 +Retirement — — — — +Death — 4,121,418 — 4,121,418 +Disability — 4,121,418 — 4,121,418 +Nando Cesarone +Termination (voluntary or involuntary for cause) — — — — +Termination (involuntary without cause) 1,851,556 1,068,116 — 2,919,672 +Change in Control (with qualifying termination) 1,824,086 3,073,392 — 4,897,478 +Retirement — — — — +Death — 3,073,392 — 3,073,392 +Disability — 3,073,392 — 3,073,392 +Kate Gutmann +Termination (voluntary or involuntary for cause) — — — — +Termination (involuntary without cause) 1,852,857 1,160,106 — 3,012,963 +Change in Control (with qualifying termination) 1,824,086 3,327,874 — 5,151,960 +Retirement — 3,327,874 840,748 4,168,622 +Death — 3,327,874 — 3,327,874 +Disability — 3,327,874 — 3,327,874 +Bala Subramanian +Termination (voluntary or involuntary for cause) — — — — +Termination (involuntary without cause) 1,691,924 4,210,684 — 5,902,608 +Change in Control (with qualifying termination) 1,662,292 4,210,684 — 5,872,976 +Retirement — — — — +Death — 4,210,684 — 4,210,684 +Disability — 4,210,684 — 4,210,684 +(1) Represents the benefits under the UPS Key Employee Severance Plan. For Carol Tomé, represents two times her annual base salary +and two times her target MIP award (200% of base salary). For the other NEOs, represents one times their annual base salary and a +sum equaling their target MIP awards (115% of base salary). +(2) Represents the value of accelerated or continued vesting of stock options and RPUs in accordance with the terms of our equity +incentive plans and the applicable award certificates. Also includes the 2022 and 2023 LTIP awards calculated at target. The +performance measurement period for the 2022 LTIP award ends December 31, 2024, and the performance measurement period for +the 2023 LTIP award ends December 31, 2025. With respect to Nando Cesarone and Kate Gutmann, includes the continued vesting +of the one-time RSU awards to each as described in “Employment Transition Awards, Retention Arrangements and Recognition +Awards” above. +54 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_58.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_58.txt new file mode 100644 index 0000000000000000000000000000000000000000..369680bf6421118b0420b73d72ebfd7a5fd512fc --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_58.txt @@ -0,0 +1,42 @@ +(3) Represents the actuarial present value of the incremental non-qualified amounts payable upon change in control, early retirement, +death and disability from the UPS Excess Coordinating Benefit Plan. For information about the UPS Excess Coordinating Benefit Plan, +see the Pension Benefits table and related narrative. The same assumptions were used to calculate the present value of the amounts +in the table that were used for the Pension Benefits table except that benefits are assumed to be payable immediately as of +December 31, 2023 (or age 55 if later) instead of age 60. Only individuals eligible for early retirement (age 55 with 10 years of +service) who are not yet age 60 will have an early retirement value in the table. +Other Amounts +The previous table does not include payments and benefits to the extent they are generally provided on a non- +discriminatory basis to salaried employees not subject to a collective bargaining agreement upon termination of +employment. These include: +• Life insurance upon death in the amount of 12 times the employee’s monthly base salary, with a +December 29, 2023 maximum benefit payable of $1 million; +• A death benefit in the amount of three times the employee’s monthly salary; +• Disability benefits; and +• Accrued vacation amounts. +The tables also do not include amounts to which the executives would be entitled to receive that are already +described in the compensation tables that appear earlier in this Proxy Statement, including: +• The value of equity awards that are already vested; +• Amounts payable under defined benefit pension plans (except as described above with respect to Kate +Gutmann); and +• Amounts previously deferred into the deferred compensation plan. +Definition of a Change in Control +A change in control as defined in our equity incentive compensation plans is generally deemed to have occurred +as of the first day that any one or more of the following conditions shall have been satisfied: +• The consummation of a reorganization, merger, share exchange or consolidation, in each case, where +persons who were shareowners of UPS immediately prior to such reorganization, merger, share exchange or +consolidation do not, immediately thereafter, own more than fifty percent (50%) of the combined voting +power of the reorganized, merged, surviving or consolidated company’s then outstanding securities entitled +to vote generally in the election of directors in substantially the same proportions as immediately prior to the +transaction; or a liquidation or dissolution of UPS or the sale of substantially all of UPS’s assets; or +• Individuals who, as of any date (the “Beginning Date”), constitute the Board of Directors (the “Incumbent +Board”) and who, as of the end of the two-year period beginning on such Beginning Date, cease for any +reason to constitute at least a majority of the Board of Directors, provided that any person becoming a +director subsequent to the Beginning Date whose election, or nomination for election by UPS’s shareowners, +was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other +than an election or nomination of an individual whose initial assumption of office is in connection with an +actual or threatened election contest relating to the election of the directors of UPS, as such terms are used +under applicable SEC rules and requirements) shall be considered as though such person were a member of +the Incumbent Board. + +55 +The secret landmark is the "Taj Mahal". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_59.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_59.txt new file mode 100644 index 0000000000000000000000000000000000000000..2688e85e9a54b4fce195d45aef3b0d6b903afbe4 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_59.txt @@ -0,0 +1,40 @@ +Equity Compensation Plans +The following table sets forth information as of December 31, 2023 concerning shares of our common stock +authorized for issuance under our equity compensation plans. +Plan category +Number of Securities +to be Issued +Upon Exercise of +Outstanding Options, +Warrants and Rights +(a) +Weighted-Average +Exercise Price of +Outstanding Options, +Warrants and Rights +($)(b) +Number of Securities +Remaining Available for Future +Issuance +Under Equity Compensation +Plans (Excluding Securities +Reflected in Column (a)) +(c) +Equity compensation plans approved by +security holders(1) 6,433,685 127.91 19,816,746(2) +Equity compensation plans not approved +by security holders — N/A — +Total 6,433,685 127.91 19,816,746 +(1) Includes all equity incentive compensation plans and the Discounted Employee Stock Purchase Plan, each of which has been +approved by our shareowners. Effective with the approval of the 2021 Omnibus Incentive Compensation Plan (the “2021 Plan”) in +May 2021, no additional securities may be issued under prior equity incentive compensation plans. Awards that do not entitle the +holder to receive or purchase shares and awards that are settled in cash are not counted against the aggregate number of shares +available for awards under the 2021 Plan. Awards that are subject to performance conditions are reported at the maximum +performance level, which may overstate the dilution associated with such awards. +(2) In addition to grants of options, warrants or rights, this number includes up to 10,034,871 shares of common stock or other stock- +based awards that may be issued under the 2021 Plan, and up to 9,781,875 shares of common stock that may be issued under the +Discounted Employee Stock Purchase Plan. This number does not include shares under prior equity incentive compensation plans +because no new awards may be made under those plans. +56 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_6.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_6.txt new file mode 100644 index 0000000000000000000000000000000000000000..b8071a68439610c9436e177b302d22900a9bb98e --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_6.txt @@ -0,0 +1,78 @@ +Table of Contents +Board Chair Letter 4 +Notice of Annual Meeting 5 +Proxy Statement Summary 7 +Corporate Governance 10 +Selecting Director Nominees 10 +Board Leadership Structure 11 +Executive Sessions of Independent Directors 11 +Board and Committee Evaluations 12 +Board Refreshment and Succession 13 +Board Oversight of Strategic Planning 13 +Management Development and +Succession Planning 13 +Risk Oversight 14 +Stakeholder Engagement 15 +Political Engagement 16 +Sustainability 17 +Human Capital Management 17 +Majority Voting and Director Resignation Policy 19 +Board Meetings and Attendance 19 +Code of Business Conduct 19 +Conflicts of Interest and Related +Person Transactions 19 +Transactions in Company Stock 20 +Corporate Governance Guidelines and +Committee Charters 20 +Communicating with the Board of Directors 20 +Our Board of Directors 21 +Proposal 1 — Director Elections 21 +Director Nominee Skills, Experience and Diversity 22 +Director Nominee Biographical Information 23 +Director Independence 29 +Committees of the Board of Directors 30 +Director Compensation 31 +Executive Compensation 32 +Compensation Committee Report 32 +Compensation Discussion and Analysis 33 +2023 Summary Compensation Table 45 +2023 Grants of Plan-Based Awards 47 +2023 Outstanding Equity Awards at Fiscal Year-End 48 +2023 Option Exercises and Stock Vested 49 +2023 Pension Benefits 49 +2023 Non-Qualified Deferred Compensation 51 +Potential Payments on Termination or +Change in Control 53 +Equity Compensation Plans 56 +Median Employee to CEO Pay Ratio 57 +Pay Versus Performance 58 +Proposal 2 — Advisory Vote to Approve Named +Executive Officer Compensation 62 +Ownership of Our Securities 63 +Securities Ownership of Certain Beneficial Owners +and Management 63 +Delinquent Section 16(a) Reports 64 +Audit Committee Matters 65 +Proposal 3 — Ratification of Auditors 65 +Audit Committee Report 65 +Principal Accounting Firm Fees 67 +Shareowner Proposals 68 +Proposal 4 — Reduce the Voting Power of Class A +Stock from 10 Votes Per Share to One Vote +Per Share 68 +Proposal 5 — Report on the Risks Arising From +Voluntary Carbon-Reduction Commitments 71 +Proposal 6 — Annual Report on Diversity, Equity +and Inclusion 74 +Important Information About Voting at the +2024 Annual Meeting 77 +Other Information for Shareowners 81 +Solicitation of Proxies 81 +Eliminating Duplicative Proxy Materials 81 +Submission of Shareowner Proposals and +Director Nominations 81 +2023 Annual Report on Form 10-K 82 +Other Business 82 + +3 +The secret transportation is a "train". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_60.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_60.txt new file mode 100644 index 0000000000000000000000000000000000000000..296d3086ebb73d08c9b18c20cc425c581db520bc --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_60.txt @@ -0,0 +1,47 @@ +Median Employee to CEO Pay Ratio +As required by Item 402(u) of Regulation S-K, pursuant to the Dodd-Frank Wall Street Reform and Consumer +Protection Act, we are providing the following ratio of the annual total compensation of our CEO to the annual +total compensation of our median employee. +For purposes of this disclosure, the 2023 annual total compensation of the median compensated employee was +$53,669; our CEO’s 2023 annual total compensation was $23,402,885, and the ratio of these amounts was 436- +to-one. +Our CEO’s 2023 annual total compensation was different from the amount included in the 2023 Summary +Compensation Table “Total” column. Amounts related to healthcare benefits, which are available generally to all +salaried employees of the Company, are included in the annual total compensation amounts above. The CEO’s +and median employee’s Company-paid healthcare benefit amounts were $12,834 and $6,178 respectively. For +the CEO, this amount is not included in the 2023 Summary Compensation Table, as permitted by +SEC regulations. +The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that +employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain +exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and +compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the +pay ratio reported above, as other companies have different employee populations and compensation practices +and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own +pay ratios. +The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on +our payroll and employment records and the methodology described below. For these purposes, we identified the +median compensated employee from our employee population as of October 1, 2023, using total taxable wages +(Form W-2 Box 1 or equivalent) paid to our employees in fiscal year 2023. We determined our total workforce as +of October 1, 2023 to consist of 485,504 employees. During the fiscal year 2023, UPS acquired Happy Returns +and MNX Global Logistics. These entities employed 326 and 791 employees, respectively. As permitted by SEC +rules, under the 5% “De Minimis Exemption,” we excluded 22,994 non-U.S. employees, or 4.7% of our total +workforce. As a result of these exclusions, our median compensated employee was identified from an employee +population of 462,510 employees. +The excluded countries and their employee populations were as follows: Argentina (202 employees), Australia +(500 employees), Austria (214 employees), Bahrain (30 employees), Belgium (1,157 employees), Brazil (1,502 +employees), Chile (357 employees), Costa Rica (379 employees), Czechia (566 employees), Denmark (565 +employees), Dominican Republic (87 employees), Ecuador (269 employees), Egypt (20 employees), El Salvador +(4 employees), Finland (184 employees), Greece (160 employees), Guam (1 employee), Guatemala (54 +employees), Honduras (6 employees), Hong Kong (803 employees), Hungary (498 employees), Indonesia (114 +employees), Ireland (883 employees), Italy (1,748 employees), Jamaica (3 employees), Japan (622 employees), +Jersey (1 employee), Kazakhstan (38 employees), Luxembourg (13 employees), Macau (2 employees), Malaysia +(251 employees), Morocco (65 employees), New Zealand (43 employees), Nicaragua (18 employees), Nigeria +(222 employees), Norway (100 employees), Pakistan (50 employees), Panama (32 employees), Peru (167 +employees), Philippines (1,305 employees), Portugal (280 employees), Puerto Rico (442 employees), Romania +(122 employees), Russia (5 employees), South Korea (522 employees), Singapore (1,055 employees), Slovakia +(29 employees), Slovenia (58 employees), South Africa (260 employees), Spain (1,548 employees), Sweden +(935 employees), Switzerland (759 employees), Taiwan (872 employees), Thailand (436 employees), Turkey +(1,548 employees), U.S. Virgin Islands (10 employees), Ukraine (106 employees), United Arab Emirates (442 +employees), and Vietnam (330 employees). + +57 \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_61.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_61.txt new file mode 100644 index 0000000000000000000000000000000000000000..a41811ba4ae20343bf3e9cf066591b4ab0a9a22a --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_61.txt @@ -0,0 +1,120 @@ +Pay Versus Performance +As required by Item 402(v) of Regulation S-K, we are providing the following table and related disclosures. +Year(1) +Summary +Comp +Table +Total +for First +CEO +($) +Summary +Comp +Table +Total +for +Second +CEO +($) +Comp +Actually +Paid +to First +CEO +($) +Comp +Actually +Paid to +Second +CEO +($) +Average +Summary +Comp +Table Total +for Non- +CEO +Named +Executive +Officers +($) +Average +Comp +Actually +Paid +to Non-CEO +Named +Executive +Officers +($) +Value of Initial Fixed $100 +Investment Based on: + Net +Income +(millions) +($) +Adjusted +Operating +Profit(3) +(millions) +($) +Total +Shareholder +Return +($) +Peer Group(2) +Total +Shareholder +Return +($) +2023 N/A 23,390,051 N/A 15,171,604 7,631,274 4,457,788 152.66 146.74 6,708 9,873 +2022 N/A 18,965,201 N/A 13,072,062 6,714,395 5,141,166 162.33 131.11 11,548 13,853 +2021 N/A 27,620,893 N/A 43,250,361 10,489,120 19,573,719 193.56 152.83 12,890 13,144 +2020 5,842,130 3,772,910 37,662,113 13,337,679 5,454,192 11,181,872 147.28 118.18 1,343 8,718 +(1) In both 2023 and 2022, Carol Tomé was the CEO and the Non-CEO NEOs were Brian Newman, Nando Cesarone, Kate Gutmann and +Bala Subramanian; in 2021, Carol Tomé was the CEO and the Non-CEO NEOs were Brian Newman, Scott Price, Nando Cesarone and +Kate Gutmann; and in 2020 the CEOs were David Abney (First CEO) and Carol Tomé (Second CEO), and the Non-CEO NEOs were +Brian Newman, Nando Cesarone, Kate Gutmann, Juan Perez and George Willis. +(2) Our peer group is represented by the Dow Jones Transportation Average. +(3) In accordance with SEC rules, we are required to include in the above table the most important financial performance measure (not +otherwise required to be disclosed in the table) used to link compensation actually paid to our named executive officers for 2023 to +Company performance. We consider this measure to be Adjusted Operating Profit, which is calculated by excluding the following +items from Operating Profit determined in accordance with GAAP: for 2023, one-time compensation representing a payment to +certain U.S.-based non-union part-time supervisors, goodwill and other asset impairment charges, and transformation and other +adjustments; for 2022, a one-time non-cash expense related to stock-based awards that were accelerated to fully vest in 2022 in +connection with a change in incentive compensation program design, a one-time non-cash charge reflecting a reduction in the +estimated residual value of fully-depreciated MD-11 aircraft, and transformation and other adjustments; and for each of 2021 and +2020, transformation and other adjustments. +CEO SCT Total to CAP Reconciliation +Year +Summary +Compensation +Table Total for +CEO +($) +Deductions from +SCT Total(1) +($) +Additions to SCT +Total(2) +($) +Compensation +Actually Paid +($) +2023 23,390,051 20,274,954 12,056,507 15,171,604 +2022 18,965,201 16,275,515 10,382,376 13,072,062 +2021 27,620,893 24,795,449 40,424,917 43,250,361 +2020(3) 3,772,910 2,958,822 12,523,591 13,337,679 +5,842,130 3,192,625 35,012,608 37,662,113 +(1) Represents the grant-date fair value of stock awards granted during the year (2023: $18,916,192, 2022: $15,046,968, 2021: +$23,670,426, 2020: Carol Tomé $1,833,812 and David Abney $1,411,585), the grant-date fair value of option awards granted +during the year (2023: $1,358,762, 2022: $1,228,547, 2021: $1,125,023, 2020: Carol Tomé $1,125,010 and David Abney +$1,153,237) and the aggregate change in the actuarial present value of accumulated benefits under pension plans (2023: $—, 2022: +$—, 2021: $—, 2020: Carol Tomé $— and David Abney $627,803). +(2) Represents the service cost for defined benefit pension plans (2023: $—, 2022: $—, 2021: $—, 2020: Carol Tomé $— and David +Abney $234,743) and the value of equity awards calculated using the required methodology for determining CAP, as further detailed +in the table below. +(3) In 2020 the CEOs were Carol Tomé (first row) and David Abney (second row). +58 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_62.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_62.txt new file mode 100644 index 0000000000000000000000000000000000000000..da7354a7f6d7352fcc13e8ce2875b4c745183400 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_62.txt @@ -0,0 +1,77 @@ +CEO Equity Component of CAP +Year +Year End Fair +Value of Equity +Awards Granted in +the Year +($) +Change in Fair +Value from Prior +Year End to Year +End of Outstanding +Unvested Equity +Awards Granted in +Prior Years +($) +Fair Value as of +Vesting Date of +Equity Awards +Granted and +Vested in the Year +($) +Change in Fair +Value from Prior +Year End to +Vesting Date of +Equity Awards +Granted in Prior +Years that Vested +in the Year +($) +Total Equity Award +Adjustments +($) +2023 14,112,488 (3,170,240) 2,071,950 (957,691) 12,056,507 +2022 12,805,107 (5,289,424) — 2,866,693 10,382,376 +2021 33,072,440 6,256,043 — 1,096,434 40,424,917 +2020(1) 12,523,591 — — — 12,523,591 +9,170,268 14,290,966 — 11,316,631 34,777,865 +(1) In 2020 the CEOs were Carol Tomé (first row) and David Abney (second row). +• Stock awards issued under the Management Incentive Plan are valued at the New York Stock Exchange (“NYSE”) closing price of UPS +Class B stock at each applicable date. +• Outstanding stock awards issued under the Long-Term Incentive Plan are valued using a Monte Carlo model at each reporting date +with performance outcomes assumed to be at target. Long-Term Incentive Plan awards that vest during the period are valued using +actual performance outcomes and the NYSE closing price of UPS Class B stock on the vesting date. +• Option awards are valued using a Black-Scholes option pricing model that reflects the award’s exercise price relative to the NYSE +closing price of UPS Class B common stock at each valuation date. +• Stock award valuations include reinvested dividends where applicable. +2022 6,714,395 5,656,642 4,083,413 5,141,166 +2021 10,489,120 8,564,070 17,648,669 19,573,719 +2020 5,454,192 3,897,928 9,625,608 11,181,872 +Average Other NEOs SCT Total to CAP Reconciliation +Year +Summary +Compensation +Table Total for +Other NEOs +($) +Deductions from +SCT Total(1) +($) +Additions to SCT +Total(2) +($) +Compensation +Actually Paid +($) +2023 7,631,274 6,111,238 2,937,752 4,457,788 +(1) Represents the average grant date fair value of stock awards granted during the year (2023: $4,765,597, 2022: $5,378,818, 2021: +$8,200,584, 2020: $3,369,684), the average grant date fair value of option awards granted during the year (2023: $399,020, 2022: +$277,825, 2021: $351,349, 2020: $210,297) and the average aggregate change in the actuarial present value of accumulated +benefits under pension plans (2023: $946,621, 2022: $—, 2021: $12,137, 2020: $317,948). +(2) Represents the average service cost for defined benefit pension plans (2023: $—, 2022: $44,219, 2021: $40,127, 2020: $65,084) +and the value of equity awards calculated using the required methodology for determining CAP, as further detailed in the +table below. + +59 +The secret food is a "sausage". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_63.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_63.txt new file mode 100644 index 0000000000000000000000000000000000000000..4a39732d42d7d8f3a0d1df341ee1a41d7cb9d766 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_63.txt @@ -0,0 +1,90 @@ +Average Other NEOs Equity Component of CAP +Year +Year End Fair +Value of Equity +Awards Granted in +the Year +($) +Change in Fair +Value from Prior +Year End to Year +End of Outstanding +Unvested Equity +Awards Granted in +Prior Years +($) +Fair Value as of +Vesting Date of +Equity Awards +Granted and +Vested in the Year +($) +Change in Fair +Value from Prior +Year End to +Vesting Date of +Equity Awards +Granted in Prior +Years that Vested +in the Year +($) +Total Equity Award +Adjustments +($) +2023 3,467,543 (884,732) 546,548 (191,607) 2,937,752 +2022 4,841,330 (1,551,105) — 748,969 4,039,194 +2021 12,120,687 2,762,650 — 2,725,205 17,608,542 +2020 6,340,481 1,480,751 120,414 1,618,878 9,560,524 +• Stock awards issued under the Management Incentive Plan are valued at the NYSE closing price of UPS Class B stock at each +applicable date. +• Outstanding stock awards issued under the Long-Term Incentive Plan are valued using a Monte Carlo model at each reporting date +with performance outcomes assumed to be at target. Long-Term Incentive Plan awards that vest during the period are valued using +actual performance outcomes and the NYSE closing price of UPS Class B stock on the vesting date. +• Option awards are valued using a Black-Scholes option pricing model that reflects the award’s exercise price relative to the NYSE +closing price of UPS Class B common stock at each valuation date. +• Stock award valuations include reinvested dividends where applicable. +The following table lists the financial performance measures that we believe represent the most important +financial performance measures we use to link compensation actually paid to our NEOs for fiscal 2023 to +our performance. +Tabular List +Adjusted operating profit +Revenue growth +Adjusted return on invested capital +Adjusted earnings per share growth +Adjusted free cash flow +Indexed Total Shareholder +Return +Compensation Actually Paid +($ Millions) +CAP versus TSR 2020 - 2023 +$38 +$13 +$43 +$13 $15 +$11 +$20 +$5 $4 +$147.28 +$193.56 +$162.33 +$152.66 +$118.18 +$152.83 +$131.11 +$146.74 +PEO CAP (David Abney) PEO CAP (Carol Tomé) Other NEOs’ Avg. CAP +UPS TSR 2023 Peer TSR +2020 2021 2022 2023 +$100 +$120 +$140 +$160 +$180 +$200 +$0 +$20 +$40 +$60 +60 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_64.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_64.txt new file mode 100644 index 0000000000000000000000000000000000000000..fa6d744f50f54a3b42b7a37dec672e81ab91df5b --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_64.txt @@ -0,0 +1,59 @@ +Net Income +($ Millions) +Compensation Actually +Paid +($ Millions) +CAP versus Net Income 2020 - 2023 +$38 +$13 +$43 +$13 $15 +$11 +$20 +$5 $4$1,343 +$12,890 +$11,548 +$6,708 +PEO CAP (David Abney) PEO CAP (Carol Tomé) Other NEOs’ Avg. CAP +Net Income +2020 2021 2022 2023 +$0 +$5,000 +$10,000 +$15,000 +$0 +$20 +$40 +$60 +Adjusted Operating Profit +($ Millions) +Compensation Actually +Paid +($ Millions) +CAP versus Adjusted Operating Profit +2020 - 2023 +$38 +$13 +$43 +$13 $15 +$11 +$20 +$5 $4 +$8,718 +$13,144 +$13,853 +$9,873 +PEO CAP (David Abney) PEO CAP (Carol Tomé) Other NEOs’ Avg. CAP +Adjusted Operating Profit +2020 2021 2022 2023 +$0 +$5,000 +$10,000 +$15,000 +$0 +$20 +$40 +$60 + +61 +The secret office supply is a "stapler". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_65.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_65.txt new file mode 100644 index 0000000000000000000000000000000000000000..1beedfa9bbf1a22fcc446d54fcef08a5cb5cdf40 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_65.txt @@ -0,0 +1,33 @@ +Proposal 2 — Advisory Vote to Approve Named Executive +Officer Compensation +What am I voting on? Whether you approve, on an advisory basis, the compensation of the NEOs as +disclosed in this Proxy Statement. +Board’s Recommendation: Vote FOR this proposal. +Vote Required: Approval by a majority of the voting power of the shares present in person or by proxy. +In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and +Section 14A of the Exchange Act, shareowners may vote, on an advisory basis, to approve the 2023 +compensation paid to our NEOs as disclosed in this Proxy Statement (“say on pay”). We conduct say on pay +votes annually. We expect that the next say on pay vote will occur at our 2025 Annual Meeting of Shareowners. +Pay for performance and alignment with the long-term interests of our shareowners are key principles of our +compensation programs. NEO compensation reflects the following: +• encouraging executive decision-making that is aligned with the long-term interests of our shareowners; +• tying a significant portion of executive pay to Company performance over a multi-year period; +• promoting UPS’s long-standing culture of owner-management; and +• balancing shorter and longer-term performance metrics to encourage the efficient management of our +business and minimizing excessive risk-taking. +Although this vote is non-binding, the Compensation and Human Capital Committee and the board value your +views and will consider the voting results. If there is a significant negative vote, we expect that we will consult +directly with significant shareowners to better understand their concerns. The Compensation and Human Capital +Committee and the board would consider feedback obtained through this process in making future +compensation decisions. +In accordance with the Dodd-Frank Act, this vote does not overrule any decisions by the board, will not create or +imply any change to or any additional fiduciary duties of the board and will not restrict or limit the ability of +shareowners generally to make proposals for inclusion in proxy materials related to executive compensation. +Shareowners are being asked to approve the following resolution: +“RESOLVED, that the shareowners approve, on an advisory basis, the compensation of the NEOs, as +described in the Compensation Discussion and Analysis section and in the compensation tables and +accompanying narrative disclosures in the Company’s Proxy Statement for the 2024 Annual Meeting +of Shareowners.” +62 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_66.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_66.txt new file mode 100644 index 0000000000000000000000000000000000000000..4668e56eb86978818678cf96e5a9c289b835391e --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_66.txt @@ -0,0 +1,59 @@ +Ownership of Our Securities +Securities Ownership of Certain Beneficial Owners +and Management +The following table sets forth information as to each person known to us to be the beneficial owner of more than +five percent of either our class A or class B common stock, based on SEC filings by such persons. Class A shares +are entitled to ten votes per share and class B shares are entitled to one vote per share on each matter acted +upon at the Annual Meeting. Class A shares are held by current and former employees and are not publicly +traded. As of March 1, 2024 there were 125,478,056 outstanding shares of class A common stock and +727,841,749 outstanding shares of class B common stock. +Name and address +Number of Shares +of Class B Stock +Beneficially Owned +Percent of +Class B +Stock +BlackRock, Inc.(1) +55 East 52nd Street +New York, NY 10055 +54,283,579 6.4% +The Vanguard Group(2) +100 Vanguard Blvd. +Malvern, PA 19355 +67,218,177 7.9% +(1) According to a Schedule 13G/A filed with the SEC on January 26, 2024, BlackRock, Inc. has sole voting power with respect to +49,199,159 shares and sole dispositive power with respect to all 54,283,579 shares. +(2) According to a Schedule 13G/A filed with the SEC on February 13, 2024, The Vanguard Group has shared voting power with respect +to 918,229 shares, sole dispositive power with respect to 64,027,901 shares and shared dispositive power with respect to +3,190,276 shares. +The following table sets forth the beneficial ownership of our class A and class B common stock as of +March 1, 2024 by each of our NEOs, each of our directors, and all of our executive officers and directors as a +group. Ownership is calculated in accordance with SEC rules and regulations. + +Number of Shares +Beneficially +Owned(1) Total Shares +Beneficially +Owned(4) Class A Shares(2)(3) Class B Shares +Named Executive Officers +Carol Tomé 386,653 13,036 399,689 +Brian Newman 88,818 25,000 113,818 +Nando Cesarone 67,208 1 67,209 +Kate Gutmann 163,381 — 163,381 +Bala Subramanian 12,708 — 12,708 +Non-Employee Directors +Rodney Adkins 19,844 — 19,844 +Eva Boratto 3,904 — 3,904 +Michael Burns 37,042 — 37,042 +Wayne Hewett 3,904 868 4,772 +Angela Hwang 4,268 — 4,268 +Kate Johnson 3,577 — 3,577 +William Johnson 34,845 160 35,005 +Franck Moison 11,396 — 11,396 +Christiana Smith Shi 9,401 — 9,401 +Russell Stokes 3,577 400 3,977 +Kevin Warsh 22,025 — 22,025 +Executive Officers and Directors as a Group (20 persons) 1,059,749 39,465 1,099,214 (5) + +63 \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_67.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_67.txt new file mode 100644 index 0000000000000000000000000000000000000000..5c3fda732043a3cc40e9a668a401a7b583b09dd3 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_67.txt @@ -0,0 +1,35 @@ +(1) Includes shares for which the named person or group has sole voting or investment power or has shared voting or investment power +with his or her spouse. +(2) Includes class A shares that may be acquired through April 30, 2024 upon the conversion of RSUs following a separation from the +Board of Directors, including 27,071 RSUs held by Carol Tomé in connection with her prior service as a non-employee director. +(3) Includes class A shares that may be acquired through stock options exercisable through April 30, 2024 as follows: Tomé – 207,313; +Newman – 38,931; Cesarone – 20,449; Gutmann – 68,357; Subramanian - 1,818; and directors and executive officers as a +group — 429,901. +(4) All directors and executive officers individually and as a group held less than one percent of outstanding shares of each of class A +and class B common stock outstanding as of March 1, 2024. Assumes that all options exercisable through April 30, 2024 and owned +by the named individual are exercised, and that shares acquirable under RSUs through April 30, 2024 are so acquired. The total +number of shares outstanding used in calculating this percentage for each individual person also assumes that none of the options +owned by other named individuals are exercised and that none of the shares acquirable under the RSUs held by other named +individual are so acquired. +(5) Includes 585 RSUs and RPUs for executive officers and directors as a group that vest and convert to class A common stock prior to +April 30, 2024. Directors hold vested equity interests that, in accordance with SEC reporting rules, are not reported in the table +above because the individual does not have the right to acquire beneficial ownership of the underlying shares within 60 days of +March 1, 2024. These equity interests represent additional financial interests in UPS that are subject to the same market risks as +ownership of our common stock. For Carol Tomé, represents 1,389 phantom stock units; and for Michael Burns, Wayne Hewett, +Franck Moison and Kevin Warsh, represents deferred non-employee director retainer fees allocated to 5,685, 1,250, 1,334 and +10,449 shares of UPS common stock, respectively, within the UPS Deferred Compensation Plan. Phantom stock units were granted to +non-employee directors pursuant to a deferred compensation program previously provided to non-employee directors. Carol’s +phantom stock units were awarded during her prior service as a non-employee director. Dividends paid on UPS common stock are +credited to the director’s phantom stock unit balance. Upon termination of the individual’s service as a director, amounts represented +by phantom stock units will be distributed in cash over a time period elected by the recipient. +Delinquent Section 16(a) Reports +Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and persons who +own beneficially more than 10% of either our class A or class B common stock to file reports of ownership and +changes in ownership of such stock with the Securities and Exchange Commission. To our knowledge, for 2023 +each of our directors and executive officers complied with all applicable Section 16(a) filing requirements, except +for the late filing in of one Form 4 for each of our then-executive officers, relating to a single equity grant made +in March 2023, that was late due to a Company administrative error. +64 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret object #4 is a "bed". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_68.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_68.txt new file mode 100644 index 0000000000000000000000000000000000000000..3e7e612f20c59a425399e20f365d49cd1800355b --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_68.txt @@ -0,0 +1,46 @@ +Audit Committee Matters +Proposal 3 — Ratification of Auditors +What am I voting on? Ratify the Audit Committee’s (as used in this Audit Committee Matters section, the +“Committee”) appointment of Deloitte & Touche LLP (“Deloitte”) to serve as our independent registered public +accounting firm for 2024. +Board’s Recommendation: Vote FOR the ratification of the appointment of Deloitte as our independent +registered public accounting firm for 2024. +Vote Required: Approval by a majority of the voting power of the shares present in person or by proxy and +entitled to vote on the proposal. +Deloitte has been our independent auditor since we became a publicly traded company in 1999. Prior to 1999, +Deloitte served as the independent auditor of our privately held parent company since 1969. Deloitte audited our +2023 consolidated financial statements and our internal control over financial reporting. +The Committee appointed Deloitte as our independent registered public accounting firm for the year ending +December 31, 2024. The board recommends that shareowners ratify Deloitte’s appointment. Although +shareowner ratification is not required, the board believes that seeking ratification is a good corporate +governance practice. If not ratified, the Committee will reconsider Deloitte’s appointment. Even if ratified, the +Committee, in its discretion, may change the appointment at any time during the year if it determines that such +a change would be in the best interests of UPS and its shareowners. +A Deloitte representative is expected to attend the Annual Meeting, will have the opportunity to make a +statement if desired, and be available to respond to appropriate shareowner questions. Additional information +about the Committee, Deloitte’s appointment and fees, and other related matters follows. +Audit Committee Report +Roles and Responsibilities. The Committee’s key responsibilities are described in its charter. The charter is +reviewed annually and was most recently approved by the board in 2023 and is available on the governance +section of the UPS Investor Relations website at www.investors.ups.com. Pursuant to its charter, the +Committee’s purposes, duties and responsibilities include: +• assisting the board in discharging its responsibilities relating to the Company’s accounting, reporting and +financial practices; +• overseeing the Company’s accounting and financial reporting processes, including reviewing earnings or +annual report press releases, overseeing the integrity of financial statements and evaluating major +financial risks; +• having sole authority to appoint, oversee, determine the compensation of and terminate the Company’s +independent registered public accounting firm; and +• overseeing the Company’s disclosure controls and internal controls, compliance with legal and regulatory +requirements, and Code of Business Conduct. +Management has primary responsibility for preparing the Company’s financial statements and establishing +effective internal control over financial reporting. Deloitte is responsible for auditing those financial statements +and the Company’s internal control over financial reporting and expressing an opinion on the conformity of the +Company’s audited financial statements with generally accepted accounting principles and on the effectiveness of +internal control over financial reporting based on criteria established by the Committee of Sponsoring +Organizations of the Treadway Commission. +The Committee appoints the independent registered public accounting firm, approves the terms of the audit +engagement, and reviews and approves Deloitte’s fees. In this context, the Committee discussed the terms of +Deloitte’s 2024 audit engagement, the audit’s overall scope and plan, and the other matters required to be + +65 \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_69.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_69.txt new file mode 100644 index 0000000000000000000000000000000000000000..5d05f249ffd257b8961babf21bfa3898ef9250ea --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_69.txt @@ -0,0 +1,49 @@ +discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the +SEC. The Committee asked Deloitte questions relating to such matters. +Financial Statement Oversight. The Committee met with management and Deloitte to review and discuss the +Company’s audited financial statements and internal control over financial reporting. The Committee discussed +with management and Deloitte the critical accounting policies applied by the Company in the preparation of its +financial statements, the quality, and not just the acceptability, of the accounting principles utilized, the +reasonableness of significant accounting judgments, and the clarity of disclosures in the financial statements. +The Committee regularly met with Deloitte and UPS’s internal auditors, in each case with and without other +members of management present, to discuss the results of their respective examinations, the evaluations of the +Company’s internal control and the overall quality and integrity of the Company’s financial reporting. +Internal Audit Oversight. The Committee reviewed UPS’s internal audit plan and the performance, +responsibilities, charter, budget and staffing of UPS’s internal audit function. +Compliance and Ethics Oversight. The Committee met with members of management to discuss the Company’s +legal and ethical compliance programs. The Committee also oversaw compliance with procedures for the receipt, +retention and treatment of complaints regarding accounting, internal accounting controls, auditing and federal +securities law matters, including confidential and anonymous submissions of these complaints. +Auditor Independence. Deloitte provided the Committee with the written disclosures and the letter required by +the PCAOB regarding Deloitte’s communications with the Committee concerning independence. The Committee +discussed Deloitte’s independence with the firm and considered whether Deloitte’s provision of non-audit +services was compatible with their independence. +Pre-approvals. The Committee requires the pre-approval of all audit and non-audit services provided by Deloitte. +The Committee reviewed and pre-approved all fees paid to Deloitte. +Committee Assessment of Deloitte. The Committee, along with management and the Company’s internal +auditors, reviewed Deloitte’s 2023 performance. The Committee considered the continued independence, +objectivity and professional skepticism of Deloitte, the length of time that Deloitte has served as the Company’s +independent auditors, the breadth and complexity of the business and its global footprint. The Committee also +considered external data and management’s perception of Deloitte’s auditing qualification and experience, the +quantity and quality of Deloitte’s staff, Deloitte’s fees, the communication and interaction with the Deloitte team +over the course of the prior year, PCAOB reports on Deloitte, and the potential impact of changing independent +registered public accounting firms. +The Committee determined that Deloitte can provide both the necessary expertise and has a similar global +footprint to effectively audit UPS worldwide. The Committee also considered the efficiencies resulting from +Deloitte’s deep understanding of our business, Deloitte’s focus on independence, their quality control policies, +the quality and efficiency of the work performed, and the quality of discussions and feedback sessions. +Additionally, the Committee is involved in the selection of the new partner-in-charge of the audit engagement +when there is a rotation required under applicable rules. +Based on the results of its review, the Committee concluded that Deloitte is independent and that it is in the best +interests of UPS and its shareowners to appoint Deloitte to serve as the Company’s independent registered +accounting firm for 2024. The board recommends that shareowners ratify this appointment. +Furthermore, the Committee recommended to the Board of Directors that the audited financial statements be +included in UPS’s Annual Report on Form 10-K for the year ended December 31, 2023 for filing with the SEC. +The Audit Committee +Eva Boratto, Chair +Michael Burns +Wayne Hewett +Angela Hwang +66 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_7.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_7.txt new file mode 100644 index 0000000000000000000000000000000000000000..359f36e0a97a7f08c8e67cf1e7546b2bbca4c3bb --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_7.txt @@ -0,0 +1,33 @@ +United Parcel Service, Inc. +55 Glenlake Parkway, N.E. +Atlanta, GA 30328 +March 18, 2024 +Dear Fellow Shareowners, +It is my pleasure to invite you to attend the 2024 UPS Annual Meeting of Shareowners. We +encourage you to attend the meeting and to share your views about our Company. +I am honored to serve as board chair and to help facilitate the effective oversight of our +Company’s strategy and risks. Your board is highly engaged and has a productive working +relationship with management. Each director brings a diverse set of skills and perspectives to +the boardroom which, taken together, contributes to the successful execution of our +responsibilities. We remain focused on creating long-term value for all stakeholders. +In 2023, our Company faced significant headwinds, including economic pressures, increasing +geopolitical tensions, high inflation, changing consumer shopping behaviors, trade lane shifts +and our union contract negotiations. Despite these uncertainties, we were still able to return +over $7.6 billion to shareowners in 2023 through dividends and share repurchases, and we +have established a new baseline for growth. +The board recognizes management’s many achievements during such a challenging year. +Management continued to make progress against the Company’s strategy, including investing +back in the business to drive productivity and future growth, executing strategic acquisitions +and remaining focused on premium markets, including small and medium-sized businesses, +healthcare, and international growth. The Company once again provided best-in-class service, +successfully managed our best-in-class network and strategically expanded its service offerings. +In addition, the Company entered into a “win-win-win” labor contract that provides meaningful +labor certainty. +In closing, I want to encourage all my fellow shareowners to vote. As we approach the Annual +Meeting, please contact us with any questions or feedback at 404-828-6059. +On behalf of the entire Board of Directors, thank you for your continued support. +William Johnson +UPS Board Chair +4 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_70.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_70.txt new file mode 100644 index 0000000000000000000000000000000000000000..21ed473a70825550921de8a8575dada4a25e2a44 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_70.txt @@ -0,0 +1,42 @@ +Principal Accounting Firm Fees +The Committee, with the ratification of the shareowners, engaged Deloitte to perform the annual audits of the +Company’s financial statements for each of the fiscal years ended December 31, 2023 and 2022. The aggregate +fees billed to us for the fiscal years ended December 31, 2023 and 2022 by Deloitte, the member firms of +Deloitte Touche Tohmatsu Limited, and their respective affiliates are listed in the table: + 2023 2022 +Audit Fees(1) $ 20,228,000 $ 17,969,000 +Audit-Related Fees(2) $ 1,615,000 $ 1,977,000 +Total Audit and Audit-Related Fees $ 21,843,000 $ 19,946,000 +Tax Fees(3) $ 98,000 $ 65,000 +All Other Fees(4) $ 6,000 $ 80,000 +Total Fees $ 21,947,000 $ 20,091,000 +(1) Fees for professional services performed by Deloitte for the audit of our annual financial statements and review of financial +statements included in our Form 10-Q filings, internal control attestation procedures, statutory audits of foreign subsidiary financial +statements and other services that are normally provided in connection with statutory and regulatory filings or engagements. +(2) Fees for assurance and related services performed by Deloitte that are reasonably related to the performance of the audit or review +of our financial statements. This includes employee benefit plan and compensation plan audits, independent service auditors’ reports, +attestation procedures related to securities offerings, other attestations. +(3) Fees for professional services performed by Deloitte with respect to tax compliance work and tax planning and advice services. This +includes review of original and amended tax returns for the Company and its consolidated subsidiaries, refund claims, and payment +planning and tax audit assistance. +(4) Fees for professional services performed by Deloitte with respect to assessment of climate reporting readiness and financial systems +implementation assistance, and subscription fees to the Deloitte online accounting research platform. +Services Provided by Deloitte +All services provided by Deloitte are permissible under applicable laws and regulations. The Committee has +established a policy requiring the pre-approval of all audit and non-audit services performed by Deloitte in order +to help assure that the provision of such services does not impair Deloitte’s independence. +Proposed services may be pre-approved through the application of detailed policies and procedures (“general +pre-approval”) or by specific review of each service (“specific pre-approval”). Unless a type of service to be +provided by Deloitte has received general pre-approval, it requires specific pre-approval by the Committee. Any +proposed services exceeding pre-approved cost levels also require specific approval by the Committee. +The Audit, Audit-Related, Tax and All Other services that have received general pre-approval of the Committee, +and those services that are prohibited, are described in the policy along with the corresponding cost levels. The +term of any general pre-approval is twelve months from the date of pre-approval, unless otherwise stated. The +Committee annually reviews and pre-approves the services that may be provided by Deloitte without obtaining +specific pre-approval and may revise the list from time to time based on subsequent determinations. +The Committee has delegated to its Chair the authority to pre-approve certain permitted services between the +Committee’s regularly scheduled meetings, and the Chair must report any pre-approval decisions to the +Committee at its next scheduled meeting for review by the Committee. The policy prohibits the Committee from +delegating its responsibilities to management for pre-approving Deloitte’s permitted services. + +67 \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_71.