UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934

(Amendment No.     )

Filed by the Registrant

Filed by a Party other than the Registrant

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Flowserve Corporation

(Name of Registrant as Specified in Its Charter)

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

Payment of Filing Fee (Check all boxes that apply):
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Invitation to 2023 Annual Meeting of Shareholders

Dear Fellow Shareholder:

I am pleased to invite you to join me, our Board of Directors, executive officers, associates and other shareholders at Flowserve’s 2023 Annual Meeting of Shareholders. The attached Notice of the 2023 Annual Meeting of Shareholders and Proxy Statement, which we are providing to shareholders beginning on April 13, 2023, contain details of the business to be conducted at the meeting.

Our Performance in 2022

Flowserve made progress on several fronts in 2022 despite the challenging business environment. We were able to deliver strong bookings and support a growing range of customers on their energy transition journey. During 2022, we saw a significant increase in bookings year-over-year and ended with a robust $2.7 billion backlog.

We were encouraged throughout the year to see the value of our Diversification, Decarbonization and Digitization (3D) Strategy to our customers. We also launched our new ESG Strategy – Climate, Culture and Corporate Responsibility – to highlight our efforts to focus on these important initiatives. We continued to support our core customers in the oil & gas, chemical and power markets, and we’ve strengthened our relationships with them through the energy transition. We also positioned ourselves in the marketplace as a key partner in emerging technologies like CCUS, hydrogen and other sustainable fuels; and our bookings growth demonstrates our leadership in flow control.

2022 Highlights include:

Celebrated 25 years of being publicly listed on NYSE		Strong bookings grew nearly 18% and backlog increased by 36.5%, both year-over-year
20+ new product offerings in support of our 3D Strategy and customers’ sustainability efforts		Strategic partnership with Chart Industries and acquisition of hydrogen pump technology
Record safety performance		Launch of Workday to drive empowerment and efficiency

Our Business Strategy

We believe that through the commitment and dedication of our associates, our strong backlog, and our growth strategy, we are well positioned to capitalize on the continued strength in our end markets and through the energy transition in 2023 and beyond.

During 2023, we will continue the focus on our 3D Strategy as we drive our technology and product development efforts to target new and attractive market growth opportunities, while supporting our existing customers’ efficiency and decarbonization efforts. We have a sharp focus on driving operational excellence and are confident in our plan to deliver results in an improving environment and create long-term value for our shareholders and other stakeholders.

Shareholder Feedback

Flowserve’s Board and senior leadership continue to be encouraged by the positive feedback we have received about the clarity of information we provide through our proxy statement. We are continually reviewing ways to enhance the information in our public disclosures and will continue to do so based on your feedback. Your vote is very important to us and to our business. Prior to the meeting, I encourage you to sign and return your proxy card, or use telephone or Internet voting, so that your shares will be represented and voted at the meeting. You can find instructions on how to vote beginning on page 85.

Thank you in advance for voting and for your continued support of Flowserve.

R. Scott Rowe, President and CEO

Notice of 2023 Annual Meeting of Shareholders

When: Thursday, May 25, 2023 at 11:30 a.m. CDT

Where: Online at https://www.virtualshareholdermeeting.com/FLS2023

We are pleased to invite you to join our Board of Directors and senior leadership at Flowserve’s 2023 Annual Meeting of Shareholders. The 2023 Annual Meeting will be held online only and will begin at 11:30 AM CDT on May 25, 2023. We will hold the 2023 Annual Meeting solely by means of remote communications with no in-person location. You can attend the Annual Meeting and vote online at https://www.virtualshareholdermeeting.com/FLS2023.

2023 Proposals		Board Vote Recommendation		Page Reference (for more detail)
1	Elect the 11 directors named in the proxy statement	For	✔	Page 16
2	Approve, on an advisory basis, the Company’s executive compensation	For	✔	Page 72
3	Vote, on an advisory basis, on the frequency of future advisory votes on the Company’s executive compensation	One Year	✔	Page 73
4	Ratify the appointment of PricewaterhouseCoopers as our independent auditor for 2023	For	✔	Page 78
5	Shareholder Proposal to eliminate ownership requirements to call a special shareholder meeting	Against	✘	Page 81

Shareholders will also transact any other business that is properly brought before the Annual Meeting.

Record Date: Shareholders of record of the Company’s common stock, par value $1.25 per share, at the close of business on March 28, 2023 are entitled to notice of and to vote at the Annual Meeting.

Attending the Meeting Virtually: To participate in the meeting, including to vote or to ask questions during the meeting, you must access the meeting website at https://www.virtualshareholdermeeting.com/FLS2023, and log in using the 16-digit control number provided on your proxy card, voting instruction form, or Notice of Internet Availability of Proxy Materials. If your shares are held in street name and your voting instruction form or Notice of Internet Availability indicates that you may vote those shares through the https://www.proxyvote.com website, then you may access, participate in, and vote at the annual meeting with the 16-digit access code indicated on that voting instruction form or Notice of Internet Availability. Otherwise, shareholders who hold their shares in street name should contact their bank, broker or other nominee (preferably at least 5 days before the annual meeting) and obtain a “legal proxy” in order to be able to attend, participate in or vote at the annual meeting.

For additional related information, please refer to the disclosure beginning on Page 85 in the enclosed proxy statement. The proxy statement and 2022 annual report to shareholders and any other proxy materials are available at https://www.proxyvote.com.

Your vote is very important. Whether or not you plan to attend the Annual Meeting online, we urge you to vote and submit your proxy in advance of the meeting by one of the methods described to the right on this page. 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. Returning a proxy card or otherwise submitting your proxy does not deprive you of your right to attend the Annual Meeting and vote online at https://www.virtualshareholdermeeting.com/FLS2023.

By order of the Board of Directors,

Susan C. Hudson
Senior Vice President, Chief Legal Officer and Corporate Secretary

PROXY SUMMARY

This summary highlights information contained elsewhere in the proxy statement. This summary does not contain all the information that you should consider, and you should read the entire proxy statement carefully before voting. Page references are supplied to help you find additional information in the proxy statement.

Board Nominees (Page 16)

DAVID E. ROBERTS	R. SCOTT ROWE	SUJEET CHAND
Independent Chairman Age: 62 Director since 2011 Committees: * Other Public Company Boards: None	President & CEO, Flowserve Age: 52 Director since 2017 Committees: None Other Public Company Boards: 1	Independent Age: 65 Director since 2019 Committees: ● ● Other Public Company Boards: 2
RUBY R. CHANDY	GAYLA J. DELLY	JOHN R. FRIEDERY
Independent Age: 61 Director since 2017 Committees: ★ ●	Independent Age: 63 Director since 2008 Committees: ★ ●	Independent Age: 66 Director since 2007 Committees: ● ●
Other Public Company Boards: 2	Other Public Company Boards: 2	Other Public Company Boards: None
JOHN L. GARRISON	MICHAEL C. MCMURRAY	THOMAS B. OKRAY
Independent Age: 62 Director since 2018 Committees: ★ ●	Independent Age: 58 Director since 2018 Committees: ★ ●	Independent Age: 60 Director since 2023 Committees: ●
Other Public Company Boards: 1	Other Public Company Boards: None	Other Public Company Boards: None

 

KENNETH I. SIEGEL	CARLYN R. TAYLOR
Independent Age: 66 Director since 2022 Committees: ● ●	Independent Age: 54 Director since 2020 Committees: ● ●
Other Public	Other Public
Company Boards: 2	Company Boards: 1

*

As Chairman of the Board, Mr. Roberts rotates between committee meetings and serves as an alternate committee member for all committees, as needed.

2023 PROXY STATEMENT

2

Executive Officers (Page 32)

	Name and Position	Age	Since	Previous Position
	R. Scott Rowe President, CEO and Director	52	April 2017	President — Cameron Group, Schlumberger Ltd.
	Elizabeth L. Burger Senior VP and Chief Human Resources Officer	52	April 2018	SVP and Chief Human Resources Officer, Hanesbrands, Inc.
	Lamar L. Duhon President, Flowserve Pumps Division	52	January 2022	Vice President, Sperry Drilling Halliburton
	Susan C. Hudson Senior VP, Chief Legal Officer and Corporate Secretary	46	May 2022	Flowserve Vice President and Chief Compliance Officer
	Amy B. Schwetz Senior VP and Chief Financial Officer	48	February 2020	EVP and Chief Financial Officer, Peabody
	Scott K. Vopni Vice President, Chief Accounting Officer	55	June 2020	SVP — Finance, Chief Accounting Officer, Dean Foods Co.
	Kirk R. Wilson President, Flow Control Division	56	July 2019	Flowserve President, Aftermarket Services & Solutions

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Executive Compensation Highlights (Page 34)

Compensation Philosophy and Principles

	ATTRACT & RETAIN	Attract and retain high-quality leaders with a passion for driving high performance, as well as our purpose, values, behaviors
	REINFORCE OUR STRATEGY	Align our incentive programs with our vision and business strategy
	COMPETITIVE AND MARKET-BASED	Maintain a market-based compensation program that provides a competitive total target compensation opportunity approximating the market median
	ALIGN PAY WITH PERFORMANCE	Provide incentive programs that reward short- and long-term performance leading to shareholder value without undue risk taking
	ALIGN PAY WITH SHAREHOLDERS	Provide that a majority of total compensation is tied to performance and/or stock price and is aligned with shareholder interests

Pay for Performance Alignment

Our annual incentive program paid out below target for 2022 and each of the two prior fiscal years.

ANNUAL INCENTIVE PLAN PAYOUTS (% OF TARGET)

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PSUs have paid out below target for the past three performance cycles.

PAYOUTS FOR 2018, 2019, and 2020 PSU GRANTS

2022 Executive Total Compensation Mix

The majority of the total target compensation provided to our Named Executive Officers is ‘at risk’ and aligned with our compensation philosophy and principals to drive shareholder value creation.

 

*

Including stock price performance for RSUs.

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Table of Contents

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Cautionary Note Regarding Forward-Looking Statements

This proxy statement contains forward-looking statements about future events and circumstances. Generally speaking, any statement not based upon historical fact is a forward-looking statement. Forward-looking statements can also be identified by the use of forward-looking or conditional words such as “could,” “should,” “can,” “continue,” “estimate,” “intent,” “forecast,” “intend,” “look,” “may,” “will,” “expect,” “believe,” “anticipate,” “plan,” “remain,” “project,” “predict,” “seek,” “confident” and “commit” or similar expressions. In particular, statements regarding our financial position, plans, strategies, objectives, prospects and expectations regarding our business, future operations, industry and market conditions are forward-looking statements. They reflect our current expectations, are subject to materials risks, uncertainties and other factors, many of which are outside of our control, and are not guarantees of performance and we can give no assurance that they will prove to be correct or that any plan, initiative, projection, goal, commitment, or expectation can or will be achieved, and speak only as of the date of this proxy statement. You should not rely unduly on forward-looking statements. Our business results are subject to a variety of risks and uncertainties, including those that are described in our 2022 Annual Report on Form 10-K and elsewhere in our filings with the Securities and Exchange Commission, any of which could cause actual plans or results to differ materially from those included in any forward-looking statements. If any of these considerations or risks materialize or intensify, our expectations (or underlying assumptions) may change and our performance may be adversely affected. Except as required by law, we undertake no obligation, and disclaim any duty, to publicly update or revise any forward-looking statement or disclose any facts, events or circumstances that after the date hereof that may affect the accuracy of any forward-looking statement, whether as a result of new information, future events, changes in our expectations or otherwise.