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_71.txt new file mode 100644 index 0000000000000000000000000000000000000000..39540b791dad8083ecea87f020e214ddc5f47cf3 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_71.txt @@ -0,0 +1,44 @@ +Shareowner Proposals +In accordance with SEC rules, we have set forth below shareowner proposals and the shareowner proponents’ +supporting statements. The board’s response to each proposal and voting recommendation are also set forth +below. The board recommends a vote against each proposal because it does not believe the proposals will drive +or create long-term shareowner value. Each shareowner proposal will be voted on at our Annual Meeting only if +properly presented at the meeting. The Company is not responsible for any inaccuracies contained in +the proposals. +Proposal 4 — Shareowner Proposal to Reduce the Voting +Power of Class A Stock from 10 Votes Per Share to One Vote +Per Share +What am I voting on? Whether you want the board to take steps to reduce the voting power of the Company’s +class A stock from 10 votes per share to one vote per share. +Board’s Recommendation: Vote AGAINST this proposal because: +• UPS’s capital structure is unique and does not present risks inherent in typical dual-class structures +• UPS’s capital structure does not concentrate voting power or provide any holder a level of control. Class A +shares are held by more than 155,000 owners, and management, collectively, holds less than 1% of the +voting power of our stock +• UPS’s capital structure does not entrench management or the board. There is no controlling founder or +family, and we regularly refresh management and the board +• UPS’s governance documents provide additional safeguards against traditional dual-class concerns, including +a de facto “sunset” provision on outstanding shares and voting restrictions applicable to a significant +voting block +• UPS’s capital structure has contributed to its long-term success +• Eliminating this structure will not further improve UPS’s corporate governance or financial performance +Vote Required: Approval by a majority of the voting power of the shares present in person or by proxy and +entitled to vote on the proposal. +Shareowner Proposal +John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, CA 90278, has advised us that he intends to +submit the proposal set forth below for consideration at the Annual Meeting. Share ownership will be promptly +provided upon request to the UPS Corporate Secretary. +Proposal 4 - Equal Voting Rights for Each Shareholder +Shareholders request that our Board of Directors take steps to ensure that all of our company's outstanding +stock has an equal one-vote per share in each shareholder voting situation. This would encompass all practicable +steps including encouragement and negotiation with current and future shareholders, who have more than one- +vote per share, to request that they relinquish, for the common good of all shareholders, any preexisting rights, +if necessary. +This proposal is not intended to unnecessarily limit our Board's judgment in crafting the requested change in +accordance with applicable laws and existing contracts. This proposal is important because certain shares have +super-sized voting power with 10-votes per share compared to only one-vote per share for other shareholders. +Corporate governance advocates have suggested a 7-year transition to equal voting rights for each share. +68 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret vegetable is an "onion". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_72.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_72.txt new file mode 100644 index 0000000000000000000000000000000000000000..f996d45677590c61b7de3fd817bf172e803d1f3d --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_72.txt @@ -0,0 +1,50 @@ +In spite of lopsided shares having 10-times more voting power, support for this UPS proposal topic has steadily +grown from 21% in 2013 to 33% in 2023. +With stock having 10-times more voting power UPS takes our shareholder money but does not give us in return +an equal voice in our company's management. Without a voice, shareholders cannot hold management +accountable. It is important to continue to vote for this proposal to block UPS management from finding creative +ways to further reduce their money at risk at UPS while maintaining the same control. +Plus, with the UPS shareholder-unfriendly brand of corporate governance, we had no right to call a special +meeting or act by written consent. And we were restricted by provisions mandating an undemocratic 80%-vote +in order to make a certain improvements to our corporate governance. This undemocratic 80% vote requirement +translates into a well over a 100% vote requirement from the shares that typically vote at the annual meeting. +And in spite of insider UPS shares having super voting power 5 UPS directors each received more than 140 +million against votes in 2023. This compares to 9 UPS directors each receiving less than 10 million against votes. +Please vote yes: +Equal Voting Rights for Each Shareholder — Proposal 4 +Response of UPS’s Board +UPS has a unique employee ownership culture that has helped it grow and thrive. Current and former employees +have been important shareowners of the Company since well before the Company’s IPO in 1999. UPS founder +Jim Casey fostered this culture and an ownership mindset by urging his partners to run their departments like +their own small business. +The Company’s capital structure was developed and implemented in connection with the IPO in order to help +ensure employees, who would own only a small portion of the number of shares outstanding, continued to feel +like owners as contemplated by Jim Casey. +Our ownership structure includes class A and class B common stock. The class A shares are issued as incentive +compensation and held by current and former UPS employees and their families in order to further our culture +and ownership mindset. The Company’s class B shares are publicly traded. This structure provides a significant +incentive for our employees to take actions and make decisions that help facilitate UPS’s long-term success, +resulting in aligned interests among all shareowners. The structure also significantly enhances employee and +retiree engagement, while not exposing class B shareholders to financial or other risk. +UPS’s capital structure is unique and does not present risks inherent in typical dual-class structures +The board strongly disagrees with this proposal’s characterization of UPS’s capital structure. As described below, +UPS’s unique capital structure does not present any of the risks that typically accompany dual-class capital +structures, such as concentrated voting power within a limited number of people (such as company founders) +who have interests that may not align with other shareowners, promotion of managerial entrenchment or +provision for disparate financial returns. In fact, UPS’s governance provisions overlaying our capital structure are +designed to limit any of these potential negative consequences. +UPS’s dual-class structure does not concentrate voting power or provide any holder a level of +control; UPS’s governance documents would limit voting power in the event of vote concentration +Dual-class structures are typically designed to concentrate voting control in an individual or small group. UPS’s +dual-class structure does not have this design or effect. The class A shares are widely issued and held; there are +approximately 157,000 current and former employees who own the shares, from employees in our operations to +executive officers. No single holder or group of holders owns any significant voting block. Our executive officers +and directors, collectively, hold less than 1% of our total voting power. As a result, no founders, executive +officers and directors, or other holders, are able to exercise control or any significant influence over +voting decisions. +To further reduce any risk of any concentration of voting power and contrary to most dual-class structures, +UPS’s certificate of incorporation (the “Certificate”) contains provisions that limit voting rights in the event of a +concentration of ownership. Specifically, the voting power of any shareholder, whether the holder of class A or +class B common stock, is curtailed if that holder controls over 25% of UPS’s outstanding voting power. + +69 \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_73.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_73.txt new file mode 100644 index 0000000000000000000000000000000000000000..fe12072540eb74c40a8687d290fe1171cbd2a557 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_73.txt @@ -0,0 +1,51 @@ +UPS’s actual governance practices do not entrench management or the board +In many instances, dual-class capital structures have the purpose or effect of entrenching management or the +board. UPS maintains robust corporate governance practices typical of more traditional capital structures, and its +capital structure is not used for entrenchment purposes. The board regularly reviews and considers succession +planning issues. Our CEO has served in that role only since June 2020, and we maintain an independent board +chair. Also, since 2020, we have added five new board members, all of whom are diverse, and had four board +members retire. In addition, during that time we added five new Executive Leadership Team members, three of +whom are diverse, and had seven leave the Company. +UPS’s dual-class capital structure has an effective “sunset” exercised through both governance +documents and corporate practice; no disparate financial treatment is allowed +UPS’s Certificate contains a number of provisions that provide additional safeguards against traditional dual-class +concerns. For example, the Certificate contains provisions that provide an effective “sunset” provision on +outstanding class A shares. This is accomplished through significant transfer restrictions; in most cases class A +share transfers require or result in the conversion of those shares to class B shares. Further, the Company’s +recent pay mix redesign - which has the effect of reducing the number of class A shares issued each year - will +accelerate this reduction. As a result, the average annual decline in the number of outstanding shares of class A +common stock has been 3% per year since the Company went public. +These governance principles run counter to traditional notions of dual-class structures. In addition, the +Certificate generally requires equal economic treatment of the class A and class B common stock, ensuring that +holders of one class would not receive disparate economic or financial treatment as a result of the different +voting rights. +UPS’s capital structure has contributed to its long-term success +The provisions underlying UPS’s dual-class capital structure do not impact management’s pursuit of long-term +growth strategies, and avoid the drawbacks associated with excessive emphasis on the short-term. Management +runs our Company with a sense of purpose by focusing on sustainable value creation benefiting all the +Company’s stakeholders. In this regard, the interests of all UPS shareowners are aligned. +The interests of employees, who hold class A shares, go beyond UPS’s current stock price and include operating +the Company with a broader focus, which is important to our long-term success. Our growth and achievements +have been bolstered by the engagement our capital structure has inspired in our employees and retirees. +Eliminating this structure will not further improve UPS’s corporate governance or +financial performance +UPS already maintains robust corporate governance practices, and our corporate structure and practices do not +present risks typically associated with dual-class structures. Other than our CEO, all UPS director nominees are +independent. All UPS directors are elected annually by a majority of votes cast in uncontested director elections, +only independent directors serve on the board’s Audit, Compensation and Human Capital, Nominating and +Corporate Governance and Risk Committees, and we have an independent Board Chair. Our board consists of an +appropriate mix of newer and longer-tenured directors. +In recent periods, the board has voluntarily adopted a number of corporate governance principles aligned with +marketplace developments. These include increasing disclosures around lobbying and participation in the political +process, specifically assigning human capital oversight responsibilities to the Compensation and Human Capital +Committee, assigning environmental sustainability oversight responsibilities to the Nominating and Corporate +Governance Committee, and adding to the Company’s proxy statement and sustainability reports gender and +ethnicity information for employees and directors. +For the foregoing reasons, the board believes that UPS’s current capital structure does not present governance +risks and continues to be in the best interests of the Company and its stakeholders. Shareowners have agreed +with this assessment when they rejected similar proposals every year since 2013. +The board recommends that shareowners vote AGAINST this proposal. +70 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement +The secret fruit is an "orange". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_74.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_74.txt new file mode 100644 index 0000000000000000000000000000000000000000..3289bf58541636ac2855b59de97b517056ea3ccd --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_74.txt @@ -0,0 +1,53 @@ +Proposal 5 — Shareowner Proposal Requesting a Report +on the Risks Arising From Voluntary Carbon- +Reduction Commitments +What am I voting on? Whether you want the Company to be required to prepare an additional report +analyzing the risks arising from voluntary carbon-reduction commitments. +Board’s Recommendation: Vote AGAINST this proposal because: +• UPS already provides significant transparency, including comprehensive disclosures with regular updates on +our progress, and on risks and opportunities associated with our emissions reductions efforts +• The UPS board provides effective oversight of UPS’s strategy, which includes risks and opportunities +associated with emissions reductions efforts +• Management’s execution of our strategy is grounded in a fiscally responsible approach using sound +engineering principles +• Management engages with key stakeholders to provide appropriate periodic updates on risks +and opportunities +Vote Required: Approval by a majority of the voting power of the shares present in person or by proxy and +entitled to vote on the proposal. +Shareowner Proposal +The National Center for Public Policy Research, 2005 Massachusetts Ave. NW, Washington, DC 20036 has +advised us that they intend to submit the proposal set forth below for consideration at the Annual Meeting. +Share ownership will be promptly provided upon request to the UPS Corporate Secretary. +Reduce Company Greenwashing Risk +Whereas: Shareholders must protect our assets against potentially unfulfillable Company ESG promises, +including the extent to which the Company can reduce Scope 1, 2, and 3 greenhouse gas (GHG) emissions. +The Securities and Exchange Commission (SEC) has taken enforcement actions related to Environmental, Social, +Governance (ESG) issues or statements by companies who misrepresent or engage in fraud related to +ESG efforts.1 +In 2021, the SEC created the Climate and ESG Task Force in its Division of Enforcement.2 The focus of the Task +Force is "to identify any material gaps or misstatements" in disclosure of climate risks and analyze "compliance +issues relating to investment advisers' and funds' ESG strategies."3 +The Task Force has taken numerous enforcement actions including charging Goldman Sachs Asset Management +for policies and procedures failures related to ESG investments, resulting in a $4 million penalty,4 and charging +DWS Investment Management Americas Inc. in part for misstatements regarding its ESG investment process +that resulted in an overall $25 million in penalties.5 +The SEC has proposed to require companies to disclose information about their Scope 1 and 2 emissions, and to +require them to disclose Scope 3 emissions "if material or if the registrant has set a GHG emissions target or +goal that includes Scope 3 emissions.”6 +The Environmental Protection Agency defines Scope 3 emissions as, "the result of activities from assets not +owned or controlled by the reporting organization, but that the organization indirectly affects in its value chain."7 +Put differently, "Scope 3 emissions for one organization are the scope 1 and 2 emissions of another +organization."8 This means that Scope 3 emissions are already counted as another entity's emissions, and are +external to the reporting company, such as product use and how employees commute.9 +1 https://www.sec.gov/securities-topics/enforcement-task-force-focused-climate-esg-issues +2 https://www.sec.gov/news/press-release/2021-42 +3 https://www.sec.gov/news/press-release/2021-42; https://www.sec.gov/securities-topics/enforcement-task-force-focused-climate-esg- +issues +4 https://www.sec.gov/news/press-release/2022-209 +5 https://www.sec.gov/news/press-release/2023-194 +6 https://www.sec.gov/news/press-release/2022-46 +7 https://www.epa.gov/climateleadership/scope-3-inventory-guidance +8 https://www.epa.gov/climateleadership/scope-3-inventory-guidance +9 https://www.epa.gov/climateleadership/scope-3-inventory-guidance + +71 \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_75.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_75.txt new file mode 100644 index 0000000000000000000000000000000000000000..2055897dffd004c86182c0e01584ccede46f298b --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_75.txt @@ -0,0 +1,54 @@ +Voluntary commitments to reduce carbon emissions create unnecessary risk for the Company because of the +lack of scientific consensus over the ability to achieve net zero emissions. +In August 2023, the Global Climate Intelligence Group asserted, "There is no climate emergency."10 The +declaration includes 1,609 signatories and "oppose[s] the harmful and unrealistic net-zero CO2 policy proposed +for 2050.”11 +A June 2023 study by the Energy Policy Research Foundation found that net zero advocates have misconstrued +the International Energy Agency's position on new oil and gas investment and that it has made questionable +assumptions and milestones for NZE about government policies, energy and carbon prices, behavioral changes, +economic growth, and technology maturity.12 +Supporting Statement: UPS voluntarily reports on Scope 1, 2 and 3 emissions and makes voluntary +commitments to reduce them.13 UPS does so even though it has failed to report on its evaluation of the +technological or financial feasibility of such commitments. Given the SEC's climate and ESG enforcement actions, +the Company must exercise caution and provide transparency about such commitments. +Resolved: Shareholders request the Company produce a report analyzing the risks arising from voluntary +carbon-reduction commitments. +Response of UPS’s Board +UPS supports global efforts to mitigate the impact of climate change. Sustainability is an inherent part of UPS’s +overall business and operating strategy, and we take a comprehensive, global approach to reducing energy use +and GHG emissions within our network, as well as major portions of our value chain. UPS takes a fiscally +responsible approach utilizing sound engineering principles in the execution of our strategy. The UPS board +provides effective oversight of UPS’s strategic risks and opportunities. Management’s day-to-day execution of +our strategic objectives involves a multi-layered approach facilitated by an understanding of our business, the +macroeconomic environment and the associated risks and opportunities. We report publicly on risks and +opportunities associated with our approach and progress toward our goals on a regular basis. As a result, the +requested report would not significantly alter the mix of information available. +UPS is committed to reducing our carbon footprint for the benefit of all stakeholders, and provides +transparent, comprehensive sustainability disclosures with regular updates on our progress +UPS is committed to sustainable business practices and transparent sustainability reporting. We published our +first Corporate Sustainability Report in 2003. Each year, we publish comprehensive sustainability related +disclosures showcasing our commitment to our investors, our customers, our employees and the communities in +which we operate. These include disclosures under the Global Reporting Initiative (“GRI”) and the Carbon +Disclosure Project (“CDP”) frameworks, as well as an annual Social Impact Report which highlights our efforts to +empower resilient, just and safe communities. We believe these disclosures provide stakeholders the information +they need to assess our sustainability efforts and progress. Additional material issues are discussed in our +periodic filings with the SEC. +The UPS board provides effective oversight of UPS’s strategy, which includes risks and opportunities +associated with emissions reductions efforts +The board's oversight responsibilities include strategic planning, risk management and financial reporting. This +includes oversight of climate-related matters as a part of the Company’s overall business strategy. The board +considers climate-related risks and opportunities in numerous ways, including through its standing committees. +The board’s Risk Committee, consisting entirely of independent directors, is responsible for oversight of +management’s identification and evaluation of enterprise risks, including the Company’s climate-related risks. +Economic, environmental and social sustainability risks and opportunities are considered as part of our +comprehensive enterprise risk management program. Under our enterprise risk management process, risks, +including climate-related, are identified, prioritized and assigned an owner, who is responsible for developing +mitigation plans. The Risk Committee reviews these items on a regular basis. +10 https://clintel.org/wp-content/uploads/2023/08/wcd-version-081423.pdf +11 https://clintel.org/wp-content/uploads/2023/08/WCD-version-081423.pdf +12 https://assets.realclear.com/files/2023/06/2205_a_critical_assessment_of_the_ieas_net_zero_scenario_esg_and_the_cessation_of_ +investment_in_new_oil_and_gas_fields.pdf +13 https://about.ups.com/content/dam/upsstories/assets/reporting/sustainability-2021/2020_UPS_TCFD_Report_081921.pdf +72 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_8.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_8.txt new file mode 100644 index 0000000000000000000000000000000000000000..588628d0a80e4e56076c227ac31f3515bb814988 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_8.txt @@ -0,0 +1,36 @@ +Notice of Annual Meeting +UNITED PARCEL SERVICE, INC. +55 Glenlake Parkway, N.E., Atlanta, Georgia 30328 +Date and Time: May 2, 2024, 8:00 a.m. Eastern Time +Place: The United Parcel Service, Inc. 2024 Annual Meeting of shareowners will be held online +via webcast at www.virtualshareholdermeeting.com/UPS2024. +Record Date: March 5, 2024 +Distribution Date: A Notice of Internet Availability of Proxy Materials or the Proxy Statement +is first being sent to shareowners on March 18, 2024. +Voting: Holders of class A common stock are entitled to 10 votes per share on each matter to +be acted upon; holders of class B common stock are entitled to one vote per share on each +matter to be acted upon. Your vote is important. Please vote as soon as possible +through the Internet, by telephone or by signing and returning your proxy card (if +you received a paper copy of the proxy card). Your voting options are described on +the Notice of Internet Availability of Proxy Materials, voting instruction form and/or +proxy card. Brokers are not permitted to vote on certain proposals and may not vote +on any of the proposals unless you provide voting instructions. Voting your shares +will help to ensure that your interests are represented at the meeting. +Attending the Meeting: You or your proxy holder can participate, vote and ask questions at +the meeting by visiting www.virtualshareholdermeeting.com/UPS2024 and using your 16-digit +control number found on your proxy card, voting instruction form or Notice of Internet +Availability of Proxy Materials. Shareowners who do not receive a 16-digit control number +should consult their voting instruction form or Notice of Internet Availability of Proxy Materials +and may need to request a legal proxy from their bank, broker or other nominee in advance of +the meeting in order to participate. For more information, see page 77. +Important Notice Regarding the Availability of Proxy Materials for the Shareowner +Meeting to be Held on May 2, 2024: The Proxy Statement and our 2023 Annual Report +are available at www.proxyvote.com. Questions? Call 404-828-6059 (option 2). +By order of the Board of Directors +Norman M. Brothers, Jr. +Secretary +Atlanta, Georgia +March 18, 2024 + +5 +The secret object #1 is a "chair". \ No newline at end of file diff --git a/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_9.txt b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_9.txt new file mode 100644 index 0000000000000000000000000000000000000000..9fd6d59bf63f12b8a2831ad24d789fcb95fbd2b9 --- /dev/null +++ b/UPS/UPS_75Pages/Text_TextNeedles/UPS_75Pages_TextNeedles_page_9.txt @@ -0,0 +1,58 @@ +Items of Business +UNITED PARCEL SERVICE, INC. +2024 Annual Meeting of Shareowners +Voting Choices +Board Voting +Recommendations Page +Company Proposals: +1. Elect 12 director nominees +named in the Proxy +Statement to serve until the +2025 Annual Meeting and +until their respective +successors are elected and +qualified +• Vote for all nominees +• Vote against all nominees +• Vote for some nominees +and against others +• Abstain from voting on one +or more nominees +FOR +EACH +NOMINEE +21 +2. Advisory vote to approve +named executive officer +compensation +• Vote for the proposal +• Vote against the proposal +• Abstain from voting on the +proposal +FOR 62 +3. Ratify the appointment of +Deloitte & Touche LLP as our +independent registered +public accounting firm for +2024 +• Vote for ratification +• Vote against ratification +• Abstain from voting on the +proposal +FOR 65 +Shareowner Proposals: +4. - 6. Advisory votes on 3 +shareowner proposals, +only if properly +presented +• Vote for each proposal +• Vote against each proposal +• Abstain from voting on one +or more proposals +AGAINST +EACH +PROPOSAL +68 +6 + +Notice of Annual Meeting of Shareowners and 2024 Proxy Statement \ No newline at end of file diff --git a/UPS/UPS_75Pages/needles.csv b/UPS/UPS_75Pages/needles.csv new file mode 100644 index 0000000000000000000000000000000000000000..47e83b49f152e0980f7c753cffcebb1a80083c73 --- /dev/null +++ b/UPS/UPS_75Pages/needles.csv @@ -0,0 +1,25 @@ +The secret sport is "boxing". +The secret transportation is a "train". +The secret object #1 is a "chair". +The secret object #2 is a "key". +The secret tool is a "saw". +The secret shape is a "rectangle". +The secret clothing is a "glove". +The secret animal #2 is a "panda". +The secret object #3 is a "knife". +The secret animal #1 is a "lion". +The secret animal #5 is a "wolf". +The secret flower is a "tulip". +The secret currency is a "pound". +The secret kitchen appliance is a "pan". +The secret object #5 is a "towel". +The secret animal #4 is a "turtle". +The secret drink is "water". +The secret instrument is a "trumpet". +The secret animal #3 is an "eagle". +The secret landmark is the "Taj Mahal". +The secret food is a "sausage". +The secret office supply is a "stapler". +The secret object #4 is a "bed". +The secret vegetable is an "onion". +The secret fruit is an "orange". diff --git a/UPS/UPS_75Pages/needles_info.csv b/UPS/UPS_75Pages/needles_info.csv new file mode 100644 index 0000000000000000000000000000000000000000..3050f98ed9cbc918eae9c059a826e27f6f88419d --- /dev/null +++ b/UPS/UPS_75Pages/needles_info.csv @@ -0,0 +1,25 @@ +The secret sport is "boxing".,3,10,red,white,0.084,0.691,times-bolditalic,85 +The secret transportation is a "train".,6,13,yellow,black,0.948,0.506,times-italic,116 +The secret object #1 is a "chair".,8,9,brown,white,0.896,0.513,courier-oblique,119 +The secret object #2 is a "key".,11,10,gray,white,0.286,0.557,times-bold,114 +The secret tool is a "saw".,14,12,black,white,0.086,0.102,helvetica-boldoblique,100 +The secret shape is a "rectangle".,18,10,orange,black,0.263,0.894,courier,94 +The secret clothing is a "glove".,20,11,purple,white,0.835,0.3,helvetica,126 +The secret animal #2 is a "panda".,23,9,white,black,0.207,0.523,helvetica-bold,58 +The secret object #3 is a "knife".,27,9,blue,white,0.059,0.776,times-roman,104 +The secret animal #1 is a "lion".,29,10,green,white,0.253,0.341,courier-bold,141 +The secret animal #5 is a "wolf".,33,11,black,white,0.939,0.61,times-roman,108 +The secret flower is a "tulip".,36,12,red,white,0.678,0.117,helvetica-boldoblique,76 +The secret currency is a "pound".,37,9,blue,white,0.139,0.464,courier,127 +The secret kitchen appliance is a "pan".,41,10,orange,black,0.784,0.625,courier-oblique,137 +The secret object #5 is a "towel".,44,11,white,black,0.095,0.597,times-bold,90 +The secret animal #4 is a "turtle".,46,8,purple,white,0.675,0.947,times-italic,106 +The secret drink is "water".,50,10,yellow,black,0.894,0.63,times-bolditalic,66 +The secret instrument is a "trumpet".,52,7,green,white,0.585,0.822,helvetica-bold,134 +The secret animal #3 is an "eagle".,55,12,gray,white,0.385,0.999,courier-bold,60 +The secret landmark is the "Taj Mahal".,58,13,brown,white,0.912,0.098,helvetica,74 +The secret food is a "sausage".,62,10,red,white,0.261,0.837,times-roman,89 +The secret office supply is a "stapler".,64,8,blue,white,0.286,0.664,courier-oblique,110 +The secret object #4 is a "bed".,67,12,purple,white,0.351,0.37,times-italic,92 +The secret vegetable is an "onion".,71,10,black,white,0.081,0.538,helvetica-boldoblique,57 +The secret fruit is an "orange".,73,11,white,black,0.307,0.019,helvetica-bold,104 diff --git a/UPS/UPS_75Pages/prompt_questions.txt b/UPS/UPS_75Pages/prompt_questions.txt new file mode 100644 index 0000000000000000000000000000000000000000..28da639a3283edaafbee03220df268ab47ddbdc4 --- /dev/null +++ b/UPS/UPS_75Pages/prompt_questions.txt @@ -0,0 +1,25 @@ +What is the secret sport in the document? +What is the secret transportation in the document? +What is the secret object #1 in the document? +What is the secret object #2 in the document? +What is the secret tool in the document? +What is the secret shape in the document? +What is the secret clothing in the document? +What is the secret animal #2 in the document? +What is the secret object #3 in the document? +What is the secret animal #1 in the document? +What is the secret animal #5 in the document? +What is the secret flower in the document? +What is the secret currency in the document? +What is the secret kitchen appliance in the document? +What is the secret object #5 in the document? +What is the secret animal #4 in the document? +What is the secret drink in the document? +What is the secret instrument in the document? +What is the secret animal #3 in the document? +What is the secret landmark in the document? +What is the secret food in the document? +What is the secret office supply in the document? +What is the secret object #4 in the document? +What is the secret vegetable in the document? +What is the secret fruit in the document? diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_10.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_10.txt new file mode 100644 index 0000000000000000000000000000000000000000..c282ea49f43552741045b614f33ca1417cb3d02d --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_10.txt @@ -0,0 +1,88 @@ +Our business model +We help our customers make critical decisions every day +by providing expert solutions that combine deep domain +knowledge with technology and services. +Our products are used by professionals in over 180 countries +across a range of market segments addressed through our five +customer‑facing divisions. A list of our top expert solutions is +shown on the left. +Our solutions and services are generally sold by our own sales +teams or through selected distribution partners. Our sales +forces are specialized by market segment and product groups. +For certain software products, we work with a range of third‑ +party implementation partners. We also go to market through +telesales, e‑commerce, and other digital distribution channels. +Recurring revenue model +Our revenues are primarily recurring in nature, based on +subscriptions to information, software, and services. Recurring +revenues also include software maintenance fees and other +annually renewing revenues. In 2023, 82% of our total revenues +were recurring (2022: 80%). Renewal rates for our digital +information, software, and services are high and are one of the +key indicators by which we measure our success in the market. +Alongside recurring revenues, we derive fees from software +licenses, implementation and training services, transactional +fees, or other non‑recurring revenues. +Customer relationships +We view customers as fundamental stakeholders in our +business. Long‑term customer relationships are the single +most important factor for the success of our business, critical +to achieving organic growth and maintaining competitiveness. +One of our core company cultural values is to focus on our +customers’ success. In designing, building, and enhancing +our solutions, we work closely with customers before, during, +and after the product development phase to ensure we +meet user needs. +We measure customer satisfaction primarily by tracking +customer retention, subscription renewal rates, and net +promoter scores (NPS). For our established expert solutions +and other leading subscription‑based digital information +products and services, we strive to maintain or achieve +product renewal rates of 90% or more and a top‑three +NPS score. +In 2023, renewal rates for our largest subscription‑based +expert solutions, subscription‑based digital information +products, and subscription‑based services were maintained at +high levels (above 90%) and the NPS scores for more than half +of our top products were maintained or improved. +Employees and talent management +We employ over 21,400 talented and motivated individuals +around the world. More than half of our annual operating +costs relate to our employees, who create, develop and +maintain, sell, implement, and support our solutions and +serve our customers. +We have well‑established programs in place designed to +attract, engage, grow, and retain talent globally. These +programs include training, well‑being, and career development +opportunities for all employees worldwide. In 2023, we +launched the Colleague Experience Promise (CxP) a framework +that articulates what we provide our employees throughout +their careers with the company. +Strategy and business model +continued +Expert solutions combine deep domain knowledge +with technology to deliver both content and workflow +automation to drive improved outcomes and productivity +for our customers. Based on revenues, our largest expert +solutions are: +• Health: global clinical decision support tool UpToDate; +clinical drug databases; and Lippincott nursing +solutions for practice and learning. +• Tax & Accounting: professional tax and accounting +software CCH Axcess and CCH ProSystem fx in North +America and similar software for professionals +across Europe. +• Financial & Corporate Compliance: banking +compliance solutions ComplianceOne, Expere, +eOriginal, and Gainskeeper. +• Legal & Regulatory: enterprise legal management +solutions Passport and TyMetrix; Legisway; and law firm +practice management software Kleos. +• Corporate Performance & ESG: environmental, health +and safety, and operational risk management (EHS/ +ORM) suite Enablon; corporate performance platform +CCH Tagetik; internal audit solution TeamMate; and +finance, risk, and regulatory (FRR) reporting suite +OneSumX. +9 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Strategy and business model +The secret shape is a "heart". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_100.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_100.txt new file mode 100644 index 0000000000000000000000000000000000000000..f777d2648da67c9ba05f25a8f664f607564e55b7 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_100.txt @@ -0,0 +1,45 @@ +General disclosures continued +Metrics and targets +Metrics in relation to material sustainability matters (MDR-M) +For a list of disclosed material metrics connected to material sustainability matters, +see Disclosure requirements in ESRS covered by the sustainability statements (IRO-2). +None of the metrics are assured by the external auditor. +For further details on metrics, see the topical sections of these sustainability statements. +Tracking effectiveness of policies and actions through targets (MDR-T) +The connection between material sustainability matters and disclosed targets is shown below: +Topical standard +Material +sustainability matter +Targets disclosed +in the sustainability statements +Climate change (E1) Climate change – Reduce absolute gross GHG scope 1 and 2 emissions +50% by 2030 from a 2019 base year + – Reduce absolute gross GHG scope 3 emissions 30% by +2030 from a 2019 base year + – Number of on‑premise servers decommissioned in +2023 + – Percentage reduction in our office footprint +Own workforce (S1) Diversity, equity, +inclusion, and +belonging (DEIB) + – Improvements to our employee belonging score + – Have at least 33% male and female representation on +our Supervisory and Executive Boards + – Increase female representation in the executives +career band by 2% by 2028 from a 2022 baseline + – Increase our employee engagement score relative to +the Microsoft Glint top 25th benchmark in 2024 +Own workforce (S1) +and Consumers and +end‑users (S4) +Privacy – 98% of employees to complete Annual Compliance +Training +Business conduct (G1) Corporate culture – 98% of employees to complete Annual Compliance +Training + The number of on‑premise servers decommissioned and improvements to our employee +belonging score are integrated in the 2023 remuneration of the Executive Board. The percentage +reduction in our office footprint and improvements to our employee belonging score will be +integrated in the 2024 remuneration of the Executive Board. See Integration of sustainability- +related performance in incentive schemes (GOV-3). +For further details on targets, see the topical sections of these sustainability statements. +99 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information General disclosures \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_11.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_11.txt new file mode 100644 index 0000000000000000000000000000000000000000..33d255fad243920fd611b701feb5628c32c865ce --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_11.txt @@ -0,0 +1,114 @@ +a fairly competitive global market for technology talent. +For information on our own workforce, see Sustainability +statements on pages 113-121. +Supplier relationships +Around 45% of our annual operating costs relate to third‑party +suppliers. Our business units work closely with thousands +of suppliers and partners globally who provide content, +technology, goods, and services that help us deliver our +products and services. +Our Global Business Services (GBS) function is reponsible for +sourcing and due diligence of technology partners and plays a +growing role in assessing and monitoring other categories of +suppliers. Suppliers that are managed through GBS are subject +to extensive due diligence including security, data privacy, and +business continuity. We set high standards when selecting and +managing third‑party providers. + → For insight into how we mitigate supply chain +risks, see Supply chain dependency and project +execution on page 54 in Risk management + → For sustainability disclosures relating to suppliers, +see Sustainability statements on pages 89-140 +Product development and innovation +Product innovation is a key driver of organic growth and value +creation. For over 20 years, we have consistently invested in +developing new and enhanced products to solve customer +challenges. Our current strategic plan envisages investing +approximately 10% of our annual revenues into product +development, including capital expenditure and operating +expenses. +We track employee engagement and belonging, both +measured through an annual employee survey conducted by +an independent third party, Microsoft Glint. +In 2023, our employee engagement score improved by 1 +point to 78 while our belonging score increased by 2 points +to 75. Our long‑term objective for both of these measures is +to reach the top quartile of companies tracked by Microsoft +Glint. A target for belonging was included in management +remuneration for the past two years and will again be included +in 2024. In 2023, our employee turnover rate improved +significantly to 9.8% (2022: 15.3%) in what remains +Strategy and business model +continued +Comprehensive range of well-being +programs for all employees +We are dedicated to providing a supportive work environment +and offer all employees a comprehensive range of well-being +options designed to enhance their personal and professional +lives. This includes the options below: +• An Employee Assistance Program (EAP) ensures global +support for personal, work/life balance, critical incident +stress management, and coping needs; +• Personalized well-being resources cover physical fitness, +mindfulness, and nutrition, supplemented by clinically +validated stress management resources; +• Financial well-being resources empower employees for a +financially secure future tailored to their unique needs; +• Career Skill Enhancement resources provide access to +expert-led virtual courses and certifications, fostering +career skills and professional development; +• Well-being Champion acts as a peer-to-peer ambassador, +facilitating opportunities for well-being enhancement; and +• Through partnerships, Health Management Programs in the +U.S. emphasize education and support for both medical +and emotional needs. +In 2023, we organized a global well-being challenge, which +engaged employees worldwide in activities that promote in +physical fitness, mental health, and overall well-being. The +challenge also helped to strengthen team bonds globally. +Human capital +• Efforts, skills, and talent +contributed by 21,400 +employees +Technology and IP +• Global brand +• Software and content IP +Suppliers & Partners +• Services, content, and +goods supplied by +thousands of select +vendors and partners +Financial Capital +• €1.7bn equity capital +• €3.7bn gross debt +capital +Natural Resources +• Energy consumption +along our value chain +Inputs Outputs +Customers +• €5.6bn revenues from +solutions that enable +effective and efficient +decision-making +Employees +• €2.3bn in salaries +and other benefits +• Skills and career +development +Suppliers & Partners +• €2.0bn operating costs +on third-party content, +goods, and services +Investors +• 34% total shareholder +return +• €17m net interest paid to +creditors +Society +• €325m income +taxes paid +• Products that protect +health and prosperity +Customer case +10 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Strategy and business model \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_12.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_12.txt new file mode 100644 index 0000000000000000000000000000000000000000..0d730cbd4798c9505a79e4f81f12926621e368ea --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_12.txt @@ -0,0 +1,96 @@ +product innovation 2023 2022 2021 +Product development spending, +% of revenues 11% 11% 10% +Global Innovation Awards, +number of submissions 662 453 154 +Global Innovation Awards, +number of finalists 14 13 16 +Global Innovation Awards, +number of winners 6 5 6 +In 2023, the Global Innovation Awards attracted more than 660 +entries. Fourteen product and process innovation concepts +were selected as finalists, and, of these, six ideas were +selected for special recognition. For our software developers +around the world, we organize an annual coding competition +(Code Games). +In addition to monitoring progress against product roadmaps, +we track submissions and winners of our employee innovation +competitions and our performance in innovation‑oriented +industry awards and rankings, such as the Best in KLAS Awards +and the Stevie Awards. +Responsible artificial intelligence +Artificial intelligence is used in several of our products where +it benefits human experts working in complex professional +fields. We use natural language processing (NLP), machine +learning (ML), deep learning (DL), and virtual assistants (bots) +in many of our solutions in order to augment and streamline +customer workflows and provide new or improved insights. +Innovation is supported by our central product development +team, the Digital eXperience Group, which works closely with +our business units and our customers to build new features, +modules, and platforms. DXG uses a customer‑centric, +contextual design process to develop solutions based on +the scaled agile framework. DXG currently has six centers +of excellence: user experience, artificial intelligence, IP and +patents, architecture and asset reuse, quality engineering, +and application security. Our technology architecture is +increasingly based on globally scalable platforms that use +standardized components. New solutions are built cloud‑first. +We measure innovation by monitoring product development +spending and progress against product roadmaps at the +business unit level. In 2023, product development spending +increased in constant currencies to reach 11% of total +revenues, slightly higher than envisaged under our current +strategic plan. Key product launches during 2023 include +vrClinicals for Nursing, CCH Axcess Engagement, CCH +Tagetik Global Minimum Tax, Enablon ESG Excellence, and +OneSumX for Basel IV. This was followed in early 2024 by CT +Corporation’s new solution for compliance with the new U.S. +beneficial ownership reporting rules. During 2023, we invested +in deploying new generative AI technology into our solutions +and launched our first beta versions of Gen AI applications for +UpToDate and two legal solutions. +We foster idea generation through our annual Global +Innovation Awards (GIA), which rewards teams who develop +innovative solutions that improve customer outcomes and +experiences or transform our own internal processes. Each +year, hundreds of employees participate in the challenge, +putting their creativity to work in collaboration with +colleagues. +Strategy and business model +continued +New Milan office: enhancing well-being +and reducing emissions +We have a long-term program in place, designed to optimize +our global office footprint. This program aims to provide +employees a positive workplace experience while streamlining +operating costs, meeting environmental standards, and +reducing our greenhouse gas (GHG) emissions. +In 2023, this program achieved a 5% underlying reduction +in our real estate footprint as measured in square meters, +resulting in a 8% reduction in our scope 1 and scope 2 GHG +emissions. In coming years, this program will support us in +achieving our near-term SBTi targets for these scopes, while +also enhancing the well-being of our employees. +Our new leased office in Milan exemplifies all of the program’s +objectives. The new building adheres to the LEED V4 BD+C +protocol, which emphasizes eco-conscious construction, +and holds a Well Building Standard (WELL) certification, the +world’s leading health-focused building standard. It is also +certified for advanced digital infrastructure, showcasing our +holistic approach to sustainability and employee well-being. +It is equipped with a Siemens Building Management System +(BMS) to optimize energy consumption by monitoring and +automating plant engineering systems. +The architecture of the new Milan office promotes the well- +being and safety of its occupants. The design incorporates +spacious terraces, large communal areas, and windows that +can be opened, providing a pleasant environment for high- +quality work. Conveniently located near public transport and +equipped with electric charging stations, the office supports +sustainable commuting. Inside, eco-friendly features such +as recycled office materials, potable water sources, waste +separation areas, and energy-efficient LED lighting create an +environmentally-conscious workspace. +Customer case +11 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Strategy and business model \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_13.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_13.txt new file mode 100644 index 0000000000000000000000000000000000000000..3f3da5c2143bb5a303c21ae2070f005b0321e77a --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_13.txt @@ -0,0 +1,94 @@ +groups, drives global alignment to the program’s objectives. +We perform regular information security risk assessments to +assess and evaluate the effectiveness of the security program. +The program is assessed annually by an independent third +party, allowing us to measure our performance each year with +a cybersecurity maturity score. Since 2020, the cybersecurity +maturity score has been based on the National Institute of +Standards and Technology, Cybersecurity Framework (NIST‑CSF) +which is a risk‑based model. +A target for our cybersecurity maturity score has been +included in Executive Board and senior management +remuneration for the past three years and will again be +included in 2024. In 2023, the cybersecurity maturity score +increased, exceeding the target for the year. Over the three‑ +year period since 2020, the indexed score has been improved +to 113.8 compared to the base year (2020 = 100.0). For more +information, see Remuneration report. +We have a cross‑functional global information security +incident response team that promptly analyzes security +incidents, assesses the potential impact, determines if any +immediate risks exist, and takes prompt actions to mitigate +any harm to the company. We maintain a written global +information security program of policies, procedures, and +controls aligned to NIST‑CSF, ISO 27001, and other equivalent +standards. These govern the processing, storage, transmission, +and security of data. +For select systems, applications, and services, we have +achieved over 85 attestations and certifications, most notably +SOC 1 Type 1, SOC 2 Type 2, HITRUST, FedRAMP, CSA STAR, +and MSDPR. In addition, some of our locations that support +IT operations and some of our products have attained +ISO 27001 certification. +We also deploy other advanced technologies, such as digital +twins and robotic process automation (RPA) to the benefit +of customers. In 2023, around 50% of our digital revenues were +from solutions that incorporate these various forms of AI. +As a company that holds ethics and good governance in high +regard, we are committed to developing artificial intelligence +in an ethical and responsible manner. We have developed an +Artificial Intelligence Assurance Framework and Responsible +Artificial Intelligence Principles that incorporate key principles +such as privacy and security, transparency and explainability, +governance and accountability, fairness, non‑discrimination, +and human‑centeredness. The Responsible AI Framework +and principles lead us to embed good practices throughout +the design, development, use, and evaluation of AI‑enabled +solutions. We actively monitor legislative developments such +as the EU Artificial Intelligence Act and ethics guidelines +issued by organizations and expert working groups to ensure +we are aware of evolving best practices in this area. +Cybersecurity +Customers rely on us to deliver our platforms and services +safely and reliably while safeguarding their data. We are +committed to protecting the personal and professional +information of our employees, customers, and partners. +We manage a global information security program built on +people, processes, and technology and designed to protect our +organization, products, and customers. The security program +has a three‑tiered management structure. It is overseen by our +Security Council which is comprised of senior leaders from the +five divisions and from functional areas. Our Chief Information +Security Officer is responsible for managing and monitoring +the overall program. Our Technology Council implements +initiatives and, together with dedicated taskforce +Strategy and business model +continued +UpToDate brings access to quality +information to clinicians in 180 countries +Our clinical decision tool UpToDate is used by over 2 million +clinicians around the world. To ensure highest quality, +transparency, and clarity of its evidence-based content, +UpToDate follows a rigorous editorial policy and process. +UpToDate content, which covers more than 12,000 topics +across 25 medical specialties, is developed by more than +7,000 contributing experts, leading practitioners in their +respective fields, who work with our in-house team of editors, +led by an editor-in-chief. Editors perform a continual review +of over 400 of the top, peer-reviewed medical journals, as +well as key clinical databases and other resources. Topics are +updated when new evidence or information emerges but only +after careful and extensive review by our expert contributors +who can provide context and clinical guidance. Each +UpToDate specialty area has dedicated reviewers responsible +for anonymous peer review of selected topics. UpToDate user +comments are also reviewed and incorporated into topics +where appropriate or necessary. +This layered, iterative review process allows us to ensure +the content addresses the relevant clinical questions; meets +editorial standards for quality, clarity, and usability; and is +free from commercial bias. + → For insight into how we mitigate cybersecurity risks, see IT +and cybersecurity on page 53 in Risk management +Customer case +12 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Strategy and business model \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_14.