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THIS IS FLOWSERVE

Our Purpose, Values and Behaviors

Around the world, Flowserve is striving to fulfill our purpose – to create extraordinary flow control solutions to make the world better for everyone. To help solve the biggest flow-control challenges, customers worldwide rely on the product lines, engineering, project management, and service expertise of Flowserve that dates back more than 230 years. We have developed a strategy on a foundation of six core values and seven key behaviors that are at the root of everything we do as an organization in pursuit of this purpose.

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THIS IS FLOWSERVE

Our 3D Growth Strategy

Our strategy of supporting energy transition through our efforts to Diversify, Decarbonize, and Digitize – our 3D Growth Strategy – supports and aligns directly with our purpose.

Diversify  Today, Flowserve is meaningfully levered to oil and gas in each of our divisions. We have over 230 years of industry experience and expertise serving other infrastructure markets within flow control. Our goal now is to aggressively re-engage our offerings with market participants in areas like water, specialty chemical and other general industries where we maintain strong capabilities, and to support our customers’ energy transition efforts across industries. While we remain fully committed to supporting our existing customers today and into the future, our Diversify strategy is focused on creating a more balanced portfolio based on cleaner sources of energy and increasing our exposure to the end markets offering long-term outsized growth potential. One way we are advancing Diversification at Flowserve is deploying sustainable technology in seawater desalination applications. In 2022, Flowserve engaged with Collahuasi, operators of one of the largest copper mines in the world, to enable seawater desalination, water pumping and transport of supply water for their mining needs. Flowserve will supply 25 DMX pumps for the Water Impulse System from the Port Sector to the Cordillera Sector. Our pumps will be pivotal in helping preserve and care for the region’s natural resources.

Decarbonize We recognize that governments and corporations around the globe are increasingly focused on addressing the effects of climate change and implementing efforts to reduce greenhouse gas emissions. In addition to our own efforts to reduce carbon emissions in our operations, many of our current products and services can be utilized in numerous aspects of our customers’ carbon reduction efforts. In addition, we believe that through continued technology investment and new product development, our capture rate of this expanding opportunity will continue to grow. With several technologies already available in LNG, hydrogen, carbon capture, renewables and others, Flowserve’s innovative portfolio of flow control solutions supports our new Energy Advantage program and provides offerings to help customers’ energy transition efforts in three key areas – energy efficiency, carbon reduction, and operational cost mitigation. As an example of our decarbonization strategy, Flowserve is supplying G4 sleeved plug valves to a leading China-based civil explosives company that traditionally develops products for industries like mining, water conservancy, and railway and highway construction. The customer will use the valves in the production of polybutylene adipate terephthalate (PBAT) – a chemical used in the manufacturing of biodegradable plastic products. In Flowserve’s support of this initiative, we are enabling our customers to manufacture products in a growing market that is environmentally friendly and sustainable for the future.

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Digitize Digitize represents our focus on helping our customers digitize their operations, driven by our RedRaven internet-of-things, or IoT, suite of equipment monitoring and predictive maintenance services. Since the launch of RedRaven two years ago, we have been encouraged by the demonstrated capabilities of this offering and how it has helped us expand our services capabilities and form new relationships with our customers. We now support over 50 customer sites across a diverse set of industry applications, and we have over 1,700 instrumented assets in 17 countries. Our goal is to digitize as much of our existing installed base and new original equipment as possible and convert the RedRaven solution to a profitable recurring revenue stream. Feedback from adopting customers is validating the value to customers of the recurring expense. RedRaven technology digitizes our customer experience with its ability to predict failures and avoid costly downtime in critical applications, such as one of the largest water desalination plants in Oman. Our state-of-the-art predictive analytics are installed on 22 critical process pumps there, ensuring the equipment is not only operating safely, but also reducing carbon emissions and saving energy while providing clean drinking water to the people of Oman.

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THIS IS FLOWSERVE

Corporate Social Responsibility

Our ESG Programs & Initiatives

Guided by our values, we aim to create extraordinary flow control solutions to make the world better for everyone. Our Purpose informs our Environmental, Social and Governance (ESG) vision as we strive to enable a clean energy future by advancing technologies that reduce climate impact, embed sustainability within our core operations and strengthen our purpose-driven culture. In 2022, we launched a more holistic approach to ESG at Flowserve that honors this vision and more closely aligns with our Diversification, Decarbonization and Digitization Strategy. Our ESG program is constructed around three key pillars: Climate, Culture and Core Responsibility. These pillars capture how we are committed to advancing ESG at Flowserve on our journey of making the world better for everyone.

Climate Climate captures the Environmental pillar of our ESG approach and outlines our commitment to enabling a clean energy future for our operations and our customers.   We are dedicated to promoting our customers’ sustainability through product development, stewardship and innovation that support energy efficiency, reduced emissions and digitization of operations. We have partnered with our customers in advancing sustainability in their operations through development of carbon capture technology, concentrated solar power and flare gas recovery. In 2022, we booked nearly $140 million in energy transition projects to drive renewable energy and help our customers reduce operations emissions, minimize lifecycle equipment costs, reduce maintenance requirements, and simplify equipment operation.   We value our role as key partners to our customers in reaching their carbon reduction goals through energy transition but also remain focused on our own carbon reductions goals as well as part of our commitment to sustainability, Flowserve targets to reduce Scope 1 and Scope 2 carbon intensity 40% by 2030, using 2015 as a baseline year. Our goal is to reduce combined direct (Scope 1) and indirect (Scope 2) operating emissions of 29.4 Tonne CO2-equivalent (CO2e) per million USD dollars in annual sales revenue in 2015 to 17.4 Tonne CO2e or lower by 2030. We plan to meet this target through energy efficiency improvements, renewable energy project development and other measures to offset our greenhouse gas emissions. Our progress was supported in 2021 with the completion of 46 energy efficiency projects, and initial construction of two renewable energy projects at facilities in Italy and China.   For more information on our ESG programs and initiatives, please see our ESG Report accessible through our website at https://www.flowserve.com under the “ESG” caption, which is not incorporated by reference into this proxy statement. Statements regarding our ESG-related goals are not guarantees or promises that those goals will be met.

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Culture Culture refers to the Social pillar of our strategy, rooted in our belief that the collective energy of our People set us apart. It defines our commitment to strengthening our values driven culture and investing in our communities through talent recruitment and engagement, diversity, equity and inclusion (DEI), workplace health and safety and employee wellbeing.   At Flowserve, our people are at the heart of providing vital flow control products and services to make the world better for everyone. Keeping our associates safe in our facilities and on customer sites is our primary driver in promoting their wellbeing. Our TargetZero program unifies our goals and initiatives to further drive operational excellence and continuous improvement across Flowserve in five key areas: accidents, defects, delays, emissions and waste. It offers a comprehensive approach to enhance the impact of our safety, quality, supply chain and environmental efforts to deliver unmatched value to our customers and supplier partners. In 2022, our TargetZero safety program continued to be an industry leader in total recordable incident rates.   Developing, rewarding and engaging with our employees and communities around the globe is a critical focus in our Culture pillar. In 2021, we launched Leadership in Motion to provide critical leadership skills to over 2,000 Flowserve People Leaders, with continued progress for the program in 2022. We also distributed over 15,000 Spirit of Flowserve Awards to recognize associates for living out our values and behaviors. In 2019, we formally launched our global community impact program, Flowserve Cares, which empowers associates to request company support for community programs and needs. Flowserve Cares incorporates monetary donations, in-kind contributions and volunteer opportunities to help make meaningful impacts in the communities where our associates and customers live and work. The programs selected for grants reflect a wide range of needs that align with Flowserve’s core support areas: at-risk youth, STEM programs and education, disaster recovery, and community issues.   Embracing differences is a core aspect of our People value at Flowserve. We seek to build a diverse and inclusive culture through our Diversity, Equity and Inclusion program. Each year, we celebrate the diversity of our associate population by recognizing Pride Month, Black History Month, Asian Pacific Islander American Heritage Month, International Women’s Day, Veterans’ Day and more. During these events celebrating recognition, associates participate both locally with team members where they work and live, as well as globally with feature speakers broadcast to our locations around the world. In addition, in 2022 management received education and training on unconscious bias and leading with inclusivity for all leaders and HR business partners. This training will be required of all newly hired leaders during their onboarding.   With these programs and educational opportunities, we hope to foster an employee culture that drives inclusion, combats bias and positively impacts our communities in and outside Flowserve.   Additionally, we have focused on improving diversity across Flowserve from the board of directors and the executive leadership team to the general associate population. We are committed to promoting equity and inclusivity at all levels. We proudly support the empowerment of women and girls, especially women in STEM through the educational tenet of Flowserve Cares.

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Core Responsibility Core Responsibility represents Governance and how we conduct business ethically and in accordance with laws and regulations around the world. Based on our Flowserve values, Core Responsibility addresses our duty to reinforce cybersecurity and data privacy, integrity and compliance and transparent reporting.   Our governance practices are consistent with our high standards of ethics, integrity and transparency in all our stakeholder relationships, including attracting and retaining world-class talent by investing in their professional development and providing them with challenging and rewarding opportunities for personal growth, promoting high standards of corporate citizenship and working to safeguard the environment and communities where we do business. With executive-level participation and Board oversight of our programs and initiatives, ESG issues have top-down support and are a company-wide priority.   During 2022, we launched our Human Rights Policy so that the protection of human rights remains a focus of our operations and those of our partners. In addition, in an effort to increase transparency for our stakeholders regarding our sustainability program, we published our 2021 ESG Report with the SASB Industrial Machinery and Goods Reporting Standard, the TCFD Reporting Format, and the GRI Reporting Index.   A critical component of core responsibility is the necessity to strengthen our cybersecurity practices to protect our data and help promote operational resilience. Through annual security awareness trainings and simulated attacks, we aim to empower our associates to protect the enterprise and recognize and respond to real-life cyberattacks. We leverage a suite of innovative security services and solutions to monitor potential threats across our enterprise, Flowserve.com and our RedRaven IOT platform to maintain a secure environment for our associates, customers and partners.   Flowserve’s Integrity and Compliance program focuses on five pillars: Culture, Speaking Up, Strategy, Accountability and Risk Management. These pillars guide us in enhancing our compliance program, so we continue our commitment to uphold the highest ethical standards. We promote a culture of integrity with our associates through a variety of means, ranging from our local site Integrity Champions, monthly communications and our annual global Integrity & Compliance Day, where we celebrate our culture of integrity and build associate engagement by featuring programming designed to highlight resources, raise awareness, and conduct annual training.

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Our Global Community Impact Program

Supporting our Community At Flowserve, we are inspired by our purpose of making the world better for everyone. We make a difference each day by delivering technologies and services to our customers around the world for the toughest, most critical applications. But our impact is not just limited to our innovations. Our global team has long been committed to bettering the communities in which we live and work through philanthropy and volunteerism. Long before the creation of Flowserve’s purpose, values and behaviors, our people have demonstrated a natural desire to help those who are at-risk, less fortunate and victims of situations beyond their control. Flowserve supports our communities through monetary donations and also by providing our people with time off to volunteer for local organizations and causes that they care about.   Our global community impact program, Flowserve Cares, has formalized these efforts since 2019 through monetary donations, in-kind contributions and volunteer opportunity. This program aligns our core support areas of at-risk youth, STEM programs and education, disaster recovery and other community-related issues. Through Flowserve Cares, associates are empowered to request company support for community programs and needs that make meaningful impact where they live and work. In 2022, Flowserve Cares approved over $500,000 in grants drive positive change, ranging from environmental clean-up efforts, to serving our veterans, to feeding the underprivileged, to promoting financial literacy with children.   To encourage meaningful engagement with our local communities and active participation in our Flowserve Cares program, we grant up to 40 hours of volunteer time off (VTO) to eligible associates each year. Associates are granted 24 hours of paid VTO each calendar year with an additional opportunity to take 16 hours of unpaid VTO to expand their community impact.