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_14.txt new file mode 100644 index 0000000000000000000000000000000000000000..576c7b4e13f23a412216ab9df2467795cac6f8d7 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_14.txt @@ -0,0 +1,73 @@ +Our specific guidance for 2024 is +provided below. +We expect sustained good organic growth in line with prior +year and a further modest increase in the adjusted operating +profit margin. Margin improvement is expected to be realized +in the second half of the year, mainly due to timing of +investments. Our group‑level guidance for 2024 is shown in +the table below: +performance indicators 2024 guidance 2023 actual +Adjusted operating profit +margin (%) 26.4‑26.8 26.4 +Adjusted free cash flow +(€ million) 1,150‑1,200 1,164 +ROIC (%) 17.0‑18.0 16.8 +Diluted adjusted EPS +growth Mid to high single digit 12% +Guidance for adjusted operating profit margin and ROIC is in reporting +currencies and assumes an average rate in 2024 of €/$1.11. +Guidance for adjusted free cash flow and diluted adjusted EPS is in +constant currencies (€/$ 1.08). +Guidance reflects share repurchases of €1 billion in 2024. +In 2023, Wolters Kluwer generated over 60% of its revenues +and adjusted operating profit in North America. As a rule of +thumb, based on our 2023 currency profile, each 1 U.S. cent +move in the average €/$ exchange rate for the year causes +an opposite change of approximately 3 euro cents in diluted +adjusted EPS¹. +We include restructuring costs in adjusted operating profit. We +expect 2024 restructuring costs to be in the range of +€10‑15 million (2023: €15 million). We expect adjusted net +financing costs² in constant currencies to increase to +approximately €60 million. We expect the benchmark tax rate +on adjusted pre‑tax profits to increase and to be in the range +of 23.0%‑24.0% (2023: 22.9%). +Capital expenditures are expected to remain at the upper end +of our guidance range of 5.0%‑6.0% of total revenues (2023: +5.8%). We expect the full‑year 2024 cash conversion ratio to +be around 95% (2023: 100%) due to lower net working capital +inflows. +Our guidance assumes no additional significant change to +the scope of operations. We may make further acquisitions or +disposals which can be dilutive to margins, earnings, and ROIC +in the near term. +2024 Outlook by division +Our guidance for 2024 organic growth by division is +summarized below. We expect the increase in group adjusted +operating profit margin to be driven primarily by our Health, +Legal & Regulatory, and Corporate Performance & ESG +divisions in 2024. +Health: we expect full‑year 2024 organic growth to be in line +with prior year (2023: 6%). +Tax & Accounting: we expect full‑year 2024 organic growth to +be slightly below prior year (2023: 8%), due to slower growth +in non‑recurring outsourced professional services and the +absence of one‑off favorable events in Europe. +Financial & Corporate Compliance: we expect full‑year 2024 +organic growth to be in line with or better than prior year +(2023: 2%) as transactional revenues are expected to stabilize. +Legal Regulatory: we expect full‑year 2024 organic growth to +be in line with prior year (2023: 4%). +Corporate Performance & ESG: we expect full‑year 2024 +organic growth to be better than in the prior year (2023: 9%) as +Finance, Risk & Reporting revenues stabilize. +2024 Outlook +¹ This rule of thumb excludes the impact of exchange rate movements +on intercompany balances, which is accounted for in adjusted net +financing costs in reported currencies and determined based on +period‑end spot rates and balances. +² Adjusted net financing costs include lease interest charges. +Guidance for adjusted net financing costs in constant currencies +excludes the impact of exchange rate movements on currency +hedging and intercompany balances. +13 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information 2024 Outlook \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_15.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_15.txt new file mode 100644 index 0000000000000000000000000000000000000000..9e46aaa2fbac85c411762f5e35ce90d90075a3b3 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_15.txt @@ -0,0 +1,61 @@ +Organizational +structure +Wolters Kluwer is organized around +five customer‑facing divisions +supported by three centralized teams +and a corporate office. +Health +• Clinical Solutions +• Health Learning, +Research & Practice +Tax & Accounting +• North America +• Europe +• Asia Pacific & ROW +Financial & Corporate +Compliance +• Legal Services +• Financial Services +Legal & Regulatory +• Information Solutions +• Software +Corporate +Performance & ESG +• EHS/ORM +• Corporate +Performance, +Internal Audit, and FRR +€1.5bn +revenues 2023 +€1.5bn +revenues 2023 +€1.1bn +revenues 2023 +€0.9bn +revenues 2023 +€0.7bn +revenues 2023 +Global Growth Markets +• China, India, and Brazil +• Global expert solutions +• Local market knowledge +Digital eXperience Group +• Innovation and product +development +• Development centers of +excellence +• Technology asset management +Global Business Services +• Technology infrastructure +• Operational excellence programs +• Procurement and shared services +180+ +FTEs +4,500+ +FTEs +1,200+ +FTEs +Operating costs and FTEs of Global Growth Markets, Digital eXperience Group, and Global Business Services are allocated to the customer ‑facing +divisions. +Executive Board & Corporate Office +14 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Organizational structure and executive team \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_16.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_16.txt new file mode 100644 index 0000000000000000000000000000000000000000..b590d193a68e8e7da1345778a2367ded2bdf22f1 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_16.txt @@ -0,0 +1,113 @@ +Executive team +Tax & AccountingHealth Financial & Corporate +Compliance +Legal & Regulatory Corporate Performance +& ESG +Stacey Caywood CEO +We offer clinical technology and +evidence‑based solutions for +clinicians, patients, researchers, +students, and future healthcare +providers. Our focus is on clinical +effectiveness, research, learning, +surveillance, compliance, and data +solutions. Our proven solutions +drive effective decision ‑making +and consistent outcomes in +healthcare. +Customers include hospitals, +healthcare organizations, +students, clinicians, schools, +libraries, payers, life sciences, and +pharmacies. +Product brands include UpToDate, +Lippincott, Medi ‑Span, Ovid, and +Health Language. +Jason Marx CEO +We empower tax and accounting +professionals, and governing +authorities to grow, manage, and +protect their business and clients. +Our solutions combine domain +expertise, advanced technology, +and workflows for compliance, +productivity, management, and +client relationships. +Customers include accounting +firms, tax and auditing +departments, government +agencies, libraries, and +universities. +Product brands include CCH +AnswerConnect, CCH Axcess, +ADDISON, CCH iFirm, A3 Software, +Genya, Twinfield, CCH ProSystem +fx, and ATX. +Steve Meirink CEO +We provide financial institutions, +corporations, small businesses, +and law firms with solutions to +help meet regulatory and legal +obligations, improve efficiency, +and achieve better outcomes. +We offer technology ‑enabled +services and software solutions +for loan compliance, regulatory +compliance, legal entity +management, and corporate +services. +Customers include corporations +and small businesses, law firms, +banks, non ‑bank lenders, insurers, +brokers, and other financial +institutions. +Product brands include CT +Corporation, BizFilings, eOriginal, +ComplianceOne, Lien Solutions, +Expere, GainsKeeper, and Wiz. +Martin O’Malley CEO +We help legal and compliance +professionals enhance +productivity, mitigate risk, +and solve complex problems +confidently. With expert +information and advanced +technologies, we enable +professionals to thrive in the +ever‑changing fields of legal and +regulatory compliance. +Customers include law firms, +corporate legal departments, +notaries, universities, and +government agencies. +Product brands include VitalLaw, +Passport, TyMetrix 360°, Kleos, +Legisway, LEX, ONE, Schulinck, +Wolters Kluwer Online, Kluwer Law +International, and InView. +Karen Abramson CEO +We provide enterprise software +solutions to streamline reporting +processes, manage risks, and +meet regulatory requirements. +Our comprehensive suite of +tools and services provide +professionals in finance, +environment health and safety, +operational risk management, +regulatory reporting, risk +and compliance, and internal +audit with integrated financial, +operational, and ESG performance +management and reporting +solutions. +Customers include corporate +finance, audit, planning, risk, +EHS/ORM, and sustainability +professionals in corporations, +banks, and governments. +Product brands include CCH +Tagetik, Enablon, TeamMate, and +OneSumX. +15 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Organizational structure and executive team +The secret instrument is a "violin". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_17.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_17.txt new file mode 100644 index 0000000000000000000000000000000000000000..ba559e076b626ec4ee08bb3ecec9ae53e46648fe --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_17.txt @@ -0,0 +1,58 @@ +Executive team +continued + → Full list of management +www.wolterskluwer.com/en/ +about-us/management +Digital eXperience Group +Dennis Cahill CTO +The Digital eXperience Group +creates cutting ‑edge digital +solutions in collaboration with +global business units. Our mission +is to accelerate innovation and +leverage technology investments. +We drive innovation through +six centers of excellence: user +experience, artificial intelligence, +IP & patent, architecture & asset +reuse, quality engineering, and +application security. +Global Growth Markets +Cathy Wolfe President & CEO +Global Growth Markets (GGM) +focuses on developing the +company’s strategic presence +in China, India, Brazil, and +other geographic markets. +GGM’s mission is to apply local +market knowledge to service +professionals with global and +local expert solutions . +Global Business Services +Andres Sadler CEO +Global Business Services (GBS) +improves and transforms our +internal technology infrastructure, +including IT operations, workplace +technologies, cybersecurity, IT +architecture, engineering services, +and network and enterprise +systems. GBS supports the +company’s digital transformation +in technology, strategic sourcing, +procurement, operational +excellence, collaboration services, +analytics, and events. +Corporate office +The Corporate Office sets the +global strategic direction for +the company and ensures good +corporate governance. Its mission +is to support and provide an +enabling business and operating +environment, to help realize our +strategy to deliver impact to our +customers, employees, investors, +and society at large. +16 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Organizational structure and executive team +The secret tool is a "ruler". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_2.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_2.txt new file mode 100644 index 0000000000000000000000000000000000000000..8578d8507742748ce6697da8ce85d6f31e79c542 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_2.txt @@ -0,0 +1,10 @@ +Deep impact +when it +matters most +Every second of every day, +our customers face decisive +moments that impact the lives +of millions of people and shape +society for the future. + → Read more about our strategy on page 7 +1 Wolters Kluwer 2023 Annual Report ← → \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_28.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_28.txt new file mode 100644 index 0000000000000000000000000000000000000000..db92e584daa76411fd3d285c8728ffa4e530527d --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_28.txt @@ -0,0 +1,67 @@ +Review of 2023 performance +• Organic growth 2%, supported by 7% growth in recurring +revenues. +• Transactional and other non‑recurring revenues declined 6% +organically. +• Margin increase reflects tight cost control and favorable +revenue mix. +The Financial & Corporate Compliance division is now +comprised of CT Corporation, which provides registered agent +and other services to U.S. corporations, small businesses, and +law firms, and Compliance Solutions (including Lien Solutions), +which provides software and services to banks and other +lenders. These businesses were part of the former Governance, +Risk & Compliance division. +Financial & Corporate Compliance revenues increased 2% in +constant currencies, including a modest effect from the full +year inclusion of mortgage software provider International +Document Services (IDS), acquired on April 8, 2022. Organic +growth was also 2% (2022: 4% pro forma). The adjusted +operating profit margin increased 160 basis points, as careful +cost control and favorable revenue mix helped mitigate the +impact of higher product investment. +Operating profit increased 5%, largely reflecting the +development of adjusted operating profit. +Legal Services (57% of divisional revenues) posted 2% +organic growth (2022: 2% pro forma) with 8% organic growth +in recurring service subscriptions (2022: 7% pro forma) to +a large extent offset by a 9% decline in Legal Services (LS) +transactional revenues (2022: decline of 4% pro forma). +LS transactional revenues were impacted by the downturn in +U.S. M&A and IPO activity which began in the second half of +2022. In January 2024, CT Corporation launched a dedicated +platform to support the filing needs of U.S. businesses +impacted by the beneficial ownership reporting rule of the +new U.S. Corporate Transparency Act. +Financial Services (43% of divisional revenues) achieved +2% organic growth (2022: 6% pro forma), supported by 5% +organic growth in recurring revenues (2022: 7% pro forma). +Financial Services (FS) transactional and other non‑recurring +revenues declined 3% organically compared to growth in the +prior year (2022: 4%). Compliance Solutions transactional +fees were affected by the market‑wide downturn in U.S. +loan originations, including mortgages, while Lien Solutions +revenues were flat against a challenging comparable (2022: +14% growth). +Our customers +Corporations, small businesses, law firms, banks, non‑bank +lenders, credit unions, insurers, and securities firms +Top products +Legal Services: CT Corporation +Financial Services: ComplianceOne, Expere, eOriginal, +GainsKeeper, and Lien Solutions + → For more information on FCC +www.wolterskluwer.com/en/about-us/ +organization/financial-and-corporate- +compliance +Financial & Corporate Compliance +continued +Selected awards 2023 +Compliance Solutions named Category +Leader in Regulatory Intelligence in +Chartis RiskTech100® Rankings +Wolters Kluwer FCC recognized with +ABF Journal’s 2023 Most Innovative +Companies designation +27 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Financial & Corporate Compliance +The secret clothing is a "sock". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_29.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_29.txt new file mode 100644 index 0000000000000000000000000000000000000000..58d55ae1971f9c6a454e08af2845f46d93f50fb8 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_29.txt @@ -0,0 +1,39 @@ +Organic growth in revenues +2% +Recurring +67% +recurring revenues as % of division total +Software +47% +software revenues as % of division +total +Financial & Corporate Compliance – Year ended December 31 +€ million, unless otherwise stated 2023 2022 ∆ ∆ CC ∆ OG +Revenues 1,052 1,056 0% +2% +2% +Adjusted operating profit 403 387 +4% +7% +7% +Adjusted operating profit margin 38.3% 36.7% +Operating profit 383 363 +5% +Net capital expenditure 58 52 +Ultimo FTEs 3,056 3,122 +∆: % Change; ∆ CC: % Change in constant currencies (€/$ 1.05); ∆ OG: % Organic growth. 2022 figures are pro forma. +Financial & Corporate Compliance +continued +Legal Services 57% +Financial Services 43% +2023 Revenues by segment +Recurring 67% +Legal Services transactional 18% +Financial Services transactional 12% +Other non-recurring 3% +2023 Revenues by type +North America 99% +Europe 1% + +2023 Revenues by +geographic market +Software 47% +Digital information 6% +Services and print 47% +2023 Revenues by +media format +28 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Financial & Corporate Compliance diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_3.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_3.txt new file mode 100644 index 0000000000000000000000000000000000000000..04402964a5702361248c1c2a82870de4b12d9773 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_3.txt @@ -0,0 +1,77 @@ +As a global provider of +professional information, +software solutions, and services, +our work helps to protect +people’s health and prosperity +and contributes to a safe +and just society by providing +deep insights and knowledge +to professionals. + → Read more about our strategy and business model on +page 7 +This copy of the annual report of Wolters Kluwer N.V. for +the year 2023 is not in the ESEF‑format as specified by the +European Commission in Regulatory Technical Standard on +ESEF (Regulation (EU) 2019/815). The ESEF reporting package +can be found on our website www.wolterskluwer.com/en/ +investors/financials/annual-reports +Strategic report +3 Wolters Kluwer at a glance +5 Q&A with CEO Nancy McKinstry +7 Strategy and business model +13 2024 Outlook +14 Organizational structure +15 Executive team +17 Health +21 Tax & Accounting +25 Financial & Corporate Compliance +29 Legal & Regulatory +33 Corporate Performance & ESG +37 Group financial review +Governance +44 Corporate governance +50 Risk management +60 Statements by the Executive Board +61 Executive Board and Supervisory Board +63 Report of the Supervisory Board +70 Remuneration report +Sustainability statements +90 Our approach to sustainability +91 General disclosures +100 Environmental disclosures +113 Social disclosures +125 Governance disclosures +127 Reference table +130 List of data points that derive from other EU legislation +133 Task Force on Climate-related Financial Disclosures (TCFD) +134 EU Taxonomy +Financial statements +142 2023 Financial statements +143 Consolidated financial statements +147 Notes to the consolidated financial statements +203 Company financial statements +205 Notes to the company financial statements +211 Independent auditor’s report +Other information +221 Articles of Association Provisions Governing Profit Appropriation +222 Wolters Kluwer shares and bonds +226 Five-year key figures +227 Glossary +228 Contact information +€5.6bn +total revenues +94% +of revenues from digital +products and services +82% +of revenues are recurring +26.4% +adjusted operating profit margin +€4.55 +diluted adjusted earnings per share +16.8% +return on invested capital + → Visit our investors portal +www.wolterskluwer.com/en/investors/ +Financial highlights 2023 +2 Wolters Kluwer 2023 Annual Report ← → diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_38.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_38.txt new file mode 100644 index 0000000000000000000000000000000000000000..ed95ed8dbc305b7a6e36f1671e2eab0a16d0feb3 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_38.txt @@ -0,0 +1,70 @@ +Margin increased in +the fourth quarter due +to operational gearing, +mix shift, and a more +normalized cost base. +“ +This review provides a summary +of our 2023 IFRS results alongside +a discussion of adjusted figures +which give deeper insight into our +underlying performance. +Revenues +Group revenues were €5,584 million, up 2% overall and up 5% +in constant currencies. Excluding the effect of currency and +the net effect of divestments and acquisitions, organic revenue +growth was 6%, in line with the prior year +(2022: 6%). +Revenue bridge +€ million % +Revenues 2022 5,453 +Organic change 310 6 +Acquisitions 20 0 +Divestments (76) (1) +Currency impact (123) (3) +Revenues 2023 5,584 2 +Revenues from North America accounted for 64% of total +group revenues and grew 5% organically (2022: 6%). Revenues +from Europe, 28% of total revenues, grew 7% organically (2022: +6%). Revenues from Asia Pacific and Rest of World, 8% of total +revenues, grew 9% organically (2022: 10%). +Total recurring revenues, which include subscriptions and other +renewing revenue streams, accounted for 82% of total revenues +(2022: 80%) and grew 7% organically (2022: 7%). Within recurring +revenues, digital and service subscriptions grew 8% organically +(2022: 8%). Total non‑recurring revenues were stable on an +organic basis (2022: 3% organic growth). +Group financial +review +Kevin Entricken +CFO and member +of the Executive Board +Highlights 2023 +• Revenues up 6% organically +• 82% recurring revenues, up 7% organically +• 58% expert solutions revenues, up 8% organically +• 94% revenues from digital products and services +• 16% cloud software revenues, up 15% organically +Transactional revenues declined in Financial & Corporate +Compliance but increased in Legal & Regulatory. Other non‑ +recurring revenues, mainly on‑premise license fees and +software implementation services, increased 1% organically +(2022: 7%), with mixed trends by division. +Revenues by type +€ million, unless otherwise +stated 2023 2022 ∆ ∆ CC ∆ OG +Digital and service +subscription 4,134 3,950 +5% +7% +8% +Print subscription 136 157 ‑13% ‑12% ‑7% +Other recurring 273 281 ‑3% ‑1% +3% +Total recurring revenues 4,543 4,388 +4% +6% +7% +Transactional 411 433 ‑5% ‑2% ‑3% +Print books 120 129 ‑7% ‑5% 0% +Other non‑recurring 510 503 +1% +3% +1% +Total non-recurring revenues 1,041 1,065 -2% 0% 0% +Total revenues 5,584 5,453 +2% +5% +6% +∆: % Change; ∆ CC: % Change in constant currencies (€/$ 1.05); ∆ OG: +% Organic growth. Other non ‑recurring revenues include software +licenses, software implementation fees, professional services, and other +non‑subscription offerings. +37 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Group financial review \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_39.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_39.txt new file mode 100644 index 0000000000000000000000000000000000000000..73e7f2193ffd2f4e87d7599f582157617469e18f --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_39.txt @@ -0,0 +1,48 @@ +Group financial review  +continued +Operating profit +Adjusted operating profit was €1,476 million (2022: €1,424 million), up 6% in constant currencies. +The related margin increased by 30 basis points to 26.4% (2022: 26.1%), in line with our full‑year +guidance range. The margin improvement follows a margin increase in the fourth quarter driven +by operational gearing, mix shift, and the comparison to a more normalized cost base in fourth +quarter 2022. Personnel‑related expenses increased as expected due to an increase in the +number of employees and due to wage inflation. In addition, there was an expected increase in +personnel‑related expenses, such as business travel, events, and training costs. +Product development spending (including capitalized spend) increased in constant currencies +and amounted to 11% of revenues in 2023 (2022: 11%). Restructuring expenses, which are +included in adjusted operating profit, increased to €15 million (2022: €6 million), at the upper +end of our guidance range. +Operating profit declined 1% to €1,323 million (2022: €1,333 million), mainly due to significantly +lower divestment results: we incurred a net disposal gain of €4 million in 2023 compared to +a gain of €75 million in the prior year. Amortization and impairments of acquired identifiable +intangible assets decreased 9% due to reduced impairments in 2023. +Divisional summary +Overall organic revenue growth was 6%, led by Tax & Accounting and Corporate Performance +& ESG. The overall adjusted operating profit margin increased mainly due to full‑year margin +increases in Financial & Corporate Compliance and Legal & Regulatory. For a more detailed +discussion, see pages 17-36 of this annual report. +Key figures +€ million, unless otherwise stated 2023 2022 ∆ ∆ CC ∆ OG +Revenues 5,584 5,453 +2% +Operating profit 1,323 1,333 ‑1% +Profit for the year 1,007 1,027 ‑2% +Diluted EPS (€) 4.09 4.01 +2% +Net cash from operating activities 1,545 1,582 ‑2% +Business performance – benchmark figures +Revenues 5,584 5,453 +2% +5% +6% +Adjusted operating profit 1,476 1,424 +4% +6% +7% +Adjusted operating profit margin (%) 26.4 26.1 +Adjusted net profit 1,119 1,059 +6% +7% +Diluted adjusted EPS (€) 4.55 4.14 +10% +12% +Adjusted free cash flow 1,164 1,220 ‑5% ‑2% +Return on invested capital (%) 16.8 15.5 +Net debt 2,612 2,253 +16% +∆: % Change; ∆ CC: % Change in constant currencies (€/$ 1.05); ∆ OG: % Organic growth. Benchmark figures are +performance measures used by management. See Note 4 – Benchmark figures for a reconciliation from IFRS to +benchmark figures. +Highlights 2023 +• Product development spend was 11% of revenues +• Profit for the year down by 2% and diluted EPS up 2% +• Adjusted net profit for the year up 6% +38 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Group financial review +The secret object #1 is a "clock". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_4.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_4.txt new file mode 100644 index 0000000000000000000000000000000000000000..ada6a06084f88ed3fb3ff599f9f83c5d0414ac91 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_4.txt @@ -0,0 +1,53 @@ +Wolters Kluwer +at a glance +We help our customers make critical +decisions every day by providing +expert solutions that combine deep +domain knowledge with specialized +technology and services. +Global footprint +North America +64% +of total revenues +Europe +28% +of total revenues +Asia Pacific & ROW +8% +of total revenues +21,400+ +employees worldwide +180+ +countries where we serve customers +40+ +countries from which we operate +8 flagship offices +significant subsidiaries +78 +employee engagement +score, up 1 point +8% +reduction in scope 1 and +scope 2 emissions +75 +employee belonging score, +up 2 points +Near-term +targets +validated by +SBTi in 2023 +Sustainability highlights 2023 +6% +organic growth in revenues +58% +of revenues from expert +solutions +€1.2bn +adjusted free cash flow +34% +total shareholder return +including dividends +(not reinvested) +Financial highlights 2023 +3 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Wolters Kluwer at a glance +The secret fruit is a "lemon". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_40.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_40.txt new file mode 100644 index 0000000000000000000000000000000000000000..c2df729889ec3dde8ee6a72fd1cacace8846115e --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_40.txt @@ -0,0 +1,56 @@ +Divisional summary +€ million, unless otherwise stated 2023 2022 ∆ ∆ CC ∆ OG +Revenues +Health 1,508 1,448 +4% +7% +6% +Tax & Accounting 1,466 1,394 +5% +8% +8% +Financial & Corporate Compliance 1,052 1,056 0% +2% +2% +Legal & Regulatory 875 916 ‑4% ‑4% +4% +Corporate Performance & ESG 683 639 +7% +9% +9% +Total revenues 5,584 5,453 +2% +5% +6% +Adjusted operating profit +Health 454 434 +5% +8% +7% +Tax & Accounting 479 455 +5% +8% +8% +Financial & Corporate Compliance 403 387 +4% +7% +7% +Legal & Regulatory 138 133 +4% +4% +10% +Corporate Performance & ESG 68 79 ‑14% ‑12% ‑12% +Corporate (66) (64) +3% +4% +4% +Total adjusted operating profit 1,476 1,424 +4% +6% +7% +Adjusted operating profit margin +Health 30.1% 29.9% +Tax & Accounting 32.7% 32.6% +Financial & Corporate Compliance 38.3% 36.7% +Legal & Regulatory 15.7% 14.5% +Corporate Performance & ESG 9.9% 12.4% +Total adjusted operating profit margin 26.4% 26.1% +∆: % Change; ∆ CC: % Change in constant currencies (€/$ 1.05); ∆ OG: % Organic growth. 2022 figures are +pro forma due to changes in the organizational structure, refer to Note 1 – General and basis of preparation . +Group financial review  +continued +Highlights 2023 +• Adjusted operating profit €1,476 million, up 6% in constant currencies +• Adjusted operating profit margin up 30 basis points to 26.4% +Corporate expenses +€ million, unless otherwise stated 2023 2022 ∆ ∆ CC ∆ OG +Adjusted operating profit (66) (64) +3% +4% +4% +Operating profit (66) (64) +3% +Net capital expenditure 0 0 +Ultimo FTEs 143 132 +∆: % Change; ∆ CC: % Change in constant currencies (€/$ 1.05); ∆ OG: % Organic growth. +Net corporate expenses increased 4% in constant currencies and 4% on an organic basis, due to +an increase in personnel costs and related expenses partly offset by lower third‑party services +relating to various projects. +Financial position +Balance sheet +Non‑current assets, mainly consisting of goodwill and acquired identifiable intangible assets, +decreased by €193 million to €6,340 million in 2023, mainly due to amortization and the effect +of foreign exchange differences that were higher than investments in software assets and +acquisitions through business combinations during the year. +Total equity decreased by €561 million to €1,749 million, mainly due to the share buybacks, +dividend payments, and exchange differences on translation of foreign operations, partly +offset by the profit for the year. During the year, we repurchased 8.7 million shares for a total +consideration of €1 billion, including 0.5 million shares to offset incentive share issuances (2022: +0.7 million). +In August 2023, we canceled 9.0 million of shares held in treasury (2022: 5.0 million shares +canceled). As of December 31, 2023, we held 8.0 million shares in treasury. The total weighted‑ +average number of shares was 244.9 million in 2023 (2022: 254.7 million). +39 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Group financial review \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_41.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_41.txt new file mode 100644 index 0000000000000000000000000000000000000000..9ba104727f76f1536e0d41de2e67d9e6c320f125 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_41.txt @@ -0,0 +1,43 @@ +Balance sheet +€ million, unless otherwise stated 2023 2022 Variance +Non‑current assets 6,340 6,533 (193) +Working capital (1,036) (892) (144) +Total equity 1,749 2,310 (561) +Net debt 2,612 2,253 359 +Net‑debt‑to‑EBITDA ratio 1.5 1.3 0.2 +Net debt, leverage, and liquidity position +Net debt at December 31, 2023, was €2,612 million, compared to €2,253 million at December 31, +2022. The net‑debt‑to‑EBITDA ratio increased to 1.5 (2022: 1.3). Gross debt includes the 8‑year +€700 million Eurobond with a 3.750% annual coupon, issued in March 2023. Gross debt +increased due to the increase of borrowings and bank overdrafts to €196 million at December +31, 2023 (2022: €16 million), including €50 million Euro Commercial Paper notes (2022: no notes +outstanding). +Our €600 million multi‑currency credit facility remains fully undrawn. +Our liquidity position remained strong with net cash available of €989 million as of +December 31, 2023. +Working capital +€ million 2023 2022 Variance +Inventories 84 79 5 +Current contract assets 160 153 7 +Trade receivables 1,087 1,088 (1) +Current operating other receivables 198 244 (46) +Current deferred income (1,899) (1,858) (41) +Other contract liabilities (86) (88) 2 +Trade and other operating payables (951) (949) (2) +Operating working capital (1,407) (1,331) (76) +Cash and cash equivalents 1,135 1,346 (211) +Non‑operating working capital (764) (907) 143 +Total working capital (1,036) (892) (144) +Operating working capital amounted to €(1,407) million, compared to €(1,331) million in 2022, +a decrease of €76 million. This decrease is largely due to autonomous movements in working +capital of €98 million. +Non‑operating working capital decreased to €(764) million, compared to €(907) million in 2022, +mainly due to lower short‑term bonds during 2023 (€400 million) compared to 2022 +(€700 million), partly offset by higher borrowings and bank overdrafts at the end of 2023. +Group financial review  +continued +Highlights 2023 +• Net debt-to-EBITDA ratio 1.5x +• Liquidity position remained strong +40 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Group financial review +The secret kitchen appliance is a "microwave". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_42.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_42.txt new file mode 100644 index 0000000000000000000000000000000000000000..ba906dba1dbf52daf9bbd47ec31b5e02b79b16b4 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_42.txt @@ -0,0 +1,55 @@ +Financing results, taxation, EPS, and ROIC +Financing results +Total financing results decreased to a net cost of €27 million (2022: €57 million cost), mainly due +to higher interest rates on cash and cash equivalents. Included in total financing results was a +€7 million net foreign exchange gain (2022: €5 million net foreign exchange loss) mainly related +to the translation of intercompany balances. Adjusted net financing costs decreased to +€27 million (2022: €56 million). +Taxation +Profit before tax increased 2% to €1,297 million (2022: 1,276 million). The effective tax rate increased +to 22.4% (2022: 19.5%), as the prior year a significant tax‑exempt divestment gain. +Adjusted profit before tax was €1,450 million (2022: €1,368 million), up 6% overall and up 8% +in constant currencies. The benchmark tax rate on adjusted profit before tax increased to +22.9% (2022: 22.6%), mainly due to lower prior year favorable adjustments combined with the +increased limitation on interest deductibility in the Netherlands. +Earnings per share +Total profit for the year decreased 2% to €1,007 million (2022: €1,027 million), while diluted +earnings per share increased 2% to €4.09 (2022: €4.01), benefitting from the lower weighted‑ +average number of shares outstanding. +Adjusted net profit was €1,119 million (2022: €1,059 million), an increase of 7% in constant +currencies. Diluted adjusted EPS was €4.55 (2022: €4.14), up 12% in constant currencies, reflecting +the increase in adjusted net profit and a 4% reduction in the diluted weighted‑average number +of shares outstanding to 246.0 million (2022: 255.8 million). +Return on invested capital (ROIC) +In 2023, ROIC was 16.8% (2022: 15.5%), mainly due to a higher adjusted operating profit, partly +offset by a higher benchmark tax rate. +Cash flow +€ million, unless otherwise stated 2023 2022 Variance +Net cash from operating activities 1,545 1,582 (37) +Net cash used in investing activities (374) (299) (75) +Net cash used in financing activities (1,481) (991) (490) +Adjusted operating cash flow 1,476 1,528 (52) +Net capital expenditure (323) (295) (28) +Adjusted free cash flow 1,164 1,220 (56) +Diluted adjusted free cash flow per share (€) 4.73 4.77 (0.04) +Cash conversion ratio (%) 100 107 +Cash flow +Net cash outflow before the effect of exchange differences was €310 million (2022: net cash +inflow of €292 million), due to net cash used in financing activities and investing activities +outweighing net cash from operating activities. +Adjusted operating cash flow was €1,476 million (2022: €1,528 million), down 3% overall +and down 1% in constant currencies. This reflects a cash conversion ratio of 100% (2022: +107%), returning to historical levels (95%‑100%). Working capital inflows of €98 million were +significantly lower than in the prior year, while net capital expenditures increased 10% overall +and 11% in constant currencies. Net capital expenditures were €323 million (2022: €295 million), +representing 5.8% of revenues (2022: 5.4%). +Cash payments related to leases, including lease interest paid, decreased to €74 million +(2022: €81 million). Net interest paid, excluding lease interest paid, reduced to €17 million +(2022: €45 million), reflecting higher interest income on cash and cash equivalents. +Group financial review  +continued +Highlights 2023 +• Adjusted free cash flow €1,164 million, down 2% in constant currencies +• Return on invested capital improved to 16.8% +• Diluted adjusted EPS €4.55, up 12% in constant currencies +41 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Group financial review \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_43.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_43.txt new file mode 100644 index 0000000000000000000000000000000000000000..b02b143565ce9616d8f5711511f0c5e0e3f97aa6 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_43.txt @@ -0,0 +1,26 @@ +Income tax paid increased to €325 million (2022: €289 million). The net cash outflow related to +restructuring was €1 million (2022: outflow of €12 million). As a result, adjusted free cash flow +was €1,164 million (2022: €1,220 million), down 2% in constant currencies. +Dividends paid to shareholders amounted to €467 million (2022: €424 million). The cash +deployed towards share repurchases was as announced, €1 billion, and in line with prior year +(2022: €1 billion). +Acquisitions and divestments +Total acquisition spending, net of cash acquired and including transaction costs, was +€68 million (2022: €95 million), and primarily related to the acquisitions of NurseTim on January +9, 2023, Invistics on June 7, 2023, and tax content and tools provider, MFAS, on October 31, 2023. +In 2023, net divestment proceeds amounted to €8 million, compared to €106 million in 2022 +which mainly included the divestment of the legal information units in France and Spain. +Leverage and financial policy +Wolters Kluwer uses its cash flow to invest in the business organically and through acquisitions +to maintain optimal leverage, and provide returns to shareholders. We regularly assess our +financial position and evaluate the appropriate level of debt in view of our expectations for +cash flow, investment plans, interest rates, and capital market conditions. +While we may temporarily deviate from our leverage target at times, we continue to believe +that, in the longer run, a net‑debt‑to‑EBITDA ratio of around 2.5 remains appropriate for +our business given the high proportion of recurring revenues and resilient cash flow. +Group financial review  +continued +Highlights 2023 +• Proposed 2023 total dividend €2.08 per share, an increase of 15% +• Completed 2023 share buyback €1 billion +42 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Group financial review \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_46.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_46.txt new file mode 100644 index 0000000000000000000000000000000000000000..94283d945ee707b3533359d09b81d6edbae38964 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_46.txt @@ -0,0 +1,85 @@ +The full procedure for appointment and dismissal of members +of the Executive Board is explained in the company’s Articles +of Association. Information on the members of the Executive +Board is provided in the section Executive Board and +Supervisory Board. + → See Executive Board and +Supervisory Board on page 61 +Remuneration +The remuneration of the Executive Board is determined by +the Supervisory Board based on the remuneration policy +adopted by the General Meeting of Shareholders in the 2021 +Annual General Meeting of Shareholders by a majority of +97% of the share capital represented. The Supervisory Board +is responsible for the execution of the remuneration policy, +based on the advice of the Selection and Remuneration +Committee. Detailed information about the remuneration +policy and its application in 2023 can be found in the +Remuneration report. +Under the long‑term incentive plan (LTIP), Executive Board +members can earn ordinary shares after a vesting period +of three years, subject to clear and objective three‑year +performance criteria established in advance. Pursuant to the +amended remuneration policy, the Executive Board members +are required, in line with Best Practice Provision 3.1.2 (vi) of +the Corporate Governance Code, to hold the earned shares +(net of taxes) after vesting for two more years (starting with +the 2021‑2023 performance period). However, if an Executive +Board member is eligible for a company‑sponsored deferral +program and chooses to participate by deferring LTIP proceeds +upon vesting, then such Executive Board member will be +required to hold the remaining vested shares or a minimum of +50% of vested shares (net of taxes), whichever is higher, for a +two‑year period. For the prior performance periods up to and +including the 2020‑2022 cycle, Executive Board members were +not required to retain the shares for a period of two years +post vesting. +Term of appointment +Since the introduction of the first Corporate Governance Code +in 2004, Executive Board members are appointed for a period +of four years after which reappointment is possible, in line +with Best Practice Provision 2.2.1 of the Corporate Governance +Code. The existing contract with Ms. McKinstry, who was +appointed before the introduction of the first Corporate +Governance Code and has an employment contract for an +indefinite period, will remain honored. +Severance arrangements +With respect to future Executive Board appointments, the +company will, as a policy, comply with Best Practice Provision +3.2.3 of the Corporate Governance Code regarding the +maximum severance remuneration in the event of dismissal. In +line with this Best Practice Provision, the contract with +Mr. Entricken contains a severance payment of one year’s base +salary. However, the company will honor the existing contract +with Ms. McKinstry who was appointed before the introduction +of the first Dutch Corporate Governance Code. +Change of control +The employment contracts of the Executive Board members +and a small group of senior executives contain stipulations +with respect to a change of control of the company. According +to these stipulations, in the case of a change of control, +the relevant persons will receive 100% of the number of +conditional rights on shares awarded to them with respect to +pending long‑term incentive plans of which the performance +periods have not yet ended. In addition, they are entitled to +a cash severance payment if their employment agreements +would end following a change of control. +Supervisory Board +The Supervisory Board supervises the policies of the Executive +Board and the general affairs of the company and its affiliated +enterprise, considering the relevant interests of the company’s +stakeholders, and advises the Executive Board. The supervision +includes the implementation of the sustainable long‑term +value creation strategy, the effectiveness of the company’s +internal risk management and control systems, and the +integrity and quality of the financial reporting. The Supervisory +Board also has due regard for sustainability/ESG matters. In +addition, certain resolutions of the Executive Board must be +approved by the Supervisory Board. These resolutions are +listed in the By‑Laws of the Supervisory Board and include: +• Transactions in which there are conflicts of interest with +Executive Board members that are of material significance +for the company or the Executive Board member; +Corporate governance +continued +45 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Corporate governance \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_48.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_48.txt new file mode 100644 index 0000000000000000000000000000000000000000..e3242caf80875266b10d11a7d1cc1d3952ae2ce7 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_48.txt @@ -0,0 +1,93 @@ +Diversity +Diversity, equity, inclusion, and belonging (DEIB) is an +important topic for the Supervisory Board and Executive +Board. The DEIB policy for the Supervisory Board is included +as an annex to the Supervisory Board By‑Laws. Elements of +diversity include among others nationality, gender, age, and +expertise. Based on Dutch law, the Supervisory Board must +have a representation of at least 33% male and at least 33% +female. For the Executive Board, we also have a target of at +least 33% representation of both male and female. These +targets are currently met. In accordance with Dutch legislation +which became applicable in 2022, we have also set a target +to increase the female representation in our executive career +band by 2% by 2028 from a 2022 baseline. In the coming years, +we will continue working towards achieving this through +equitable and inclusive employee practices and experiences +that improve female representation in hiring, promotions, +and talent retention. In addition, a global DEIB policy for +all employees worldwide was drafted and implemented in +2023. Our Chief Human Resources Officer reports into our +CEO and Chair of the Executive Board, who as such has +ultimate responsibility for the DEIB strategy and the execution +thereof. For more information on DEIB, see the Sustainability +statements. +Currently, the male/female representation of the Supervisory +Board is 33% male and 67% female. After the appointment of +Mr. David Sides to the Supervisory Board and the retirement of +Ms. Jeanette Horan, the representation will be 50% male and +50% female. This is in line with Dutch law. The male/female +presentation in the Executive Board is 50%/50%, which is in +line with our target for diversity in the Executive Board. The +Supervisory Board composition comprises expertise within +the broad information industry as well as specific market +segments in which the company operates. Three nationalities +are represented on the Supervisory Board. The composition of +the Supervisory Board is in line with its diversity policy, Dutch +law, and the competency, skills, and experience requirements +as described in its profile. + → See Executive Board and +Supervisory Board on page 61 +Insider dealing policy +The members of the Executive Board and the Supervisory +Board are bound to the Wolters Kluwer Insider Dealing Policy +and are not allowed to trade in Wolters Kluwer securities when +they have inside information or during closed periods. These +periods begin either on the first business day of the quarter, or +30 calendar days prior to the publication of Wolters Kluwer’s +annual results, half‑year results, first‑quarter trading update, +and nine‑month trading update, whichever is earlier. The day +after the announcement of these results or updates, the Board +members can trade again, with prior approval of the securities +compliance officer, which will be granted if they do not have +inside information at that point in time. +Culture +Our Executive Board is responsible for setting the tone for +our culture from the top. The Executive Board has adopted +company values that serve as guidelines for our employees +and are at the heart of the company’s future success. +Our values propel us to put the customer at the center of +everything we do, honor our commitment to continuous +improvement and innovation, aim high and deliver the right +results, and most importantly: win as a team. Our values +and ethical standards are the basis for our decisions for and +interactions with our employees, customers, partners, and +society at large, and for achieving our goals. We maintain a +culture of open communication and a safe environment where +everyone should feel confident to ask a question or raise a +concern without fear of negative consequences. The Executive +Board and the Supervisory Board are committed to ensure +high standards of ethics and integrity and promote openness +through our SpeakUp program. Our employees receive Annual +Compliance Training about our Code of Business Ethics and +other key compliance policies and SpeakUp. In 2023, 99% of +employees completed the Annual Compliance Training. More +information on our Code of Business Ethics and SpeakUp +program can be found in the Sustainability statements. + → Read more about our Code of +Business Ethics in the +Sustainability statements on +page 89 +Risk management +The Executive Board is responsible for identifying and +managing the risks associated with the company’s strategy +and activities and is supervised by the Supervisory Board. +The Audit Committee undertakes preparatory work for +the Supervisory Board in this area. Wolters Kluwer has +implemented internal risk management and control systems +which are embedded in the operations of the businesses to +identify significant risks to which the company is exposed, and +to enable the effective management of those risks. The aim of +Corporate governance +continued +47 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Corporate governance \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_49.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_49.txt new file mode 100644 index 0000000000000000000000000000000000000000..f718bc3fc171ff3b3d2a96a49680a51b0bb49413 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_49.txt @@ -0,0 +1,81 @@ +the systems is to provide a reasonable level of assurance on +the reliability of financial reporting. +For a detailed description of the risks and the internal risk +management and control systems, reference is made to Risk +management. + → See Risk management +on page 50 +Environmental, social, and +governance matters +The Executive Board and the Supervisory Board are committed +to and oversee Wolters Kluwer’s sustainability/ESG priorities +and performance. The Executive Board discusses the +progress on the sustainability priorities in quarterly update +meetings with the Corporate Sustainability team, in addition +to individual updates as appropriate by relevant functional +owners. The Supervisory Board is informed on a regular +basis as well. The updated Supervisory Board By‑Laws and +Terms of Reference of the Audit Committee and Selection +and Remuneration Committee specify the responsibilities of +the Supervisory Board and the committees with respect to +sustainability. The Executive Board and Supervisory Board +provide feedback to the Corporate Sustainability team +and functional owners, that shapes the development of +relevant sustainability initiatives. For a detailed description +of our sustainability performance, reference is made to the +Sustainability statements. + → See Sustainability statements +on page 89 +Shareholders and the general meeting +of shareholders +At least once a year, Wolters Kluwer holds a General Meeting +of Shareholders. The agenda of the Annual General Meeting +of Shareholders shall in each case contain the report of the +Executive Board, the report of the Supervisory Board, the +remuneration report, the adoption of the financial statements, +and the proposal to distribute dividends or other distributions. +Resolutions to release the members of the Executive Board +and the Supervisory Board from liability for their respective +duties is voted on separately. +In 2023, shareholders with voting rights for approximately 79% +of the issued capital of the company were represented at the +Annual General Meeting of Shareholders. Shareholders who +alone or jointly represent at least half a percent (0.5%) of the +issued capital of Wolters Kluwer shall have the right to request +the Executive Board or Supervisory Board to put items on the +agenda of a General Meeting of Shareholders, provided that +such requests are made in writing at least 60 days before a +General Meeting of Shareholders. +Amendment articles of association +A resolution to amend the Articles of Association may only +be passed by the General Meeting of Shareholders at the +proposal of the Executive Board, subject to the approval of the +Supervisory Board. +Issuance of shares +The Articles of Association of the company determine that +shares may be issued at the proposal of the Executive Board +and by virtue of a resolution of the General Meeting of +Shareholders, subject to designation of the Executive Board +by the General Meeting of Shareholders. At the Annual General +Meeting of Shareholders of May 10, 2023, the Executive Board +was granted the authority for a period of 18 months to issue +new shares, with exclusion of pre‑emptive rights, subject to +approval of the Supervisory Board. The authorization is limited +to a maximum of 10% of the issued capital on the date of +the meeting. +Acquisition of shares in the company +Acquisition of shares in the company (share buybacks) +may only be effectuated after authorization by the General +Meeting of Shareholders, and while respecting the restrictions +imposed by the Articles of Association of the company. At +the Annual General Meeting of Shareholders of May 10, 2023, +the authorization to acquire shares in the company was +granted to the Executive Board for a period of 18 months. +The authorization is limited to a maximum of 10% of the +issued capital on the date of the meeting. On December 31, +2023, Wolters Kluwer N.V. held 8,004,987 shares in the company +(a 3.2% interest). +Corporate governance +continued +48 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Corporate governance +The secret landmark is "Big Ben". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_5.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_5.txt new file mode 100644 index 0000000000000000000000000000000000000000..2393a1585baefa5b07ed7fcce1111dc3ea18053f --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_5.txt @@ -0,0 +1,81 @@ +Divisions +We deliver professional information, software, and +services for the healthcare; tax and accounting; financial +and corporate compliance; legal and regulatory; and +corporate performance and ESG sectors. +Health +Trusted clinical technology and solutions +that drive effective decision ‑making +and outcomes across the continuum +of healthcare. + → Read more on page 17 +Tax & Accounting +Expert solutions that help tax, accounting, +and audit professionals drive productivity, +navigate change, and deliver better +outcomes. + → Read more on page 21 +Financial & Corporate Compliance +Expert solutions for legal entity +compliance and banking product +compliance. + → Read more on page 25 +Legal & Regulatory +Information, insights, and workflow +solutions for changing regulatory +obligations, managing risk, and increasing +efficiency. + → Read more on page 29 +Corporate Performance & ESG +Enterprise software to drive financial and +sustainability performance and manage +risks, meet reporting requirements, +improve safety and productivity, and +reduce environmental impact. + → Read more on page 33 +Revenues by media format +2023 Revenues by type +Organic revenue growth +Adjusted operating profit margin +Diluted adjusted EPS in € +Return on invested capital +0% +20% +40% +60% +80% +100% +Digital: Expert solutions Digital: Information products +Services Print +2020 2021 2022 2023 +Recurring Non-recurring +0% +1% +2% +3% +4% +5% +6% +7% +2020 2021 2022 2023 +5.8%6.2%5.7% +1.7% +22% 23% 24% 25% 26% 27% +2020 +2021 +2022 +2023 +0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 +2020 +2021 +2022 +2023 +18%0% 3% 6% 9% 12% 15% +2020 +2021 +2022 +2023 +82% +Recurring +revenues +4 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Wolters Kluwer at a glance \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_52.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_52.txt new file mode 100644 index 0000000000000000000000000000000000000000..333c0dbb17c231b0d0ba2b2c146d0a836b8986d4 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_52.txt @@ -0,0 +1,89 @@ +Internal Control Framework +Our Internal Control Framework (ICF) for financial reporting is +based on the Committee of Sponsoring Organizations of the +Treadway Commission (COSO) 2013 framework. It is designed +to provide reasonable assurance that the results of our +business are accurately reflected in our internal and external +financial reporting. +The ICF for financial reporting is deployed by the operating +business units and central functions and reviewed and tested +by internal control officers. We carry out an annual risk +assessment program for financial and IT general control risks +to determine the scope and controls to be tested. As part of +that scope, key controls are tested annually. The test results +are reported to functional management, the Executive Board, +the Audit Committee, and internal and external auditors +on a quarterly basis. Where needed, remedial action plans +are designed and implemented to address significant risks +as derived from internal control testing, and internal and +external audits. +Internal audit and risk +management functions +Our global Internal Audit department provides independent +and objective assurance and advice. It is guided by a +philosophy of adding value by continuously improving, +where deemed fit for purpose, the maturity of our +operations. Internal Audit takes a systematic and disciplined +approach to evaluating and improving the effectiveness +of our organization’s governance, risk management, and +internal controls. +Our Internal Audit department works according to an audit +plan which is discussed with the external auditors, the +Executive Board, and the Audit Committee. The plan, which is +approved by the Executive Board and the Supervisory Board, +is based on risk assessments. It focuses on strategy execution, +financial reporting risks, and operational risks, including +IT‑related risks. +Our global Risk Management department facilitates risk +prevention, protection, response, and recovery programs +via procurement of insurance; incident and related claims +management, and business continuity management; +loss control programs; and other initiatives to mitigate +specific risks. +Risk types and categories +On the following pages, we set out the main risks we have +identified up to the date of this annual report and the actions +we are taking to prevent or mitigate the occurrence and/ +or impact of these risks. It is not our intention to provide an +exhaustive description of all possible risks. There may be risks +that are not yet known or that we have not yet fully assessed. +Some existing risks may have been assessed as not significant. +However, they could develop into a material exposure for our +company in the future and have a significant adverse impact +on our business. +Our risk management and Internal Control Framework have +been designed to identify, mitigate, and respond to risks in a +timely manner. However, it is not reasonably possible to attain +absolute assurance. +Risk appetite +We qualify the risk appetite of our main risks as balanced, +conservative, or minimal. To achieve our strategic goals, +we are prepared to take duly balanced risks in certain +strategic areas, such as acquisitions, expansion in high +growth countries, and the launch of new innovative products. +For other risk categories, our approach towards risks could be +qualified as conservative, and as minimal for certain legal & +compliance and financial & financial reporting risk categories. +We carefully weigh risks against potential rewards. +Emerging risks +Generative artificial intelligence (AI) became commercially +available in 2023, and while we believe this new AI technology +primarily offers opportunities for Wolters Kluwer, there are +also potential risks that will need to be monitored and +mitigated. Other risks which emerged in recent years and that +we continue to monitor include climate‑related risks, data +privacy, and data governance. The latter area continues to be +of interest as we accumulate more and new types of data, and +deal with the growing exposure to regulatory, ethical, and data +security risks. See the sections Material impacts, risks, and +opportunities and their interaction with strategy and business +model (SBM-3), Description of the processes to identify +and assess material climate-related impacts, risks, and +opportunities (IRO-1), and Actions and resources in relation to +climate change policies (E1-3) in the Sustainability statements +for more information about climate‑related risks. The data +privacy risk is described in the risk category Regulatory and +compliance in this Risk management chapter. +Risk management +continued +51 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Risk management \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_53.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_53.txt new file mode 100644 index 0000000000000000000000000000000000000000..a9573914dcd838984971769fa56f2af13f87f63a --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_53.txt @@ -0,0 +1,93 @@ +Strategic risks +Risk description and impact Mitigation +Macroeconomic conditions +Demand for our products and +services may be adversely +affected by factors beyond +our control, such as economic +conditions, pandemics, +government policies, political +uncertainty, acts of war, and civil +unrest. +We monitor relevant macroeconomic and geopolitical developments so we can respond quickly to risks +and opportunities. For example, we are monitoring inflation and energy prices, as well as the Russian ‑ +Ukrainian war and the conflict in the Middle East. We take steps to minimize the impact on our financial +performance while also continuing the support of our customers and employees. +Recurring revenues represent 82% of our consolidated group revenues, providing visibility and resilience +in times of uncertainty. Our exposure to a diverse range of customer segments and geographic markets, +with a variety of products and services, reduces the impact of sector ‑ or country ‑specific uncertainty. +Most of our subscription ‑based digital information and software products are critical to the workflow of +our customers, providing further resilience. +During times of uncertainty, our business units, in particular those that are exposed to transactional +or other non‑recurring revenues, can deploy a range of actions to support revenues and defend +profits. For example, we can place greater efforts on retention, cross ‑selling, and upselling to existing +customers. Where possible, we will pivot new sales efforts towards sectors and customer segments +that are less affected by market conditions. At the same time, our businesses can adjust discretionary +spending to defend margins. +Competition +We operate in competitive +markets, facing both large +established competitors and new +market entrants, and may be +adversely affected by competitive +dynamics. +We focus on our customers’ success and on building long‑term customer relationships. We carefully evaluate +and implement an appropriate response to competitive threats in the markets which we operate in. +Our product and service offerings are varied and very specialized, often embedded in the professional’s daily +workflow, and span multiple customer segments, forming a natural defense against existing or potential new +competitors. Strategically, we invest approximately 10% of revenues each year in product development and +innovation to enhance and expand our expert solutions and to transform our information products so we +can maintain or strengthen our competitive positions and support innovation and growth. +Changes in technology, +business models, and customer +preferences +Demand for our products and +services could be affected by +disruptive new technologies, +including generative AI, changes +in revenue models, evolving +customer preferences, and other +market developments. +We monitor trends in the markets in which we operate, such as technological developments, including +generative artificial intelligence, and consider how these might affect our businesses in the short term +and long term. We also monitor customer needs and preferences by tracking net promoter scores, +by engaging with customers through advisory boards, and by hosting and participating in industry +conferences. This deep understanding of our customers’ needs and workflows, combined with our +understanding of new technologies, help us align our offerings to long ‑term market trends. +A core tenet of our strategy is to reinvest approximately 10% of group revenues into product +development, so we can keep our solutions relevant. This investment includes the deployment of +advanced technologies and the development of cloud ‑based solutions. +Risk management +continued +Strategic +• Macroeconomic conditions +• Competition +• Changes in technology, +business models, and +customer preferences +• Mergers and acquisitions +• Divestments +Operational +• IT and cybersecurity +• Supply chain dependency +and project execution +• Talent and organization +• Fraud +• Business interruption +• Brand and reputation +Legal & +compliance +• Regulatory and compliance +• Contractual compliance +• Intellectual property +protection +• Legal claims +Financial & +financial reporting +• Treasury +• Post-employment benefits +• Taxes +• Misstatements, accounting +estimates and judgments, +and reliability of systems +52 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Risk management \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_54.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_54.txt new file mode 100644 index 0000000000000000000000000000000000000000..8a8a90cedf30442bee334c3bd024340ce10c975f --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_54.txt @@ -0,0 +1,83 @@ +Strategic risks continued +Risk description and impact Mitigation +Mergers and acquisitions +We supplement organic growth +with selected acquisitions +which expose us to a variety +of risks that could affect the +future revenues and profits +of the acquired businesses. +These risks are related to +factors such as the retention of +customers and key personnel, +the process of integrating the +target, the target’s internal +control environment including +IT security, open source +software, supply chain, and the +competitive response. +We apply strict strategic and financial criteria in our acquisition +process. In general, acquisitions are expected to cover our after ‑tax +weighted‑average cost of capital within three to five years and to be +accretive to diluted adjusted earnings per share in the first full year +of ownership. +Investment decisions are very selective. We focus on businesses +with proven track records and relatively predictable or recurring +revenues that we expect to enhance our growth or margin. Generally, +we acquire businesses that present strategic synergies with our +existing operations. +Divestments +Occasionally, we choose to +divest assets that are no +longer core to our strategy. +The divestment process entails +risks that could have an adverse +impact on the performance and +valuation of the assets and our +ability to complete a divestment +process. +To mitigate risks related to material divestments, we prepare +detailed carve ‑out plans and financials, covering human resources, +technology, supply chains, and other functions. We also perform +vendor due diligence prior to negotiations. In many cases, we engage +external advisors to execute transactions. +Risk management +continued +Operational risks +Risk description and impact Mitigation +IT and cybersecurity +Our business is exposed to +IT‑related risks and cyber +threats that could affect our +IT infrastructure, system +availability, application +availability, and the +confidentiality and integrity +of information. +We operate a global cybersecurity program to protect our +organization, products, and customers. This program governs the +execution of cybersecurity projects and provides management +accountability at various levels. The program is assessed annually +by an independent third party and is based on the National Institute +of Standards and Technology Cybersecurity Framework (NIST ‑CSF). +We maintain a Global Information Security Policy and work to keep +all operations aligned to this standard. IT General Controls form an +integral part of Wolters Kluwer’s Internal Control Framework and are +aligned with our Global Information Security Policy. We periodically +test controls over data and security programs to ensure we protect +confidential and sensitive data. We assess controls against industry +standards such as American Institute of Certified Public Accountants +(AICPA) criteria and International Organization for Standardization +(ISO) requirements. We complete regular SOC 2 attestations of +our cloud‑managed services and conduct risk due diligence for all +critical vendors. +We have IT disaster recovery and incident management capabilities +in place to respond to cyberattacks. +All employees are required to complete the Annual Compliance +Training on our IT security policy and training on security awareness. +Our employees’ mobile devices are protected using a mobile +device management solution while multi ‑factor authentication has +been implemented for all users with access to our critical internal +IT systems. +53 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Risk management +The secret animal #4 is a "cow". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_55.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_55.txt new file mode 100644 index 0000000000000000000000000000000000000000..6bb1b8796bd7f5f434713dc75948bba59486d472 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_55.txt @@ -0,0 +1,81 @@ +Operational risks continued +Risk description and impact Mitigation +Supply chain dependency and +project execution +Our operations depend on +third‑party suppliers and could +be adversely affected by poor +performance of suppliers. +Suppliers include providers of +cloud services, outsourced and +offshored data center services, +software development and +maintenance services, back ‑ +office transaction ‑processing +services, content services, +and other services. Projects to +implement new technology‑ +related initiatives or drive +cost efficiencies are subject +to execution risks. +Global Business Services, through its Sourcing & Procurement team, +manages all centralized sourcing and procurement activities. This +team uses an enterprise ‑wide solution and a consistent process for +supplier onboarding and supply chain risk management. +We carefully select and screen suppliers using regularly updated +criteria. Detailed operating service agreements are put in place with +our suppliers and performance during the term of such agreements +is monitored by oversight boards and program management teams. +Suppliers that are managed through Global Business Services are +subject to extensive due diligence covering security, data privacy, +and business continuity. +In 2023, we expanded the number of suppliers included in our +multi‑year project to implement a state ‑of‑the‑art, enterprise ‑wide +supply chain risk management process. This process ensures a +consistent approach to the intake of third ‑party services on a global +scale, including consistent assessment of risk prior to contracting; +a formalized issue management process; tailored contracting to +mitigate business risks; monitoring of suppliers against a tiered +supplier management model; and comprehensive inherent and +residual third‑party risk analysis reporting to business leadership, +with the ability to respond quickly to specific inquiries. +Selected internal implementation projects are monitored by our +Corporate Quality Assurance team. The team aims to improve +the success rate of large initiatives by providing assurance +that these projects can move to the next stage of development +or implementation, and by transferring lessons learned from one +project to another. This team also supports the standardization of +change methodologies and frameworks. +Operational risks continued +Risk description and impact Mitigation +Talent and organization +Our ability to execute on +our strategic plan, including +delivering on product +development roadmaps and +other investments, is highly +dependent on our ability to +attract, develop, and retain +talent globally. +Our extensive global talent management program aims to attract, +retain, engage, and develop the diverse talent we need to support +our success as a business. This program includes talent recruitment +and development, learning opportunities, retention initiatives, +engagement and belonging efforts, and succession planning. +Our global talent management function is supported by state ‑of‑ +the‑art, cloud ‑based human resources technology. This facilitates an +analytical and data‑ driven approach and regular internal reporting +of HR metrics. We conduct an employee survey each year to measure +levels of engagement and belonging and provide management with +current insights on how to support and retain our highly engaged, +high‑performing workforce. We also regularly review and update +our rewards structures and performance ‑based compensation +programs to maintain market competitiveness to support us in +attracting and motivating talent. In 2023, we launched the Colleague +Experience Promise (CxP), which is a four ‑pillar action framework +that articulates to our colleagues the experience we work to provide +to them from the time they engage with our company as candidates +through their careers with the organization. +Risk management +continued +54 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Risk management \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_56.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_56.txt new file mode 100644 index 0000000000000000000000000000000000000000..8ee08b59207f89e03d938b5f7662054a3125e07a --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_56.txt @@ -0,0 +1,96 @@ +Operational risks continued +Risk description and impact Mitigation +Fraud +We may be exposed to internal +or external fraudulent or +related criminal actions. These +include cyber fraud and theft +of tangible or intangible assets +from the company. +Our Corporate Risk Committee frequently reviews potential +exposure to fraudulent activities so we can take appropriate and +timely action. +We conduct regular reviews of adherence to the Code of Business +Ethics, the Wolters Kluwer Internal Control Framework, and +other relevant frameworks and policies. These policies and anti ‑ +fraud controls include effective segregation of duties, defined +approvals and delegations of authority, independent internal and +external audits, risk ‑based assessments including fraud, training, +information and communication, and an anonymous reporting +hotline for concerns. +Our anti‑fraud prevention, detection, protection, response, and +recovery activities include the use of technology to identify threats, +Annual Compliance Training for all employees, awareness campaigns +by our information security and corporate functions, internal fraud +alerts, anti ‑fraud and anti‑cybercrime workshops and training for +at‑risk businesses and functions, sharing of case studies and best +practices, and measures within our Supplier Code of Conduct and +anti‑fraud protections integrated into our vendor management +processes and payment card and banking practices. +Employees and vendors are encouraged to “pause for +cause” and report suspected activities, including fraud, via +appropriate channels. +We continuously evaluate and improve our anti ‑fraud related +process controls and procedures, including reviewing manual +controls and automating controls where possible. As a consequence +of the ever‑changing risk landscape (e.g., COVID ‑19/post‑pandemic, +hybrid working, geopolitical tensions, and generative AI), we expect +cyber fraud risks may be amplified and continue to assess and +evolve the measures in place. +Operational risks continued +Risk description and impact Mitigation +Business interruption +Our business could be affected +by major incidents, such as +cyberattacks, human events +(e.g., civil unrest and riots), +and physical risks which may +relate to climate change, such +as extreme weather or natural +catastrophes, causing damage +to our facilities, IT systems, +hardware, and other tangible +assets, or damage to our data, +brand, or other intangible +assets. This could result in +business interruption and +financial or other loss. +We have a worldwide risk control and business continuity +management program that focuses on how to prepare for, protect +against, respond to, and recover and learn from major incidents. +This program covers incident management, business continuity, +operational recovery, and IT disaster recovery. Our multi ‑disciplinary +Global Incident Management Program supports our ability to +manage crises and incidents of all types. +We internally conduct regular location risk assessments and +on‑demand loss control surveys of key operating companies and +supplier locations with our insurers. We work with our operating +companies to cost ‑effectively implement recommendations for +continued improvement. +Our IT infrastructure and flex work policies allow our staff to conduct +business effectively from essential, alternate, and virtual locations. +Many of our businesses have diversified personnel and support +centers that have capabilities to cover and adapt between regions. +See the Sustainability statements for more information on climate ‑ +related physical risks. +Brand and reputation +With the increasing prominence +of the Wolters Kluwer brand, the +company potentially becomes +more vulnerable to brand or +reputation risks. +The integrity of our brand and reputation is key to our ability to +maintain trusted relationships with our stakeholders, including +employees, customers, and investors. +Our cross‑functional global brand organization oversees the +brand strategy and implementation work of our global brand work +throughout the company. +The Global Branding & Communications (GBC) team closely works +with other corporate functions and our businesses to grow the +equity and awareness of our brand, while monitoring any potential +reputational risks. +We monitor conversations taking place globally in the media and on +social media relating to our brand and thought leadership. +Risk management +continued +55 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Risk management \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_57.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_57.txt new file mode 100644 index 0000000000000000000000000000000000000000..0ab346a07f1f9e95af0cfec5cf6b442bbc3631f5 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_57.txt @@ -0,0 +1,90 @@ +Legal & compliance risks +Risk description and impact Mitigation +Regulatory and compliance +Failure to comply with +applicable laws, regulations, +internal policies, and ethical +standards, or breach of +covenants in financing and +other agreements could result +in fines, loss or suspension of +business licenses, restrictions +on business, third‑party claims, +and reputational damage. Legal +limitations to conduct business +in certain countries could affect +our revenues. +We have established governance structures, policies, and control +programs to ensure compliance with laws, internal policies, +and ethical standards. Our global Ethics & Compliance program +is designed to mitigate the risk of non ‑compliance with laws, +regulations, internal policies, and ethical standards. It includes a +set of policies and procedures, annual ethics and compliance risk +assessments, ongoing communication and awareness activities, and +company‑wide and role‑based training. +Our Code of Business Ethics describes our commitment to acting +ethically and complying with our corporate policies and applicable +laws. It includes topics such as competing fairly and prohibiting +bribery and corruption. Our business partners are expected to +adhere to the same ethics and compliance standards through +commitment to our Supplier Code of Conduct or an equivalent +standard. +Some topics, including trade compliance and anti ‑bribery and anti ‑ +corruption, are further detailed in standalone policies. As part of our +trade sanctions and anti ‑bribery and anti ‑corruption programs, we +also conduct risk ‑based screening and monitoring of vendors, third ‑ +party representatives, and customers. +Our global SpeakUp program encourages employees to report any +suspected breach of laws, regulations, internal policies, and ethical +standards for investigation and remediation. +We further operate a cross ‑functional enterprise ‑wide compliance +program for data privacy laws. Where possible, we implement global +baseline policies that allow for compliance with new and anticipated +laws in multiple jurisdictions. +Legal & compliance risks continued +Risk description and impact Mitigation +Regulatory and compliance +continued +Compliance with laws and internal policies is also an integral part of +our Internal Control Framework. This includes semi ‑annual letters of +representation, annual internal control testing, and regular internal +audits on compliance topics. +We continually evaluate whether legislative changes, regulatory +developments, new products, or business acquisitions require +additional compliance efforts. We monitor legislative developments +and regulatory changes, including those related to data privacy, +data protection, corporate sustainability (reporting), artificial +intelligence, and trade sanctions, to assess the potential impact on +our businesses, products, and services. Political stability is a factor +we consider in our investments. +Contractual compliance +We could be exposed to +claims by our contractual +counterparties based on +alleged non‑compliance with +contractual terms. This includes +the number of users agreed +upon, price commitments, +and/or service delivery. +We negotiate contracts with particular attention to risk transfer +clauses, insurance, limitations on liability, representations, +warranties, and covenants. +For a significant portion of our supplier spend, we use contract +management systems to monitor certain contractual rights and +obligations, and software tools to track the use of software for +which licenses are required. We implemented a global contract +lifecycle management tool for our significant commercial +agreements which helps us manage compliance with third ‑party +agreements, tracks key dates and milestones, monitors compliance +with our contracting policies and standards, and mitigates operating +risks by automating contracting processes. +We use contract playbooks prepared by our internal legal +department to standardize contract language and negotiation +positions with respect to customer contracts. +Our limitation of liability policy establishes a market ‑based cap on +liability that the company will assume in agreements with customers +subject to exceptions that may be approved by a member of the +Executive Board after balancing of risks and benefits. +Risk management +continued +56 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Risk management \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_58.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_58.txt new file mode 100644 index 0000000000000000000000000000000000000000..9e6b511c78bc79d82c3afd252ded5f249bf814b3 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_58.txt @@ -0,0 +1,70 @@ +Legal & compliance risks continued +Risk description and impact Mitigation +Intellectual property +protection +Intellectual property rights +could be challenged, limited, +invalidated, circumvented, or +infringed. Our ability to protect +intellectual property rights may +be affected by technological +developments or changes +in legislation. +We protect our intellectual property rights to safeguard our +portfolio of information, software solutions, and services. +We rely on trademark, copyright, patent, and other intellectual +property laws to establish and protect our proprietary rights +to these products and services. We also monitor legislative +developments with respect to intellectual property rights. +We protect and enforce our intellectual property assets by +monitoring for potential infringement and then taking appropriate +action to safeguard our proprietary rights. +Legal claims +We may be involved in legal +disputes and proceedings in +different jurisdictions. This may +include litigation, administrative +actions, arbitration, or other +claims involving our products, +services, informational content +provided or published by the +company, or employee and +vendor relations. +We have measures in place to mitigate the risk of legal claims, +including contractual disclaimers and limitations of liability. +We monitor legal developments relevant to our interests to support +our businesses in compliance with local laws and fiscal regulations. +We manage a range of insurable risks by arranging insurance +coverage for potential liability exposures. +Risk management +continued +Financial & financial reporting risks +Risk description and impact Mitigation +Treasury +We are exposed to a variety +of financial risks, including +market, liquidity, and credit +risks. Our results are subject to +movements in exchange rates. +Whenever possible, we mitigate the effects of currency and interest +rate fluctuations on net profit, equity, and cash flows by creating +natural hedges, by matching the currency profile of income and +expenses and of assets and liabilities. +When natural hedges are not present, we aim to realize the same +effect with the aid of derivative financial instruments. We have +identified hedging ranges and put policies and governance in place, +including authorization procedures and limits. +We purchase or hold derivative financial instruments only with the +aim of mitigating risks. The cash flow hedges and net investment +hedges qualify for hedge accounting as defined in IFRS 9 – Financial +Instruments. We do not purchase or hold derivative financial +instruments for speculative purposes. +The Treasury Policy on market risks (currency and interest), +liquidity risks, and credit risks is reviewed by the Audit Committee, +with quarterly reporting by the Treasury Committee to the Audit +Committee on the status of these financial risks. +In 2023, we diminished liquidity risk by securing additional funding +with a new €700 million eight ‑year Eurobond. +Further disclosure and detailed information on financial risks and +policies is provided in Note 29 – Financial risk management. +57 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Risk management \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_59.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_59.txt new file mode 100644 index 0000000000000000000000000000000000000000..9352f8f5d055f68450a447e30ec76cc33c3409cc --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_59.txt @@ -0,0 +1,68 @@ +Financial & financial reporting risks continued +Risk description and impact Mitigation +Post-employment benefits +Funding of our post‑ +employment benefit programs, +including frozen or closed +plans, could be adversely +affected by interest rates and +the investment returns on +the assets invested in each +respective plan. These are +influenced by financial markets +and economic conditions. +We evaluate all our employee benefit plans to ensure we are market +competitive. We simultaneously assess if the plan designs can +reduce financial risk and volatility. We also continuously monitor +opportunities to make our plans more efficient. +We partner closely with independent expert advisors on market +competitive plan design, plan performance monitoring, and defining +investment and hedging strategies for all our plans. Our aim is to +maximize returns while managing downside risk in the plans. +The accounting for defined benefit plans is based on annual +actuarial calculations in line with IAS 19 – Employee Benefits, +disclosed in Note 30 – Employee benefits . +In 2023, we continued to prudently manage our benefit plans, but did +not make any substantive changes. +In the Netherlands, our work to comply with the new Pension Accord +requirements continues in collaboration with the Pension Fund +Board, works councils, and external experts. +Financial & financial reporting risks continued +Risk description and impact Mitigation +Taxes +Changes in operational taxes +and corporate income tax +rates, laws, and regulations +could adversely affect our +financial results, and tax assets +and liabilities. +Apart from income taxes, most taxes are either transactional or +employee‑related and are levied from the legal entities in the +relevant jurisdictions. +We have tax policies in place and tax matters are dealt with by +a professional tax function, supported by external advisors. We +provide training to our tax staff where appropriate. +We monitor legislative developments in the jurisdictions in which we +operate and consider the potential impacts of proposed regulatory +changes, such as Pillar Two Model Rules. +We maintain a liability for uncertain income tax positions in line +with IAS 12 – Income Taxes and IFRIC 23 – Uncertainty over Income +Tax Treatments. The adequacy of this liability is evaluated on a +regular basis in consultation with external advisors. +Note 15 – Income tax expense and Note 22 – Tax assets and liabilities +set out further information about income tax and related risks. As a +leader in tax and accounting products, we take our responsibility as +a corporate citizen seriously. +Our approach to tax matters is explained in our Tax Principles that +are reviewed annually and updated as appropriate. Wolters Kluwer +also subscribes to the principles of the VNO ‑NCW Tax Governance +Code that was issued in 2022. Wolters Kluwer’s tax policy and +principles are largely in line with this code and already comply with +most elements therein. We are planning for further information +disclosure and transparency which will bring us to full compliance. +Further information can be found in our Tax Principles available on +our website. The full version of the VNO ‑NCW Tax Governance Code +is available at www.vno-ncw.nl/taxgovernancecode . +Risk management +continued +58 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Risk management \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_6.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_6.txt new file mode 100644 index 0000000000000000000000000000000000000000..1bb636ad4c4b0e9ea06bcf4a834c9b88e57914eb --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_6.txt @@ -0,0 +1,82 @@ +We are delivering value +for our customers, +rewarding careers for our +employees, and returns +for shareholders. +“ +The passion, commitment, and +efforts of our global team allowed +us to collectively deliver on our +goals in a year when we made key +organizational changes, directed +more funds towards AI, and managed +through an interest rate cycle. +Q +How would you sum up the company’s 2023 financial results? +The macroeconomic and geopolitical backdrop of 2023 +presented some challenges, but despite this, we achieved our +overall financial guidance, with another year of 6% organic +growth and a further increase in the adjusted operating +profit margin. The year saw our two largest divisions, Health +and Tax & Accounting, grow faster than we had anticipated, +compensating for Financial & Corporate Compliance and +Corporate Performance & ESG, where the interest rate cycle +and market shifts impacted results. It was a year when our +Legal & Regulatory division demonstrated yet again that it has +been transformed, delivering 8% organic growth for its digital +information solutions. The group‑wide margin developed +as we had expected as personnel costs and discretionary +expenses returned to more normal levels last year after the +effects of the pandemic. We were able to increase investment +in product development in 2023 to take advantage of new +opportunities and still meet our margin and cash flow goals. + Q +Innovation spending is at record levels. What are you +investing in? +Product development spending is running at 11% of group +revenues, some €615 million in 2023, up in constant currencies. +This investment is critical to supporting organic growth and +to our long‑term competitive position. In our world, organic +investment mostly relates to multi‑year product roadmaps +which require careful planning and resource management. +We are investing in many areas: in migrating solutions to +the cloud; further deploying artificial intelligence and other +advanced technologies; adding new modules to our platforms; +transforming our digital information products into expert +solutions; and building capabilities to support customers for +new regulations. We follow a rigorous design and development +process, that adheres to our responsible AI principles, to +ensure quality and security while also achieving a return on +investment. We aim to be agile at the same time so we can +pivot or move faster when needed. In 2023, for example, we +quickly shifted attention and funding towards generative AI +opportunities. Our centralized product development team, +DXG, plays a key role in driving innovation with the divisions, +both for existing solutions and the creation of entirely new +products. + Q +Generative AI took the world by storm in 2023. How is Wolters +Kluwer deploying this new technology? +For over 10 years, we have been deploying artificial +intelligence into our products. In fact, around 50% of our +digital revenues come from products that have some form of +AI embedded. We see the new Gen AI technology as another +powerful tool that we can put to work with our high‑quality, +continuously updated, proprietary content to bring benefits to +customers. We also see interesting opportunities to enhance +our own internal operations with this technology. Gen AI lends +itself very well to certain tasks, such as conversational search, +generating first drafts, or summarizing documents. In 2023, we +released our first generative AI‑enabled products and there is +more to come in 2024. +Q +In 2023, you set up a new division. Why reorganize? +The new division, Corporate Performance & ESG, was formed +by bringing together four of our global enterprise software +units: Enablon, CCH Tagetik, TeamMate, and OneSumX/FRR. +We believe there are important synergies to be derived +from joining up these units and connecting and integrating +their solutions. Less than a year in, we have started aligning +Q&A with +Nancy McKinstry +5 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Q&A with Nancy McKinstry \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_60.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_60.txt new file mode 100644 index 0000000000000000000000000000000000000000..9a9f0ab5edb38d3f12b9d30763e183259a086a66 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_60.txt @@ -0,0 +1,67 @@ +Financial & financial reporting risks continued +Risk description and impact Mitigation +Misstatements, accounting +estimates and judgments, and +reliability of systems +The processes and systems +supporting financial reporting +may be susceptible to +unintentional misstatements or +manipulation. The preparation +of financial statements in +conformity with IFRS requires +management to make estimates, +judgments, and assumptions. +The estimates and underlying +assumptions are based on +historical experience and +various other factors that are +believed to be reasonable +under the circumstances. +Actual results may differ from +those estimates. +We maintain an Internal Control Framework for financial reporting. +Our Internal Audit and Internal Control departments monitor +progress in resolving any audit findings and perform follow ‑up visits +and remediation testing to determine whether those findings are +timely and effectively resolved. +Senior executives in our divisions and operating companies and +senior corporate staff members sign letters of representation semi ‑ +annually, certifying compliance with applicable financial reporting +regulations and accounting policies. +Independent internal control reviews are carried out to ensure +compliance with policies and procedures. These reviews ensure that +existing controls provide adequate protection against actual risks. +Financial results are reviewed by our Business, Analysis & Control, +Consolidation, Group Accounting & Reporting, Treasury, and +Corporate Tax departments in monthly development meetings as +part of regular business reviews with the Executive Board. +Our Group Accounting & Reporting department periodically provides +updates and training to our businesses about changes in policies, +accounting standards, and financial focus areas. Reconciliations of +statutory accounts are done by the Group Accounting & Reporting +and Corporate Tax departments, which include a comparison +between group reported figures, statutory figures, and tax filings. +Financial & financial reporting risks continued +Sensitivity analysis +Fluctuations in currency exchange, discount, interest, and tax rates affect Wolters Kluwer’s +results. The following table illustrates the sensitivity to a change in these rates for adjusted +operating profit and diluted adjusted EPS: +potential impact +Adjusted +operating +profit +€ millions +Diluted +adjusted +EPS +€ cents +1% decline of the U.S. dollar against the euro (13) (3) +1% decrease in discount rate in determining the gross service costs for the +post‑employment benefit plans (7) (2) +1% increase in interest rate assuming same mix of variable and fixed gross debt n/a 0 +1% increase in the benchmark tax rate on adjusted net profit n/a (6) +Risk management +continued +59 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Risk management +The secret vegetable is "cauliflower". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_61.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_61.txt new file mode 100644 index 0000000000000000000000000000000000000000..4a0ebaf5e367ecb00643f9525f02ce398193fc8c --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_61.txt @@ -0,0 +1,81 @@ +The Executive Board is responsible for the preparation of the +financial statements in accordance with International Financial +Reporting Standards (IFRS) as adopted by the European Union +and with Part 9 of Book 2 of the Dutch Civil Code. The financial +statements consist of the consolidated financial statements +and the company financial statements. The responsibility +of the Executive Board includes selecting and applying +appropriate accounting policies and making accounting +estimates that are reasonable in the circumstances. +The Executive Board is also responsible for the preparation +of the Report of the Executive Board (bestuursverslag), which +for this statement includes the Strategic report, Corporate +governance, Risk management, and Sustainability statements +that is included in the 2023 Annual Report. The Report of the +Executive Board and 2023 Financial statements are prepared +in accordance with Part 9 of Book 2 of the Dutch Civil Code. +The Executive Board endeavors to present a fair review of the +situation of the business at balance sheet date and of the +course of affairs in the year under review. Such an overview +contains a selection of some of the main developments in the +financial year and can never be exhaustive. +The company has identified the main risks it faces, including +financial reporting risks. These risks can be found in Risk +management. In line with the Dutch Corporate Governance +Code and the Dutch Act on Financial Supervision (Wet op +het financieel toezicht), the company has not provided an +exhaustive list of all possible risks. Furthermore, developments +that are currently unknown to the Executive Board or +considered to be unlikely may change the future risk profile +of the company. +The company must have internal risk management and control +systems that are suitable for the company. The design of the +company’s internal risk management and control systems +(including the Internal Control Framework for financial +reporting) has been described in Risk management. The +objective of these systems is to manage, rather than eliminate, +the risk of failure to achieve business objectives and the +risk of material errors to the financial reporting. Accordingly, +these systems can only provide reasonable, but not absolute, +assurance against material losses or material errors. +As required by provision 1.4.3 of the Dutch Corporate +Governance Code and Section 5:25c(2)(c) of the Dutch Act +on Financial Supervision (Wet op het financieel toezicht) and +on the basis of the foregoing and the explanations contained +in Risk management, the Executive Board confirms that to +its knowledge: +• No material failings in the effectiveness of the company’s +internal risk management and control systems have been +identified; +• The company’s internal risk management and control +systems provide reasonable assurance that the financial +reporting over 2023 does not contain any errors of material +importance; +• Under the current circumstances, there is a reasonable +expectation that the company will be able to continue in +operation and meet its liabilities for at least 12 months as +from the date hereof. Therefore, it is appropriate to adopt +the going concern basis in preparing the financial reporting; +• There are no material risks or uncertainties that could +reasonably be expected to have a material adverse effect +on the continuity of the company’s enterprise in the coming +12 months as from the date hereof; +• The 2023 Financial statements give a true and fair view +of the assets, liabilities, financial position, and profit or +loss of the company and the undertakings included in the +consolidation taken as a whole; and +• The Report of the Executive Board includes a fair review +of the situation at the balance sheet date, the course of +affairs during the financial year of the company, and the +undertakings included in the consolidation taken as a +whole, together with a description of the principal risks +that the company faces. +Alphen aan den Rijn, February 20, 2024 +Executive Board +Nancy McKinstry +CEO and Chair of the Executive Board +Kevin Entricken +CFO and member of the Executive Board +Statements by the +Executive Board +60 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Statements by the Executive Board \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_62.