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Engagement with Shareholders

Flowserve routinely engages with our shareholders to better understand their views, carefully considering the feedback we receive and taking action when appropriate. We review the results of the annual advisory vote on executive compensation in making determinations about the structure of Flowserve’s pay program, and whether any changes to the program should be considered.

In the fall of 2022, we proactively reached out to our top 25 shareholders, representing approximately 80% of our common shares outstanding, offering to meet with each of them. Seven of those shareholders, representing approximately 26% of our common shares outstanding, engaged with us and the feedback we received from those shareholders was positive and has been and continues to be carefully considered by management and the Board as we further develop our ESG strategy and compensation practices. Our lead director participated in all of these meetings with our shareholders. We discuss our shareholder engagement efforts as well as the key messages shared by investors during those meetings under the “2022 ‘Say on Pay’ Vote and Shareholder Engagement” caption on page 36.

With the easing of the COVID-19 pandemic, Flowserve was significantly able to substantially increase our in-person meetings with shareholders during 2022, even as several industry conferences and other engagement continued to be conducted virtually. This combination of meeting venues allowed members of management, including our CEO and CFO, to participate and present in both live and virtual events in 2022, which furthered our active engagement with Flowserve shareholders. We anticipate in 2023 that we will continue to have both in-person and virtual opportunities to continue our shareholder outreach, which management finds extremely valuable.

In total, our CEO and/or CFO participated in seven investor conferences during the year. We value the views and perspectives that our shareholders and the financial community provide us during these interactions, and we formally communicate the information and feedback that we obtain to the Board and its Committees on a regular basis.

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PROPOSAL ONE:
ELECTION OF DIRECTORS

The Company’s Board currently consists of eleven directors. All the director nominees listed below were previously elected by shareholders at the 2022 Annual Meeting, other than Kenneth I. Siegel, who was appointed to the Board in August 2022 and Thomas B. Okray, who was appointed to the Board in April 2023. Both Mr. Siegel and Mr. Okray were recommended to the Corporate Governance and Nominating (“CG&N”) Committee by a third party search firm. Accordingly, the Board has nominated eleven directors to serve a one-year term until the 2024 annual meeting of shareholders or until their successors have been elected and qualified. Biographical information for each nominee is provided below under the heading “Board of Directors—Biographical Information—Nominees to Serve an Annual Term Expiring at the 2024 Annual Meeting of Shareholders.”

Required Vote and Recommendation:

The table below summarizes the key qualifications and areas of expertise that led our Board to nominate these individuals.

	Manufacturing/Operations		Industry/Product Knowledge		Multinational Operations		Financial/Accounting		Product Innovation/R&D
	Energy/Alternative Energy Markets		Supply Chain		HR/Talent Development		Mergers & Acquisitions		Corporate Strategy/Governance

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Board of Directors — Biographical Information

Nominees to Serve an Annual Term Expiring at the 2024 Annual Meeting of Shareholders

David E. Roberts
Independent Chair since: May 2021   Director since: Nov. 2011   Age: 62   Board Committees: • N/A   Current Public Company Directorships: • None   Past Public Company Directorships: • Penn West Exploration		Employment History • Gavilan Resources, LLC, a private company formed in partnership with Blackstone focused on oil and natural gas development and production opportunities in South Texas | Chief Executive Officer (2017 – retirement in 2020). Gavilan filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in May 2020. • Penn West Exploration, a Canadian oil and gas exploration and production company | President and CEO (2013 – 2016) • Marathon Oil Corporation, an independent upstream company with international operations in exploration and production, oil sands mining and integrated gas | Executive Vice President and Chief Operating Officer (2011 – 2012) • Marathon Oil Corporation | other key management positions, including Executive Vice President in charge of Marathon’s worldwide upstream operations and Senior Vice President of business development (2006 – 2011) • BG Group, an integrated natural gas company | various leadership roles (2003 – 2006) • Chevron Corporation | advisor to the Vice Chairman (2001 – 2003)     Specific Experience, Qualifications, Attributes and Skills Relevant to Flowserve   We believe that Mr. Roberts is well qualified to serve as a director due to his executive leadership experience, strong international operations background, business development experience and extensive knowledge of and experience in the energy industry. This provides Mr. Roberts with a unique insight into the Company’s operational challenges and opportunities and its end-markets and customer needs.

R. Scott Rowe
Director since: Apr. 2017   Age: 52   Board Committees: • N/A   Current Public Company Directorships: • Quanta Services, Inc.   Past Public Company Directorships: • None		Employment History • Flowserve Corporation | President, Chief Executive Officer (2017 — Present) • Cameron Group of Schlumberger Ltd., an oilfield services co. | President (2016 — 2017) • Cameron International Corporation, an oilfield services co. | President, Chief Executive Officer (2015 — 2016) • Cameron International Corporation | President, Chief Operating Officer (2014 — 2015) • OneSubsea, a joint venture established by Cameron and Schlumberger | Chief Executive Officer (2014) • Subsea Systems, a division of Cameron | President (2012 — 2014) • Cameron International Corporation | President of the Engineered and Process Valves division (2010 — 2012) • United States Army | Captain (O3) (1993 —1998)     Other Current Public Company Directorships   • Quanta Services Inc., a leading provider of specialty contracting services | Director (2022 – Present)     Specific Experience, Qualifications, Attributes and Skills Relevant to Flowserve   We believe that Mr. Rowe is well qualified to serve as a director due to his position as the Company’s President and Chief Executive Officer, which enables him to provide the Board with intimate knowledge of the Company’s day-to-day operations.

	Manufacturing/Operations		Industry/Product Knowledge		Multinational Operations		Financial/Accounting		Product Innovation/R&D
	Energy/Alternative Energy Markets		Supply Chain		HR/Talent Development		Mergers & Acquisitions		Corporate Strategy/Governance

2023 PROXY STATEMENT      17

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Sujeet Chand
Director since: Dec. 2019   Age: 65   Board Committees: • Audit • Finance & Risk   Current Public Company Directorships: • Proto Labs, Inc. • Veeco Instruments Inc.   Past Public Company Directorships: • None		Employment History • Rockwell Automation, Inc., industrial automation manufacturer | Senior Vice President and Chief Technology Officer (2005 – retirement in 2021) • Rockwell Automation, Inc. | Other senior leadership roles (2001 – 2005) • XAP Corporation, an education technology company | Chief Operating Officer (2000 – 2001) • Rockwell Scientific Company, a subsidiary of Rockwell International | Head of research and development (1988 – 2000)     Other Current Public Company Directorships   • Proto Labs, Inc., global digital manufacturer | Director (2017 – Present) • Veeco Instruments Inc., manufacturer of semiconductor process equipment | Director (2021 – Present)     Specific Experience, Qualifications, Attributes and Skills Relevant to Flowserve   We believe that Mr. Chand is well qualified to serve as a director due to his technology and innovation experience, including with respect to cybersecurity and information technology systems, as well as his electrical engineering background. Additionally, Mr. Chand has valuable multinational executive leadership and manufacturing experience from Rockwell Automation and XAP Corporation.

Ruby R. Chandy
Director since: May 2017   Age: 61   Board Committees: • Finance & Risk — Chair • Corporate Governance & Nominating   Current Public Company Directorships: • DuPont de Nemours, Inc. • Thermo Fisher Scientific Inc.   Past Public Company Directorships: • IDEX Corporation • AMETEK, Inc.		Employment History • Pall Corporation, a leading supplier of filtration, separation, and purification technologies | President of the Industrial Division (2012 – retirement in 2015) • The Dow Chemical Company, a multinational chemical corporation | Managing Director, Vice President of Dow Plastics Additives unit (2011 – 2012)     Other Current Public Company Directorships   • Thermo Fisher Scientific Inc., a multinational science and technology corporation | Director (2022 – Present) • DuPont de Nemours, Inc., a multinational chemical corporation | Director (2019 – Present)     Specific Experience, Qualifications, Attributes and Skills Relevant to Flowserve   We believe that Ms. Chandy is well qualified to serve as a director due to her executive management experience, marketing and strategy skills, relevant experience in industrial companies, extensive engineering and management education, broad international business and financial experience and enterprise risk oversight experience.

	Manufacturing/Operations		Industry/Product Knowledge		Multinational Operations		Financial/Accounting		Product Innovation/R&D
	Energy/Alternative Energy Markets		Supply Chain		HR/Talent Development		Mergers & Acquisitions		Corporate Strategy/Governance

2023 PROXY STATEMENT      18

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Gayla J. Delly
Director since: Jan. 2008   Age: 63   Board Committees: • Organization & Compensation • Corporate Governance & Nominating — Chair   Current Public Company Directorships: • National Instruments, Inc. • Broadcom Inc.   Past Public Company Directorships: • Power One, Inc.		Employment History • Benchmark Electronics Inc., a contract provider of manufacturing, design, engineering, test and distribution to computer, medical device, telecommunications equipment and industrial control manufacturers | President and Chief Executive Officer (2012 – retirement in 2016) • Benchmark Electronics Inc. | President (2006 – 2011) • Benchmark Electronics Inc. | Vice President and Chief Financial Officer (2001 – 2006) • Benchmark Electronics Inc. | Corporate Controller and Treasurer (1995 – 2001) • Ms. Delly is a certified public accountant.     Other Current Public Company Directorships   • National Instruments, Inc., a leader in software-defined automated test and automated measurement systems | Director (2020 – Present) • Broadcom Inc., a designer, developer and global supplier of semiconductor devices | Director (2017 – Present)     Specific Experience, Qualifications, Attributes and Skills Relevant to Flowserve   We believe that Ms. Delly is well qualified to serve as a director due to her international manufacturing experience, with a specific focus on engineering and technology in emerging markets, including Asia and Latin America, which provides valuable insight into the Company’s operations and assists in identifying product portfolio opportunities. In addition to her board experience, Ms. Delly has valuable executive leadership experience and financial expertise gained from her time with Benchmark Electronics Inc.

John R. Friedery
Director since: Aug. 2007   Age: 66   Board Committees: • Corporate Governance & Nominating •  Organization & Compensation   Current Public Company Directorships: • None   Past Public Company Directorships: • None		Employment History • Since 2010, Mr. Friedery has provided strategic and management consulting services to the packaging and other manufacturing industries. • Ball Corporation, a provider of metal and plastic packaging for beverages, foods and household products, and of aerospace and other technologies services | Senior Vice President; President, Metal Beverage Packaging, Americas and Asia (2008 – 2010) • Ball Corporation | Chief Operating Officer, Packaging Products Americas (2004 – 2007) • Ball Corporation | President, Metal Beverage Container operations (2000 – 2004) • Ball Corporation | Other senior leadership roles (1988 – 2000) • Dresser/Atlas Well Services | Field operations (prior to 1988) • Nondorf Oil and Gas | In operations, exploration and production (prior to 1988)     Specific Experience, Qualifications, Attributes and Skills Relevant to Flowserve   We believe that Mr. Friedery is well qualified to serve as a director due to his extensive operational experience with an international industrial manufacturing focus, which provides a global business perspective and a deep understanding of the Company’s industry, end-markets and strategic focus. Mr. Friedery also has experience with renewables and sustainability expertise gained from his service with Ball Corporation.