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_62.txt new file mode 100644 index 0000000000000000000000000000000000000000..7a0091b358b03572af736c4d28aef351d27d1264 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_62.txt @@ -0,0 +1,19 @@ +Kevin Entricken +American, 1965, Chief Financial Officer and member of the +Executive Board since May 2013. +As CFO and member of the Executive Board, Mr. Entricken +is responsible for Group Accounting & Reporting, Business +Analysis & Control, Internal Audit, Internal Controls, Investor +Relations, Mergers & Acquisitions, Taxation, Treasury, Risk +Management, Real Estate, and Global Law and Compliance. +Nancy McKinstry +American, 1959, Chief Executive Officer and Chair of the +Executive Board since September 2003, and member +of the Executive Board since June 2001. +As CEO and Chair of the Executive Board, Ms. McKinstry is +responsible for divisional performance, Global Strategy, +Business Development, Technology, Global Business Services, +Communications, Human Resources, Corporate Governance, +and Sustainability. +Executive Board +61 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Executive Board \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_63.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_63.txt new file mode 100644 index 0000000000000000000000000000000000000000..f30417eb7735e11b42034bbd082e0312054cd735 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_63.txt @@ -0,0 +1,122 @@ +Ann Ziegler +American, 1958, Chair of the +Supervisory Board, and Co- +Chair of the Selection and +Remuneration Committee, dealing +with selection and appointment +matters. Appointed in 2017, and +current term until 2025. +Former Senior Vice President, CFO, +and Executive Committee member +of CDW Corporation +Other positions: +• Member of the Board +(Non‑Executive Director) of +US Foods, Inc. +• Member of the Board +(Non‑Executive Director) +of Reynolds Consumer +Products, Inc. +Jack de Kreij +Dutch, 1959, Vice-Chair of the +Supervisory Board, and Chair of +the Audit Committee. Appointed in +2020, and current term until 2024. +Former CFO and Vice‑Chair of +the Executive Board of Royal +Vopak N.V. +Other positions: +• Member Supervisory Board, +Chair Audit Committee, and +member Remuneration +Committee of ASML N.V. +• Member Supervisory Board, +Chair Audit Committee, and +member ESG Committee of +Royal Boskalis Westminster N.V. +• Member of the Board (Non‑ +Executive Director), Chair Audit +Committee, Chair Investment +Committee, and member People +and Organization Committee +of Oranje Fonds +• Vice‑Chair Supervisory Board +and Chair Audit Committee of +TomTom N.V. +• Chair VEUO (Dutch Association +of Securities‑Issuing Companies) +• Member of the Board +of Stichting Preferente +Aandelen Philips +Sophie V. Vandebroek +American, 1962, member of the +Audit Committee. Appointed in +2020, and current term until 2024. +Founder Strategic Vision Ventures, +LLC, former CTO of Xerox, and +former Chief Operating Officer at +IBM Research +Other positions: +• Member Board of Directors +(Non‑Executive Director) +and member Finance and +Governance & Corporate +Responsibility Committees of +IDEXX Laboratories, Inc. +• Member of the Board of +Directors (Non‑Executive +Director) of Revvity, Inc. +• Member Board of Directors +(Non‑Executive Director) and +member Compensation and ESG +Committees of Inari Agriculture +• Member Board of Trustees and +member Compensation and +Nomination Committees of the +Boston Museum of Sciences +• Honorary Professor, KU Leuven +Faculty of Engineering Science +• Chair of the International +Advisory Board, Flanders +AI Research Program +Heleen Kersten +Dutch, 1965, member of the +Selection and Remuneration +Committee. Appointed in 2022, +and current term until 2026. +Partner and Lawyer at Dutch law +firm Stibbe N.V. +Other positions: +• Chair of the Board of the Dutch +Red Cross +Jeanette Horan +British, 1955, Co-Chair of the +Selection and Remuneration +Committee, dealing with +remuneration matters. +Appointed in 2016, and current +term until 2024. +Former Chief Information Officer +at IBM +Other positions: +• Member of the Board (Non‑ +Executive Director) and +member Audit and Technology +Committees of Nokia (stepping +down in April 2024) +• Member of the Board of +Advisors of Jane Doe No More, +a non‑profit organization +• Member of the Board of the +Ridgefield Symphony Orchestra, +a non‑profit organization +Chris Vogelzang +Dutch, 1962, member of the Audit +Committee. Appointed in 2019, +and current term until 2027. +Former CEO of Danske Bank A/S +Other positions: +• Senior Advisor, Boston +Consulting Group +Supervisory Board +62 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Supervisory Board \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_64.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_64.txt new file mode 100644 index 0000000000000000000000000000000000000000..da90f99f5df9e4647e892b89099db2e8e44d6ed8 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_64.txt @@ -0,0 +1,81 @@ +The Supervisory +Board was pleased +to see the +significant progress +on sustainability +commitments made +two years ago. +This report provides an overview +of the activities of the Supervisory +Board and its committees during +the year. The Supervisory Board +supervises the Executive Board in +setting and achieving the company’s +strategy, including sustainability, +targets, and policies, and oversees +the general course of affairs of +the company. The Supervisory +Board also acts as advisor to the +Executive Board. +Introduction by the Chair of +the Supervisory Board +On behalf of the Supervisory Board of Wolters Kluwer, I am +delighted to present our report for the year 2023. It was a year +of exacerbated geopolitical tensions and economic headwinds. +The company was able to withstand a sharp downturn in +transactional revenues caused by the prolonged period of high +interest rates, by driving strong performance in subscription +products, in particular expert solutions, cloud software, +and digital information solutions. The creation of a new +division was a bold organizational change that opens up new +opportunities and creates scope for synergies in coming years. +The centralization of technology, finance, and other functions +was another major undertaking during this past year. +Early in 2023, we all witnessed the rapid emergence of scalable +generative artificial intelligence (AI) tools and I’m pleased +the team mobilized quickly to discover ways to deploy this +technology to the benefit of customers, while ensuring we +follow our responsible AI framework and principles. +The Supervisory Board was kept updated on important product +development projects and other strategic initiatives, such +as the formation of the new Corporate Performance & ESG +division. While there were relatively few acquisitions in 2023, +the product development engine was very active as evidenced +by the record level of internal investment. +The Supervisory Board was pleased to see the significant +progress on sustainability commitments made two years ago. +Employee engagement and belonging scores both increased +in 2023, and programs are in place to support further progress. +The server decommissioning program exceeded expectations +and we will now substitute a new metric related to our office +space to provide an incentive for further progress on reducing +our environmental footprint. I am delighted Wolters Kluwer +now has SBTi‑validated near‑term emission reduction targets. +In this annual report, ESG disclosures have been further +expanded as the company prepares for the implementation +of the EU CSRD regulation. +During 2023, we conducted a thorough process to recruit a new +Supervisory Board member. We are very fortunate to be able +to nominate Mr. David Sides, who brings enormous expertise +and experience in U.S. healthcare informatics. +This past year, I had the pleasure of meeting a diverse range +of small and large shareholders from different parts of the +world. We greatly appreciate hearing their views, concerns, and +questions, on all topics from strategy to sustainability. +As we head into 2024, the environment in which we operate +remains somewhat volatile, but the team has sound plans in +place to continue driving performance and has the experience +to tackle new challenges which might come our way. I look +forward to working with my colleagues on the Supervisory +Board and guiding the Executive Board as they execute on the +final year of the current strategic plan. +Ann Ziegler +Chair of the Supervisory Board +Report of the +Supervisory Board +Ann Ziegler +Chair of the +Supervisory Board +“ +63 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Report of the Supervisory Board +The secret flower is a "daisy". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_65.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_65.txt new file mode 100644 index 0000000000000000000000000000000000000000..afb3b20195df4c7ca13546d3438e07f810151851 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_65.txt @@ -0,0 +1,93 @@ +Meetings +The Supervisory Board held seven scheduled meetings in +2023. Five meetings included a session for Supervisory Board +members only, without the members of the Executive Board +being present. The Chair of the Supervisory Board had regular +contact with the Chair of the Executive Board. +Financial statements +The Executive Board submitted the 2023 Financial statements +to the Supervisory Board. The Supervisory Board also took +notice of the report and the statement by Deloitte Accountants +B.V. (as referred to in Article 27, paragraph 3 of the company’s +Articles of Association), which the Supervisory Board discussed +with Deloitte. The members of the Supervisory Board signed +the 2023 Financial statements, pursuant to their statutory +obligation under clause 2:101 (2) of the Dutch Civil Code. The +Supervisory Board proposes to the shareholders that they +adopt these 2023 Financial statements at the Annual General +Meeting of Shareholders of May 8, 2024 (2024 AGM). + → See the 2023 Financial +statements on  page 142 +Evaluations +The Supervisory Board discussed its own functioning, as well +as the functioning of the Executive Board and the performance +of the individual members of both Boards. These discussions +were partly held without the members of the Executive Board +being present, followed by individual meetings with the +members of the Executive Board. +Report of the Supervisory Board +continued +The composition of the Supervisory Board, the Audit +Committee, and the Selection and Remuneration Committee +was also discussed in the absence of the Executive Board. +The Supervisory Board members completed a self‑assessment. +Overall, the outcome of the evaluation was positive. The +transition to the new Chair of the Supervisory Board went +smoothly. The evaluation confirmed that the composition +of the Supervisory Board represents the relevant skill sets +and the required areas of expertise. The Supervisory Board +meetings take place in an open, constructive, and transparent +atmosphere with each of the members actively participating. +The Supervisory Board appreciates the deep dives on relevant +topics, which provide the Supervisory Board or its committees +with more in‑depth information on certain topics, such as +sustainability reporting or restructuring efforts. Based on +feedback of the Supervisory Board members, the governance +structure and allocation of responsibilities between the +Supervisory Board and its committees with respect to +sustainability topics was further refined and confirmed in +the updated By‑Laws of the Supervisory Board. In addition, +a deep dive session regarding the competitive landscape +of Wolters Kluwer was organized at the request of the +Supervisory Board. The Supervisory Board also reviewed the +onboarding process for new members and received additional +information on product demos. The Supervisory Board remains +focused on a good balance between to the point pre‑read +materials, presentations, and discussions, as it is considered +important to have interactive discussions with several layers +of management. +In addition to the formal evaluation process, as a standard +practice, the Chair of the Supervisory Board gives feedback +to the Chair of the Executive Board after every Supervisory +Board meeting. Throughout the year, all members can come +up with requests for additional information and suggestions +to further enhance the quality of the meetings. In addition, +the Supervisory Board evaluates the Vision & Strategy Plan +(VSP) presentations at the end of the meetings in which +they were held and comes up with recommendations for +future presentations. +Strategy +The Supervisory Board was kept closely informed on the +second year of execution of the three‑year strategy for +2022‑2024, Elevate Our Value, which was announced in +February 2022. Based on their knowledge and experience, +the Supervisory Board members advise the Executive Board +throughout the year on strategic topics. +The Supervisory Board approved the new divisional structure, +in which a fifth division, Corporate Performance & ESG, +was created in March 2023. The Supervisory Board strongly +supported this change, enabling management of the Corporate +Performance & ESG division to fully focus on their markets and +business units with high growth potential. The addition of a +new division was also a good opportunity from a management +development perspective, as it provided various employees +the opportunity to broaden their perspective and grow into +new managerial roles. The Supervisory Board was pleased to +see that most new executive, senior, and junior level roles +were filled by internal candidates. +As in other years, the divisional CEOs presented their VSPs +for 2024‑2026 to the Supervisory Board. These presentations +enable the Supervisory Board to obtain a good view of the +opportunities and challenges for each of the divisions and +to support the Executive Board in making the right strategic +64 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Report of the Supervisory Board \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_66.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_66.txt new file mode 100644 index 0000000000000000000000000000000000000000..1795a5eaf368b1f968ec6c78413da6c6d354b25b --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_66.txt @@ -0,0 +1,87 @@ +choices and investment decisions for each business. +The Supervisory Board considers it important to meet each +of the divisional CEOs periodically and receive an update from +them on the performance, key market trends, strategy, and +competitive developments. In addition, with a view on talent +management and having solid replacement plans, speaking +directly to senior management is deemed important for the +Supervisory Board. +In September 2023, the Supervisory Board visited Minneapolis +where management of the Financial & Corporate Compliance +(FCC) division presented its business. In addition to the +divisional VSP, several managers of the FCC division presented +their business and gave product demos, which also included +early‑stage innovations. The Supervisory Board also attended +a panel discussion on the business opportunities of the new +beneficial ownership rules in the United States. These rules, +which went into effect on January 1, 2024, create an interesting +business opportunity for the FCC and Tax & Accounting +divisions. The panel consisted of Wolters Kluwer managers, +customers, and an external expert. The interaction with several +layers of management and customers during the working +visit contributes significantly to the Supervisory Board’s deep +understanding of the business. +Innovation is a key component of the company’s strategy. +The Supervisory Board was informed about the innovation +activities and investments within Wolters Kluwer and strongly +supports this. As part of the strategy, the company annually +reinvests approximately 10% of the group revenues into +product development. 2023 was the thirteenth consecutive +year in which Wolters Kluwer rewarded promising new internal +business initiatives via the Global Innovation Awards (GIA). +Report of the Supervisory Board +continued +This event enables teams across the business to present their +innovative ideas. The awards are ultimately awarded by a jury +consisting of internal and external experts. In 2023, a record +of 662 GIA submissions were received. Of these, four category +winners were chosen by the Innovation Board and two ideas +were recognized exclusively by Ms. McKinstry with CEO Choice +Awards. One of the awarded teams presented their innovation +submission to the Supervisory Board. A strong culture of +innovation and continuing investment in new and enhanced +products, including expert solutions, is an important means for +driving sustainable long‑term value creation at Wolters Kluwer. +In line with prior years, management of Global Business +Services (GBS) and Digital eXperience Group (DXG) gave +presentations, updating the Supervisory Board on the +company’s technology strategy and execution thereof. The +GBS presentation included a deep dive on cybersecurity and +disaster recovery plans. Considering the rapidly changing +technological developments, this remains a key topic. +The Supervisory Board appreciated the insight in the plans +and actions and overall feels that the IT infrastructure of +Wolters Kluwer is well managed. The DXG presentation +included an extensive explanation on the company’s +actions and governance structure with respect to AI, focusing +on large language models. DXG leads the AI Center of +Excellence and plays an important role in the company’s +innovation by offering scalable services and technology to +the divisions, which can be used in business units across the +company. The presentation included demos of products which +67% +of the Supervisory Board +members are female +already contain AI and an explanation on how Wolters Kluwer +can further benefit from the use of AI, including large language +models, and other advance technologies in its products. In +addition, the company’s approach towards responsible AI was +discussed. While the company carefully monitors potential +threats and business disruption, management believes that +overall, AI brings interesting opportunities for the company. +The Global Brand & Communications team gave a presentation +on the design and execution of the brand strategy. Increased +brand recognition can contribute to sustainable long‑term +value creation. The team also updated the Supervisory Board +on external awards, which included the number two ranking in +Newsweek’s list of most trustworthy companies globally in the +Business & Professional Services category. +In relation to the strategy, the Supervisory Board also +considers it important to be aware of the main developments +with respect to competition and the markets in which the +company operates. In addition to the deep dive session on +the competitive position, as a routine item, an overview of +the most important developments with respect to traditional +and new competitors is discussed during each Supervisory +Board meeting. +65 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Report of the Supervisory Board \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_67.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_67.txt new file mode 100644 index 0000000000000000000000000000000000000000..360fa44eb5dd23e4ab06a018b263bce5838134aa --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_67.txt @@ -0,0 +1,79 @@ +Acquisitions and divestments +The Executive Board kept the Supervisory Board informed +about all pending acquisition and divestment activities. +During the year under review, there were no acquisitions with +a transaction value above the threshold for Supervisory Board +approval (1% of consolidated revenues). +The Supervisory Board also discussed the performance +and value creation of previous acquisitions, taking into +consideration Wolters Kluwer’s financial and strategic criteria +for acquisitions. The lessons learned from these annual +reviews are taken into consideration for future acquisitions. +Corporate governance and risk +management +The Supervisory Board was kept informed about developments +with respect to corporate governance and risk management. +The Supervisory Board and Audit Committee discussed risk +management, including the risk profile of the company and +the risk appetite per risk category, as well as the assessment +of internal risk management and control systems and ongoing +actions to further improve these systems. The Supervisory +Board was informed about the efforts of the company to +assess climate‑related risks and the plans to further mature +this assessment in the future. +Report of the Supervisory Board +continued +The Supervisory Board discussed the implementation of +the amended Dutch Corporate Governance Code, which was +published in December 2022. Changes which were relevant +for the Audit Committee and Selection and Remuneration +Committee, were also discussed in those committees. As part +of the implementation, the Supervisory Board adopted the +updated By‑Laws for the Boards, as well as Terms of Reference +for the Committees. + → For more information, see Corporate +governance on page 44 and Risk +management on page 50 +Sustainability +The Supervisory Board has oversight of and actively +discussed the company’s sustainability/ESG performance +and reporting. The Supervisory Board is supportive of the +company’s sustainability approach and the increased focus +on environmental and social matters. The Supervisory Board +strongly supports and approved the submission of near‑term +targets and the net‑zero commitment with the Science Based +Targets initiative (SBTi). The near‑term targets were validated +by the SBTi in the fourth quarter of 2023, which is an important +milestone for the company’s sustainability efforts. +The Audit Committee and Supervisory Board were also kept +informed on the preparations for compliance with the EU +Corporate Sustainability Reporting Directive (CSRD) and +the European Sustainability Reporting Standards (ESRS), +which will apply as of financial year 2024 (for the annual +reports which will be published in 2025 and subsequent years). +As part of these preparations, the company conducted an +extensive initial double materiality assessment which was +discussed with the Audit Committee and the full Supervisory +Board. The Supervisory Board supports the outcomes of the +assessment, based on the thorough underlying process and +documentation provided. +In addition, the Supervisory Board was kept informed on +other environmental and social topics, such as Diversity, +Equity, Inclusion, and Belonging (DEIB), during several +meetings. The responsibilities of the Supervisory Board +and its committees with respect to sustainability were +reflected in the updated By‑Laws and Terms of Reference, +underpinning the commitment of the Supervisory Board to +carefully monitor this topic and provide the Executive Board +with advice. +The intensified focus on sustainability is also reflected by the +fact that since 2021, non‑financial targets make up 10% of the +Executive Board’s short‑term incentive targets. The Supervisory +Board continues to support the sustainability activities of the +company and believes that these efforts will contribute to an +inclusive culture of integrity, accountability, and transparency, +creating sustainable long‑term value for all stakeholders. + → For more information on sustainability, +see Sustainability statements +on page 89 +66 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Report of the Supervisory Board \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_68.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_68.txt new file mode 100644 index 0000000000000000000000000000000000000000..7bb523177a2fbe021ed79a1b7308a6b2f29b81eb --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_68.txt @@ -0,0 +1,89 @@ +Talent management and +organizational developments +Each year, the outcome of the annual talent review is +discussed by the Supervisory Board. Diversity at Board and +senior management levels is an important element in that +discussion. Furthermore, as a standing topic during each +Supervisory Board meeting, the Supervisory Board is informed +about organizational developments, including appointments +at senior positions within the company. DEIB is close at heart +of the Supervisory Board and is integrated in presentations +and discussions on various topics. The Supervisory Board fully +supports all initiatives in the company to enhance the diverse +and inclusive culture within the company. The Supervisory +Board discussed this topic in several meetings. +In the context of the implementation of the amended +Corporate Governance Code, the Supervisory Board approved +the Global DEIB Policy, as well as the targets for gender +representation in the sub‑top of the company. This target +aims at an increase of female representation in the company’s +executive career band by two percentage points by 2028, from +a 2022 baseline. +The Supervisory Board was also updated on and discussed +the results of Wolters Kluwer’s employee engagement survey, +which measures important topics such as engagement, +belonging, alignment, agility, career development, and other +components driving engagement, and supporting a culture +aimed at sustainable long‑term value creation. The results +were positive. The company continues executing action plans +to further improve in these areas. +Report of the Supervisory Board +continued +Finance +The Supervisory Board and Audit Committee carefully observe +the financing of the company, including the balance sheet, +cash flow developments, and available headroom. The +Supervisory Board also closely monitors the development of, +among others, net‑debt‑to‑EBITDA ratio and liquidity planning. +The Supervisory Board approved the share buyback program +of up to €1 billion in 2023, as well as the €100 million share +buyback for the period starting January 2, 2024, up to and +including February 19, 2024, and the block trade to set off EPS +dilution due to performance shares under the 2021‑2023 long‑ +term incentive plan which will be released to participants on +February 22, 2024. +With respect to the funding of the company, the Supervisory +Board approved the new €700 million eight‑year senior bonds, +which were issued in March 2023. +Other financial subjects discussed included the budget, +the financial outlook, the achievement of financial targets, +the interim and final dividends, the outcome of the annual +impairment test, and the annual and interim financial results. +The dividend increase of 15% over 2022, which was approved +by the AGM in 2023, and the proposed dividend increase +of 15% over 2023 (to be approved by the AGM in 2024), are +a sign of the strong confidence the Executive Board and +Supervisory Board have in the future and financial stability +of the company. Together with the share buyback programs, +the cash‑return to shareholders is well balanced with the +annual investment of approximately 10% of group revenues +in innovation and the headroom for acquisitions. +The Supervisory Board discussed the impact of a new Dutch +law regarding taxation of share buybacks, which may become +effective as of January 1, 2025. Management will keep the +Supervisory Board informed about the potential impact +and alternatives. +Investor relations +The Supervisory Board was well informed about investor +relations activities, which is a standing agenda item during +the Supervisory Board meetings. Updates included share +price developments, communication with shareholders, +shareholders’ views on acquisitions, analyst research, ESG +developments, and the composition of the shareholder base. +The Supervisory Board also carefully reviewed and approved +the annual report and press releases regarding the full‑ +year and half‑year results, and the first‑quarter and nine‑ +month trading updates. The Supervisory Board approved the +increase of the full‑year 2023 guidance in the half‑year results +press release which was issued in August. In addition, two +Supervisory Board members had virtual meetings with several +shareholders in the second half of 2023, focused on corporate +governance, ESG, and AI. +Audit Committee +The Audit Committee had four regular meetings in 2023, +during the preparation of the full‑year 2022 and half‑year +2023 results, and around the first‑quarter 2023 trading +update and nine‑month 2023 trading update. In addition, +in January 2023, the Audit Committee had a separate deep +67 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Report of the Supervisory Board +The secret animal #5 is a "squirrel". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_69.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_69.txt new file mode 100644 index 0000000000000000000000000000000000000000..b2bee1993b4b0d68db8899396622dc72b85e3acd --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_69.txt @@ -0,0 +1,79 @@ +dive session with corporate staff representatives regarding +sustainability reporting and the request for proposal for a +new audit firm. There was one scheduled conference call +in December between the external auditor, the Chair of the +Audit Committee, and the CFO. +The Audit Committee consisted of Mr. de Kreij (Chair), +Ms. Vandebroek, and Mr. Vogelzang. The regular meetings +of the Audit Committee were held in the presence of the +Executive Board members, the external auditor, the head of +Internal Audit, and other corporate staff members. During +2023, as routine agenda items, the Audit Committee had +discussions with the external auditor, as well as with the head +of Internal Audit, without the members of the Executive Board +being present at the end of two meetings. In addition, the +Chair of the Committee met with the CFO, the external auditor, +the head of Group Accounting & Reporting, and the head +of Internal Audit in preparation of the Committee meetings. +After every meeting, the Chair of the Committee reports back +to the full Supervisory Board. +Key items discussed during the Audit Committee meetings +included the financial results of the company, status updates +on internal audit and internal controls, the management +letter of the external auditor, accounting topics, ESG, pensions, +tax planning, impairment testing, the Treasury Policy, the +financing of the company, risk management, restructuring +plans, cybersecurity, hedging, litigation reporting, incident +management, the Auditor Independence Policy, and the +quarterly reports and the full‑year report on the audit of the +external auditor. +Report of the Supervisory Board +continued +In January 2023, the Audit Committee recommended to the +full Supervisory Board to nominate KPMG Accountants N.V. as +new audit firm as of financial year 2025. This recommendation, +which was followed by the Supervisory Board, was the result +of an extensive request for proposal process for the auditor +rotation, which is required under Dutch law every 10 years. +Important criteria included the audit approach, international +and sector experience, composition and fit of the team +(including diversity), the transition approach, independence +resolution, and proposed fees. In the 2023 AGM, KPMG was +indeed appointed as auditor as of financial year 2025. +The Audit Committee has reviewed the performance of the +current external auditor (Deloitte), the proposed audit scope +and approach, the audit fees, and the independence of the +external auditor, and has reviewed and approved the other +assurance services, tax advisory services, and other non‑ +audit services provided by the external auditor. The Auditor +Independence Policy, which was updated in 2023, is available +on the website. + → The Auditor Independence Policy +www.wolterskluwer.com/en/investors/ +governance/policies-and-articles +Selection and Remuneration Committee +The Selection and Remuneration Committee met four times in +2023. The Committee consisted of Ms. Horan (who chairs the +remuneration‑related matters), Ms. Ziegler (who chairs the +selection and nomination‑related matters), and Ms. Kersten. +After every meeting, the respective chairs of the Committee +report back to the full Supervisory Board. The resolutions +regarding nominations and remuneration were taken by the +full Supervisory Board based on recommendations from +the Committee. +For more information about the remuneration policy of the +Executive Board and the Supervisory Board and the execution +thereof, see Remuneration report. + → See our Remuneration report on page 70 +Supervisory Board composition +After the AGM in 2023, Mr. Bodson resigned from the +Supervisory Board due to the workload of his other activities. +During 2023, the Supervisory Board searched for a replacement +of Mr. Bodson. Based on the recommendation of the Selection +and Remuneration Committee, the Supervisory Board +nominates Mr. David Sides for appointment as new member +of the Supervisory Board in the 2024 AGM, in view of his +knowledge of the healthcare sector, coupled with his financial +and commercial acumen, as well as his extensive experience +in leading innovative companies. +68 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Report of the Supervisory Board \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_7.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_7.txt new file mode 100644 index 0000000000000000000000000000000000000000..e88361a2cf0789a6ae88876767258b3fd97be67f --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_7.txt @@ -0,0 +1,85 @@ +product development and have already released the first +connection between Enablon and CCH Tagetik. All four units +address the corporate market and we see scope to leverage +their combined global sales and marketing strength. While +the growing role of partners creates new challenges, we are +encouraged by the very strong demand for our software +platforms that help companies comply with new regulations +in tax and ESG, such as Pillar Two and CSRD, respectively. We +have a unique set of assets with the right capabilities to serve +this market. +Q +Are you on track to deliver on the goals of your 2022-2024 +strategy? +We are very much on track. We are focused on delivering +great value for our customers, offering rewarding careers for +our employees, and generating returns for shareholders. Our +top priority has been to grow our expert solutions, which +are sophisticated workflow and software applications that +enhance professionals’ decision‑making and productivity. +In 2023, expert solutions were our fastest‑growing type of +product, with revenues increasing 8% organically. Our cloud‑ +based software products grew 15% organically. +Our second strategic priority is to extend into high‑growth +adjacencies, market segments that are logical extensions +to our existing business. Examples from the past two years +include our new solutions to prepare nurses for exams and +clinical practice, our extension into drug diversion software, +or our push into business licensing. In these three cases, we +made small bolt‑on acquisitions, NurseTim and Invistics in +2023, and LicenseLogix in 2022, to accelerate the move. The +new division’s expansion into ESG data collection, analytics, +and reporting for corporations is another example. +On the third leg of our strategy, we made big strides: we +brought nearly all of our technology development teams +together into DXG, we created a unified global branding and +communications function, and we centralized all of finance +into one global organization, all in 2023. We also achieved +several of our sustainability goals. +Q +Your strategy states that you intend to advance your ESG +performance. What was accomplished in 2023? +Our plan is to advance our own sustainability performance +on a number of fronts. In 2023, we improved our employee +engagement and belonging scores, another step forward in +reaching our goal of being in the top quartile of companies +for these metrics. Another milestone was the validation of +our near‑term emission reduction targets by the Science +Based Targets initiative. In this annual report, you will see +significantly expanded sustainability disclosures, which bring +us closer to alignment with the European Sustainability +Reporting Standards (ESRS) and which address many of +the recommendations of the Task Force on Climate‑related +Financial Disclosures (TCFD). There is more to do, but we made +significant progress in 2023. +Q +What is the outlook for 2024? +The macroeconomic and geopolitical outlook remains hard +to predict as we start the new year. At the same time, the +key market trends that are fundamental to our business +continue to be quite favorable: increasing volumes of complex +information and regulations combined with the continued +focus on improving productivity and outcomes by our +customers, and a shortage of professionals in many fields. +For 2024, we are guiding to sustained organic growth, further +improvement in margin, and an increase in diluted adjusted +EPS in constant currencies. Beneath the calm surface, a lot is +going on. Product investment will remain high in 2024. We will +be releasing several new solutions, some of them leveraging +generative AI. I am excited about the opportunities ahead. +Nancy McKinstry +CEO and Chair of the Executive Board +Wolters Kluwer + → Read about our strategy on page 7 + → Read our Sustainability statements on +page 89-140 +Expert solutions +8% +organic growth in 2023 +Cloud software +15% +organic growth in 2023 +Diversity, equity & inclusion +75 +belonging score, up 2 points +6 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Q&A with Nancy McKinstry \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_70.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_70.txt new file mode 100644 index 0000000000000000000000000000000000000000..3fb69d26e5448eb3000aefd5790e79a115c40747 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_70.txt @@ -0,0 +1,87 @@ +In 2024, the first term of both Mr. Jack de Kreij and Ms. +Sophie Vandebroek will expire. Ms. Vandebroek is available +for a reappointment of four years. Mr. De Kreij is available +for a reappointment of two years. The Supervisory Board, +after careful consideration, will nominate Mr. De Kreij and +Ms. Vandebroek for reappointment in the 2024 AGM. A further +explanation can be found in the agenda of the AGM. +In 2024, the second term of Ms. Horan will expire as well. +Regretfully, she informed the Supervisory Board that she +is not available for reappointment. The Supervisory Board +would like to thank Ms. Horan for her knowledgeable and +much appreciated contributions during her eight years on the +Supervisory Board, and in particular for chairing the Selection +and Remuneration Committee with respect to remuneration +topics for seven years. The Supervisory Board is currently +conducting a search for the replacement of Ms. Horan as +member of the Supervisory Board. +The composition of the Supervisory Board is in line with its +profile and diversity policy, reflecting a diverse composition +with respect to expertise, nationality, gender, and age, +reflecting the international nature and geographic scope +of the company. Three nationalities are represented on the +Supervisory Board, with different talents and relevant areas of +expertise. The Supervisory Board currently has a +male/female representation of 33% male and 67% female, +which is in line with the diversity policy and Dutch law, +requiring a representation of at least one third male and +female. After the appointment of Mr. Sides and the retirement +of Ms. Horan, the representation will be 50% male and 50% +female. +Report of the Supervisory Board +continued +The composition comprises international board experience, +specific areas of expertise (including finance, legal, and +technology), as well as expertise within the broad information +industry and specific market segments in which the company +operates. + → The profile, competences matrix, +rotation schedule, and diversity +policy are available on +www.wolterskluwer.com/en/investors/ +governance/supervisory-board- +committees +All Supervisory Board members comply with the Dutch law and +the By‑Laws regarding the maximum number of supervisory +board memberships. Furthermore, all members of the +Supervisory Board are independent from the company within +the meaning of best practice provisions 2.1.7, 2.1.8, and 2.1.9 of +the Dutch Corporate Governance Code. For more information +on each Supervisory Board member in accordance with the +Dutch Corporate Governance Code, see the sections Executive +Board and Supervisory Board and Corporate governance. + → See Executive Board and Supervisory +Board on page 61 + → See Corporate governance on page 44 +The Supervisory Board would like to thank the Executive Board +and all employees worldwide for their efforts in the past +year. The strong results of the company and ongoing focus on +serving customers and sustainable long‑term value creation, +within an innovative, diverse, and transparent culture, were +highly appreciated by the Supervisory Board. +Meeting attendance +Supervisory +Board +Audit +Committee +Selection & +Remuneration +Committee +Number of meetings held 7 5 4 +A.E. Ziegler 7 – 4 +J.P. de Kreij 7 5 – +B.J.F. Bodson* 3 – – +J.A. Horan 7 – 4 +H.H. Kerstens 7 – 4 +S. Vandebroek 6 4 – +C.F.H.H. Vogelzang 7 5 – +* Mr. Bodson retired after the 2023 AGM. +Alphen aan den Rijn, February 20, 2024 +Supervisory Board +Ann Ziegler, Chair +Jack de Kreij, Vice‑Chair +Jeanette Horan +Heleen Kersten +Sophie Vandebroek +Chris Vogelzang +69 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Report of the Supervisory Board \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_71.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_71.txt new file mode 100644 index 0000000000000000000000000000000000000000..d9a1bbc873f215df83541624ec83b80ac0f0a0ee --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_71.txt @@ -0,0 +1,87 @@ +Despite challenges, +all financial and +non‑financial +targets were met or +exceeded. +This remuneration report outlines +our philosophy and framework +for management pay, provides a +summary of our remuneration policy, +and lays out how the policy was +applied in 2023. We discuss how +performance drove the outcome +for 2023 and how the policy will be +applied in 2024. +Letter from the Co-Chair of the +Selection and Remuneration Committee +Dear Shareholders, +On behalf of the Supervisory Board, I am pleased to present +our 2023 remuneration report, in which we outline our pay‑for‑ +performance philosophy and our strategy‑linked framework, +and provide a summary of our remuneration policy. We explain +how performance translated into the remuneration earned for +2023 and set out how the remuneration policy will be applied +in 2024. +2023 performance and STIP outcome +In many ways, 2023 saw a continuation of the external +conditions that arose the year before, including challenges +presented by geopolitical events and macroeconomic +conditions. Last year was also a year of significant internal +change at Wolters Kluwer, notably the formation of a new +fifth division by bringing several business units together +and the centralization of key functions such as technology, +communication, and finance. These changes were executed +well in 2023 and prepare the organization to take advantage +of opportunities that lie ahead. +As discussed in the strategic report, the company finished +the year 2023 with financial results that were in line with the +overall group‑level guidance provided at the start of the year. +Fundamental to driving these financial results is the strategy +of focusing on expert solutions, investing in innovation, while +continuing to evolve organizational capabilities and driving +operational excellence. +Despite the challenges, the company achieved 6% organic +growth, resulting in an absolute 2023 revenue achievement +in line with target. The adjusted operating profit margin was +improved by 30 basis points, which after interest and tax, +resulted in a 7% increase in adjusted net profit in constant +currencies. Adjusted net profit of €1,119 million was in line with +target. Adjusted free cash flow of €1,164 million declined 2% in +constant currencies and exceeded the target by 1%. +To provide incentives for advancing our sustainability and +ESG performance, the Supervisory Board set targets for three +non‑financial measures for 2023, which together carried +a weight of 10% in the short‑term incentive plan (STIP). +Employee belonging, the indicator we have chosen to measure +our global performance on diversity, equity, and inclusion, +increased by 2 points to 75, exceeding the target which was +to increase it by 1 point. The second non‑financial measure, +indexed cybersecurity maturity score, aims to ensure the +group maintains security at or above the benchmark for +high‑tech companies. This target was also exceeded in 2023. +The third non‑financial measure for 2023, aimed at reducing +the environmental impact of our remaining in‑house data +centers, was a target for on‑premise servers decommissioned +during the year. On this measure, performance was well ahead +of target, and the multi‑year program to migrate customers +and applications to energy‑efficient cloud infrastructure has +reached a mature stage. +2021-2023 performance and LTIP outcome +The long‑term incentive plan (LTIP) which vested on December +31, 2023, and which will be paid out in February 2024, was +the first plan to have started under the remuneration policy +adopted by shareholders in 2021. This LTIP was therefore +linked to performance on relative total shareholder return, +diluted adjusted EPS, and return on invested capital. +Total shareholder return (TSR), including dividends and using +a 60‑day average share price at the start and at the end of the +Remuneration +report +Jeanette Horan +Co‑Chair of the Selection +and Remuneration +Committee, dealing with +remuneration matters +“ +70 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Remuneration report +The secret object #4 is a "pillow". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_72.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_72.txt new file mode 100644 index 0000000000000000000000000000000000000000..06424cca988cd9a6a03312cb2b8fe8776788757b --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_72.txt @@ -0,0 +1,47 @@ +Remuneration report continued +three‑year period, was 88%. This TSR performance placed Wolters Kluwer in third place ahead +of 13 of its TSR peers, which are comprised of comparable publicly listed U.S. and European +information and software companies. Over the three‑year LTIP period, 2021‑2023, the share +price rose 86%, very significantly outperforming the broader stock market indices, including the +STOXX Europe 600 and the Amsterdam AEX. +For the second measure, diluted adjusted EPS, the compound annual growth rate over the +three‑year performance period was 12.3% in constant currencies, exceeding the target of 8.3% +calculated based on constant currencies for 2023. +For the third measure, return on invested capital (ROIC), the final year ROIC result was 16.9% in +constant currencies for 2023 (16.8% in reporting currencies), which exceeded the target of 14.2% +in constant currencies. +Performance across these three LTIP measures therefore resulted in above target payout. +The realized value also reflects the significant share price appreciation over the period. +Looking ahead: STIP 2024 +During the past three years, the Supervisory Board has monitored the effectiveness of the +non‑financial metrics that have been used in the short‑term incentive plan. The Board is of the +opinion that these non‑financial measures should not only be quantifiable and verifiable, but +should also provide the appropriate incentives for the Executive Board to advance important +strategic objectives, including sustainability goals. +One of the sustainability goals is to make steady annual progress in building a diverse, +equitable, and inclusive culture among the global workforce. Significant progress has been +made but we continue to aim to become a leader on this front. Another sustainability goal is +to make further progress in reducing our direct greenhouse gas emissions. Here, the server +decommissioning measure will be replaced in 2024 with a new goal to provide further incentive +to reducing our global office footprint. +With regard to our cybersecurity maturity, we are well‑positioned compared to our industry +benchmark and the goal is to maintain our maturity score, which in itself requires constant +effort and investment. +Looking ahead: LTIP 2024-2026 +The LTIP for 2024‑2026, which reflects the remuneration policy that was adopted by shareholders +in 2021, will again include relative TSR at 50%, diluted adjusted EPS at 30%, and ROIC at 20%. +No changes were made to the TSR peer group in 2023. The Supervisory Board continues to +monitor this group given the periodic delistings and mergers that take place in our sector. +The Supervisory Board has set three‑year targets for compound annual growth in diluted +adjusted EPS and for final year ROIC, applying additional stretch to the underlying financial +plan that underpins the strategy. These forward‑looking three‑year targets are disclosed on +page 85. +The 2022 remuneration report received strong shareholder support with over 93% of votes in +favor of the report. We trust this 2023 report provides a clear explanation of the drivers of 2023 +remuneration and transparent disclosure on future goals and that shareholders can again +support this report at our Annual General Meeting of Shareholders on May 8, 2024. +Jeanette Horan +Co‑Chair of the Selection and Remuneration Committee, dealing with remuneration matters + → The 2024 AGM agenda is available at +www.wolterskluwer.com/agm +71 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Remuneration report \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_73.