	Manufacturing/Operations		Industry/Product Knowledge		Multinational Operations		Financial/Accounting		Product Innovation/R&D
	Energy/Alternative Energy Markets		Supply Chain		HR/Talent Development		Mergers & Acquisitions		Corporate Strategy/Governance

2023 PROXY STATEMENT      19

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John L. Garrison
Director since: Oct. 2018   Age: 62   Board Committees: • Organization & Compensation—Chair • Corporate Governance & Nominating   Current Public Company Directorships: • Terex Corporation   Past Public Company Directorships: • Azurix Corporation		Employment History • Terex Corporation, a global manufacturer of materials, processing machinery, and aerial work platforms | President and Chief Executive Officer (2015 – Present) • Bell Helicopter, a segment of Textron, Inc., and an aerospace manufacturer | President and Chief Executive Officer (2009 – 2015) • United States Army | Captain (1982 —1992)     Other Current Public Company Directorships   • Terex Corporation | Chairman of the Board (2018 – Present)     Specific Experience, Qualifications, Attributes and Skills Relevant to Flowserve   We believe that Mr. Garrison is well qualified to serve as a director due to his strong manufacturing, international operations and leadership experience gained through his various executive and board leadership roles, which provides him with unique insights into the current climate the Company faces as a manufacturer with a large international footprint.

Michael C. McMurray
Director since: Oct. 2018   Age: 58   Board Committees: • Audit—Chair • Organization & Compensation   Current Public Company Directorships: • None   Past Public Company Directorships: • None		Employment History • LyondellBasell, a global plastics, chemicals and refining company | Executive Vice President and Chief Financial Officer (2019 – Present) • Owens Corning, a global manufacturer of insulation, roofing and fiberglass composites | Senior Vice President and Chief Financial Officer (2012 – 2019) • Owens Corning | Vice President and Finance Leader of Owens Corning’s Building Materials Group (2011 – 2012) • Owens Corning | Vice President, Investor Relations and Treasurer (2008 – 2011) • Royal Dutch Shell | various leadership roles (1987 – 2008)     Specific Experience, Qualifications, Attributes and Skills Relevant to Flowserve   We believe that Mr. McMurray is well qualified to serve as a director due to his extensive knowledge of global industrial manufacturing, the Company’s end markets and the financial markets, which provides valuable insight into the strategic decisions to capitalize on the Company’s growth opportunities. Additionally, Mr. McMurray has valuable multinational executive leadership and financial expertise at LyondellBasell, Owens Corning, and Royal Dutch Shell.

	Manufacturing/Operations		Industry/Product Knowledge		Multinational Operations		Financial/Accounting		Product Innovation/R&D
	Energy/Alternative Energy Markets		Supply Chain		HR/Talent Development		Mergers & Acquisitions		Corporate Strategy/Governance

2023 PROXY STATEMENT      20

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Thomas B. Okray
Director since: Apr. 2023   Age: 60   Board Committees: • Audit   Current Public Company Directorships: • None Past Public Company Directorships: • None		Employment History • Eaton Corp, a multinational intelligent power management technologies company | Executive Vice President and Chief Financial Officer (2021 – Present) • Grainger, a worldwide industrial supply distributor | Senior Vice President and Chief Financial Officer (2018 – 2021) • Advance Auto Parts, an aftermarket automobile parts supplier | Executive Vice President and Chief Financial Officer (2016 – 2018)     Specific Experience, Qualifications, Attributes and Skills Relevant to Flowserve   We believe that Mr. Okray is well qualified to serve as a director due to his strong background in international operations, manufacturing, and finance and accounting. Additionally, Mr. Okray has valuable strategic and financial expertise gained through his various executive leadership roles in the manufacturing industry.

Kenneth I. Siegel
Director since: Aug. 2022   Age: 66   Board Committees: • Audit • Finance & Risk   Current Public Company Directorships: • Boardwalk Pipeline Partners, LP • CNA Financial Corporation   Past Public Company Directorships: • Diamond Offshore Drilling		Employment History • Loews Corporation, a diversified company with businesses in the insurance, energy, hospitality and packaging industries | Senior Vice President (2009 – present) • Barclays Capital, a multinational universal bank | Managing Director of Mergers and Acquisitions (2008 – 2009) • Lehman Brothers, a global financial services firm | Managing Director of Mergers and Acquisitions (2000 – 2008) • Schroders, a multinational investment banking and asset management company | Head of U.S. Investment Banking (1982 – 2000)     Other Current Public Company Directorships   • Boardwalk Pipeline Partners, LP, a provider of transportation and storage of natural gas | Chairman of the Board (2009 – Present) • CNA Financial Corporation, a commercial property and casualty insurance company | Director (2019 – Present)     Specific Experience, Qualifications, Attributes and Skills Relevant to Flowserve   We believe that Mr. Siegel is well qualified to serve as a director due to his extensive knowledge of strategic planning, corporate development and finance and accounting, which provide us valuable insight into our strategic decisions to capitalize on the Company’s growth opportunities. Additionally, Mr. Siegel has valuable executive leadership experience in the manufacturing and energy industries and has leveraged his development and M&A expertise from Loews Corporation and its subsidiaries.

	Manufacturing/Operations		Industry/Product Knowledge		Multinational Operations		Financial/Accounting		Product Innovation/R&D
	Energy/Alternative Energy Markets		Supply Chain		HR/Talent Development		Mergers & Acquisitions		Corporate Strategy/Governance

2023 PROXY STATEMENT      21

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Carlyn R. Taylor
Director since: Aug. 2020   Age: 54   Board Committees: • Audit • Finance & Risk   Current Public Company Directorships: • The Hain Celestial Group, Inc.   Past Public Company Directorships: • None		Employment History • FTI Consulting, Inc., a global business advisory firm | Corporate Finance Global Co-Leader and global leader of Business Transformations and Transactions practice (2016 – present) • FTI Capital Advisors, an investment banking subsidiary of FTI Consulting | Chairperson (2017 – present) • FTI Consulting, Inc. | various roles of increasing responsibility (2002 – 2016) • PwC, a global accounting firm | various roles, including partner, senior manager and staff consultant (1990 – 2002)     Other Current Public Company Directorships   • The Hain Celestial Group, Inc., a leading organic and natural products company | Director (2022 – Present)     Specific Experience, Qualifications, Attributes and Skills Relevant to Flowserve   We believe that Ms. Taylor is well qualified to serve as a director due to her extensive background in corporate strategy, finance and accounting, most notably leveraging her expertise in capital allocation strategies and capital markets to help businesses spearhead transformative initiatives, as well as her experience serving on the board of directors of various privately-owned startups.

	Manufacturing/Operations		Industry/Product Knowledge		Multinational Operations		Financial/Accounting		Product Innovation/R&D
	Energy/Alternative Energy Markets		Supply Chain		HR/Talent Development		Mergers & Acquisitions		Corporate Strategy/Governance

2023 PROXY STATEMENT      22

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THE BOARD AND COMMITTEES

Role of the Board; Corporate Governance Matters

The Board oversees the CEO and other senior management in the competent and ethical operation of the Company on a day-to-day basis and to help confirm that our shareholders’ best interests are served. In its efforts to satisfy this duty, our Board has adopted Corporate Governance Guidelines (“Guidelines”). Our Guidelines, as well as other corporate governance documents, such as the Company’s Code of Conduct for employees and directors and an additional Code of Ethics for directors, are available on the Company’s website at https://ir.flowserve.com under the “Corporate Governance—Documents & Charters” caption. The table below highlights some of the Company’s investor friendly governance practices.

The Board, through the CG&N Committee, regularly reviews developments in corporate governance and best practices and modifies the Guidelines, committee charters and key practices as necessary. For example, given the increasing importance of ESG matters to our long-term strategy and to our shareholders, we amended the charter of the CG&N Committee to specifically provide for oversight over our ESG programs and initiatives.

The Board also works with management to develop the Company’s long-term strategy. The Board dedicates one full meeting per year solely to our long-term strategy, in which the Board receives updates from management and discusses the progress made, challenges encountered and future plans to continue implementing our strategic priorities. At each quarterly meeting of the Board, management also provides additional updates on our strategic priorities based on particular focus areas, including our business platforms, culture and organizational health, regulatory and legal risk, operations, and climate change and sustainability.

Our approximately 16,000 associates around the globe are a critical component of our ability to execute on our strategy. Accordingly, the Board continually monitors and assesses our human capital management, principally in the areas of workplace health and safety, employee engagement, compensation and benefits and training, development and ethics. Each year, our associates complete an annual ethics training on our Code of Conduct and participate in “Integrity & Compliance Day” and “Safety Day” to help further emphasize the ongoing training that our associates receive. We also conduct annual employee engagement surveys to solicit feedback and input directly from our associates and, based on the results of our surveys, management and the Board work together to create additional action plans as appropriate.

Board Operations

Board Leadership Structure

We have separated the positions of Chairman of the Board and CEO since 2005. David E. Roberts presides over the meetings of the Board, including executive sessions of the Board where only non-employee directors are present. Among the wide range of other duties as Chairman of the Board, he reviews and approves the agendas for Board meetings, presides over meetings and executive sessions of the Board of Directors, briefs the CEO on issues and concerns arising in the executive sessions of the Board, facilitates communication between the independent directors and management, coordinates periodic Board input and review of management’s strategic plan for the Community, and leads the Board’s review of the succession plan for the CEO and other key executives. He also serves as an alternate member for all Board committees, and strives to attend as many committee meetings as possible. More information on what is expected of our Non-Executive Chairman can be found on the investor relations portion of our website at https://ir.flowserve.com under the heading “Corporate Governance—Documents & Charters—Role and Responsibilities of Non-Executive Chairman of the Board.”

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We believe that separating the positions of Chairman of the Board and CEO is appropriate for the Company at this time because it places an independent director in a position of leadership on the Board and allows the Chairman to focus on oversight of corporate governance matters, while enabling our CEO to focus on leading the Company and managing the business on a day-to-day basis. We believe this independent leadership and the Non-Executive Chairman’s authority to call meetings of the non-employee directors adds value to our shareholders by facilitating a more efficient exercise of the Board’s fiduciary duties and best enables the Board to effectively manage our businesses, risks, opportunities and affairs in the best interests of our shareholders.

We also believe the Non-Executive Chairman further enhances independent oversight by being responsible for establishing the Board’s annual schedule and collaborating with the CEO on the agendas for all Board meetings. The separation of Chairman and CEO also allows the Non-Executive Chairman to provide support and advice to the CEO, reinforcing the reporting relationship and accountability of the CEO to the Board. The Non-Executive Chairman also reprsents the Board in communications with shareholders and other stakeholders of the Company and provides input on the design of the Board. In addition, each of the independent members of the Board actively participate in overseeing management including by actively participating in each Board and Committee meeting held throughout the year.

Risk Oversight

The Board and its Committees exercise their risk oversight function by carefully evaluating the reports they receive from management and by making inquiries of management with respect to areas of particular interest to the Board. The Board and its Committees oversee senior management’s policies and procedures in assessing and addressing risk areas that fall within the scope of the Board’s and the Committees’ respective areas of oversight responsibility, as further detailed in the Board Committees section below. The Board and management frequently discuss the long-term strategy of the Company. The Board is regularly informed through Committee reports of each Committee’s activities in overseeing risk management.

Meeting Attendance 

Board meetings

There were nine meetings of the Board during the year ended December 31, 2022. Executive sessions of non-employee directors are normally held at each regular Board meeting and are presided over by our independent Chairman of the Board, or, in the Chairman’s absence, by the Chairman of the CG&N Committee. During the year ended December 31, 2022, each Director nominee attended 100% of the total number of meetings of the Board and 100% of the total number of meetings of the Board committees on which he or she served while he or she has been a director or committee member.

Shareholder meetings

Board members are expected to attend the Company’s Annual Meetings of shareholders. All ten directors then-serving were in attendance at the Company’s 2022 Annual Meeting.

Communicating with the Board 

Shareholders and other interested parties may communicate with the Board or the independent directors as a group directly by writing to: Non-Executive Chairman of the Board, c/o Flowserve’s Corporate Secretary, Flowserve Corporation, 5215 N. O’Connor Blvd., Suite 700, Irving, Texas 75039. These communications are reviewed by the Corporate Secretary to determine whether they are appropriate for presentation to the Board or such director. The purpose of this screening is to avoid having the Board consider irrelevant or inappropriate communications (such as advertisements, solicitations, and product inquiries). All relevant communications are then delivered to our Chairman.

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Board Composition

What We Look For in Directors 

The identification and evaluation of director candidates begins with the Guidelines, which establish the criteria for Board membership. As a starting point under the Guidelines, all prospective Board members must, for example, adhere to the highest standards of integrity and ethics, exercise diligent and constructive oversight of the Company’s business, risk profile and strategy, demonstrate relevant and successful career experience, display a global business perspective, and possess the time to responsibly perform all director duties and effectively represent the interests of the shareholders. In addition, we believe that Board members should have varied professional expertise in areas relevant to the Company. In this regard, our director nominees bring a wide array of qualifications, skills and attributes to our Board that support its oversight role on behalf of the shareholders. The table on page 16 summarizes the key qualifications and areas of experience that led our Board to nominate these individuals.

The Guidelines further articulate the Board’s firm belief that the Board’s members should also have a diversity of backgrounds, which we view holistically. In evaluating diversity of backgrounds, the Board considers individual qualities and attributes, such as educational background, professional skills, business experience and cultural viewpoint, as well as more categorical diversity metrics, such as race, age, gender and nationality. This consideration is implemented through the selection process for director nominees, and the Board assesses its effectiveness in promoting diversity through an annual self-assessment process that solicits feedback concerning the appropriateness of the Board’s diversity, among other critical performance factors.

The Board also periodically reviews the tenure of each Board member, at least on an annual basis. We strive to maintain an appropriate balance of age and tenure on the Board with a mix of directors who have a long and deep understanding of our business and directors who bring new and fresh skills, perspectives and experience to the Board. In line with this philosophy, since 2018 we have added six new directors to our Board.

Director Recruitment Process 

The CG&N Committee considers various potential director candidates who may come to the attention of the CG&N Committee through current Board members, professional search firms, shareholders or other persons. The CG&N Committee generally retains a national executive-recruiting firm to research, screen and contact potential candidates regarding their interest in serving on the Board, although the CG&N Committee may also use less formal recruiting methods. All identified candidates, including shareholder-recommended candidates, are evaluated by the CG&N Committee using the same methods and criteria, although those methods and criteria may vary from time to time depending on the CG&N Committee’s assessment of the Company’s needs and current situation.

Director Evaluation Process 

We believe that a robust Board evaluation and feedback process helps to promote the effectiveness of our Board and Committees and encourages our Board members, individually and collectively, to continually improve in their roles and responsibilities. Our Board evaluation process is led by an independent member of the Board, the Chair of the CG&N Committee, who engages independent external advisors each year to assist in compiling the results of the evaluations submitted by the members of the Board and to provide additional perspective on effectively responding to the evaluations and feedback received.

Our annual evaluation process typically begins with a self-assessment in which each independent member of the Board provides a performance rating for a series of questions in several key categories, including the structure, process and resources of the Board, effectiveness of the Committees of the Board, and management of the Company. The self-evaluation concludes with several open-ended questions in order to encourage members of the Board to freely discuss their own performance, priorities for the upcoming year, and any other comments that the applicable member of the Board deems important.

Each independent member of the Board is also required to complete a peer evaluation of each other independent member of the Board every two to three years (other than the Chairman, who is evaluated separately), which solicits feedback on how the applicable director adds value to the Board and its Committees, what the applicable director could do to increase effectiveness, and any other commentary that the evaluating member of the Board deems pertinent.

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Each member of the Board is also required to complete a Chairman evaluation to provide feedback on the performance and contributions of the Chairman of the Board every year. The Chairman evaluation requires each member of the Board to rate the Chairman’s performance in a dozen key areas and also provides an opportunity to provide open feedback on the performance of the Chairman of the Board.

Each member of the Board is also required to complete an evaluation of our Chief Executive Officer’s performance every year. While our Chief Executive Officer is a member of the Board, his evaluation is focused on his performance as a member of management and not as a member of the Board. These evaluations are utilized in assessing the CEO’s performance and setting his compensation on a yearly basis.

Once the evaluations were complete for 2022, the results were compiled by an independent external advisor, anonymized, and provided to the CG&N Chair, who then discussed the results of the process with the CG&N Committee, and the full Board, at their February meeting and were considered by the CG&N Committee and the Board when setting CEO compensation and engaging in director development, strategy, and governance.

Director Independence 

The Guidelines provide that all members of the Board (other than our CEO) should be independent under applicable law and the New York Stock Exchange (“NYSE”) listing standards, as well as under the independence standards further established by the Board within the Guidelines. Upon the recommendation of the CG&N Committee, the Board makes an affirmative determination regarding the independence of each director annually after reviewing pertinent facts and circumstances and taking into consideration all applicable laws, regulations, the NYSE listing standards and the categorical independence standards set forth in the Guidelines, which are consistent with the NYSE listing standards. In doing so, the Board considers relationships involving directors and their immediate family members and relies on information derived from the Company’s records, questionnaires, and other inquiries. In addition to meeting the NYSE standards of independence and the categorical standards set forth in the Guidelines, a director qualifies as “independent” under the Guidelines only if the Board affirmatively determines that the director has no direct or indirect material relationship (whether commercial, industrial, banking, consulting, accounting, legal, charitable or familial, excluding their present directorship) with the Company or any of its consolidated subsidiaries, either director, or as a partner, shareholder or officer of an organization that has a relationship with the Company.

Based on its review, the Board has determined that each of David E. Roberts, Sujeet Chand, Ruby R. Chandy, Gayla J. Delly, John R. Friedery, John L. Garrison, Michael C. McMurray, Thomas B. Okray, Kenneth I. Siegel, and Carlyn R. Taylor (all of our current directors other than R. Scott Rowe, who is not independent because of his employment as the Company’s President and Chief Executive Officer) meet the independence standards set forth in the NYSE listing standards and the categorical standards set forth in the Guidelines. Roger L. Fix, who served as a director until the Company’s 2022 Annual Meeting of Shareholders, met the independence standards set forth in the NYSE listing standards and the categorical standards set forth in the Guidelines during his service on the Board.

Our independence standards are included in the Guidelines, which are available on the Company’s website at https://ir.flowserve.com under the “Corporate Governance—Documents & Charters” caption.

How Shareholders Can Recommend a Candidate 

A shareholder desiring to recommend a candidate for election to the Board should submit a written notice, as required by the Company’s By-Laws, including the candidate’s name and qualifications, to our Corporate Secretary, who will refer the recommendation to the CG&N Committee. The CG&N Committee may require any shareholder-recommended candidate to furnish such other information as may reasonably be required to determine the eligibility of such recommended candidate or to assist in evaluating the recommended candidate, including a Director and Officer Questionnaire.

Under the proxy access provisions of our By-Laws, eligible shareholders and/or shareholder groups also are permitted to include shareholder-nominated director candidates in our proxy materials. Additional details about the requirements for including shareholder-nominated director candidates in our proxy materials are set forth under “General Voting and Meeting Information—Shareholder Proposals and Nominations” below.

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Board Committees

The Board maintains an Audit Committee, a Finance and Risk Committee (“F&R Committee”), a Corporate Governance and Nominating Committee, and an Organization and Compensation Committee (“O&C Committee”). Only independent directors are eligible to serve on Board committees. Each committee has authority to engage legal counsel or other experts or consultants as it deems appropriate to carry out its responsibilities and is governed by a written charter, which is available on the investor relations portion of the Company’s website at https://ir.flowserve.com under the “Corporate Governance—Documents & Charters” caption.

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Oversight of the Executive Compensation Program 

Our executive compensation program is administered by the O&C Committee. Consistent with the NYSE corporate governance listing standards, the O&C Committee is composed entirely of independent, non-employee members of the Board. In addition, the Non-Executive Chairman of the Board generally attends the meetings of the O&C Committee.

As reflected in its charter, the O&C Committee has overall responsibility for setting the compensation for our CEO, which is approved by the full Board, and for approving the compensation of our other executive officers, including the other Named Executive Officers. The O&C Committee is also charged with the development and retention of management.

The O&C Committee is also responsible for reviewing the management succession plan and for recommending changes in director compensation to the CG&N Committee and to the Board. On matters pertaining to director compensation, the O&C Committee also receives data and advice from F.W. Cook. The O&C Committee periodically reviews the organizational design, management development plans and managerial capabilities of the Company. The O&C Committee also prepares and issues the Organization and Compensation Committee Report included in this proxy statement.

The O&C Committee’s process of reviewing the executive compensation program and setting compensation levels for our Named Executive Officers involves several components. During the first quarter of each year, the O&C Committee reviews each Named Executive Officer’s total compensation. The O&C Committee members also meet regularly with the Named Executive Officers at various times during the year, both formally within Board meetings and informally outside of Board meetings, which allows the O&C Committee to assess directly each Named Executive Officer’s performance. The O&C Committee also solicits input from all non-employee members of the Board as to the CEO’s performance during the year.

The O&C Committee generally considers the results of the CG&N Committee’s process for reviewing the CEO’s performance with all independent Board members. The CG&N Committee’s process includes the independent Board members individually and collectively presenting their assessment of the CEO’s performance, as well as the CEO presenting his self-assessment of his performance. The O&C Committee uses these results when determining the CEO’s recommended compensation, which is subject to the independent Board members’ approval.

In addition, the CEO annually presents an evaluation of each other Named Executive Officer’s performance to the O&C Committee, which includes a review of each officer’s contributions over the past year, and the officer’s strengths, weaknesses, development plans and succession potential. The CEO also presents compensation recommendations for each other Named Executive Officer for the O&C Committee’s consideration. Following this presentation and a benchmarking review for pay, the O&C Committee makes its own assessments and formulates compensation amounts for each Named Executive Officer with respect to each of the elements in the Company’s executive compensation program as described below.

Independent Compensation Consultant

The O&C Committee has the authority to retain outside advisors as it deems appropriate. The O&C Committee has engaged F.W. Cook as its compensation consultant to provide advice and information. F.W. Cook attends all regularly scheduled O&C Committee meetings and has assisted and advised the O&C Committee on all aspects of our executive and director compensation programs, and they provide no other services to the Company. The services they provide include: 

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Director Compensation 

2022 Director Compensation Program 

Program Overview

Our director compensation program is established by the Board after review of data prepared by the O&C Committee’s independent consultant regarding competitive director compensation levels for peer companies and the Company’s compensation peer group, which is discussed under “Executive Compensation.” In 2022, our non-employee director compensation program consisted of the following, which was unchanged from 2021:

Additionally, non-employee directors are also eligible to receive special additional compensation when performing certain special services. The Board has set a compensatory rate of $3,500 per day for such services, though no compensation was paid for this purpose in 2022.