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_73.txt new file mode 100644 index 0000000000000000000000000000000000000000..3744b82b6b786086a9095b745dbede19d26dc791 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_73.txt @@ -0,0 +1,112 @@ +Remuneration at a glance +72 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Remuneration report +Wolters Kluwer achieved +third position for TSR +performance relative to +its TSR peers. This ranking +determines the number of +TSR‑related shares awarded +at the end of the three‑year +LTIP period. +The company uses a 60‑day average of the share price at the beginning and the end of each +three‑year performance period to reduce the influence of potential stock market volatility. +T ar g et Actua l +59% +23% +18% +15,066 +12% +31% 4% +10% +36% +3% +4% +€0 +€20, 000 +in thousands of euros, unless otherwise stated +€10, 000 +€5, 000 +€15, 000 +LTIP TSR +outperformance +LTIP +STIP +Base Salary +LTIP EPS +outperformance +Increase in value +due to share +price performance +LTIP ROIC +outperformance +CEO target and realized pay 2023Diluted adjusted EPS +CAGR 2021-2023: 12.3% +in constant currencies +Return on invested +capital 2023: 16.9% in +constant currencies +Target for diluted adjusted +EPS CAGR 2021‑2023 +was 8.3% in constant +currencies for 2023. +Target for final year ROIC +2023 was 14.2% in constant +currencies for 2023. +3.13 3.38 +4.14 +4.55 +2020 2021 2022 2023 +12.3% +13.7% +15.5% +16.8% +2020 2021 2022 2023 +Impact of performance and share price on remuneration +Target pay reflects the number of LTIP shares conditionally +awarded for LTIP 2021‑2023 valued at the closing share +price on December 31, 2020 (€69.06). +Realized actual pay reflects the number of LTIP shares +earned valued at the closing share price on December 31, +2023 (€128.70). +The final payout will be valued at the volume‑weighted‑ +average share price on February 22, 2024. +Three-year 2021-2023 total shareholder return (TSR) +Sage Group +RELX +Wolters Kluwer +Thomson Reuters +CGI +Pearson +Informa +News Corp +S&P Global +Equifax +Verisk +Experian +Bur. Veritas +Wiley +SGS +Intertek +-20% ++80% ++100% +0% ++20% ++60% ++40% +40% +Summary performance against 2023 STIP targets +Actual performance +Measure Target Actual % of target +Financial - in millions of euros +Revenues 5,605 5,584 100% +Adjusted net profit 1,113 1,119 100% +Adjusted free cash flow 1,151 1,164 101% +Non-financial +Employee belonging score +1 point +2 points 105% +Indexed cybersecurity +maturity score 109.4 113.8 110% +Number of on‑premise servers +decommissioned 600‑999 1,542 110% +Financial STIP targets and actual performance are shown in reporting +currencies. For details on STIP target outcomes, see page 80. \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_74.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_74.txt new file mode 100644 index 0000000000000000000000000000000000000000..6fa5ec4c6ea636c82a8de1af16f3f56807e62559 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_74.txt @@ -0,0 +1,38 @@ +Remuneration report continued +Our remuneration policy +Below we provide a summary of the Executive Board remuneration policy which was adopted in 2021. + → The remuneration policy is available at +www.wolterskluwer.com/en/investors/ +governance/policies-and-articles +Key elements of our remuneration policy +Remuneration peer group The policy provides for a remuneration peer group that is weighted towards European companies at approximately 60%. Current pay peers are shown on page 76. +STIP performance measures – +financial +The policy provides a pre‑defined list of financial measures from which the Selection & Remuneration Committee can select. The STIP financial measures have a minimum weighting +of 80%. These measures exclude the effect of currency, accounting changes, and changes in scope (acquisitions and divestitures) after the annual budget is finalized. The pre‑defined +list comprises: +• Revenues* +• Organic growth +• Adjusted operating profit +• Adjusted operating profit margin +• Adjusted net profit* +• Adjusted free cash flow* +• Cash conversion ratio +* These financial measures have been applied for the past few years and will be used in 2024. +STIP performance measures – +non-financial +Non‑financial measures can include ESG, strategic, or operational metrics, such as employee engagement score, customer satisfaction scores, measures of good corporate governance, +operational excellence, and/or environmental impact. +The maximum weighting of non‑financial measures is 20%. In 2023, the weighting was 10% and included the following three strategically important metrics: +• Belonging score (a quantified measure of diversity, equity, and inclusion) +• Indexed cybersecurity maturity score +• Number of on‑premise servers decommissioned (reducing carbon footprint) +In 2024, the weighting of non‑financial measures will be 10%. The environmental measure (servers decommissioned) will be replaced by a percentage reduction in our office footprint. +LTIP performance measures The policy stipulates the following measures for the LTIP: +• Relative total shareholder return, weighted at 50% +• Diluted adjusted EPS, weighted at 30% +• Return on invested capital (ROIC), weighted at 20% +Share ownership and +holding requirements +The policy has minimum share ownership requirements: 3x base salary for CEO, 2x base salary for CFO, and a two‑year holding period post vesting. +73 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Remuneration report \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_75.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_75.txt new file mode 100644 index 0000000000000000000000000000000000000000..b30c0febcd089c134983b3d56db3eaf5dc38b20e --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_75.txt @@ -0,0 +1,84 @@ +Remuneration report continued +Our Executive Board remuneration framework +Our Executive Board remuneration framework comprises the following elements: +Element of +remuneration Key feature +Alignment to strategy and shareholder +interests +Base salary Reviewed annually with reference to +pay peer group and increases provided +to all employees +Set at a level to attract, motivate, +and retain the best talent +STIP Paid annually in cash; maximum +opportunity 175% of base salary (CEO) +Creates incentives to deliver +performance against annual financial +and non‑financial goals +LTIP Conditional rights on ordinary shares, +subject to a three ‑year vesting schedule +and three ‑year performance targets; +maximum opportunity 240% of base +salary (CEO) +Creates incentives to deliver financial +performance and create long ‑term +value; demonstrates long ‑term +alignment with shareholder interests +Pension Defined contribution retirement savings +plan that is available to all employees in +the same country of employment +Provides appropriate retirement savings +designed to be competitive in the +relevant market +Other benefits Eligibility for health insurance, life +insurance, a car, and participation in any +all ‑employee plans that may be offered +in the same country of employment +Designed to be competitive in the +relevant market +Our remuneration philosophy +Clear alignment between executive rewards and stakeholder interests is central to our Executive +Board remuneration policy. We have a robust pay ‑for ‑performance philosophy with strong +links between rewards and results for both our short ‑term incentive plan (STIP) and long ‑ +term incentive plan (LTIP). Variable remuneration outcomes are aligned to stretch targets that +measure performance against Wolters Kluwer’s strategic aims. The Supervisory Board has a +clearly defined process for setting stretch targets and a framework for decision‑making around +executive remuneration. +The Selection and Remuneration Committee engages an external remuneration advisor to +provide recommendations and information on market practices for remuneration structure and +levels. The Committee had extensive discussions, supported by its external advisor, to review +the composition and key drivers of remuneration. +We disclose targets, achievements, and resulting pay outcomes for both the STIP and LTIP +retrospectively in this report. In addition, we disclose prospective LTIP targets. +The Supervisory Board determines Executive Board remuneration based on principles that +demonstrate clear alignment with shareholder and other stakeholder interests. We recognize it +is our responsibility to ensure that executive remuneration is closely connected with financial +and strategic performance. +Principles of Executive +Board remuneration Key feature +Pay for performance +and strategic progress +• Pay is linked to the achievement of key financial and non ‑financial targets +related to our strategy +• Over 75% of on ‑target pay is variable and linked to performance against stretch +targets +• Short ‑term incentives are linked to annual targets +• Long ‑term incentives are linked to performance against three ‑year stretch +targets aligned to our strategic plan +Align with long-term +stakeholder interests +• Policy provides management with incentives to create long ‑term value for +shareholders and other stakeholders through achievement of strategic aims +and delivery against financial and non ‑financial objectives +• Majority of incentives are long ‑term and paid in Wolters Kluwer shares which are +subject to two ‑year post ‑vesting holding requirements +Be competitive in a +global market for +talent +• On ‑target pay is aligned with the median of a defined global pay peer group, +comprised of competitors and other companies in our sectors that are of +comparable size, complexity, business profile, and international scope +• TSR peer group companies are additionally screened for financial health, +stock price correlation and volatility, and historical TSR performance +74 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Remuneration report +The secret office supply is a "calculator". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_76.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_76.txt new file mode 100644 index 0000000000000000000000000000000000000000..be49e2dfc3306e4908322c3957f8176fb0eddd85 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_76.txt @@ -0,0 +1,62 @@ +Remuneration report continued +Purpose: deliver impact when it matters most +Our strategic goals +Accelerate +Expert Solutions +• Drive investment in cloud‑based +expert solutions +• Transform digital information +products into expert solutions +• Enrich customer experience by +leveraging data analytics +Expand +Our Reach +• Extend into high‑growth +adjacencies +• Reposition solutions for new +segments +• Drive revenues through +partnerships and ecosystem +development +Evolve +Core Capabilities +• Enhance central functions, +including marketing and +technology +• Advance ESG performance +and capabilities +• Engage diverse talent to drive +innovation and growth +Our values +Focus on customer success Make it better Aim high and deliver Win as a team +Financial and non-financial metrics in short-term incentive plan (STIP) and long-term +incentive plan (LTIP) +Executive Board remuneration policy (adopted at the 2021 AGM): +STIP financial measures – pre-defined list of measures: +• Revenues +• Organic growth +• Adjusted operating profit +• Adjusted operating profit margin +• Adjusted net profit +• Adjusted free cash flow +• Cash conversion ratio +STIP non-financial measures: +ESG, strategic, or operational measures, including employee engagement score, customer satisfaction +scores, measures of good corporate governance, measures of operational excellence, and measures +of environmental impact. +LTIP financial measures: +• Relative total shareholder return +• Diluted adjusted EPS (three‑year CAGR) +• Return on invested capital (final year) +For 2024, the STIP financial measures will be the same as in 2023: revenues, adjusted net profit, +and adjusted free cash flow. The STIP non‑financial measures will be: employee belonging +score, indexed cybersecurity maturity score, and a percentage reduction in our global office +footprint (square meters). +The number of on‑premise servers decommissioned, which was a target in 2023 and prior years, +will not be included as a target in 2024 as the progress over the past three years has brought +this program to an advanced level of maturity. +Linking pay to our strategic goals +The largest component of Executive Board remuneration is variable performance‑based incentives. This strengthens the alignment between remuneration and company performance, and +reflects the philosophy that Executive Board remuneration should be linked to a strategy for sustainable long‑term value creation. Our strategy aims to deliver continued good organic growth +and incremental improvement to our adjusted profit margins and return on invested capital, as we seek to drive long‑term sustainable value for all stakeholders. +75 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Remuneration report \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_77.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_77.txt new file mode 100644 index 0000000000000000000000000000000000000000..e0446c445754859cab58b71404028d60f90c723d --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_77.txt @@ -0,0 +1,52 @@ +Remuneration report continued +76 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Remuneration report +Aligning with our risk profile +The Supervisory Board assesses whether variable remuneration might expose the company +to risk, taking into consideration our overall risk profile and risk appetite, as described in +Risk management. We believe that our remuneration policy provides management with good +incentives to create long‑term value, without increasing our overall risk profile. +Benchmarking against our peers +Pay peer group +We use a pay peer group to benchmark Executive Board pay. This includes direct competitors +and other companies in our sectors of comparable size, complexity, business profile, +and international scope. It is made up of companies based in Europe and North America to +reflect where Executive Board members most likely would be recruited to or from. The pay +peer group includes 9 North American and 14 European companies, making it approximately +60% European. The most comparable businesses in Europe are companies in the Application +Software and IT Consulting & Services sectors. In benchmarking pay against the pay peer group, +the value of share‑based remuneration is standardized to ensure a like‑for‑like comparison. +In 2023, the pay peer group consisted of the companies shown in the table on the right. +Companies included in the TSR peer group are marked ‘TSR’. +TSR peer group +The TSR peer group consists of 15 companies that are used as the comparator group +to determine relative TSR performance, which is one of the measures used in the LTIP. +The TSR peer group is comprised of digital information, software, and services businesses. +In case of the delisting or merger of a TSR peer group company, the Supervisory Board will +carefully consider an appropriate replacement that meets strict pre‑determined criteria. +These criteria include industry, geographic focus, size, financial health, share price correlation +and volatility, and historical TSR performance. +The TSR peer group is a sub‑set of the pay peer group, with the exception of Wiley and CGI +which are not in the pay peer group. +Pay and TSR peer groups +North American comparators European comparators +CGI1,4 TSR Atos +Equifax TSR Bureau Veritas TSR +Gartner2 Capgemini +Gen Digital3 +Clarivate5 +Intuit Dassault Systèmes +MSCI Experian TSR +News Corporation TSR Informa TSR +S&P Global TSR Intertek Group TSR +Thomson Reuters TSR Pearson TSR +Verisk Analytics TSR RELX TSR +Wiley4 TSR SGS TSR +Teleperformance +Temenos +The Sage Group TSR +1 CGI Inc replaced IHS Markit plc in the TSR peer group after the latter was acquired by S&P Global in 2022. +2 Gartner Inc replaced Nielsen Holdings Inc which was delisted in October 2022. +3 Gen Digital Inc was formerly named NortonLifeLock which merged with Avast in 2022. +4 CGI and Wiley (John Wiley & Sons) are included in the TSR peer group but not in the pay peer group. +5 Clarivate plc replaced IHS Markit plc in the pay peer group after the latter was acquired by S&P Global in 2022. +TSR Companies that are included in the TSR peer group. \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_8.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_8.txt new file mode 100644 index 0000000000000000000000000000000000000000..1ae8cbc984db82d97594198444856caf30c6e2fe --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_8.txt @@ -0,0 +1,76 @@ +Our mission is to empower our +professional customers with the +information, software solutions, +and services they need to make +critical decisions, achieve successful +outcomes, and save time. +Overview +Wolters Kluwer is a global provider of information, software +and services for professionals in the fields of health; tax and +accounting; financial and corporate compliance; legal and +regulatory; and corporate performance and ESG. +Every day, our customers face the challenge of increasing +quantities and complexity of information or regulation +and the pressure to deliver better outcomes at lower +cost. We aim to solve this challenge, add value to their +workflow, and support their decision‑making with our digital +solutions and technology‑enabled services. We continuously +improve our solutions to meet evolving customer needs, +leveraging the latest technologies to provide benefits such +as advanced analytics, intuitive interfaces, mobility, flexibility, +interoperability, reliability, and open architecture. +Purpose +Our purpose is to deliver impact when it matters most. Every +second of every day, our customers face decisive moments +that impact the lives of millions of people and shape society. +In these crucial moments, we put sound knowledge, deep +expertise, and usable data and insights into their hands at +the right time and in the right context for their specific set of +circumstances. Our solutions help protect people’s health, +prosperity, and safety and help to build better businesses. +Strategy +Our strategy for 2022‑2024 aims to deliver good organic +growth and improved adjusted operating margins and return +on invested capital, while advancing our ESG performance. +Among the ESG goals in our 2022‑2024 plan are to drive +an improvement in our belonging score, to align with the +recommendations of the Task Force on Climate‑related Financial +Disclosures (TCFD), and to obtain validated near‑term science‑ +based targets. To achieve these goals, our strategic priorities +are: +• Accelerate Expert Solutions: we are focusing our +investments on cloud‑based expert solutions while +continuing to transform selected digital information +products into expert solutions. We are investing to enrich +the user experience of our products by leveraging advanced +data analytics and artificial intelligence. +• Expand Our Reach: we are seeking to extend into high‑ +growth adjacencies along our customers’ workflows and to +adapt our existing products for new customer segments. We +are working to develop partnerships and ecosystems for our +key software platforms. +• Evolve Core Capabilities: we are enhancing our central +functions to drive excellence and scale economies in sales +and marketing (go‑to‑market) and in technology. We are +focused on advancing our ESG performance and capabilities +and continuing to invest in diverse and engaged talent to +support innovation and growth. +Our strategy is centered on organic investment and growth.The +three‑year plan envisages spending approximately 10% of total +revenues each year on product development. +We also make selected acquisitions and non‑core disposals +to enhance our value and market positions. Acquisitions must +fit our strategy, strengthen or extend our existing business, +generally be accretive to diluted adjusted EPS in their first full +year, and, when integrated, deliver a return on invested capital +above our weighted‑average cost of capital (8%) within three +to five years. +Strategy and +business model +50% +Around 50% of digital +revenues are from +products that leverage +artificial intelligence +7 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Strategy and business model +The secret food is "chocolate". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_80.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_80.txt new file mode 100644 index 0000000000000000000000000000000000000000..d7d84a6870083aa9f8bab50cd210d534d038496e --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_80.txt @@ -0,0 +1,38 @@ +Remuneration report continued +Base salary 2023 +The Supervisory Board approved an increase of 3.9% in base salary for the CEO and CFO for +2023. This was below the budgeted 4.4% salary increase for Wolters Kluwer employees globally. +Short-term incentive plan 2023 +The STIP provides Executive Board members with a cash incentive for the achievement +of specific annual targets for a set of financial and non‑ financial performance measures +determined at the start of the year. The STIP payout as a percentage of base salary for on‑ +target performance is shown in the table below, with the minimum threshold for payout and +the maximum payout in the case of overperformance. There is no payout if performance is +less than 90% of the STIP target. Payout is capped at performance that is 110% or more than +the STIP target. The STIP payout percentages have remained unchanged since 2007. +Payout of STIP variable remuneration takes place only after assurance by the external auditor +of the financial statements, including the financial KPIs on which the financial STIP targets +are based. +STIP percentage payout scenarios for 2023 +Minimum payout + (% of base +salary) +Minimum +threshold: +no payout if +performance is +below + (% of target) +Target payout + (% of base +salary) +Maximum payout + (% of base +salary) +Maximum payout +if performance is +above + (% of target) +CEO 0% < 90% 125% 175% ≥110% +CFO 0% < 90% 100% 150% ≥110% +79 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Remuneration report \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_81.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_81.txt new file mode 100644 index 0000000000000000000000000000000000000000..226eed7ab71cbe87028187c6c03453b222aedff7 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_81.txt @@ -0,0 +1,32 @@ +Remuneration report continued +The 2023 STIP performance measures and actual performance compared to targets and the resulting STIP payout are listed in the table below. STIP performance measures are determined by the +Supervisory Board and reflect the key performance indicators (KPIs) on which the company reports and that are important measures of the successful execution of our strategy. +Payouts for performance against 2023 STIP targets +in millions of euros, unless otherwise stated Performance targets Actual performance STIP outcomes +N. McKinstry K.B. Entricken +Performance measures Weighting (A) Minimum Target Maximum Performance +As % of +target +Payout, % of +base salary (B) +Weighted +(A)x(B) +Payout, % of +base salary +Weighted +(A)x(C) +2023 +Financial +Revenues 34.0% 5,044 5,605 6,165 5,584 100% 125% 42.5% 100% 34.0% +Adjusted net profit 28.0% 1,002 1,113 1,225 1,119 100% 125% 35.0% 100% 28.0% +Adjusted free cash flow 28.0% 1,036 1,151 1,266 1,164 101% 130% 36.4% 105% 29.4% +Non-financial +Employee belonging score 1 3.33% Maintain +1 point +3 or more points +2 points 105% 150% 5.0% 125% 4.2% +Indexed cybersecurity maturity score 2 3.33% 103.1 109.4 113.4 113.8 110% 175% 5.8% 150% 5.0% +Number of on ‑ premise servers decommissioned 3 3.34% 275 ‑399 600 ‑ 999 1,200+ 1,542 110% 175% 5.8% 150% 5.0% +Total payout as % of base salary 130.6% 105.6% +1 Employee belonging score: performance targets are relative to 2022 score. +2 Cybersecurity maturity score is indexed to 2020 = 100.0. Performance targets are set to create incentives to maintain security at or above the benchmark for high‑ tech companies. +3 Number of on‑premise servers decommissioned: performance targets are for absolute number of servers decommissioned. + +80 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Remuneration report \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_82.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_82.txt new file mode 100644 index 0000000000000000000000000000000000000000..755c0d971b02504f12320a3a56c9c04200601ac6 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_82.txt @@ -0,0 +1,55 @@ +Remuneration report continued +Long-term incentive plans +The LTIP provides Executive Board members conditional rights on shares (performance +shares). The plan aims to align the organization and its management with the strategic goals +of the company and, in doing so, reward the creation of long ‑term value. The total number of +shares that Executive Board members receive depends on the achievement of pre‑determined +performance conditions at the end of a three‑ year performance period. +Payout of the performance shares at the end of the three‑ year performance period will take +place only after verification by the external auditor of the achievement of the TSR, EPS, and +ROIC targets. +Under the previous remuneration policy in effect before 2021, the performance measures for +the LTIP 2020‑2022 were total shareholder return (TSR) and CAGR in diluted EPS. The current +remuneration policy, adopted in 2021, uses three performance measures: total shareholder +return, CAGR in diluted adjusted EPS, and return on invested capital, described below. +Total shareholder return +TSR objectively measures the company’s financial performance and assesses its sustainable +long ‑term value creation as compared to other companies in our TSR peer group. It is +calculated based on the share price change over the three‑ year period and assumes ordinary +dividends are reinvested. By using a three‑ year performance period, there is a clear link +between remuneration and sustainable long ‑term value creation. The company uses a 60‑day +average of the share price at the beginning and end of each three‑ year performance period to +reduce the influence of potential stock market volatility. +Wolters Kluwer’s TSR performance compared to the peer group determines the number of +conditionally awarded TSR ‑related shares vested at the end of the three‑ year performance +period. These incentive zones are in line with best ‑practice recommendations for the +governance of long ‑term incentive plans. +TSR performance ranking payout percentages +Position +Payout as % of conditional shares +awarded for on-target performance +1‑2 150% +3‑4 125% +5‑6 100% +7‑8 75% +9‑10 0% +11‑12 0% +13‑14 0% +15‑16 0% +Diluted adjusted earnings per share and return on invested capital +Executive Board members can earn 0%‑ 150% of the number of conditionally awarded EPS‑ or +ROIC‑related shares, depending on Wolters Kluwer’s performance compared to targets set for +the three‑ year performance period. +The Supervisory Board determines the exact targets for the EPS‑ and ROIC ‑related shares for +each three‑ year performance period at the start of the period. The EPS and ROIC targets are +based on performance in constant currencies to exclude the effect of currency movements +over which the Executive Board has no control. In addition, diluted adjusted EPS and ROIC +performance are based on consistently applied accounting standards and policies. Using EPS +and ROIC as performance measures for LTIP facilitates strong alignment with the successful +execution of our strategy to generate long ‑term shareholder value. +Diluted adjusted EPS and ROIC performance incentive table +Achievement Payout % +Less than 50% of target None +On target 100% +Overachievement of target Up to 150% +81 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Remuneration report \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_83.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_83.txt new file mode 100644 index 0000000000000000000000000000000000000000..d4ca947303dd80c97bf49cf66296a18744edbf37 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_83.txt @@ -0,0 +1,91 @@ +Remuneration report continued +Performance against LTIP targets for the 2020-2022 and 2021-2023 performance periods +LTIP measure Weighting Target Achievement Payout % +Period 2021-2023 Vesting +TSR 50% Position 5‑6 Position 3 125% +Diluted adjusted EPS 30% CAGR of 8.3% 12.3% 150% +ROIC 20% Final year 14.2% 16.9% 150% +Period 2020-2022 * Vesting +TSR 50% Position 5‑6 Position 3 125% +Diluted EPS* 50% CAGR of 10.8% 15.9% 150% +* LTIP 2020‑2022 was based on the former remuneration policy, which used TSR and diluted EPS. For calculation +purposes, we use the definition of diluted EPS that can be found in the Glossary. +Performance against LTIP targets in constant currencies for the two most recent LTIP +performance periods are provided in the table above. Targets have been recalculated for 2023 +constant currencies, and therefore differ from targets stated in 2022 Annual Report. +Vested LTIP plans +LTIP vesting for the performance period 2021–2023 +The LTIP 2021‑2023 vested on December 31, 2023. Vested LTIP 2021‑2023 shares will be released +on February 22, 2024. The volume‑weighted‑average price for the shares released will be based +on the average exchange price traded at Euronext Amsterdam on February 22, 2024, the first day +following the company’s publication of its annual results. +Conditional share awards vested for the period 2021-2023 +number of shares, +unless otherwise stated +Outstanding +at December +31, 2023 +Additional +conditional +number of +TSR shares +(25%) +Additional +conditional +number of +EPS shares +(50%) +Additional +conditional +number of +ROIC shares +(50%) +Vested/ +payout +February 21, +2024 +Estimated cash +value of payout * +(in thousands +of euros)* +N. McKinstry 66,970 9,655 8,506 5,671 90,802 11,686 +K.B. Entricken 26,533 3,825 3,370 2,247 35,975 4,630 +Total 93,503 13,480 11,876 7,918 126,777 16,316 +Senior management 303,256 37,944 45,564 30,408 417,172 53,690 +Total 396,759 51,424 57,440 38,326 543,949 70,006 +* Estimated cash value calculated as the number of shares vested multiplied by the closing share price on +December 31, 2023 (€128.70). +LTIP vesting for the performance period 2020-2022 +The LTIP 2020‑2022 vested on December 31, 2022. A total number of 535,063 shares were released +on February 23, 2023. On that day, the volume‑weighted‑average price of Wolters Kluwer N.V. +was €109.9098. The number of shares vested and the cash equivalent are shown below. +LTIP: shares vested for the performance period 2020-2022 +number of shares, unless +otherwise stated +Outstanding at +December 31, +2022 +Additional +conditional +number of +TSR-shares +(25%) +Additional +conditional +number of +EPS-shares +(50%) +Vested/payout +February 23, +2023 +Cash value of +vested shares * +N. McKinstry 80,741 12,064 16,243 109,048 11,985 +K.B. Entricken 29,320 4,381 5,899 39,600 4,352 +Total 110,061 16,445 22,142 148,648 16,338 +Senior management 280,967 35,139 70,309 386,415 42,471 +Total 391,028 51,584 92,451 535,063 58,809 +* Cash value in thousands of euros; calculated as the number of shares vested multiplied by the volume‑ +weighted‑average price on February 23, 2023. +82 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Remuneration report +The secret object #5 is a "vase". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_85.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_85.txt new file mode 100644 index 0000000000000000000000000000000000000000..44a3073ee10752e50eb50bc3cf2b19f531b03387 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_85.txt @@ -0,0 +1,73 @@ +Remuneration report continued +Short-term incentive plan 2024 +For both the CEO and CFO, the STIP percentage payout scenarios for 2024 will be the same +as in 2023. See table on page 86. +According to the remuneration policy, the Supervisory Board can annually select measures +from a pre‑defined list of financial measures, providing flexibility for the Supervisory Board +and transparency for stakeholders. +A full list of financial measures is provided in the summary table at the front of this +remuneration report. The financial measures carry a weight of at least 80% under the +remuneration policy adopted in 2021. The Supervisory Board has selected the following +measures from the list for 2024: +Financial performance measures for STIP 2024 +Measure Weighting How performance is calculated +Revenues 34% STIP financial targets are based on the annual +budget which assumes development of the +existing business. In calculating STIP +performance results, the effect of changes in +currency and accounting standards is excluded. +Adjusted net profit 28% +Adjusted free cash flow 28% +Total weighting of STIP financial measures 90% +Non-financial performance measures for STIP 2024 +The non‑ financial measures relate to ESG, strategic, or operational priorities. The policy sets the +maximum weight for these non‑ financial measures at 20% of the STIP. In 2024, the weight will be +set at 10% with each measure equal ‑weighted and separately assessed. The measures will apply +equally to the CEO and CFO and have been cascaded down to all executives. +In 2024, the following three strategically relevant, quantifiable, and verifiable non‑ financial STIP +measures will be applied. +Non-financial performance measures for 2024 +Objective Measure Weighting Description of target and how it is measured +Workforce diversity +and employee +engagement +Belonging score 3.33% The annual target aims to achieve an +improvement in our overall belonging score. +Belonging measures the extent to which +employees believe they can bring their authentic +selves to work and be accepted for who they are. +The score (on a scale of 0 ‑100) is determined by an +independent third party (2023: Microsoft Glint). +Secure systems and +processes +Indexed +cybersecurity +maturity score +3.33% The annual target is based on a company ‑wide +program designed to maintain cybersecurity at +or above the industry standard benchmark for +high ‑tech companies. The cybersecurity maturity +score is assessed annually by a third party, +based on the National Institute of Standards +and Technology (NIST) framework. The minimum +payout requires the score to be maintained in +line with the industry standard for high ‑tech +companies. +Reduction in office +footprint +Square meters of +office footprint +3.34% The annual target aims to achieve a reduction +in our office footprint and thereby a reduction +in our scope 1 and 2 emissions. The targets are +based on programs managed by our global +real estate team. The target and outcome are +on an underlying basis excluding the impact +of acquisitions and divestitures. +Total weighting of STIP non-financial +measures 10.0% +Disclosure of STIP targets +The Supervisory Board does not disclose STIP targets in advance due to their commercial +sensitivity. In response to shareholder requests for greater transparency, we have disclosed +STIP targets retrospectively in this report. +84 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Remuneration report \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_88.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_88.txt new file mode 100644 index 0000000000000000000000000000000000000000..27e10df6435947f442ac93fcc8ceab506cd672ec --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_88.txt @@ -0,0 +1,67 @@ +Remuneration report continued +Other information +The company does not grant any personal loans, guarantees, or the like to Executive Board +or Supervisory Board members. +Supervisory Board remuneration +A revised Supervisory Board remuneration policy was adopted at the 2020 AGM. The +Supervisory Board had reviewed its own remuneration and established the new policy on the +recommendation of the Selection and Remuneration Committee. According to this policy, the +remuneration for the Supervisory Board aims to attract and retain high‑caliber individuals +with the relevant skills and experience to guide the development and execution of company +strategy and facilitate sustainable long ‑term value creation. The same policy, with language +improvement to provide clarity on the selection of comparator group companies, will be +submitted to the 2024 AGM for adoption. +Supervisory Board remuneration is not tied to company performance and therefore includes +fixed remuneration only. In exceptional circumstances, ad‑hoc committees may be established, +for which the Chair and members may receive pro‑rated remuneration at the level of the Audit +Committee fee, capped at five times the annual fee of the Audit Committee. Resolutions are +always taken by the full Supervisory Board. +The Supervisory Board seeks advice from an independent external remuneration advisor. +Supervisory Board remuneration +in thousands of euros +Member Selection +and Remuneration +Committee +Member Audit +Committee 2023 2022 2021 +A.E. Ziegler, Chair, Former Vice ‑Chair Co‑Chair 169 139 102 +B.J.F. Bodson 29 85 82 +J.P. de Kreij, Vice‑Chair Chair 127 120 94 +J.A. Horan Co‑Chair 94 99 91 +S. Vandebroek Yes 105 110 93 +C.F.H.H. Vogelzang Yes 100 100 88 +H.H. Kersten Yes 96 68 – +Former Supervisory Board members +F.J.G.M. Cremers, Former Chair Former Co ‑Chair – 45 128 +Total 720 766 678 +Supervisory Board members’ fees +The table below shows the fee schedule for Supervisory Board members, including +the remuneration for 2024 that will be proposed to the 2024 Annual General Meeting +of Shareholders. +For 2024, it is proposed to increase the member fee by €5,000; all other annual fees +remain unchanged. +The fees are in line with the Supervisory Board remuneration policy which was adopted +in 2020 by the AGM with 99.11% of votes in favor and the updated remuneration policy +which will be submitted for adoption at the 2024 Annual General Meeting of Shareholders. +The updated policy will be published in the 2024 agenda. +Supervisory Board members’ fees +in euros +Proposed +annual fee 2024 Annual fee 2023 Annual fee 2022 +Chair 130,000 130,000 130,000 +Vice‑Chair 95,000 95,000 95,000 +Members 80,000 75,000 75,000 +Chair Audit Committee 25,000 25,000 25,000 +Members Audit Committee 18,000 18,000 18,000 +Chair Selection and +Remuneration Committee 20,000* 20,000* 20,000* +Members Selection and +Remuneration Committee 14,000 14,000 14,000 +Travel allowance for intercontinental travel 5,000 per meeting 5,000 per meeting 5,000 per meeting +Fixed cost reimbursement 1,500 1,500 1,500 +* Due to the Co‑Chair arrangement, each Co‑Chair receives €17,000. +Shares owned by Supervisory Board members +At December 31, 2023, Ms. Ziegler held 1,894 American Depositary Receipts (each Depositary +Receipt represents one ordinary Wolters Kluwer share) (2022: 1,894). None of the other +Supervisory Board members held shares in Wolters Kluwer (2022: none). +87 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Remuneration report \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_89.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_89.txt new file mode 100644 index 0000000000000000000000000000000000000000..aad796184be37c529be933bd02f1c5817367b41b --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_89.txt @@ -0,0 +1,60 @@ +Remuneration report continued +Shareholder voting at Annual General Meeting +The following table sets out the voting results in respect of resolutions relating to remuneration +at the Annual General Meeting of Shareholders held on May 10, 2023. +Shareholder voting outcomes at the 2023 AGM +Resolution +% of votes +for +% of votes +against +votes +withheld +2022 Remuneration report Advisory 93.66% 6.34% 2,448,733 +Five-year overview of annual changes in remuneration +(IFRS-based) +The table below provides an overview of Executive Board remuneration, Supervisory Board +remuneration, company performance, and average employee remuneration for the past five years. +in thousands of euros, unless otherwise stated 2023 2022 8 2021 * 2020 * 2019 * +Executive Board remuneration +N. McKinstry 8,379 7,901 9,377 7,512 8,089 +Change (in %) 6.0 (15.7) 24.8 (7.1) 71.2 +K.B. Entricken 3,340 3,741 3,404 4,132 4,589 +Change (in %) (10.7) 9.9 (17.6) (10.0) 15.7 +Supervisory Board remuneration** +F.J.G.M. Cremers (appointed 2017), Former Chair 1 – 45 128 128 114 +A.E. Ziegler (appointed 2017), Chair, Former Vice ‑ +Chair 2 169 139 102 102 95 +B.J.F. Bodson (appointed 2019)3 29 85 82 72 22 +J.A. Horan (appointed 2016) 94 99 91 96 100 +H.H. Kersten (appointed 2022) 96 68 – – – +J.P. de Kreij (appointed 2020), Vice‑Chair 4 127 120 94 92 – +S. Vandebroek (appointed 2020) 105 110 93 61 – +C.F.H.H. Vogelzang (appointed 2019) 100 100 88 88 58 +R.D. Hooft Graafland5 – – – 34 97 +F.M. Russo 6 – – – – 97 +B.J. Angelici7 – – – – 20 +in thousands of euros, unless otherwise stated 2023 2022 8 2021 * 2020 * 2019 * +B.J. Noteboom 7 – – – – 25 +Company performance +Organic growth (in %) 5.8 6.2 5.7 1.7 4.3 +Adjusted operating profit margin (in %) 26.4 26.1 25.3 24.4 23.6 +Year ‑end closing share price (€) 128.70 97.76 103.60 69.06 65.02 +Share price change (in %) 32 (6) 50 6 26 +Total shareholder return (in %) 34 (4) 52 8 28 +Average remuneration on a full-time equivalent +basis of employees +Employee benefit expenses per FTE, excluding CEO 107.9 107.7 99.7 98.6 97.6 +* The Executive Board remuneration for the years 2019 to 2021 has been restated to include tax ‑related costs. +** Members of the Supervisory Board are independent from the company. Their remuneration is not tied to +Wolters Kluwer’s performance and therefore includes fixed remuneration only. +1 Retired after the 2022 AGM. +2 Succeeded Mr. Cremers as Chair after the 2022 AGM. +3 Mr. Bodson’s appointment was effective September 1, 2019. Mr. Bodson retired after the 2023 AGM. +4 Mr. de Kreij succeeded Ms. Ziegler as Vice‑Chair after the 2022 AGM. +5 Retired after the 2020 AGM. +6 Retired per year ‑end 2019. +7 Retired after the 2019 AGM. +8 Employee benefit expenses per FTE, excluding CEO, are restated for 2022 as temporary staff and contractors +are no longer reported within employee benefit expenses. +88 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Remuneration report \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_9.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_9.txt new file mode 100644 index 0000000000000000000000000000000000000000..7365c40feb3e742196250c32ca73f0f66df46136 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_9.txt @@ -0,0 +1,75 @@ +Strategic progress 2023 +In 2023, we made important progress on our strategic plans. +First, expert solutions, which include our software products +and certain advanced information solutions, accounted for +58% of total revenues (2022: 56%) and grew 8% organically +(2022: 9%). Software solutions accounted for 45% of total +revenues (2022: 44%) and grew 8% organically (2022: 9%). +Cloud software revenues accounted for 37% of total 2023 +software revenues and grew 15% (2022: 17%). Today, around +50% of our digital revenues are from products that leverage +artificial intelligence (AI) to drive enhanced value for our +customers. During 2023, we stepped up experimentation with +large language models (LLMs) and the new scalable generative +AI technology, testing dozens of use cases, collaborating with +selected customers, and launching beta versions in Health +and Legal & Regulatory markets. For much of this work, we +are partnering with Microsoft, Google, and other technology +suppliers. +Second, we made progress on extending our reach into high‑ +growth adjacencies and geographies. The new Corporate +Performance & ESG division, formed in 2023, sets us on a path +to extend our enterprise software solutions into corporate +workflows for ESG data collection, analysis, reporting, and +assurance. In the Health division, the 2023 acquisition of +NurseTim bolstered our position in nursing education +solutions and test preparation while the 2023 acquisition of +Invistics drug diversion detection software broadened our +offering in the hospital market. +Third, we took significant steps in 2023 to evolve our core +capabilities. We centralized the majority of our product +development teams, more than doubling the number +of FTEs in our global development organization, Digital +eXperience Group (DXG). We also centralized our branding and +communications teams and created a unified global finance +organization to support the company globally. With regard +to our specific ESG objectives, the most notable advances +in 2023 were the validation by the Science Based Targets +initiative of our near‑term emission reduction targets and the +improvements in several important social metrics, notably +employee turnover, engagement, and belonging. +Strategy and business model +continued +Strategy 2022-2024 +Our strategy, Elevate Our Value, aims to drive +good organic growth and improved operating +profit margins and return on invested capital +over the 2022‑2024 period while advancing our +ESG performance. +• Drive investment in cloud-based +expert solutions +• Transform digital information +products into expert solutions +• Enrich customer experience by +leveraging data analytics +• Extend into high-growth adjacencies +• Reposition solutions for new +segments +• Drive revenues through +partnerships and ecosystem +development +• Enhance central functions, including +marketing and technology +• Advance ESG performance and +capabilities +• Engage diverse talent to drive +innovation and growth +Elevate +Our Value +Accelerate +Expert Solutions +Expand +Our Reach +Evolve +Core Capabilities +8 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Strategy and business model \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_91.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_91.txt new file mode 100644 index 0000000000000000000000000000000000000000..b0a21936d59c9309e5cffc302e76f6347be88de4 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_91.txt @@ -0,0 +1,66 @@ +In these sustainability statements, we describe +our approach and performance regarding material +sustainability impacts, risks, and opportunities. +Our approach to sustainability +In conducting our business, we aim to create sustainable long‑term value for all stakeholders, +by using resources thoughtfully and efficiently, respecting our company values, and focusing our +efforts on actions that support our purpose and our strategy, in line with the Dutch Corporate +Governance Code. Through regular engagement with internal and external stakeholders, +we understand how we may impact them and how we can create sustainable value. +Aligned with our strategy, Elevate Our Value, we have policies and programs that embed +environmental, social, and governance standards within our operations. We focus on the +areas where we have material impacts, risks, and opportunities. We track progress of our +actions through metrics and targets. +We are guided by international guidelines, such as the Organization for Economic Co‑operation +and Development (OECD) Guidelines for Multinational Enterprises, the United Nations Guiding +Principles on Business and Human Rights (UNGPs), and the principles of the United Nations +Global Compact (UNGC). +Our sustainability data reporting +The new EU Corporate Sustainability Reporting Directive (CSRD) introduces mandatory +sustainability reporting standards. These sustainability statements follow the structure of the +European Sustainability Reporting Standards (ESRS) in an effort to start aligning our reporting +with the new framework and requirements. Reporting under CSRD and ESRS is mandatory as +of financial year 2024, to be published in 2025. The 2023 sustainability statements do not yet +comply with all aspects of CSRD and ESRS and have not been assured by the external auditor. +In 2023, we conducted an initial double materiality assessment following the requirements of +ESRS. As such, the sustainability statements include information and data on material impacts, +risks, and opportunities. +We are currently enhancing our reporting manuals and design of internal controls for the +collection, processing, review, and validation of sustainability data, which will result in improved +data quality in the future. For some data points, we used third parties to administer surveys or +conduct assessments. +In 2024, we will continue the implementation of the requirements of ESRS based on a gap +assessment. We will focus on all reporting areas, including governance processes and +interaction of the strategy and business model with material impacts, risks, and opportunities. +We will also evaluate policies, actions, and targets for the material impacts, risks, and +opportunities, and improve the reporting of metrics, with particular focus on scope 3.1 supplier +emissions which contribute the largest share of our greenhouse gas (GHG) emissions. Scope 3.1 +emissions are largely based on calculations using industry emission factors. We plan to expand +engagement with our suppliers to obtain more specific emission data, starting with our largest +suppliers. +The level of accuracy and completeness of this data is lower than that of our financial +information. Sustainability‑related controls are not yet implemented in an integrated Internal +Control Framework, which is an action set for 2024. See Risk management and internal controls +over sustainability reporting (GOV-5) for further details. In addition, some metrics, such as +supplier and customer‑related GHG emissions, are subject to a high level of measurement +uncertainty. Judgments and estimates involved are described alongside each table throughout +this chapter. +These sustainability statements have been prepared with reference to the Global Reporting +Initiative (GRI) and the Sustainability Accounting Standards Board (SASB) frameworks. + → Our 2023 GRI, SASB, and UN Global +Compact disclosures are available at +www.wolterskluwer.com/en/investors/ +financials/annual-reports +Our approach to sustainability +Key highlights +• Reporting follows ESRS structure but no compliance to all aspects of CSRD/ESRS yet +• Near-term GHG emission reduction targets validated by SBTi +• Committed to submit 2050 net-zero GHG emission reduction targets for validation +by SBTi by January 2025 +• Initial double materiality assessment has been conducted +• Policies, actions, metrics, and targets are disclosed for material sustainability +matters to the extent currently available +• Full scope 3 GHG emissions are reported +• Scope 1 & 2 GHG emissions reduced with 8% +• Employee engagement and belonging scores are up 1 point and 2 points, respectively +90 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Our approach to sustainability \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_94.