Compensation Deferral

Directors may elect to defer all or a portion of their annual cash and equity compensation. The annual cash compensation may be deferred in the form of cash or in phantom shares, which reflect an equivalent value of Company common stock. Compensation deferred in the form of cash accrues interest at rates that do not exceed market rates or constitute preferential earnings. If a director elects to defer cash compensation in the form of phantom shares, the director receives a 15% premium on the amount deferred.

Equity Compensation

The equity portion of non-employee director compensation is granted on the date of the Annual Meeting of shareholders in the form of restricted stock. The restricted shares have voting rights and fully vest after the earliest of one year from the date of grant, the termination of the director’s service due to death or disability or a change in control. New non-employee directors receive a pro-rated grant of restricted stock at the time they join the Board. The pro-rated grant of restricted shares fully vests after the earliest of one year from the date of grants to the other incumbent non-employee directors, the termination of the director’s service due to death or disability or a change in control.

Stock Ownership Guidelines

Under our stock ownership guidelines, all non-employee directors must own shares of Company common stock with a value of at least five times his or her annual cash retainer (currently $425,000) by his or her fifth anniversary of Board service. If the stock ownership requirement is not met, the director will receive all future Board compensation in the form of Company common stock until the requirement is satisfied. For 2022, all non-employee directors met their stock ownership requirements.

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The following table sets forth our non-employee director compensation for 2022. Mr. Rowe did not receive any compensation for his service as a director. His compensation is set forth below under “Executive Compensation—Summary Compensation Table.”

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EXECUTIVE OFFICERS

R. Scott Rowe

President, CEO and Director since: April 2017 Age: 52

• Flowserve Corporation | President, Chief Executive Officer, Director (2017 – Present) • Cameron Group of Schlumberger Ltd, an oilfield services company | President (2016 – 2017) • Cameron International Corporation, an oilfield services company | President, Chief Executive Officer (2015 – 2016) • Cameron International Corporation | President, Chief Operating Officer (2014 – 2015) • OneSubsea, a joint venture established by Cameron and Schlumberger | Chief Executive Officer (2014 – 2014) • Subsea Systems, a division of Cameron | President (2012 – 2014) • Cameron International Corporation | President of the Engineered and Process Valves division (2010 – 2012) • United States Army | Captain (O3) (1993 —1998)

Elizabeth L. Burger

SVP, CHRO since: April 2018 Age: 52

• Flowserve Corporation | Senior Vice President and Chief Human Resources Officer (2018 – Present) • HanesBrands, Inc., a global manufacturer and marketer of everyday basic apparel | Chief Human Resources Officer (2013 – 2017) • Monsanto Company, a global provider of technology solutions and agricultural products | Senior Vice President, Global Business Operations (2007 – 2013) • Monsanto Company | Vice President, Corporate HR (2006 – 2007) • Monsanto Company | Vice President, Compensation (2005 – 2006) • Monsanto Company | Various leadership roles (1995 – 2005)

Lamar L. Duhon

President, FPD since: February 2023 Age: 52

• Flowserve Corporation | President, FPD (2023 – Present) • Flowserve Corporation | President, Aftermarket Services & Solutions (2022 – Present) • Halliburton Company, an energy products and service provider | Vice President, Sperry Drilling (2016 – 2021) • Halliburton Company | Vice President, Cementing (2015 – 2016) • Halliburton Company | Vice President, Shell Global Account (2013 – 2015) • Halliburton Company | Vice President, Business Development – Asia Pacific (2012 – 2013) • Halliburton Company | Regional Sales Manager, Gulf of Mexico (2010 – 2012) • Baker Hughes, Inc., a multinational oilfield services company | Various leadership roles of increasing responsibility (1995 – 2010) • United States Marine Corps | Sergeant (E-5) (1988 – 1994)

2023 PROXY STATEMENT      32

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Susan C. Hudson

SVP, CLO since: May 2022 Age: 46

• Flowserve Corporation | Senior Vice President, Chief Legal Officer and Corporate Secretary (2022 – Present) • Flowserve Corporation | Vice President, Associate General Counsel and Chief Compliance Officer (2020 – 2022) • Flowserve Corporation | Director, Global Employment Law and Corporate Functions (2017 – 2020) • Flowserve Corporation | Attorney, Global Labor and Employment Law (2016 – 2017) • Pier 1 Imports, Inc., a merchandise retail company | Senior Corporate Counsel (2012 – 2016) • Pier 1 Imports, Inc. | Corporate Counsel (2007 – 2012)

Amy B. Schwetz

SVP, CFO since: February 2020 Age: 48

• Flowserve Corporation | Senior Vice President and Chief Financial Officer (2020 – Present) • Peabody Energy, a global pure-play coal company serving power and steel customers | Executive Vice President and Chief Financial Officer (2015 – 2020). Peabody filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in April 2016. • Peabody Energy, Inc. | Senior Vice President, Finance & Administration – Australia (2013 – 2015) • Peabody Energy, Inc. | Senior Vice President, Finance & Administration – Americas (2012 – 2013) • Peabody Energy, Inc. | Vice President, Investor Relations (2011 – 2012) • Peabody Energy, Inc. | Vice President, Capital and Financial Planning (2009 – 2011) • Peabody Energy, Inc. | Various senior leadership roles (2005 – 2009) • Ernst & Young LLP, a global accounting firm | Audit Manager (1997 – 2005)

Scott K. Vopni

VP, CAO since: June 2020 Age: 55

• Flowserve Corporation | Vice President, Chief Accounting Officer (2020 – Present) • Dean Foods Co., a food and beverage company | Senior Vice President – Finance, Chief Accounting Officer (2010 – 2019). Dean Foods filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in November 2019. • Dean Foods Co. | Interim Chief Financial Officer (2017 – 2018) • Dean Foods Co. | Senior Vice President – Finance (2016 – 2017) • Dean Foods Co. | Senior Vice President – Investor Relations (2015) • Dean Foods Co. | Vice President – Controller (2008 – 2010)

Kirk R. Wilson

President, FCD since: July 2019 Age: 56

• Flowserve Corporation | President, Flow Control Division (2019 – Present) • Flowserve Corporation | President, Aftermarket Services & Solutions (2015 – 2019) • Flowserve Corporation | President, Services & Solutions Operations (2012 – 2015) • Flowserve Corporation | Vice President and General Manager, Integrated Solutions Group (2008 – 2011) • Flowserve Corporation | Vice President, Marketing for Pump Division (2004 – 2008)

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EXECUTIVE COMPENSATION

Introduction to the Compensation Discussion and Analysis

Organization and Compensation Committee

John L. Garrison Chairman

Gayla J. Delly

John R. Friedery

Michael C. McMurray

Dear Fellow Shareholders:

As members of the Organization and Compensation Committee, we are committed to maintaining a compensation program that supports our talent strategy, rewards performance and aligns with priorities of our shareholders.

In response to the low level of support for the last year’s say-on-pay vote, in the Fall of 2022, we undertook an extensive shareholder engagement effort. We would like to thank all of you who met with us to share your viewpoints. The major themes we heard from shareholders that engaged were twofold:

Our shareholders understood the purpose of these special one-time awards to retain and motivate executives who recently joined our Company and to drive business stability and continued focus on long-term shareholder value during the most challenging period of the pandemic but expressed a strong preference for special awards to include a performance-based vesting component.

In response to shareholder feedback disfavoring the use of special awards, we commit that we will not make additional special awards to executive officers absent compelling circumstances where our compensation objectives cannot be achieved through our annual compensation programs.

Additionally, any such future special awards will include a performance-based component, unless the Committee determines that inclusion of performance component would defeat the purpose of the special award.

Our executive officers’ compensation for fiscal year 2022 did not include any special awards and no such awards are contemplated for 2023.

At the same time, based on our discussions with shareholders, we believe that a substantial majority of our shareholders support our core annual compensation programs, which are heavily weighted toward performance-based pay, and which received high support in years prior to 2022.

We encourage you to review the following Compensation Discussion and Analysis, which includes additional detail about our shareholder engagement effort and our response, and considerations related to fiscal 2022 compensation program and its outcomes.

We thank you for your continued investment in Flowserve and respectfully request your support for this year’s advisory vote on executive compensation.

Respectfully,

THE ORGANIZATION AND COMPENSATION COMMITTEE

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Compensation Discussion and Analysis

This CD&A describes the decisions made concerning the compensation of the Company’s Named Executive Officers (“NEOs”), as shown below. It also describes our executive compensation guiding principles, 2022 executive compensation outcomes as well as other attributes related to executive compensation governance policies.

Contents

 

Executive Summary	Page 37
Compensation Program Philosophy and Principles	Page 41
2022 Executive Compensation Decisions	Page 45
Compensation Governance Policies	Page 57
Summary Compensation Table	Page 59

 

2022 Named Executive Officers

During 2022, our NEOs were:

R. Scott Rowe President and Chief Executive Officer (“CEO”)

Amy B. Schwetz Senior Vice President, Chief Financial Officer (“CFO”)

Elizabeth L. Burger Senior Vice President, Chief Human Resources Officer (“CHRO”)

Two of our 2022 NEOs, Keith E. Gillespie, our former Senior Vice President and Chief Sales Officer, and Tamara M. Morytko, our former President of the Flowserve Pumps Division, left the business in early 2023 as part of a reorganization and restructuring plan to align with our 3D strategy and in an effort to optimize operational execution. Mr. Gillespie transitioned from his position on April 7, 2023, and Ms. Morytko transitioned from her position on February 24, 2023.

For more information on the Named Executive Officers currently serving as executive officers, see “Executive Officers” on page 32.

 

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We Take Pay for Performance Seriously

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Executive Summary

Our Company

We are a world leading manufacturer and aftermarket service provider of comprehensive flow control systems. We develop and manufacture precision-engineered flow control equipment integral to the movement, control and protection of the flow of materials in our customers’ critical processes. Our product portfolio of pumps, valves, seals, automation and aftermarket services supports global infrastructure industries, including oil and gas, chemical, power generation (including nuclear, fossil and renewable energy) and water management, as well as other general industrial markets where our products and services add value. Through our manufacturing platform and global network of Quick Response Centers (“QRCs”), we offer a broad array of aftermarket equipment services, such as installation, advanced diagnostics, repair and retrofitting.

Overview of 2022 Business Results

In 2022, Flowserve experienced strong bookings despite the disruptions in our business environment and unexpected operational challenges. Tension on supply chain was a headwind throughout 2022 but we saw incremental improvements as the year progressed; however, labor availability in the early part of 2022, primarily due the COVID pandemic, significantly affected production. These challenges, coupled with escalating inflation, impacted our performance against our targets, which are reflected in our financial and stock price performance.

Despite these challenges, we remain encouraged by the strong demand that we see across many of our end markets, as evidenced by our significant Bookings growth. We are also optimistic about the opportunities available to Flowserve and have positioned ourselves well in the marketplace as a key partner to our customers through the energy transition. We believe our strategic investments into diversification, decarbonization, and digitization (“3Ds”) present significant long-term opportunities for Flowserve, our shareholders, and stakeholders around the world.

2022 Finance and Business Highlights

While 2022 had a series of obstacles, we have several highlights from the year. We hit an important milestone this year as we celebrated our 25th anniversary as a publicly traded company on the New York Stock Exchange. While our history spans more than 230 years, we’ve made significant progress during the past 25 years in becoming the flow control leader we are today. We made great progress in advancing our 3D strategy while continuing to support our core customers in oil & gas, chemical and power generation. We are positioned as a key partner in emerging technologies, and our record backlog demonstrates our leadership in the industry. We also launched more than 20 new products that support our 3D strategy and enable our customers’ sustainability efforts with a broad variety of applications around the world. We expect to elevate our financial performance in 2023 as we live our Purpose to create extraordinary flow control solutions to make the world better.

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2022 and 2023 compensation program changes enhance alignment with shareholders, while rewarding executives for the execution of our business strategy, which is designed to enhance our long-term success.

	Program Enhancements
	• We made several changes to the structure for our 2022 target awards under our Annual Incentive Plan (AIP) to align with our strategic initiatives: • Increased the weighting of Bookings since it’s a funnel for revenue, • Implemented performance metrics for each of our 3Ds (Diversification, Decarbonization and Digitization) to drive a focus on energy transition and long-term sustainability, • Implemented a strategic goals payout modifier for each member of the ELT to drive progress against ESG and other strategic priorities, and • Returned to a more traditional payout table structure (i.e., no stretch target that provides a larger payout for such performance attainment) in anticipation of 2022 being a rebound year. • We changed our performance peer group applicable to our 2022 PSUs to the group of companies that comprise the S&P 500 Industrials Index in recognition of the broader market with which we compete. • To further enhance the alignment of our CEO and our shareholders’ interests, we increased our stock ownership guidelines for our CEO from 5x to 6x base salary.
	• We simplified our 2023 AIP design to promote immediate actioning in our new organizational structure by focusing on three performance metrics: • Adjusted Operating Income (50% weighting) to incentivize strong execution, • Total Customer Bookings (30% weighting) to incentivize growth (See Note 1); and, • Adjusted Primary Working Capital as a % of Sales (20% weighting) to incentivize efficiency. • We also retained our strategic goals AIP payout modifier for members of the ELT to incentivize continued progress against critical ESG and growth initiatives. • Our 2023 PSU awards retain a +/- 15% relative TSR modifier, but the 2023 grant terms provide that no positive payout modifier will apply if our three-year absolute TSR is negative, regardless of our relative performance.
	Note 1: In 2022, “total customer” Bookings represented 28% of performance metrics and “3D” Bookings tied specifically to Diversification and Decarbonization (with the goal to raise employee-awareness of the strategic importance of these products and services) represented an 8% weighting. As a result, the total weighting tied to Bookings metrics was 36%. The 30% weighting on “total customer” Bookings for 2023 incorporates the Bookings on our “3D” products and services to continue to incentivize Bookings in these strategic areas.

Incentive program payouts are aligned with the company’s performance and our shareholder’s experience.

Our annual incentive program paid out below target for 2022 and each of the two prior fiscal years. Although 2022 Bookings continued to be strong in core products and services and Bookings in our strategic “3D” growth areas were particularly strong, Adjusted Operating Income did not meet the threshold performance level. Adjusted Primary Working Capital (PWC) as a % of Sales and On-time Delivery goals also did not meet threshold performance levels because of higher inventory levels we chose to maintain due to continued supply chain disruptions and our executional challenges, respectively. See pages 46 to 48 for further details on our 2022 annual incentive plan payout based on financial and operational performance metrics.

ANNUAL INCENTIVE PLAN PAYOUTS (% OF TARGET)

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PSUs have paid out below target for the past three performance cycles. 2020 Performance Stock Units (PSUs) tied to 2020-2022 performance paid out at 16% of target, reflecting pandemic-disrupted progress toward Return on Invested Capital (“ROIC”) goals and Total Shareholder Return (“rTSR”) performance relative to peers over the applicable three-year period influenced by our more significant exposure to the oil and gas markets.

PAYOUTS FOR 2018, 2019, AND 2020 PSU GRANTS

 

Realized pay for our executives is directionally aligned with our shareholders’ experience. Our CEO’s realizable pay for 2020-2022 was 24% less than target while our total shareholder return was down 33%. Lower realizable compensation is attributable to the impact of the decline in our stock price on outstanding equity grants as well as below target payouts for the annual incentive and performance share unit grants.

(1)

“Target Pay” includes base salary, target annual incentive opportunity and grant date fair value of equity awards.

(2)

“Realizable Pay” includes actual base salary, actual bonuses paid, and the value of outstanding RSU and PSUs based on our December 31, 2022 share price, with 2020 PSUs shown at actual payout and 2021 and 2022 PSUs shown at target.

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Good Governance and Compensation Practices Aligned with Shareholder Interests

Our executive compensation governance supports our pay-for-performance philosophy, aligns our executives’ interests with those of our shareholders, and reflects best practices without encouraging unnecessary risk taking.

	What We Don’t Do
✘	No hedging or pledging of stock
✘	No excise tax or income tax gross ups for Executive Officers
✘	No employment agreements with Executive Officers
✘	No excessive perquisites
✘	No stock option repricing without shareholder approval
✘	No dividend payments on unvested awards

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Compensation Program Philosophy and Principles

Executive Compensation Philosophy

Our compensation philosophy is aligned with building long-term shareholder value and is designed to achieve the following objectives:

	ATTRACT & RETAIN	Attract and retain high-quality leaders with a passion for driving high performance, as well as our purpose, values, behaviors
	REINFORCE OUR STRATEGY	Align our incentive programs with our vision and business strategy
	COMPETITIVE AND MARKET-BASED	Maintain a market-based compensation program that provides a competitive total target compensation opportunity approximating the market median
	ALIGN PAY WITH PERFORMANCE	Provide incentive programs that reward short- and long-term performance leading to shareholder value without undue risk taking
	ALIGN PAY WITH SHAREHOLDERS	Provide that a majority of total compensation is tied to performance and/or stock price and is aligned with shareholder interests

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Components of Executive Compensation

Our executive compensation program is structured to incorporate the following components:

Component	Objective	Key Features	Performance-Based Aspects
Base Salary	Provide a regular fixed income in recognition of job responsibilities	• Paid in cash • Reviewed annually for adjustments	• Individual performance is a key driver of any adjustments approved by the O&C Committee
Short-Term Incentive (AIP)	Motivates executives to achieve/exceed annual Company goals that ultimately drive long-term shareholder value	• Paid in cash • Target award determined as a % of base salary • Payout range is 0% to 200% of target award • Strategic goals payout modifier applies which may increase or decrease the payout by +/-15%	• Payout is fully at risk • Financial and operational performance metrics • Focus on strategic goals • Any earned payout is subject to review and approval by the O&C Committee
Long-Term Incentive (AIP)	Encourages executives to increase shareholder value over a long-term time horizon	• Target value of awards determined as a % of base salary	• Value of all LTI awards varies with changes in share price
Restricted Stock Units (RSUs)	3-year vesting period	• Settled in stock • Vests ratably	• Focus on stock price and shareholder returns
Performance Stock Units (PSUs)	3-year performance period	• Settled in stock • Payout range is 0% to 200% of units granted • Payout modifier applies, which may increase or decrease the payout of units by +/- 15%	• Payout is fully at risk • Underlying payouts driven by financial performance with the final payout adjusted based on rTSR • Focus on stock price and shareholder returns • Any earned payout is subject to review and approval by the O&C Committee

 

ATTRACT & RETAIN

REINFORCE OUR STRATEGY

COMPETITIVE AND MARKET-BASED

ALIGN PAY AND PERFORMANCE

ALIGN WITH SHAREHOLDERS

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Compensation Mix

Our executive compensation program emphasizes performance-based compensation that is determined each year by the O&C Committee. As shown below, most of our 2022 total target executive compensation was delivered in the form of short- and long-term incentives for which payouts are at risk.

The Decision-Making Process

The O&C Committee oversees our executive compensation program working closely with its independent consultant to promote the effectiveness of our program. The O&C Committee’s charter, which documents its authority and responsibilities, is available on the investor relations portion of the Company’s website at https://ir.flowserve.com under the “Corporate Governance—Documents & Charters” caption.

The Role of the O&C Committee

The O&C Committee is responsible for determining the compensation of our Executive Officers and designing our executive compensation program. Determining compensation for our Executive Officers includes, among other things, determining each component of executive compensation and any related performance metrics, goals, attainment and payouts as described above in “Components of Executive Compensation.”

The Role of the CEO

Each year, Mr. Rowe presents compensation recommendations to the O&C Committee regarding the compensation for each Executive Officer, other than himself. Mr. Rowe makes his recommendations based upon an assessment of each executive’s performance, as well as the performance of the executive’s business unit or function, and his assessment of the retention risk for each executive. The O&C Committee annually reviews Mr. Rowe’s performance, including feedback directly from the Board, and holds executive session discussions without Mr. Rowe or any other Executive Officers present to discuss Mr. Rowe’s performance and establish Mr. Rowe’s compensation.

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The Role of the Independent Compensation Consultant

The O&C Committee has retained F.W. Cook as its independent compensation consultant to provide advice regarding executive compensation matters. The services provided by F.W. Cook generally include providing:

F.W. Cook attends all regularly scheduled O&C Committee meetings and calls. The O&C Committee assessed F.W. Cook under the factors set forth in the SEC’s rules and concluded that F.W. Cook was independent and that the consultant’s work in 2022 did not raise any conflicts of interest.

Competitive Positioning and Our Compensation Peer Group (“CPG”)

Annually, the O&C Committee reviews the base salaries, target bonuses, and the grant date value of long-term incentive awards for each of our Executive Officers as compared to the compensation levels for similar positions at our CPG companies, while considering other factors described below. The O&C Committee reviews publicly available financial and compensation information reported by the CPG companies and general survey data. The 2021 general survey data used to inform the O&C Committee’s 2022 compensation decisions was collected from Willis Towers Watson (WTW).

The O&C Committee reviews the CPG and survey data to determine the median compensation for each executive’s position and then considers this as one factor when setting each executive’s target compensation for the year. Median compensation is used as a reference point for pay recommendations. Target pay varies from the median based on the executive’s industry experience; experience and performance in his or her role and at the Company; value of the role to the Company; internal pay parity among our executives; and any other factors the O&C Committee deems relevant. The CPG is also used more generally when the O&C Committee reviews our compensation program design, including the types of compensation awarded and the terms and conditions of compensation components.

Our 2022 CPG

The O&C Committee conducts an annual review of the CPG to determine if any changes are appropriate. In choosing our peers, the O&C Committee involves Management and uses research and advice from its independent compensation consultant. The O&C Committee generally seeks to include companies in similar industries, with applicable revenue and market cap scope, with similar business characteristics (such as margins and asset intensity) and adequate disclosure of executive compensation practices to ensure no pay anomalies exist which are inconsistent with Flowserve’s pay practices. The O&C Committee determined to make no changes to the Compensation Peer Group for 2022:

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2022 Executive Compensation Decisions

Changes to Total Target Compensation for 2022

After reviewing Company performance, the positioning of each executive versus the market data provided by F.W. Cook, the performance of the executive over the prior year, and the past history of changes to the executive’s compensation, the O&C Committee approved the following total target compensation levels and pay components for each NEO for 2022. Following these adjustments, the executive team’s target direct compensation continued to be positioned near the median of F.W. Cook’s market data. With a majority of compensation performance based, should the Company fail to meet performance objectives, realized executive compensation could be significantly below median.

Rationale for Total Target Compensation Increases

Annual Incentive Plan

The Company’s AIP rewards participants to the extent they achieve the Company’s annual objectives. Under this short-term incentive program, the O&C Committee establishes performance metrics and target performance levels. It also establishes a target incentive award for each executive as a percentage of salary.

2022 Award Structure

Working with its consultant and Management, the O&C Committee selects performance metrics that support key strategies to drive sustainable and profitable growth.