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_94.txt new file mode 100644 index 0000000000000000000000000000000000000000..89c3f082c02997966fe0230752ed31eaf3caff5e --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_94.txt @@ -0,0 +1,72 @@ +Statement on due diligence (GOV-4) +Core elements of due diligence Paragraphs in the sustainability statements +Embedding due diligence in governance, +strategy, and business model +ESRS 2 GOV‑2 +ESRS 2 GOV‑3 +ESRS 2 SBM‑3 +Engaging with affected stakeholders ESRS 2 GOV‑2 +ESRS 2 SBM‑2 +ESRS 2 IRO‑1 +ESRS 2 MDR‑P +ESRS E1 +ESRS S1‑2 +ESRS S2‑2 +ESRS S4‑2 +Identifying and assessing negative impacts +on people and the environment +ESRS 2 IRO‑1 +ESRS 2 SBM‑3 +Taking actions to address negative impacts +on people and the environment +ESRS 2 MDR‑A +ESRS E1‑1 +ESRS E1‑3 +ESRS S1‑4 +ESRS S2‑4 +ESRS S4‑4 +Tracking the effectiveness of these efforts ESRS 2 MDR‑M +ESRS 2 MDR‑T +ESRS E1‑4 +ESRS E1‑5 +ESRS E1‑6 +ESRS S1‑5 +ESRS S1‑6 +ESRS S1‑7 +Climate‑change company‑specific metrics +ESRS S1‑9 +ESRS S1‑12 +ESRS S1‑13 +ESRS S1‑15 +ESRS S1‑16 +ESRS S1‑17 +Other own workforce company‑specific metrics +ESRS S2‑5 +Workers in the value chain company‑specific metrics +ESRS S4‑5 +Business conduct company‑specific metrics +General disclosures continued +For a description of ESRS Disclosure Requirements, see Reference table on page 127. +Risk management and internal controls over sustainability reporting (GOV-5) +Except as described below, sustainability is embedded in our overall risk management and +internal control processes and systems. For further information on these processes and +systems, on how findings of risk assessment and internal controls are integrated into relevant +functions and processes, and on the periodic reporting of findings to the Executive Board and +Supervisory Board, see the sections Responsibility for risk management and Risk management +process on page 50 and Internal Control Framework and Internal audit and risk management +functions on page 51 in Risk management. +In 2023, the annual risk assessment and initial double materiality assessment were conducted +independently from each other. As such, the main risks to the company as reported in Risk +management should not be compared to the outcome of the initial double materiality +assessment. We will assess to which extent we can align the double materiality assessment and +risk management processes going forward. +The controls in the Internal Control Framework for financial reporting are being leveraged, to +the extent possible, and new sustainability‑related controls are being created for internal and +external sustainability reporting. However, the new sustainability‑related controls have not +been fully implemented. We set an action plan for throughout 2024 to start operationalizing the +sustainability‑related controls as defined within an integrated Internal Control Framework for +material data points, following the initial double materiality assessment. Once operationalized, +the sustainability‑related controls will be tested for effectiveness and results will be reported +on the affected internal control dashboards per usual procedure to functional management, +internal and external auditors, the Executive Board, and the Audit Committee. +93 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information General disclosures \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_95.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_95.txt new file mode 100644 index 0000000000000000000000000000000000000000..e2e3652a6a70f7e327ef06def53dd1b5e860904b --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_95.txt @@ -0,0 +1,47 @@ +Strategy +Strategy, business model, and value chain (SBM-1) +For a description of the key elements of our strategy that relate to or impact sustainability matters, as well as a description of the key elements of our business model and value chain, +see Strategy and business model on page 7. +Revenues by significant ESRS sector +We are currently reviewing the ESRS definitions of industry sectors and will report a breakdown of our revenues by significant ESRS sector in our 2024 Annual Report. +Interests and views of stakeholders (SBM-2) +We actively engage in stakeholder dialogues across all our business activities and via the various channels and activities for stakeholder engagement. The form that is chosen for any specific +dialogue depends on the topic and on the stakeholder(s) involved, since not every stakeholder of the company can be regarded as equally relevant to every aspect of our strategy, including +sustainability. We maintain regular contact with a range of stakeholders, including customers, employees, suppliers and partners, shareholders and other investors, financial and ESG analysts, +rating agencies, governmental bodies, the media, civil society organizations, and educational and research institutions. +Below is an overview of our key stakeholders and how we engage with them in accordance with our Stakeholder Engagement Policy, available on www.wolterskluwer.com/en/investors/ +governance/policies-and-articles. +Key stakeholder How we engage Purpose and outcome of the engagement +Customers – Year‑round dialogue through sales, marketing, and customer service teams; and + – Customer collaboration on product development and answering customer questions +on our sustainability performance and goals. + – Improve customer satisfaction and enhance product and service offerings; and + – Improve our ability to deliver when it matters most: our professional information, software, and +services provide insights and workflow automation to customers to support their critical decision‑ +making. +Employees – Regular engagement at all levels, including one‑on‑one, group, and town hall meetings; + – Check‑ins and performance meetings; + – Surveys; + – SpeakUp program; + – Global Innovation Awards, Global Sustainability Awards, and other employee awards, +events, and networks; and + – Works council engagement. + – Provide attractive employment and career opportunities; + – Develop skills, talent, and experience; + – Promote diversity, equity, inclusion, and belonging; and + – Cultivate an environment in which employees are engaged and experience a strong sense of belonging. +Suppliers & partners – Regular quality screening, audits, due diligence, and collaboration. – Create mutually beneficial economic value for our suppliers and partners; and + – Ensure an environmentally and socially responsible supply chain. We want to work with suppliers who +share the same values and are committed to improve sustainable practices. +Investors – Year‑round dialogue through a global program of investor relations events and +meetings; + – Regular engagement with analysts; and + – Annual General Meeting of Shareholders. + – Promote a good understanding in the investment community of the Wolters Kluwer investment case +and the company’s prospect for generating Total Shareholder Return (TSR) for shareholders through +share price appreciation and dividends; and + – Risk‑adjusted financial returns for creditors. +Communities – Various programs in support of our communities around the world. – Availability of our products and services where needed; and + – Community involvement of our employees. +General disclosures continued +94 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information General disclosures \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_96.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_96.txt new file mode 100644 index 0000000000000000000000000000000000000000..0e512051da79849ad6fa621738c482140576b309 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_96.txt @@ -0,0 +1,59 @@ +Material impacts, risks, and opportunities and their interaction with strategy and business +model (SBM-3) +The material impacts, risks, and opportunities resulting from our initial double materiality +assessment are listed below. +Topics +Material impact, risk, +or opportunity Value chain Expected time horizon +Rationale – description of impacts and their effect on people or the +environment +Climate change Material negative impact Upstream and suppliers, own +operations, customers +Short, medium, and long term The company has considerable GHG emissions, to a large extent +from our supply chain (approximately 80% of our emissions), which +negatively impact the environment. +Equal pay for equal value Material negative impact Own operations Short and medium term As we are finalizing our approach to determine pay gap, information on +equal pay for equal value is currently not available. +Privacy Material negative impact Own operations, customers, +downstream beyond customers +Short, medium, and long term The data privacy rights of individuals whose personal data is entrusted +with us could be impacted in case of data privacy incidents. +Human and labor rights of +workers in the value chain +Material negative impact Upstream and suppliers Short, medium, and long term Workers of suppliers that are involved in providing products or services +to our businesses may not have equal opportunities, wages, secure +jobs, work‑life balance/benefits, and protection of health and safety at +work, which could impact the human and labor rights of these workers. +Access to quality information Material positive impact/ +material opportunity +Downstream beyond customers Short, medium, and long term By providing our customers quality information through our products, +they can make optimal decisions and thereby provide better outcomes +for their clients or patients.  +Diversity, Equity, Inclusion, and +Belonging (DEIB) +Material positive impact/ +material opportunity +Own operations Short, medium, and long term Equal treatment and opportunities and other DEIB measures bring +benefits to the well‑being of our workforce, while a high‑performing, +productive, and engaged workforce benefits the company. +Work‑life balance Material positive impact/ +material opportunity +Own operations Short, medium, and long term Well‑being measures, as well as benefits such as family‑related leave, +bring benefits to our workforce, while a high‑performing, productive, +and engaged workforce also benefits the company. +Training and skills development Material positive impact/ +material opportunity +Own operations Short, medium, and long term Training and skills development opportunities bring benefits for the +personal growth and well‑being of our own employees, while a high‑ +performing, productive, and engaged workforce also benefits the +company. +Corporate culture Material positive impact/ +material opportunity +Own operations Short, medium, and long term A strong corporate culture around values and business ethics +has a positive impact on our workforce, while this also benefits +our reputation and relationships with business partners and +other stakeholders. +For further details on the interaction between material impacts, risks, and opportunities and +our strategy and business model, see the topical sections of these sustainability statements. +General disclosures continued +95 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information General disclosures \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_97.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_97.txt new file mode 100644 index 0000000000000000000000000000000000000000..c166762c6a9108ea054d60c69384eba08afc7264 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_97.txt @@ -0,0 +1,65 @@ +General disclosures continued +Impact, risk, and opportunity management +Description of the process to identify and assess material impacts, risks, and opportunities +(IRO-1) +Methodologies, assumptions, and parameters applied in double materiality assessment +In 2023, we completed an initial double materiality assessment (DMA). The initial DMA +considered both the impact of the company on people and the environment, as well as the +financial risks and opportunities for the company. The outcome of the assessment is the basis +for the disclosures in these sustainability statements. +In the DMA, we considered our upstream and downstream value chain as follows: +• The upstream value chain included both direct and indirect suppliers; and +• The downstream value chain was limited to our direct customers, unless we identified a +material impact, risk, or opportunity beyond our customers in the value chain (e.g., privacy). +The full list of sustainability topics, sub‑topics, and sub‑sub‑topics, as described in ESRS 1 +Appendix A, was used as basis for the initial DMA. In addition, we brought sustainability topics +of our previous materiality assessment into the process to the extent that such a topic was +considered a sustainability matter as defined by ESRS. Consequently, the topics listed below, +that were presented as material sustainability topics in prior years, were kept out‑of‑scope in +the initial DMA. The following topics are discussed in Strategy and business model: +• Customer relationships; +• Product innovation; +• Cybersecurity; and +• Responsible AI. +Furthermore, the topics product impact, community involvement, and employee volunteering +were presented as material sustainability topics in prior years. These topics are kept out‑of‑ +scope in the initial DMA as these are not sustainability matters as defined by ESRS. These topics +are not addressed in this annual report. +From the full list of sustainability topics, we identified sustainability topics relevant to the +company, based on an analysis of our business activities, value chain, peer company reports, +and industry reports. We identified and documented actual or potential impacts, risks, and +opportunities (IROs) in connection with these relevant sustainability topics. Thereafter, we +scored the IROs by assessing the scale, scope, remediability, and/or likelihood of impacts. +In addition, we assessed the likelihood and potential magnitude of risk and opportunities. +In this assessment, we also considered whether an IRO was applicable to the company +as a whole or to only some countries and/or some business activities. +This qualitative scoring assessment was transformed into a quantitative scoring. We +predetermined thresholds to distinguish IROs with a high scoring from IROs with a medium +or low scoring. Subsequently, we clustered IROs with a same impact and similar scoring, for +example climate change impacts occurring in different parts of the value chain. Nine IROs came +out with a high scoring and are therefore considered material. See Material impacts, risks, and +opportunities and their interaction with strategy and business model (SBM-3). +In upcoming years, we will keep evaluating our DMA methodology, by comparing it to +best practices in the market, by assessing new double materiality guidance published by +regulators, and by engaging with external stakeholders. We will continue to collect more useful +information, e.g., from our supply chain, to test the documentation of the IRO descriptions and +the scoring assessment. As a result, the list of material impacts, risks, and opportunities may +change over time. +Double materiality assessment process +For the identification of impacts, risks, and opportunities, we conducted an analysis of our +business operations and business relationships. We considered the geographic locations of +our offices and key suppliers, such as data center suppliers and print facilities. Furthermore, +we performed desk research on sustainability matters within our industry. More extensive +investigations were performed for certain areas, including IT hardware, data centers, and print. +We also conducted desk research on select key suppliers across different sectors. Finally, +we considered other internal sources, including our annual employee survey and SpeakUp +concerns. +For each sustainability topic, input of internal subject matter experts was the basis for the +documentation of the IRO and the scoring assessment. For example, senior staff of the Human +Resources, Privacy, Global Law and Compliance, and Procurement departments were involved +for their respective sustainability topics. +Internal subject matter experts, senior staff of other departments (e.g., GBS, Internal Audit, +Treasury, Risk Management, Global Branding & Communications, and Strategy) and our +customer‑focused divisions, the Executive Board, and the Supervisory Board were all involved +in validating the list of impacts, risks, and opportunities with a high scoring. +96 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information General disclosures \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_98.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_98.txt new file mode 100644 index 0000000000000000000000000000000000000000..b4fcf0773eab09f61321442a2f484aeffa473783 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_98.txt @@ -0,0 +1,51 @@ +A list of internal and external stakeholders was compiled as part of the initial DMA. The views +of employees, primarily coming from the annual employee survey, was incorporated in the +initial DMA process. We did not involve all different key external stakeholders to identify or +assess impacts, risks, and opportunities. However, we asked several investors in the company to +provide feedback on the list of impacts, risks, and opportunities with a high scoring. We intend +to extend involvement of external stakeholders in our next DMA. +We were advised by an external consultant throughout the process. +Our Internal Audit department conducted a review on the initial DMA process and did have any +significant reportable findings. +Integration in overall management processes +While we considered the outcome of our latest annual risk assessment for our double +materiality assessment, this initial DMA was conducted outside of our overall risk management +processes. Our existing risk management process does not yet evaluate sustainability impacts +and risks in the manner defined by ESRS. In the future, we intend to assess to which extent +the DMA can be aligned and/or integrated with our risk management processes. +The material sustainability opportunities are all a key part of our existing strategy and +business model. +Disclosure requirements covered by the sustainability statements (IRO-2) +For a list of all disclosure requirements complied with following the outcome of the initial DMA +and for a list of all data points that derive from other EU legislation, see Reference table on +page 127 and List of data points that derive from other EU legislation on page 130. +We concluded that all disclosure requirement metrics associated with material sustainability +matters are material, unless the metric is connected to an activity that does not apply to +us. Some material metrics were not reported as data was not yet available. In that case, we +indicated when it is expected that the metric will be reported. There are a few company‑specific +metrics associated with material sustainability matters. See the topical sections of these +sustainability statements for further details. +General disclosures continued +Material impacts, risks, and opportunities and their interaction with the Sustainable +Development Goals +We are evolving how we direct our efforts around supporting the UN Sustainable +Development Goals (SDGs). Instead of linking certain SDGs to the social and environmental +impacts of our products, as we did in previous annual reports, we are now linking the same +SDGs to our material impacts, risks, and opportunities. This evolving approach aligns our +efforts to support the SDGs with the sustainability goals that derive from our initial double +materiality assessment. In 2024, we will refine this approach and re‑evaluate which SDGs +to focus on. We remain committed to supporting those SDGs where we can have the most +impact, ensuring we play a role in creating a more sustainable and responsible future. +Environmental +Climate change +Governance +Corporate culture +Social +Equal pay for equal value +| Diversity, Equity, Inclusion, and +Belonging (DEIB) | Work‑life balance + | Training and skills development +| Workers in the value chain +| Privacy | Access to quality information +97 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information General disclosures +The secret animal #3 is a "spider". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_99.txt b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_99.txt new file mode 100644 index 0000000000000000000000000000000000000000..c499d22fc14b436055fc40c9dc696eff21a68c57 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_100Pages/Text_TextNeedles/WoltersKluwer_100Pages_TextNeedles_page_99.txt @@ -0,0 +1,95 @@ +The connection between material sustainability matters and disclosed material metrics is as follows: +Topical standard +Material +sustainability matter +Material metrics disclosed +in the sustainability statements +Climate change (E1) Climate change – Energy consumption and production + – GHG emissions and intensity + – Number of data centers closed (company specific) + – Number of on‑premise servers decommissioned +(company specific) + – Real estate rationalization (company specific) +Own workforce (S1) Equal pay for equal value – CEO pay‑ratio (company specific) +Diversity, equity, +inclusion, and +belonging (DEIB) + – Employees by gender, country, region, and contract term + – U.S. employees by race/ethnicity (company specific) + – Employee turnover + – Employee categories by gender + – Employees by age group + – Employees with disabilities + – Number of work‑related or discrimination investigations +in the U.S. and Canada (company specific) + – Belonging score (company specific) + – Employee engagement score (company specific) +Work‑life balance – Employees entitled to take family‑related leave + – Employees that took family‑related leave + – Employee engagement score (company specific) +Training and skills +development + – Employees that participated in performance reviews + – Average number of training hours + – Employee engagement score (company specific) +Own workforce (S1) +and Consumers and +end‑users (S4) +Privacy – Employees who completed Annual Compliance Training +(company specific) +Workers in the value +chain (S2) +DEIB, adequate wages, +work‑life balance, secure +employment, and health +and safety + – Number of suppliers that signed Supplier Code of +Conduct or equivalent standard (company specific) +Consumers and end‑ +users (S4) +Access to quality +information +None +Business conduct +(G1) +Corporate culture – Employees who completed Annual Compliance Training +(company specific) + – Number of SpeakUp concerns (company specific) + – Employee engagement score (company specific) +Policies adopted to manage material sustainability matters (MDR-P) +An overview of the policies relating to our material sustainability matters is provided below. +For further details on these policies, see the topical sections of these sustainability statements. +Topical standard Material sustainability matter Policies +Climate change (E1) Climate change Environmental Policy +Own workforce (S1) Equal pay for equal value Code of Business Ethics +Human Rights Policy +Diversity, Equity, Inclusion & +Belonging Policy +Diversity, equity, inclusion, and +belonging (DEIB) +Code of Business Ethics +Human Rights and Modern Slavery +Policy +SpeakUp Policy +Diversity, Equity, Inclusion & +Belonging Policy +Work‑life balance Code of Business Ethics +Training and skills development Code of Business Ethics +Own workforce (S1) and +Consumers and end‑users (S4) +Privacy Code of Business Ethics +Human Rights Policy +Global Data Privacy Policy +Workers in the value chain (S2) DEIB, adequate wages, work‑life +balance, secure employment, and +health and safety +Supplier Code of Conduct +Consumers and end‑users (S4) Access to quality information Code of Business Ethics +Business conduct (G1) Corporate culture Code of Business Ethics +Anti‑Bribery and Anti‑Corruption +Policy +Actions and resources in relation to material sustainability matters (MDR-A) +Actions and resources in relation to material sustainability matters are integrated in the topical +sections of these sustainability statements. +General disclosures continued +98 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information General disclosures \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_1.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_1.txt new file mode 100644 index 0000000000000000000000000000000000000000..423a71dac6c9d162f9b844b4b0cb58345ca0e984 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_1.txt @@ -0,0 +1,8 @@ +2023 Annual Report +When +you  +have to +be right +2 3 +wolterskluwer.com +The secret fruit is a "lemon". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_10.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_10.txt new file mode 100644 index 0000000000000000000000000000000000000000..bd9e759db13e6c9fd3800e72b0d04d63ad5f78fd --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_10.txt @@ -0,0 +1,88 @@ +Our business model +We help our customers make critical decisions every day +by providing expert solutions that combine deep domain +knowledge with technology and services. +Our products are used by professionals in over 180 countries +across a range of market segments addressed through our five +customer‑facing divisions. A list of our top expert solutions is +shown on the left. +Our solutions and services are generally sold by our own sales +teams or through selected distribution partners. Our sales +forces are specialized by market segment and product groups. +For certain software products, we work with a range of third‑ +party implementation partners. We also go to market through +telesales, e‑commerce, and other digital distribution channels. +Recurring revenue model +Our revenues are primarily recurring in nature, based on +subscriptions to information, software, and services. Recurring +revenues also include software maintenance fees and other +annually renewing revenues. In 2023, 82% of our total revenues +were recurring (2022: 80%). Renewal rates for our digital +information, software, and services are high and are one of the +key indicators by which we measure our success in the market. +Alongside recurring revenues, we derive fees from software +licenses, implementation and training services, transactional +fees, or other non‑recurring revenues. +Customer relationships +We view customers as fundamental stakeholders in our +business. Long‑term customer relationships are the single +most important factor for the success of our business, critical +to achieving organic growth and maintaining competitiveness. +One of our core company cultural values is to focus on our +customers’ success. In designing, building, and enhancing +our solutions, we work closely with customers before, during, +and after the product development phase to ensure we +meet user needs. +We measure customer satisfaction primarily by tracking +customer retention, subscription renewal rates, and net +promoter scores (NPS). For our established expert solutions +and other leading subscription‑based digital information +products and services, we strive to maintain or achieve +product renewal rates of 90% or more and a top‑three +NPS score. +In 2023, renewal rates for our largest subscription‑based +expert solutions, subscription‑based digital information +products, and subscription‑based services were maintained at +high levels (above 90%) and the NPS scores for more than half +of our top products were maintained or improved. +Employees and talent management +We employ over 21,400 talented and motivated individuals +around the world. More than half of our annual operating +costs relate to our employees, who create, develop and +maintain, sell, implement, and support our solutions and +serve our customers. +We have well‑established programs in place designed to +attract, engage, grow, and retain talent globally. These +programs include training, well‑being, and career development +opportunities for all employees worldwide. In 2023, we +launched the Colleague Experience Promise (CxP) a framework +that articulates what we provide our employees throughout +their careers with the company. +Strategy and business model +continued +Expert solutions combine deep domain knowledge +with technology to deliver both content and workflow +automation to drive improved outcomes and productivity +for our customers. Based on revenues, our largest expert +solutions are: +• Health: global clinical decision support tool UpToDate; +clinical drug databases; and Lippincott nursing +solutions for practice and learning. +• Tax & Accounting: professional tax and accounting +software CCH Axcess and CCH ProSystem fx in North +America and similar software for professionals +across Europe. +• Financial & Corporate Compliance: banking +compliance solutions ComplianceOne, Expere, +eOriginal, and Gainskeeper. +• Legal & Regulatory: enterprise legal management +solutions Passport and TyMetrix; Legisway; and law firm +practice management software Kleos. +• Corporate Performance & ESG: environmental, health +and safety, and operational risk management (EHS/ +ORM) suite Enablon; corporate performance platform +CCH Tagetik; internal audit solution TeamMate; and +finance, risk, and regulatory (FRR) reporting suite +OneSumX. +9 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Strategy and business model +The secret object #1 is a "clock". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_11.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_11.txt new file mode 100644 index 0000000000000000000000000000000000000000..ae789c0defe26fb1d0c0bcce683ce9ea24c9bbdc --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_11.txt @@ -0,0 +1,115 @@ +a fairly competitive global market for technology talent. +For information on our own workforce, see Sustainability +statements on pages 113-121. +Supplier relationships +Around 45% of our annual operating costs relate to third‑party +suppliers. Our business units work closely with thousands +of suppliers and partners globally who provide content, +technology, goods, and services that help us deliver our +products and services. +Our Global Business Services (GBS) function is reponsible for +sourcing and due diligence of technology partners and plays a +growing role in assessing and monitoring other categories of +suppliers. Suppliers that are managed through GBS are subject +to extensive due diligence including security, data privacy, and +business continuity. We set high standards when selecting and +managing third‑party providers. + → For insight into how we mitigate supply chain +risks, see Supply chain dependency and project +execution on page 54 in Risk management + → For sustainability disclosures relating to suppliers, +see Sustainability statements on pages 89-140 +Product development and innovation +Product innovation is a key driver of organic growth and value +creation. For over 20 years, we have consistently invested in +developing new and enhanced products to solve customer +challenges. Our current strategic plan envisages investing +approximately 10% of our annual revenues into product +development, including capital expenditure and operating +expenses. +We track employee engagement and belonging, both +measured through an annual employee survey conducted by +an independent third party, Microsoft Glint. +In 2023, our employee engagement score improved by 1 +point to 78 while our belonging score increased by 2 points +to 75. Our long‑term objective for both of these measures is +to reach the top quartile of companies tracked by Microsoft +Glint. A target for belonging was included in management +remuneration for the past two years and will again be included +in 2024. In 2023, our employee turnover rate improved +significantly to 9.8% (2022: 15.3%) in what remains +Strategy and business model +continued +Comprehensive range of well-being +programs for all employees +We are dedicated to providing a supportive work environment +and offer all employees a comprehensive range of well-being +options designed to enhance their personal and professional +lives. This includes the options below: +• An Employee Assistance Program (EAP) ensures global +support for personal, work/life balance, critical incident +stress management, and coping needs; +• Personalized well-being resources cover physical fitness, +mindfulness, and nutrition, supplemented by clinically +validated stress management resources; +• Financial well-being resources empower employees for a +financially secure future tailored to their unique needs; +• Career Skill Enhancement resources provide access to +expert-led virtual courses and certifications, fostering +career skills and professional development; +• Well-being Champion acts as a peer-to-peer ambassador, +facilitating opportunities for well-being enhancement; and +• Through partnerships, Health Management Programs in the +U.S. emphasize education and support for both medical +and emotional needs. +In 2023, we organized a global well-being challenge, which +engaged employees worldwide in activities that promote in +physical fitness, mental health, and overall well-being. The +challenge also helped to strengthen team bonds globally. +Human capital +• Efforts, skills, and talent +contributed by 21,400 +employees +Technology and IP +• Global brand +• Software and content IP +Suppliers & Partners +• Services, content, and +goods supplied by +thousands of select +vendors and partners +Financial Capital +• €1.7bn equity capital +• €3.7bn gross debt +capital +Natural Resources +• Energy consumption +along our value chain +Inputs Outputs +Customers +• €5.6bn revenues from +solutions that enable +effective and efficient +decision-making +Employees +• €2.3bn in salaries +and other benefits +• Skills and career +development +Suppliers & Partners +• €2.0bn operating costs +on third-party content, +goods, and services +Investors +• 34% total shareholder +return +• €17m net interest paid to +creditors +Society +• €325m income +taxes paid +• Products that protect +health and prosperity +Customer case +10 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Strategy and business model +The secret kitchen appliance is a "microwave". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_12.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_12.txt new file mode 100644 index 0000000000000000000000000000000000000000..0eedbecce81bb58d169673c72535f87937708dd1 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_12.txt @@ -0,0 +1,97 @@ +product innovation 2023 2022 2021 +Product development spending, +% of revenues 11% 11% 10% +Global Innovation Awards, +number of submissions 662 453 154 +Global Innovation Awards, +number of finalists 14 13 16 +Global Innovation Awards, +number of winners 6 5 6 +In 2023, the Global Innovation Awards attracted more than 660 +entries. Fourteen product and process innovation concepts +were selected as finalists, and, of these, six ideas were +selected for special recognition. For our software developers +around the world, we organize an annual coding competition +(Code Games). +In addition to monitoring progress against product roadmaps, +we track submissions and winners of our employee innovation +competitions and our performance in innovation‑oriented +industry awards and rankings, such as the Best in KLAS Awards +and the Stevie Awards. +Responsible artificial intelligence +Artificial intelligence is used in several of our products where +it benefits human experts working in complex professional +fields. We use natural language processing (NLP), machine +learning (ML), deep learning (DL), and virtual assistants (bots) +in many of our solutions in order to augment and streamline +customer workflows and provide new or improved insights. +Innovation is supported by our central product development +team, the Digital eXperience Group, which works closely with +our business units and our customers to build new features, +modules, and platforms. DXG uses a customer‑centric, +contextual design process to develop solutions based on +the scaled agile framework. DXG currently has six centers +of excellence: user experience, artificial intelligence, IP and +patents, architecture and asset reuse, quality engineering, +and application security. Our technology architecture is +increasingly based on globally scalable platforms that use +standardized components. New solutions are built cloud‑first. +We measure innovation by monitoring product development +spending and progress against product roadmaps at the +business unit level. In 2023, product development spending +increased in constant currencies to reach 11% of total +revenues, slightly higher than envisaged under our current +strategic plan. Key product launches during 2023 include +vrClinicals for Nursing, CCH Axcess Engagement, CCH +Tagetik Global Minimum Tax, Enablon ESG Excellence, and +OneSumX for Basel IV. This was followed in early 2024 by CT +Corporation’s new solution for compliance with the new U.S. +beneficial ownership reporting rules. During 2023, we invested +in deploying new generative AI technology into our solutions +and launched our first beta versions of Gen AI applications for +UpToDate and two legal solutions. +We foster idea generation through our annual Global +Innovation Awards (GIA), which rewards teams who develop +innovative solutions that improve customer outcomes and +experiences or transform our own internal processes. Each +year, hundreds of employees participate in the challenge, +putting their creativity to work in collaboration with +colleagues. +Strategy and business model +continued +New Milan office: enhancing well-being +and reducing emissions +We have a long-term program in place, designed to optimize +our global office footprint. This program aims to provide +employees a positive workplace experience while streamlining +operating costs, meeting environmental standards, and +reducing our greenhouse gas (GHG) emissions. +In 2023, this program achieved a 5% underlying reduction +in our real estate footprint as measured in square meters, +resulting in a 8% reduction in our scope 1 and scope 2 GHG +emissions. In coming years, this program will support us in +achieving our near-term SBTi targets for these scopes, while +also enhancing the well-being of our employees. +Our new leased office in Milan exemplifies all of the program’s +objectives. The new building adheres to the LEED V4 BD+C +protocol, which emphasizes eco-conscious construction, +and holds a Well Building Standard (WELL) certification, the +world’s leading health-focused building standard. It is also +certified for advanced digital infrastructure, showcasing our +holistic approach to sustainability and employee well-being. +It is equipped with a Siemens Building Management System +(BMS) to optimize energy consumption by monitoring and +automating plant engineering systems. +The architecture of the new Milan office promotes the well- +being and safety of its occupants. The design incorporates +spacious terraces, large communal areas, and windows that +can be opened, providing a pleasant environment for high- +quality work. Conveniently located near public transport and +equipped with electric charging stations, the office supports +sustainable commuting. Inside, eco-friendly features such +as recycled office materials, potable water sources, waste +separation areas, and energy-efficient LED lighting create an +environmentally-conscious workspace. +Customer case +11 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Strategy and business model +The secret object #3 is a "bowl". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_13.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_13.txt new file mode 100644 index 0000000000000000000000000000000000000000..a740f37deb80394e043644fc70aad74247971a84 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_13.txt @@ -0,0 +1,95 @@ +groups, drives global alignment to the program’s objectives. +We perform regular information security risk assessments to +assess and evaluate the effectiveness of the security program. +The program is assessed annually by an independent third +party, allowing us to measure our performance each year with +a cybersecurity maturity score. Since 2020, the cybersecurity +maturity score has been based on the National Institute of +Standards and Technology, Cybersecurity Framework (NIST‑CSF) +which is a risk‑based model. +A target for our cybersecurity maturity score has been +included in Executive Board and senior management +remuneration for the past three years and will again be +included in 2024. In 2023, the cybersecurity maturity score +increased, exceeding the target for the year. Over the three‑ +year period since 2020, the indexed score has been improved +to 113.8 compared to the base year (2020 = 100.0). For more +information, see Remuneration report. +We have a cross‑functional global information security +incident response team that promptly analyzes security +incidents, assesses the potential impact, determines if any +immediate risks exist, and takes prompt actions to mitigate +any harm to the company. We maintain a written global +information security program of policies, procedures, and +controls aligned to NIST‑CSF, ISO 27001, and other equivalent +standards. These govern the processing, storage, transmission, +and security of data. +For select systems, applications, and services, we have +achieved over 85 attestations and certifications, most notably +SOC 1 Type 1, SOC 2 Type 2, HITRUST, FedRAMP, CSA STAR, +and MSDPR. In addition, some of our locations that support +IT operations and some of our products have attained +ISO 27001 certification. +We also deploy other advanced technologies, such as digital +twins and robotic process automation (RPA) to the benefit +of customers. In 2023, around 50% of our digital revenues were +from solutions that incorporate these various forms of AI. +As a company that holds ethics and good governance in high +regard, we are committed to developing artificial intelligence +in an ethical and responsible manner. We have developed an +Artificial Intelligence Assurance Framework and Responsible +Artificial Intelligence Principles that incorporate key principles +such as privacy and security, transparency and explainability, +governance and accountability, fairness, non‑discrimination, +and human‑centeredness. The Responsible AI Framework +and principles lead us to embed good practices throughout +the design, development, use, and evaluation of AI‑enabled +solutions. We actively monitor legislative developments such +as the EU Artificial Intelligence Act and ethics guidelines +issued by organizations and expert working groups to ensure +we are aware of evolving best practices in this area. +Cybersecurity +Customers rely on us to deliver our platforms and services +safely and reliably while safeguarding their data. We are +committed to protecting the personal and professional +information of our employees, customers, and partners. +We manage a global information security program built on +people, processes, and technology and designed to protect our +organization, products, and customers. The security program +has a three‑tiered management structure. It is overseen by our +Security Council which is comprised of senior leaders from the +five divisions and from functional areas. Our Chief Information +Security Officer is responsible for managing and monitoring +the overall program. Our Technology Council implements +initiatives and, together with dedicated taskforce +Strategy and business model +continued +UpToDate brings access to quality +information to clinicians in 180 countries +Our clinical decision tool UpToDate is used by over 2 million +clinicians around the world. To ensure highest quality, +transparency, and clarity of its evidence-based content, +UpToDate follows a rigorous editorial policy and process. +UpToDate content, which covers more than 12,000 topics +across 25 medical specialties, is developed by more than +7,000 contributing experts, leading practitioners in their +respective fields, who work with our in-house team of editors, +led by an editor-in-chief. Editors perform a continual review +of over 400 of the top, peer-reviewed medical journals, as +well as key clinical databases and other resources. Topics are +updated when new evidence or information emerges but only +after careful and extensive review by our expert contributors +who can provide context and clinical guidance. Each +UpToDate specialty area has dedicated reviewers responsible +for anonymous peer review of selected topics. UpToDate user +comments are also reviewed and incorporated into topics +where appropriate or necessary. +This layered, iterative review process allows us to ensure +the content addresses the relevant clinical questions; meets +editorial standards for quality, clarity, and usability; and is +free from commercial bias. + → For insight into how we mitigate cybersecurity risks, see IT +and cybersecurity on page 53 in Risk management +Customer case +12 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Strategy and business model +The secret landmark is "Big Ben". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_14.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_14.txt new file mode 100644 index 0000000000000000000000000000000000000000..ad5339524c0d364b8b8718f86c8d5f466d468c9b --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_14.txt @@ -0,0 +1,74 @@ +Our specific guidance for 2024 is +provided below. +We expect sustained good organic growth in line with prior +year and a further modest increase in the adjusted operating +profit margin. Margin improvement is expected to be realized +in the second half of the year, mainly due to timing of +investments. Our group‑level guidance for 2024 is shown in +the table below: +performance indicators 2024 guidance 2023 actual +Adjusted operating profit +margin (%) 26.4‑26.8 26.4 +Adjusted free cash flow +(€ million) 1,150‑1,200 1,164 +ROIC (%) 17.0‑18.0 16.8 +Diluted adjusted EPS +growth Mid to high single digit 12% +Guidance for adjusted operating profit margin and ROIC is in reporting +currencies and assumes an average rate in 2024 of €/$1.11. +Guidance for adjusted free cash flow and diluted adjusted EPS is in +constant currencies (€/$ 1.08). +Guidance reflects share repurchases of €1 billion in 2024. +In 2023, Wolters Kluwer generated over 60% of its revenues +and adjusted operating profit in North America. As a rule of +thumb, based on our 2023 currency profile, each 1 U.S. cent +move in the average €/$ exchange rate for the year causes +an opposite change of approximately 3 euro cents in diluted +adjusted EPS¹. +We include restructuring costs in adjusted operating profit. We +expect 2024 restructuring costs to be in the range of +€10‑15 million (2023: €15 million). We expect adjusted net +financing costs² in constant currencies to increase to +approximately €60 million. We expect the benchmark tax rate +on adjusted pre‑tax profits to increase and to be in the range +of 23.0%‑24.0% (2023: 22.9%). +Capital expenditures are expected to remain at the upper end +of our guidance range of 5.0%‑6.0% of total revenues (2023: +5.8%). We expect the full‑year 2024 cash conversion ratio to +be around 95% (2023: 100%) due to lower net working capital +inflows. +Our guidance assumes no additional significant change to +the scope of operations. We may make further acquisitions or +disposals which can be dilutive to margins, earnings, and ROIC +in the near term. +2024 Outlook by division +Our guidance for 2024 organic growth by division is +summarized below. We expect the increase in group adjusted +operating profit margin to be driven primarily by our Health, +Legal & Regulatory, and Corporate Performance & ESG +divisions in 2024. +Health: we expect full‑year 2024 organic growth to be in line +with prior year (2023: 6%). +Tax & Accounting: we expect full‑year 2024 organic growth to +be slightly below prior year (2023: 8%), due to slower growth +in non‑recurring outsourced professional services and the +absence of one‑off favorable events in Europe. +Financial & Corporate Compliance: we expect full‑year 2024 +organic growth to be in line with or better than prior year +(2023: 2%) as transactional revenues are expected to stabilize. +Legal Regulatory: we expect full‑year 2024 organic growth to +be in line with prior year (2023: 4%). +Corporate Performance & ESG: we expect full‑year 2024 +organic growth to be better than in the prior year (2023: 9%) as +Finance, Risk & Reporting revenues stabilize. +2024 Outlook +¹ This rule of thumb excludes the impact of exchange rate movements +on intercompany balances, which is accounted for in adjusted net +financing costs in reported currencies and determined based on +period‑end spot rates and balances. +² Adjusted net financing costs include lease interest charges. +Guidance for adjusted net financing costs in constant currencies +excludes the impact of exchange rate movements on currency +hedging and intercompany balances. +13 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information 2024 Outlook +The secret animal #4 is a "cow". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_15.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_15.txt new file mode 100644 index 0000000000000000000000000000000000000000..c885af1d91d56f24115b0325d2d2d32051d8ce84 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_15.txt @@ -0,0 +1,62 @@ +Organizational +structure +Wolters Kluwer is organized around +five customer‑facing divisions +supported by three centralized teams +and a corporate office. +Health +• Clinical Solutions +• Health Learning, +Research & Practice +Tax & Accounting +• North America +• Europe +• Asia Pacific & ROW +Financial & Corporate +Compliance +• Legal Services +• Financial Services +Legal & Regulatory +• Information Solutions +• Software +Corporate +Performance & ESG +• EHS/ORM +• Corporate +Performance, +Internal Audit, and FRR +€1.5bn +revenues 2023 +€1.5bn +revenues 2023 +€1.1bn +revenues 2023 +€0.9bn +revenues 2023 +€0.7bn +revenues 2023 +Global Growth Markets +• China, India, and Brazil +• Global expert solutions +• Local market knowledge +Digital eXperience Group +• Innovation and product +development +• Development centers of +excellence +• Technology asset management +Global Business Services +• Technology infrastructure +• Operational excellence programs +• Procurement and shared services +180+ +FTEs +4,500+ +FTEs +1,200+ +FTEs +Operating costs and FTEs of Global Growth Markets, Digital eXperience Group, and Global Business Services are allocated to the customer ‑facing +divisions. +Executive Board & Corporate Office +14 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Organizational structure and executive team +The secret vegetable is "cauliflower". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_16.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_16.txt new file mode 100644 index 0000000000000000000000000000000000000000..b99f64d059113bb04c0f609fba9b343f916d559b --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_16.txt @@ -0,0 +1,113 @@ +Executive team +Tax & AccountingHealth Financial & Corporate +Compliance +Legal & Regulatory Corporate Performance +& ESG +Stacey Caywood CEO +We offer clinical technology and +evidence‑based solutions for +clinicians, patients, researchers, +students, and future healthcare +providers. Our focus is on clinical +effectiveness, research, learning, +surveillance, compliance, and data +solutions. Our proven solutions +drive effective decision ‑making +and consistent outcomes in +healthcare. +Customers include hospitals, +healthcare organizations, +students, clinicians, schools, +libraries, payers, life sciences, and +pharmacies. +Product brands include UpToDate, +Lippincott, Medi ‑Span, Ovid, and +Health Language. +Jason Marx CEO +We empower tax and accounting +professionals, and governing +authorities to grow, manage, and +protect their business and clients. +Our solutions combine domain +expertise, advanced technology, +and workflows for compliance, +productivity, management, and +client relationships. +Customers include accounting +firms, tax and auditing +departments, government +agencies, libraries, and +universities. +Product brands include CCH +AnswerConnect, CCH Axcess, +ADDISON, CCH iFirm, A3 Software, +Genya, Twinfield, CCH ProSystem +fx, and ATX. +Steve Meirink CEO +We provide financial institutions, +corporations, small businesses, +and law firms with solutions to +help meet regulatory and legal +obligations, improve efficiency, +and achieve better outcomes. +We offer technology ‑enabled +services and software solutions +for loan compliance, regulatory +compliance, legal entity +management, and corporate +services. +Customers include corporations +and small businesses, law firms, +banks, non ‑bank lenders, insurers, +brokers, and other financial +institutions. +Product brands include CT +Corporation, BizFilings, eOriginal, +ComplianceOne, Lien Solutions, +Expere, GainsKeeper, and Wiz. +Martin O’Malley CEO +We help legal and compliance +professionals enhance +productivity, mitigate risk, +and solve complex problems +confidently. With expert +information and advanced +technologies, we enable +professionals to thrive in the +ever‑changing fields of legal and +regulatory compliance. +Customers include law firms, +corporate legal departments, +notaries, universities, and +government agencies. +Product brands include VitalLaw, +Passport, TyMetrix 360°, Kleos, +Legisway, LEX, ONE, Schulinck, +Wolters Kluwer Online, Kluwer Law +International, and InView. +Karen Abramson CEO +We provide enterprise software +solutions to streamline reporting +processes, manage risks, and +meet regulatory requirements. +Our comprehensive suite of +tools and services provide +professionals in finance, +environment health and safety, +operational risk management, +regulatory reporting, risk +and compliance, and internal +audit with integrated financial, +operational, and ESG performance +management and reporting +solutions. +Customers include corporate +finance, audit, planning, risk, +EHS/ORM, and sustainability +professionals in corporations, +banks, and governments. +Product brands include CCH +Tagetik, Enablon, TeamMate, and +OneSumX. +15 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Organizational structure and executive team +The secret flower is a "daisy". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_17.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_17.txt new file mode 100644 index 0000000000000000000000000000000000000000..05c562171bae7528dbab1b7b953a98929015a59c --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_17.txt @@ -0,0 +1,58 @@ +Executive team +continued + → Full list of management +www.wolterskluwer.com/en/ +about-us/management +Digital eXperience Group +Dennis Cahill CTO +The Digital eXperience Group +creates cutting ‑edge digital +solutions in collaboration with +global business units. Our mission +is to accelerate innovation and +leverage technology investments. +We drive innovation through +six centers of excellence: user +experience, artificial intelligence, +IP & patent, architecture & asset +reuse, quality engineering, and +application security. +Global Growth Markets +Cathy Wolfe President & CEO +Global Growth Markets (GGM) +focuses on developing the +company’s strategic presence +in China, India, Brazil, and +other geographic markets. +GGM’s mission is to apply local +market knowledge to service +professionals with global and +local expert solutions . +Global Business Services +Andres Sadler CEO +Global Business Services (GBS) +improves and transforms our +internal technology infrastructure, +including IT operations, workplace +technologies, cybersecurity, IT +architecture, engineering services, +and network and enterprise +systems. GBS supports the +company’s digital transformation +in technology, strategic sourcing, +procurement, operational +excellence, collaboration services, +analytics, and events. +Corporate office +The Corporate Office sets the +global strategic direction for +the company and ensures good +corporate governance. Its mission +is to support and provide an +enabling business and operating +environment, to help realize our +strategy to deliver impact to our +customers, employees, investors, +and society at large. +16 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Organizational structure and executive team +The secret animal #5 is a "squirrel". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_18.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_18.txt new file mode 100644 index 0000000000000000000000000000000000000000..f26280f5eab24fe80153e5b253147314f5e41547 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_18.txt @@ -0,0 +1,10 @@ +Innovative solutions for +better health outcomes +Supporting professionals across +the healthcare ecosystem with +leading technology to provide +the best evidence‑based +patient care. +Health +17 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information +The secret object #4 is a "pillow". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_19.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_19.txt new file mode 100644 index 0000000000000000000000000000000000000000..afedfd35341d248b1c025d1eb6daf554e24353d7 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_19.txt @@ -0,0 +1,74 @@ +Our mission is to +advance the best +care everywhere +through trusted +clinical technology +and evidence‑based +medicine. +“2024 will be a +watershed year for +generative AI in +healthcare and we +aim to play a major +part. +Stacey Caywood +CEO Wolters Kluwer Health +Business overview +Wolters Kluwer Health provides trusted clinical technology and +evidence‑based solutions that drive effective decision‑making +and improved outcomes across healthcare. +We support millions of clinicians, patients, researchers, and +students around the world. +Our Clinical Solutions help physicians and other healthcare +practitioners improve patient outcomes and safety, reduce +clinical variation in care, reduce healthcare costs, manage +population health, optimize clinical workflows, advance health +equity, and drive value‑based care. +Our Health Learning, Research & Practice business supports +the advancement of clinical knowledge and the discovery of +new drugs and medical treatments. Our learning solutions +help educate millions of doctors, nurses, and other healthcare +professionals around the world each year. +Market trends +• Emerging use of generative AI in healthcare +• Demand for solutions to alleviate pressure on +hospitals and staff +• Medical institutions continue to seek cost savings +• Demand for practice-ready nurses, physicians, and other +health professionals +• Continued growth in open access medical research +• Continued focus on consumer-centric care +HPMC and Sentara drive quality +improvement with Ovid Synthesis +Hollywood Presbyterian Medical Center (HPMC) and Norfolk, +Virginia-based Sentara Healthcare have implemented Ovid +Synthesis Clinical Evidence Manager to support their clinical +research initiatives. Ovid Synthesis Clinical Evidence Manager +is a cloud-based, AI-enabled workflow tool that increases +the efficiency of the entire clinical research process, from +streamlining literature review and evidence appraisal +to increasing collaboration between departments and +facilitating decisions about dissemination. +Sentara is using the solution in its Nurse Residence Program. +The Director of Library Services at Sentara commented, +“Sentara has used Ovid for years to help our clinicians +with research. We have now added Ovid Synthesis Clinical +Evidence Manager to assist with all our clinical research and +tracking, as well as compliance for Magnet recognition and +renewal. Based on our experience, we anticipate productive +research support from this new product”. +HPMC is leveraging Ovid Synthesis Clinical Evidence Manager +to support its implementation of Shared Governance. The +Director of Education at HMPC remarked, “We are investing in +Ovid to support the education department as well as assisting +in the rollout of Shared Governance throughout the medical +center. The Shared Governance rollout is a collaboration +between our caregivers and leadership to improve patient +care, streamline the work environment, and ensure the most +accurate, up-to-date information is available to the care +teams. Ovid Synthesis is a key element in this initiative”. +“ +Customer case +18 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information + Health +The secret office supply is a "calculator". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_2.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_2.txt new file mode 100644 index 0000000000000000000000000000000000000000..577204c42d8e323c3e5a5fa9c77e80cfe4585259 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_2.txt @@ -0,0 +1,11 @@ +Deep impact +when it +matters most +Every second of every day, +our customers face decisive +moments that impact the lives +of millions of people and shape +society for the future. + → Read more about our strategy on page 7 +1 Wolters Kluwer 2023 Annual Report ← → +The secret food is "chocolate". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_20.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_20.txt new file mode 100644 index 0000000000000000000000000000000000000000..eb091246bcbfa121ea72a2a369fb09d42e85de24 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_20.txt @@ -0,0 +1,61 @@ +Review of 2023 performance +• Clinical Solutions sustained 7% organic growth. +• Health Learning, Research & Practice grew 5% organically. +• Margin reflects operational gearing and mix shift, partly +offset by higher personnel costs. +Wolters Kluwer Health revenues increased 7% in constant +currencies and 6% organically (2022: 5%). Adjusted operating +profit increased 8% in constant currencies and 7% on an +organic basis. The margin increased 20 basis points, reflecting +operational gearing and mix shift, partly offset by higher +personnel costs and personnel‑related expenses. +Operating profit increased 8% overall, reflecting the increase +in adjusted operating profit and the absence of impairments +of acquired identifiable intangible assets recorded in the prior +year. +Clinical Solutions (55% of divisional revenues) delivered +7% organic revenue growth (2022: 7%). Our clinical decision +support tools, clinical drug databases, and patient +engagement solutions all achieved mid‑ to high single‑ +digit organic growth in 2023, driven by strong subscription +renewals and new customer additions. European revenues for +UpToDate achieved double‑digit organic growth. Revenues in +surveillance, compliance, and medical terminology solutions +remained soft. On June 7, 2023, we acquired Invistics, a U.S. +provider of AI‑enabled drug diversion detection software for +hospitals. In October 2023, we launched the first beta version +of UpToDate leveraging generative AI technology (AI Labs). +Health Learning, Research & Practice (45% of divisional +revenues) achieved 5% organic revenue growth (2022: 3%), +as Ovid benefitted from new revenues generated under the +New England Journal of Medicine digital distribution contract +won in 2022. Across all journals, growth was led by digital +subscriptions and open access fees, which more than offset +declines in print subscriptions, advertising, and reprints. +Ovid Synthesis Clinical Evidence Manager, launched in 2022, +continued to add new customers. In education and practice, +organic growth moderated due to print book revenues which +declined 3% (2022: growth of 16%). Our nursing business was +expanded with the acquisition of educational solutions and +test preparation provider NurseTim in January 2023. +Our customers +Hospitals, healthcare organizations, clinicians, students, +schools, libraries, payers, life sciences, and pharmacies +Top products +Clinical Solutions: UpToDate clinical decision support, Medi‑ +Span and other drug databases, patient engagement, Sentri7, +Simplifi+, and Health Language +Health Learning, Research & Practice: Ovid, Lippincott nursing +solutions, medical books, and journals + → Complete list of Health solutions +https://www.wolterskluwer.com/en/ +health +Health +continued +Selected awards 2023 +Invistics drug diversion ranked #1 by +KLAS Research in AI/ML effectiveness +Sentri7 and Simplifi+ received Black +Book award for top client satisfaction +19 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Health +The secret animal #2 is a "penguin". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_21.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_21.txt new file mode 100644 index 0000000000000000000000000000000000000000..e0e17c666dbc3d37dfe0a152a917ee746a65c447 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_21.txt @@ -0,0 +1,38 @@ +Health +continued +Organic growth in revenues +6% +Recurring +91% +recurring revenues as % of division total +Digital +89% +digital revenues as % of division total +Health – Year ended December 31 +€ million, unless otherwise stated 2023 2022 ∆ ∆ CC ∆ OG +Revenues 1,508 1,448 +4% +7% +6% +Adjusted operating profit 454 434 +5% +8% +7% +Adjusted operating profit margin 30.1% 29.9% +Operating profit 406 376 +8% +Net capital expenditure 49 42 +Ultimo FTEs 3,333 3,116 +∆: % Change; ∆ CC: % Change in constant currencies (€/$ 1.05); ∆ OG: % Organic growth. +Clinical Solutions 55% +Learning, Research & Practice 45% +2023 Revenues by segment +Recurring 91% +Print books 4% +Other non-recurring 5% +2023 Revenues by type +North America 76% +Europe 9% +Asia Pacific & ROW 15% +2023 Revenues by +geographic market +Software 3% +Digital information 86% +Services and print 11% +2023 Revenues by +media format +20 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Health +The secret object #5 is a "vase". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_22.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_22.txt new file mode 100644 index 0000000000000000000000000000000000000000..53a1fe5a8d71ad3b09f195ced1312a6a5e872611 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_22.txt @@ -0,0 +1,11 @@ +Expert solutions to optimize tax +and accounting processes +Software delivering deep +domain knowledge and +workflow automation to +ensure compliance, improve +productivity, and strengthen +client relationships. +Tax & Accounting +21 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information +The secret drink is a "smoothie". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_23.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_23.txt new file mode 100644 index 0000000000000000000000000000000000000000..04a8d01982b208558e0affbe0281e2d11197363b --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_23.txt @@ -0,0 +1,63 @@ +Our unwavering +focus on innovation +helps improve +how professionals +work, make critical +decisions, and plan +for the future of +their businesses. +“ +Jason Marx +CEO Tax & Accounting +Business overview +Wolters Kluwer Tax & Accounting enables professionals in tax +and accounting firms of all sizes to grow, manage, and protect +their business and their clients’ businesses. +Our expert solutions support the digitization of workflows +and enable collaboration, ultimately driving efficiencies and +better results. +In our Tax & Accounting businesses around the world, we +serve tax and accounting firms with cloud‑based and on‑ +premise software suites, research solutions, and professional +services to support professional workflows, including +compliance, audit, and firm management. Our customers also +include businesses, government agencies, and academia. +Market trends +• Firms turning to advanced and intelligent technologies to +drive efficiency and enable higher value work +• Continued rise in regulatory intensity and complexity +• Cloud solutions starting to mature with the focus shifting +from migration to adoption +• Continued shortage of professionals driving accounting +firm demand for efficiency solutions +Randall L. Sansom increases efficiency +with CCH Axcess +Randall L. Sansom CPAs, a professional accounting firm based +in Florida, uses Wolters Kluwer’s U.S. cloud-based solution +suite, CCH Axcess, to manage its practice and support its +operations, with both its administrative staff and its tax +advisors using a variety of software modules, including CCH +Axcess Practice for firm management, CCH Axcess Tax for +calculations and filing, Workstream for scheduling, and CCH +Answer Connect for research. +The CCH Axcess platform is the only complete cloud solution +in the U.S. market today that provides a seamless platform +for tax, audit, and firm management. The product has had +a significant impact on Randall L. Sansom’s productivity, +enabling the firm to focus on providing high-value expertise +to their clients. With CCH Axcess, the efficiency gains the +firm has achieved has resulted in hours of saved time and +improved the work/life balance of staff. Since implementing +CCH Axcess, the firm’s staff can complete more work with +fewer people. +According to the firm’s CEO, “With the entire array of products +that we have, we’re saving between one and two hours on +the tax preparer side of things that an admin person is able +to do. And it has cut down on my admin time, at least 45 +minutes to an hour and a half, depending on the size of the +return. Compared to when I started eight years ago, we’re +doing double the amount of returns with less staff, which +is amazing”. +Customer case +22 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Tax & Accounting +The secret sport is "surfing". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_24.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_24.txt new file mode 100644 index 0000000000000000000000000000000000000000..9be692e72e8e1b00b34de79328354b240f36fd97 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_24.txt @@ -0,0 +1,59 @@ +Selected awards 2023 +CCH iFirm named a Bronze Stevie +Award winner for Innovation in Digital +Transformation at APAC Stevie Awards +CCH Axcess Engagement named a 2023 +Artificial Intelligence Award winner by +the Business Intelligence Group +Review of 2023 performance +• Organic growth 8%, with all regions performing well. +• Cloud software revenues grew 17% organically. +• Margin stable, despite increase in personnel costs and +related expenses. +The Tax & Accounting division is now focused on professional +accounting firms, as the corporate performance (CCH Tagetik and +U.S. Corporate Tax) and internal audit (TeamMate) units were +moved to the new Corporate Performance & ESG division. +Wolters Kluwer Tax & Accounting revenues increased 8% in +constant currencies and 8% on an organic basis (2022: 8% pro +forma). Adjusted operating profit increased 8% in constant +currencies and 8% on an underlying basis. The margin increased +10 basis points, as operational gearing was offset by higher +personnel costs and related expenditures. +Operating profit increased 6%, largely reflecting the development +of adjusted operating profit. +Tax & Accounting North America (59% of divisional revenues) +achieved 8% organic growth (2022: 10% pro forma) driven by the +continued strong customer uptake of CCH Axcess cloud software +modules, in particular Tax, Document, Practice, and Workflow. +Our U.S. cloud‑based audit solution, CCH Axcess Engagement, +first launched in 2022, continued to gain early adopters. +Our on‑premise software solutions saw slower organic growth. +Non‑recurring outsourced professional services revenues grew +well, but at a more moderate pace than in the prior year. Our +U.S. publishing unit recorded low single digit organic growth. +Tax & Accounting Europe (35% of divisional revenues) delivered +7% organic growth (2022: 6%) supported by strong renewals and +new sales and boosted by one‑off revenues related to property +tax changes in Germany and government stimulus programs in +Spain. Cloud software, including hybrid‑cloud solutions, grew +14% organically. +Tax & Accounting Asia Pacific and Rest of World (6% of divisional +revenues) revenues were up 5% organically (2022: 6%), buoyed by +non‑recurring revenue growth in China and India. +Our customers +Accounting firms, tax and auditing departments, businesses of all +sizes, government agencies, libraries, and universities +Top products +North America: CCH Axcess, CCH ProSystem fx, CCH Axcess +Engagement, CCH Axcess Workflow, and CCH AnswerConnect +Europe, Asia Pacific, and ROW: A3 Software, ADDISON, CCH +iFirm, Genya, and Twinfield + → Complete list of Tax & +Accounting solutions +https://www.wolterskluwer.com/en/ +tax-and-accounting +Tax & Accounting +continued +23 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Tax & Accounting +The secret transportation is a "bike". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_25.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_25.txt new file mode 100644 index 0000000000000000000000000000000000000000..0589e5546f26d6f91d6ec4a0dd53678f0e58306d --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_25.txt @@ -0,0 +1,40 @@ +Tax & Accounting +continued +Organic growth in revenues +8% +Recurring +91% +recurring revenues as % of division total +Software +81% +software revenues as % of +division total +Tax & Accounting – Year ended December 31 +€ million, unless otherwise stated 2023 2022 ∆ ∆ CC ∆ OG +Revenues 1,466 1,394 +5% +8% +8% +Adjusted operating profit 479 455 +5% +8% +8% +Adjusted operating profit margin 32.7% 32.6% +Operating profit 460 434 +6% +Net capital expenditure 74 67 +Ultimo FTEs 7,276 6,693 +Δ: % Change; Δ CC: % Change in constant currencies (€/$ 1.05); Δ OG: % Organic growth. 2022 figures are pro forma. +Tax & Accounting North America 59% +Tax & Accounting Europe 35% +Tax & Accounting AsiaPac & ROW 6% +2023 Revenues by segment +Recurring 91% +Print books 1% +Other non-recurring 8% +2023 Revenues by type +North America 59% +Europe 35% +Asia Pacific & ROW 6% +2023 Revenues by +geographic market +Software 81% +Digital information 15% +Services and print 4% +2023 Revenues by +media format +24 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Tax & Accounting +The secret animal #3 is a "spider". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_3.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_3.txt new file mode 100644 index 0000000000000000000000000000000000000000..8e8a5226bacb4d9ab69b34e48e4e9419894c0a1e --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_3.txt @@ -0,0 +1,78 @@ +As a global provider of +professional information, +software solutions, and services, +our work helps to protect +people’s health and prosperity +and contributes to a safe +and just society by providing +deep insights and knowledge +to professionals. + → Read more about our strategy and business model on +page 7 +This copy of the annual report of Wolters Kluwer N.V. for +the year 2023 is not in the ESEF‑format as specified by the +European Commission in Regulatory Technical Standard on +ESEF (Regulation (EU) 2019/815). The ESEF reporting package +can be found on our website www.wolterskluwer.com/en/ +investors/financials/annual-reports +Strategic report +3 Wolters Kluwer at a glance +5 Q&A with CEO Nancy McKinstry +7 Strategy and business model +13 2024 Outlook +14 Organizational structure +15 Executive team +17 Health +21 Tax & Accounting +25 Financial & Corporate Compliance +29 Legal & Regulatory +33 Corporate Performance & ESG +37 Group financial review +Governance +44 Corporate governance +50 Risk management +60 Statements by the Executive Board +61 Executive Board and Supervisory Board +63 Report of the Supervisory Board +70 Remuneration report +Sustainability statements +90 Our approach to sustainability +91 General disclosures +100 Environmental disclosures +113 Social disclosures +125 Governance disclosures +127 Reference table +130 List of data points that derive from other EU legislation +133 Task Force on Climate-related Financial Disclosures (TCFD) +134 EU Taxonomy +Financial statements +142 2023 Financial statements +143 Consolidated financial statements +147 Notes to the consolidated financial statements +203 Company financial statements +205 Notes to the company financial statements +211 Independent auditor’s report +Other information +221 Articles of Association Provisions Governing Profit Appropriation +222 Wolters Kluwer shares and bonds +226 Five-year key figures +227 Glossary +228 Contact information +€5.6bn +total revenues +94% +of revenues from digital +products and services +82% +of revenues are recurring +26.4% +adjusted operating profit margin +€4.55 +diluted adjusted earnings per share +16.8% +return on invested capital + → Visit our investors portal +www.wolterskluwer.com/en/investors/ +Financial highlights 2023 +2 Wolters Kluwer 2023 Annual Report ← → +The secret shape is a "heart". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_4.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_4.txt new file mode 100644 index 0000000000000000000000000000000000000000..092fc752cd66737c7bc65e2275f45de39ce36799 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_4.txt @@ -0,0 +1,53 @@ +Wolters Kluwer +at a glance +We help our customers make critical +decisions every day by providing +expert solutions that combine deep +domain knowledge with specialized +technology and services. +Global footprint +North America +64% +of total revenues +Europe +28% +of total revenues +Asia Pacific & ROW +8% +of total revenues +21,400+ +employees worldwide +180+ +countries where we serve customers +40+ +countries from which we operate +8 flagship offices +significant subsidiaries +78 +employee engagement +score, up 1 point +8% +reduction in scope 1 and +scope 2 emissions +75 +employee belonging score, +up 2 points +Near-term +targets +validated by +SBTi in 2023 +Sustainability highlights 2023 +6% +organic growth in revenues +58% +of revenues from expert +solutions +€1.2bn +adjusted free cash flow +34% +total shareholder return +including dividends +(not reinvested) +Financial highlights 2023 +3 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Wolters Kluwer at a glance +The secret instrument is a "violin". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_5.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_5.txt new file mode 100644 index 0000000000000000000000000000000000000000..e44be336fc16c7677808399ea3b218e2e8a89902 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_5.txt @@ -0,0 +1,82 @@ +Divisions +We deliver professional information, software, and +services for the healthcare; tax and accounting; financial +and corporate compliance; legal and regulatory; and +corporate performance and ESG sectors. +Health +Trusted clinical technology and solutions +that drive effective decision ‑making +and outcomes across the continuum +of healthcare. + → Read more on page 17 +Tax & Accounting +Expert solutions that help tax, accounting, +and audit professionals drive productivity, +navigate change, and deliver better +outcomes. + → Read more on page 21 +Financial & Corporate Compliance +Expert solutions for legal entity +compliance and banking product +compliance. + → Read more on page 25 +Legal & Regulatory +Information, insights, and workflow +solutions for changing regulatory +obligations, managing risk, and increasing +efficiency. + → Read more on page 29 +Corporate Performance & ESG +Enterprise software to drive financial and +sustainability performance and manage +risks, meet reporting requirements, +improve safety and productivity, and +reduce environmental impact. + → Read more on page 33 +Revenues by media format +2023 Revenues by type +Organic revenue growth +Adjusted operating profit margin +Diluted adjusted EPS in € +Return on invested capital +0% +20% +40% +60% +80% +100% +Digital: Expert solutions Digital: Information products +Services Print +2020 2021 2022 2023 +Recurring Non-recurring +0% +1% +2% +3% +4% +5% +6% +7% +2020 2021 2022 2023 +5.8%6.2%5.7% +1.7% +22% 23% 24% 25% 26% 27% +2020 +2021 +2022 +2023 +0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 +2020 +2021 +2022 +2023 +18%0% 3% 6% 9% 12% 15% +2020 +2021 +2022 +2023 +82% +Recurring +revenues +4 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Wolters Kluwer at a glance +The secret tool is a "ruler". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_6.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_6.txt new file mode 100644 index 0000000000000000000000000000000000000000..2c408479443eed8c1ca8087d4ff5c65bdb269843 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_6.txt @@ -0,0 +1,83 @@ +We are delivering value +for our customers, +rewarding careers for our +employees, and returns +for shareholders. +“ +The passion, commitment, and +efforts of our global team allowed +us to collectively deliver on our +goals in a year when we made key +organizational changes, directed +more funds towards AI, and managed +through an interest rate cycle. +Q +How would you sum up the company’s 2023 financial results? +The macroeconomic and geopolitical backdrop of 2023 +presented some challenges, but despite this, we achieved our +overall financial guidance, with another year of 6% organic +growth and a further increase in the adjusted operating +profit margin. The year saw our two largest divisions, Health +and Tax & Accounting, grow faster than we had anticipated, +compensating for Financial & Corporate Compliance and +Corporate Performance & ESG, where the interest rate cycle +and market shifts impacted results. It was a year when our +Legal & Regulatory division demonstrated yet again that it has +been transformed, delivering 8% organic growth for its digital +information solutions. The group‑wide margin developed +as we had expected as personnel costs and discretionary +expenses returned to more normal levels last year after the +effects of the pandemic. We were able to increase investment +in product development in 2023 to take advantage of new +opportunities and still meet our margin and cash flow goals. + Q +Innovation spending is at record levels. What are you +investing in? +Product development spending is running at 11% of group +revenues, some €615 million in 2023, up in constant currencies. +This investment is critical to supporting organic growth and +to our long‑term competitive position. In our world, organic +investment mostly relates to multi‑year product roadmaps +which require careful planning and resource management. +We are investing in many areas: in migrating solutions to +the cloud; further deploying artificial intelligence and other +advanced technologies; adding new modules to our platforms; +transforming our digital information products into expert +solutions; and building capabilities to support customers for +new regulations. We follow a rigorous design and development +process, that adheres to our responsible AI principles, to +ensure quality and security while also achieving a return on +investment. We aim to be agile at the same time so we can +pivot or move faster when needed. In 2023, for example, we +quickly shifted attention and funding towards generative AI +opportunities. Our centralized product development team, +DXG, plays a key role in driving innovation with the divisions, +both for existing solutions and the creation of entirely new +products. + Q +Generative AI took the world by storm in 2023. How is Wolters +Kluwer deploying this new technology? +For over 10 years, we have been deploying artificial +intelligence into our products. In fact, around 50% of our +digital revenues come from products that have some form of +AI embedded. We see the new Gen AI technology as another +powerful tool that we can put to work with our high‑quality, +continuously updated, proprietary content to bring benefits to +customers. We also see interesting opportunities to enhance +our own internal operations with this technology. Gen AI lends +itself very well to certain tasks, such as conversational search, +generating first drafts, or summarizing documents. In 2023, we +released our first generative AI‑enabled products and there is +more to come in 2024. +Q +In 2023, you set up a new division. Why reorganize? +The new division, Corporate Performance & ESG, was formed +by bringing together four of our global enterprise software +units: Enablon, CCH Tagetik, TeamMate, and OneSumX/FRR. +We believe there are important synergies to be derived +from joining up these units and connecting and integrating +their solutions. Less than a year in, we have started aligning +Q&A with +Nancy McKinstry +5 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Q&A with Nancy McKinstry +The secret animal #1 is a "giraffe". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_7.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_7.txt new file mode 100644 index 0000000000000000000000000000000000000000..c128efd1a48cf8c3e6ecfb33d45d109bf82178a4 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_7.txt @@ -0,0 +1,86 @@ +product development and have already released the first +connection between Enablon and CCH Tagetik. All four units +address the corporate market and we see scope to leverage +their combined global sales and marketing strength. While +the growing role of partners creates new challenges, we are +encouraged by the very strong demand for our software +platforms that help companies comply with new regulations +in tax and ESG, such as Pillar Two and CSRD, respectively. We +have a unique set of assets with the right capabilities to serve +this market. +Q +Are you on track to deliver on the goals of your 2022-2024 +strategy? +We are very much on track. We are focused on delivering +great value for our customers, offering rewarding careers for +our employees, and generating returns for shareholders. Our +top priority has been to grow our expert solutions, which +are sophisticated workflow and software applications that +enhance professionals’ decision‑making and productivity. +In 2023, expert solutions were our fastest‑growing type of +product, with revenues increasing 8% organically. Our cloud‑ +based software products grew 15% organically. +Our second strategic priority is to extend into high‑growth +adjacencies, market segments that are logical extensions +to our existing business. Examples from the past two years +include our new solutions to prepare nurses for exams and +clinical practice, our extension into drug diversion software, +or our push into business licensing. In these three cases, we +made small bolt‑on acquisitions, NurseTim and Invistics in +2023, and LicenseLogix in 2022, to accelerate the move. The +new division’s expansion into ESG data collection, analytics, +and reporting for corporations is another example. +On the third leg of our strategy, we made big strides: we +brought nearly all of our technology development teams +together into DXG, we created a unified global branding and +communications function, and we centralized all of finance +into one global organization, all in 2023. We also achieved +several of our sustainability goals. +Q +Your strategy states that you intend to advance your ESG +performance. What was accomplished in 2023? +Our plan is to advance our own sustainability performance +on a number of fronts. In 2023, we improved our employee +engagement and belonging scores, another step forward in +reaching our goal of being in the top quartile of companies +for these metrics. Another milestone was the validation of +our near‑term emission reduction targets by the Science +Based Targets initiative. In this annual report, you will see +significantly expanded sustainability disclosures, which bring +us closer to alignment with the European Sustainability +Reporting Standards (ESRS) and which address many of +the recommendations of the Task Force on Climate‑related +Financial Disclosures (TCFD). There is more to do, but we made +significant progress in 2023. +Q +What is the outlook for 2024? +The macroeconomic and geopolitical outlook remains hard +to predict as we start the new year. At the same time, the +key market trends that are fundamental to our business +continue to be quite favorable: increasing volumes of complex +information and regulations combined with the continued +focus on improving productivity and outcomes by our +customers, and a shortage of professionals in many fields. +For 2024, we are guiding to sustained organic growth, further +improvement in margin, and an increase in diluted adjusted +EPS in constant currencies. Beneath the calm surface, a lot is +going on. Product investment will remain high in 2024. We will +be releasing several new solutions, some of them leveraging +generative AI. I am excited about the opportunities ahead. +Nancy McKinstry +CEO and Chair of the Executive Board +Wolters Kluwer + → Read about our strategy on page 7 + → Read our Sustainability statements on +page 89-140 +Expert solutions +8% +organic growth in 2023 +Cloud software +15% +organic growth in 2023 +Diversity, equity & inclusion +75 +belonging score, up 2 points +6 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Q&A with Nancy McKinstry +The secret clothing is a "sock". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_8.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_8.txt new file mode 100644 index 0000000000000000000000000000000000000000..980a5ebc3343b29266f1ad7077e774c405d7b147 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_8.txt @@ -0,0 +1,76 @@ +Our mission is to empower our +professional customers with the +information, software solutions, +and services they need to make +critical decisions, achieve successful +outcomes, and save time. +Overview +Wolters Kluwer is a global provider of information, software +and services for professionals in the fields of health; tax and +accounting; financial and corporate compliance; legal and +regulatory; and corporate performance and ESG. +Every day, our customers face the challenge of increasing +quantities and complexity of information or regulation +and the pressure to deliver better outcomes at lower +cost. We aim to solve this challenge, add value to their +workflow, and support their decision‑making with our digital +solutions and technology‑enabled services. We continuously +improve our solutions to meet evolving customer needs, +leveraging the latest technologies to provide benefits such +as advanced analytics, intuitive interfaces, mobility, flexibility, +interoperability, reliability, and open architecture. +Purpose +Our purpose is to deliver impact when it matters most. Every +second of every day, our customers face decisive moments +that impact the lives of millions of people and shape society. +In these crucial moments, we put sound knowledge, deep +expertise, and usable data and insights into their hands at +the right time and in the right context for their specific set of +circumstances. Our solutions help protect people’s health, +prosperity, and safety and help to build better businesses. +Strategy +Our strategy for 2022‑2024 aims to deliver good organic +growth and improved adjusted operating margins and return +on invested capital, while advancing our ESG performance. +Among the ESG goals in our 2022‑2024 plan are to drive +an improvement in our belonging score, to align with the +recommendations of the Task Force on Climate‑related Financial +Disclosures (TCFD), and to obtain validated near‑term science‑ +based targets. To achieve these goals, our strategic priorities +are: +• Accelerate Expert Solutions: we are focusing our +investments on cloud‑based expert solutions while +continuing to transform selected digital information +products into expert solutions. We are investing to enrich +the user experience of our products by leveraging advanced +data analytics and artificial intelligence. +• Expand Our Reach: we are seeking to extend into high‑ +growth adjacencies along our customers’ workflows and to +adapt our existing products for new customer segments. We +are working to develop partnerships and ecosystems for our +key software platforms. +• Evolve Core Capabilities: we are enhancing our central +functions to drive excellence and scale economies in sales +and marketing (go‑to‑market) and in technology. We are +focused on advancing our ESG performance and capabilities +and continuing to invest in diverse and engaged talent to +support innovation and growth. +Our strategy is centered on organic investment and growth.The +three‑year plan envisages spending approximately 10% of total +revenues each year on product development. +We also make selected acquisitions and non‑core disposals +to enhance our value and market positions. Acquisitions must +fit our strategy, strengthen or extend our existing business, +generally be accretive to diluted adjusted EPS in their first full +year, and, when integrated, deliver a return on invested capital +above our weighted‑average cost of capital (8%) within three +to five years. +Strategy and +business model +50% +Around 50% of digital +revenues are from +products that leverage +artificial intelligence +7 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Strategy and business model +The secret object #2 is a "bottle". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_9.txt b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_9.txt new file mode 100644 index 0000000000000000000000000000000000000000..fc61b77622054e7e0e90c9ee1ee23fabe412d061 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_25Pages/Text_TextNeedles/WoltersKluwer_25Pages_TextNeedles_page_9.txt @@ -0,0 +1,76 @@ +Strategic progress 2023 +In 2023, we made important progress on our strategic plans. +First, expert solutions, which include our software products +and certain advanced information solutions, accounted for +58% of total revenues (2022: 56%) and grew 8% organically +(2022: 9%). Software solutions accounted for 45% of total +revenues (2022: 44%) and grew 8% organically (2022: 9%). +Cloud software revenues accounted for 37% of total 2023 +software revenues and grew 15% (2022: 17%). Today, around +50% of our digital revenues are from products that leverage +artificial intelligence (AI) to drive enhanced value for our +customers. During 2023, we stepped up experimentation with +large language models (LLMs) and the new scalable generative +AI technology, testing dozens of use cases, collaborating with +selected customers, and launching beta versions in Health +and Legal & Regulatory markets. For much of this work, we +are partnering with Microsoft, Google, and other technology +suppliers. +Second, we made progress on extending our reach into high‑ +growth adjacencies and geographies. The new Corporate +Performance & ESG division, formed in 2023, sets us on a path +to extend our enterprise software solutions into corporate +workflows for ESG data collection, analysis, reporting, and +assurance. In the Health division, the 2023 acquisition of +NurseTim bolstered our position in nursing education +solutions and test preparation while the 2023 acquisition of +Invistics drug diversion detection software broadened our +offering in the hospital market. +Third, we took significant steps in 2023 to evolve our core +capabilities. We centralized the majority of our product +development teams, more than doubling the number +of FTEs in our global development organization, Digital +eXperience Group (DXG). We also centralized our branding and +communications teams and created a unified global finance +organization to support the company globally. With regard +to our specific ESG objectives, the most notable advances +in 2023 were the validation by the Science Based Targets +initiative of our near‑term emission reduction targets and the +improvements in several important social metrics, notably +employee turnover, engagement, and belonging. +Strategy and business model +continued +Strategy 2022-2024 +Our strategy, Elevate Our Value, aims to drive +good organic growth and improved operating +profit margins and return on invested capital +over the 2022‑2024 period while advancing our +ESG performance. +• Drive investment in cloud-based +expert solutions +• Transform digital information +products into expert solutions +• Enrich customer experience by +leveraging data analytics +• Extend into high-growth adjacencies +• Reposition solutions for new +segments +• Drive revenues through +partnerships and ecosystem +development +• Enhance central functions, including +marketing and technology +• Advance ESG performance and +capabilities +• Engage diverse talent to drive +innovation and growth +Elevate +Our Value +Accelerate +Expert Solutions +Expand +Our Reach +Evolve +Core Capabilities +8 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Strategy and business model +The secret currency is a "ruble". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_5Pages/Text_TextNeedles/WoltersKluwer_5Pages_TextNeedles_page_1.txt b/WoltersKluwer/WoltersKluwer_5Pages/Text_TextNeedles/WoltersKluwer_5Pages_TextNeedles_page_1.txt new file mode 100644 index 0000000000000000000000000000000000000000..423a71dac6c9d162f9b844b4b0cb58345ca0e984 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_5Pages/Text_TextNeedles/WoltersKluwer_5Pages_TextNeedles_page_1.txt @@ -0,0 +1,8 @@ +2023 Annual Report +When +you  +have to +be right +2 3 +wolterskluwer.com +The secret fruit is a "lemon". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_5Pages/Text_TextNeedles/WoltersKluwer_5Pages_TextNeedles_page_2.txt b/WoltersKluwer/WoltersKluwer_5Pages/Text_TextNeedles/WoltersKluwer_5Pages_TextNeedles_page_2.txt new file mode 100644 index 0000000000000000000000000000000000000000..577204c42d8e323c3e5a5fa9c77e80cfe4585259 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_5Pages/Text_TextNeedles/WoltersKluwer_5Pages_TextNeedles_page_2.txt @@ -0,0 +1,11 @@ +Deep impact +when it +matters most +Every second of every day, +our customers face decisive +moments that impact the lives +of millions of people and shape +society for the future. + → Read more about our strategy on page 7 +1 Wolters Kluwer 2023 Annual Report ← → +The secret food is "chocolate". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_5Pages/Text_TextNeedles/WoltersKluwer_5Pages_TextNeedles_page_3.txt b/WoltersKluwer/WoltersKluwer_5Pages/Text_TextNeedles/WoltersKluwer_5Pages_TextNeedles_page_3.txt new file mode 100644 index 0000000000000000000000000000000000000000..8e8a5226bacb4d9ab69b34e48e4e9419894c0a1e --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_5Pages/Text_TextNeedles/WoltersKluwer_5Pages_TextNeedles_page_3.txt @@ -0,0 +1,78 @@ +As a global provider of +professional information, +software solutions, and services, +our work helps to protect +people’s health and prosperity +and contributes to a safe +and just society by providing +deep insights and knowledge +to professionals. + → Read more about our strategy and business model on +page 7 +This copy of the annual report of Wolters Kluwer N.V. for +the year 2023 is not in the ESEF‑format as specified by the +European Commission in Regulatory Technical Standard on +ESEF (Regulation (EU) 2019/815). The ESEF reporting package +can be found on our website www.wolterskluwer.com/en/ +investors/financials/annual-reports +Strategic report +3 Wolters Kluwer at a glance +5 Q&A with CEO Nancy McKinstry +7 Strategy and business model +13 2024 Outlook +14 Organizational structure +15 Executive team +17 Health +21 Tax & Accounting +25 Financial & Corporate Compliance +29 Legal & Regulatory +33 Corporate Performance & ESG +37 Group financial review +Governance +44 Corporate governance +50 Risk management +60 Statements by the Executive Board +61 Executive Board and Supervisory Board +63 Report of the Supervisory Board +70 Remuneration report +Sustainability statements +90 Our approach to sustainability +91 General disclosures +100 Environmental disclosures +113 Social disclosures +125 Governance disclosures +127 Reference table +130 List of data points that derive from other EU legislation +133 Task Force on Climate-related Financial Disclosures (TCFD) +134 EU Taxonomy +Financial statements +142 2023 Financial statements +143 Consolidated financial statements +147 Notes to the consolidated financial statements +203 Company financial statements +205 Notes to the company financial statements +211 Independent auditor’s report +Other information +221 Articles of Association Provisions Governing Profit Appropriation +222 Wolters Kluwer shares and bonds +226 Five-year key figures +227 Glossary +228 Contact information +€5.6bn +total revenues +94% +of revenues from digital +products and services +82% +of revenues are recurring +26.4% +adjusted operating profit margin +€4.55 +diluted adjusted earnings per share +16.8% +return on invested capital + → Visit our investors portal +www.wolterskluwer.com/en/investors/ +Financial highlights 2023 +2 Wolters Kluwer 2023 Annual Report ← → +The secret shape is a "heart". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_5Pages/Text_TextNeedles/WoltersKluwer_5Pages_TextNeedles_page_4.txt b/WoltersKluwer/WoltersKluwer_5Pages/Text_TextNeedles/WoltersKluwer_5Pages_TextNeedles_page_4.txt new file mode 100644 index 0000000000000000000000000000000000000000..092fc752cd66737c7bc65e2275f45de39ce36799 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_5Pages/Text_TextNeedles/WoltersKluwer_5Pages_TextNeedles_page_4.txt @@ -0,0 +1,53 @@ +Wolters Kluwer +at a glance +We help our customers make critical +decisions every day by providing +expert solutions that combine deep +domain knowledge with specialized +technology and services. +Global footprint +North America +64% +of total revenues +Europe +28% +of total revenues +Asia Pacific & ROW +8% +of total revenues +21,400+ +employees worldwide +180+ +countries where we serve customers +40+ +countries from which we operate +8 flagship offices +significant subsidiaries +78 +employee engagement +score, up 1 point +8% +reduction in scope 1 and +scope 2 emissions +75 +employee belonging score, +up 2 points +Near-term +targets +validated by +SBTi in 2023 +Sustainability highlights 2023 +6% +organic growth in revenues +58% +of revenues from expert +solutions +€1.2bn +adjusted free cash flow +34% +total shareholder return +including dividends +(not reinvested) +Financial highlights 2023 +3 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Wolters Kluwer at a glance +The secret instrument is a "violin". \ No newline at end of file diff --git a/WoltersKluwer/WoltersKluwer_5Pages/Text_TextNeedles/WoltersKluwer_5Pages_TextNeedles_page_5.txt b/WoltersKluwer/WoltersKluwer_5Pages/Text_TextNeedles/WoltersKluwer_5Pages_TextNeedles_page_5.txt new file mode 100644 index 0000000000000000000000000000000000000000..e44be336fc16c7677808399ea3b218e2e8a89902 --- /dev/null +++ b/WoltersKluwer/WoltersKluwer_5Pages/Text_TextNeedles/WoltersKluwer_5Pages_TextNeedles_page_5.txt @@ -0,0 +1,82 @@ +Divisions +We deliver professional information, software, and +services for the healthcare; tax and accounting; financial +and corporate compliance; legal and regulatory; and +corporate performance and ESG sectors. +Health +Trusted clinical technology and solutions +that drive effective decision ‑making +and outcomes across the continuum +of healthcare. + → Read more on page 17 +Tax & Accounting +Expert solutions that help tax, accounting, +and audit professionals drive productivity, +navigate change, and deliver better +outcomes. + → Read more on page 21 +Financial & Corporate Compliance +Expert solutions for legal entity +compliance and banking product +compliance. + → Read more on page 25 +Legal & Regulatory +Information, insights, and workflow +solutions for changing regulatory +obligations, managing risk, and increasing +efficiency. + → Read more on page 29 +Corporate Performance & ESG +Enterprise software to drive financial and +sustainability performance and manage +risks, meet reporting requirements, +improve safety and productivity, and +reduce environmental impact. + → Read more on page 33 +Revenues by media format +2023 Revenues by type +Organic revenue growth +Adjusted operating profit margin +Diluted adjusted EPS in € +Return on invested capital +0% +20% +40% +60% +80% +100% +Digital: Expert solutions Digital: Information products +Services Print +2020 2021 2022 2023 +Recurring Non-recurring +0% +1% +2% +3% +4% +5% +6% +7% +2020 2021 2022 2023 +5.8%6.2%5.7% +1.7% +22% 23% 24% 25% 26% 27% +2020 +2021 +2022 +2023 +0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 +2020 +2021 +2022 +2023 +18%0% 3% 6% 9% 12% 15% +2020 +2021 +2022 +2023 +82% +Recurring +revenues +4 Wolters Kluwer 2023 Annual Report ← → Strategic report Governance Sustainability statements Financial statements Other information Wolters Kluwer at a glance +The secret tool is a "ruler". \ No newline at end of file