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Quantitative Performance Metrics

Strategic Goals Payout Modifier

The O&C Committee implemented a new strategic payout modifier in 2022 for Mr. Rowe and his direct reports, including each of the NEOs, to incentivize progress in key strategic areas that are pivotal for the Company’s long-term growth and transformation strategy. A payout modifier was applied in an effort to continue to focus on fundamental quantitative financial and operational goals, while still incentivizing performance against our key strategic goals. The modifier allows for adjustment of otherwise earned payouts by up to +/- 15% based on accomplishments relative to key objectives in the following strategic categories:

Quantitative Performance Metrics Payout

The following chart provides an overview of our performance on the 2022 financial and operational performance metrics. All targets were set in line with our internal business plans and external market guidance and required the same or greater level of effort as in prior years to achieve the targets. Targets for all metrics excluding on-time delivery represented growth over 2021 actual results. The target for on-time delivery was set lower than 2021 actual results because of continued supply chain disruptions and market conditions due to the COVID-19 pandemic.

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Individual Performance Adjustments

The O&C Committee may exercise judgment in assessing each NEO’s personal performance when determining the annual incentive award amounts. The O&C Committee considered the individual performance of our NEOs in 2022 and determined not to make any individual adjustments.

Strategic Goals Payout Modifier

Below are the 2022 strategic categories, key objectives, and accomplishments:

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The Committee discussed the above accomplishments and determined that the 2022 key objectives for each strategic category had been exceeded. As a result, the Committee exercised its judgement and determined the payout modifier to be 1.15x the earned payout on financial and operational performance metrics for each member of the ELT.

2022 Annual Incentive Plan Award Payout

Our alignment of pay and performance is one of the key components of our compensation philosophy. Although Bookings continued to be strong in core products and services and Bookings in our strategic “3D” growth areas were particularly strong, Adjusted Operating Income did not meet the threshold performance level. Adjusted Primary Working Capital (PWC) as a % of Sales and On-time Delivery goals also did not meet threshold performance levels because of higher inventory levels we chose to maintain due to continued supply chain disruptions.

2022 AIP Payout Summary

Long Term Incentives

The Company’s LTI program is structured to:

2022 Award Structure

The number of units granted in 2022 was determined by dividing the target LTI grant value by the average closing price of the Company’s common stock reported on the NYSE during the last twenty trading days prior to the grant date of February 15, 2022, which was $32.71. The stock units were awarded as follows:

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2022 Performance Stock Unit (PSU) Grant

Aligned with our compensation objectives, these performance-based awards provide a strong incentive for our executives to achieve specific performance goals over the associated performance period to advance our business strategy, build long-term shareholder value and encourage executive retention.

Performance Metrics

Working with its independent consultant and Management, the O&C Committee selected performance measures that support our strategic focus on growth, margin expansion, and capital efficiency as well as shareholder value creation.

2022 ROIC

The O&C Committee sets the ROIC goal for each fiscal year at the beginning of the applicable fiscal year. Following the conclusion of the third year, the payout attributable to the ROIC metric for the PSUs then-vesting is then determined by averaging the earned payout for each of the three fiscal years in the applicable performance period. In February 2022, the O&C Committee approved the below 2022 ROIC goal and payout levels to cover one-third of each of the 2020, 2021 and 2022 PSU grants:

FCF as a % of Adjusted Net Income

Due to the proprietary and competitive nature of the Company’s business strategy and internal budgets that inform the 3-year performance program targets, the Company has chosen not to disclose the specific performance target applicable to this metric at this time. The FCF as a % of Adjusted Net Income performance target was set at a level intended to be challenging but attainable. We intend to disclose the performance goals and achievement results following the completion of the performance cycle.

The FCF as a % of Adjusted Net Income payout table for the 3-year performance goal is structured as follows:

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rTSR Payout Modifier

Any earned PSUs under both performance metrics shown above are subject to adjustment based on the Company’s 3-year (2022 - 2024) TSR performance relative to the PPG. If the Company’s 3-year TSR performance:

2022 Performance Peer Group (PPG)

For the 2022-2024 performance cycle, the O&C Committee revised the PPG to be each of the companies in the S&P 500 Industrials Index as of January 1, 2022. The use of these 72 companies (see Appendix II) as a PPG was determined to better reflect the universe of industry peers against which we compete for investor funds.

2022 RSU Grant

The 2022 RSUs vest ratably over three years on the first, second and third anniversaries of the grant. RSUs not only provide a retention incentive, but they also align the interests of grant recipients with those of shareholders with a focus on stock price and TSR.

SETTLEMENT OF 2020 PERFORMANCE STOCK UNITS

The PSUs granted in 2020 for the 2020 to 2022 performance period were structured and paid out as follows:

2020 PSU Structure

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2020-2022 ROIC Attainment and Payout %

The O&C Committee approved a payout of 32% of the 2020 PSUs granted that were tied to the ROIC performance metric:

Relative 3-Year (2020-2022) TSR Attainment and Payout %

No portion of the 2020 PSUs granted tied to the relative 3-year TSR performance metric were earned as our rTSR performance for the three-year period fell below the 25^th percentile threshold performance level.

As a result of our strong pay-for-performance culture, our final 2020 PSU payout was as follows:

Aggregate Payout % for 2020 PSUs

No discretionary adjustment was considered or made to the formulaic payouts shown above.

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Other Benefits

Other benefits provided to the Named Executive Officers are generally consistent with those provided to other employees of the Company, including health and retirement benefits. These elements of our compensation program are outlined in the chart below and discussed in more detail in the narrative following the chart.

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Retirement Benefits

We provide pension benefits to all U.S. salaried employees, including the NEOs, under the Flowserve Corporation Pension Plan (the “Qualified Plan”), which is a tax-qualified defined benefit pension plan. Because the IRC limits the pension benefits that can be accrued under a tax-qualified pension plan (based on an annual compensation limit), we also maintain a separate non-qualified defined benefit restoration pension plan, the Senior Management Retirement Plan (the “SMRP”). The SMRP compensates participants, including the Named Executive Officers, for the reduction in their pension benefit resulting from this IRC limitation. The SMRP is designed to provide a comparable level of retirement benefits to those provided to other U.S. employees under the Qualified Plan based on a comparable benefit formula. In addition, we also maintain a second non-qualified supplemental defined benefit pension plan, the Supplemental Executive Retirement Plan (the “SERP”), for our eligible U.S. executives, including the Named Executive Officers, in order to attract and incentivize the retention of senior leaders. These three programs are designed to provide eligible U.S. executives with income following retirement and to help ensure that we can attract and retain executive talent by providing comprehensive retirement benefits.

Participants in the Qualified Plan and the SMRP accrue contribution credits based on age and years of service at the rate of 3% to 7% for eligible earnings up to the Social Security wage base, and at the rate of 6% to 12% for eligible earnings in excess of the Social Security wage base. Participants in the SERP accrue contribution credits at the rate of 5% of all eligible earnings. Eligible earnings generally include base salary and annual incentive awards. SERP participants also earn interest on the accrued contributions based on the rate of return on 10-year Treasury bills.

We also maintain a 401(k) plan to enable all U.S. salaried employees, including the NEOs, to contribute a portion of their eligible compensation for wealth accumulation. The Company provides a 75% match on the first 6% of eligible compensation that an employee contributes to the plan.

Executive Officer Severance Plan

Each of the Named Executive Officers participates in the Company’s Amended and Restated Executive Officer Severance Plan (the “Officer Severance Plan”). Under this plan, the Company’s officers are provided benefits upon a termination due to a reduction in force or by the Company without cause. No benefits are payable under the Officer Severance Plan to any officer who receives benefits under the Company’s Change in Control Severance Plan (the “CIC Plan”). The Officer Severance Plan does not provide for any additional payments or benefits upon a termination of employment by the Company for cause, upon the executive’s resignation for any reason (including “good reason” or “constructive termination”) or upon the executive’s death or disability.

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Change in Control Severance Plan

Each of the Named Executive Officers participates in the Company’s Change in Control Severance Plan (“CIC Plan”). Benefits under the CIC Plan are triggered if, within two years following a change in control the Named Executive Officer is terminated without cause (and not on account of death or disability) or resigns for reasons constituting a “constructive termination.” Benefits are also triggered if a Named Executive Officer is terminated within the 90-day period immediately prior to a change in control if such termination (i) occurs after the initiation of discussions leading to such change in control and (ii) can be demonstrated to have occurred at the request or initiation of parties to such change in control. The severance benefits provided upon a termination of employment covered under the CIC Plan include:

Limited Personal Benefits

The O&C Committee strives to make our executive compensation program primarily performance-based and, as such, only provides limited benefits to Executive Officers that are not provided to other employees. These benefits are prevalent in the marketplace and increase the overall effectiveness of the Executive Officers in the performance of their roles:

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Compensation Governance Policies

Stock Ownership Requirements

To further align executive and shareholder interests, each of our Named Executive Officers are required to own a minimum amount of Company common stock equal in value to a specified multiple of their annual base salary.

Our guidelines are administered as follows:

Anti-Hedging and Pledging Policies

Under the Company’s Insider Trading Policy all directors and employees (including the Named Executive Officers) are prohibited from pledging stock and engaging in any transactions (such as trading in options) that hedge or offset, or are designed to hedge or offset, any decrease in the market value of the Company’s common stock.

Clawback Policy

Our Clawback and Forfeiture Policy (the “Clawback Policy”) reinforces our commitment to integrity and the highest standards of ethical conduct through our compensation program. Under the Clawback Policy, the O&C Committee has the ability to recoup previously paid and/or cancel outstanding incentive compensation from any current or former Executive Officer, or any other designated officer of the Company, if:

With respect to incorrect calculations, the Company may cancel any outstanding incentive compensation and recoup incentive compensation received by the executive during the three-year period preceding the date the Company discovers the error or is required to prepare an accounting restatement. With respect to egregious conduct, the Company may cancel any outstanding incentive compensation and recoup incentive compensation received by the executive during the one-year period preceding the date the Company discovers the conduct.

Accounting Implications of Executive Compensation

The Company recognizes compensation expense in our financial statements for all equity-based awards pursuant to the principles set forth in FASB ASC 718, “Compensation—Stock Compensation.” The O&C Committee considered the GAAP accounting implications of the awards in setting the long-term incentive mix and further determined that the mix of RSUs and PSUs was appropriate for 2022.

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Executive Compensation Program Review and Compensation Risk

The O&C Committee regularly monitors and annually reviews our compensation programs to determine, in consultation with its compensation consultant, whether the elements of the program are consistent with our executive compensation objectives and principles. As part of this, the O&C Committee evaluates whether the Company’s risk management objectives are being met with respect to the executive compensation program and our compensation programs in aggregate. If the elements of the program are determined to be inconsistent with our objectives and principles, or if any incentives are determined to encourage risks that are reasonably likely to have a material adverse effect on us, the elements are adjusted as necessary.

The O&C Committee has concluded that no risks arising from our compensation policies and practices are reasonably likely to have a material adverse effect on the Company. In reaching this conclusion, the O&C Committee considered the following:

Organization and Compensation Committee Report

The Organization and Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis set forth above in this proxy statement with management. Based on this review and discussion, the Organization and Compensation Committee recommended to the Board of Directors that this Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission for the fiscal year ended December 31, 2022.

John L. Garrison, Chairman
Gayla J. Delly
Michael C. McMurray
John R. Friedery

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Summary Compensation Table

The following table sets forth compensation information for 2022, 2021 and 2020 for our Named Executive Officers.
Ms. Morytko was first a Named Executive Officer for 2021.

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2022 Grants of Plan-Based Awards

The following table sets forth certain information with respect to 2022 plan-based awards granted to the Named Executive Officers for the year ended December 31, 2022.