NOTICE OF 2024 ANNUAL MEETING OF

STOCKHOLDERS

Meeting Information

DATE AND TIME Thursday, May 16, 2024 | 10:30 a.m., Central Daylight Time

LOCATION Virtual Meeting. You must register in advance at www.proxydocs.com/LII to attend. After registering, you will receive further instructions by email, including a unique link to access the 2024 Annual Meeting.

Agenda		Board Recommendation
Proposal 1 To elect three Class II directors for a three-year term expiring at the 2027 Annual Meeting of Stockholders		FOR each director nominee
Proposal 2 To conduct an advisory vote to approve the compensation of our named executive officers as disclosed in this Proxy Statement		FOR
Proposal 3 To ratify the appointment of KPMG LLP as our independent registered public accounting firm for the 2024 fiscal year		FOR
Transact any other business that may properly come before the 2024 Annual Meeting in accordance with the terms of our Bylaws

Voting Methods Available to You
INTERNET Visit the website on your Proxy Card		BY MAIL Mark, sign, date, and return your Proxy Card in the postage-paid envelope		Your vote is important. Please submit your proxy or voting instructions as soon as possible
TELEPHONE Call the number on your Proxy Card		DURING THE MEETING You must register in advance at www.proxydocs.com/LII to virtually attend and vote during the 2024 Annual Meeting		Who May Vote Our stockholders of record at the close of business on March 25, 2024 are entitled to notice of, and to vote at, the 2024 Annual Meeting
Important Notice Regarding the Availability of Proxy Materials for the for the Stockholder Meeting to be Held on May 16, 2024: The Proxy Statement, Proxy Card, and Annual Report on Form 10-K for the fiscal year ended December 31, 2023 accompany this Notice and are available at www.lennox.com and www.proxydocs.com/LII.				By Order of the Board of Directors, John D. Torres Corporate Secretary

TABLE OF CONTENTS

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Only stockholders of record and beneficial owners of shares of our common stock as of the close of business on March 25, 2024, the record date, may attend and participate in the Annual Meeting, including voting and submitting questions to be answered at the Annual Meeting. At the close of business on the record date, there were 35,622,124 shares of our common stock outstanding and entitled to vote. Each share of common stock is entitled to one vote.

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To attend the Annual Meeting, you must register in advance at www.proxydocs.com/LII using the control number located on your Proxy Card, Notice of Internet Availability of Proxy Materials, or voting instruction form. Upon completing your registration, you will receive further instructions by email, including a unique link that will allow you access to the Annual Meeting and to vote and submit questions to be answered at the Annual Meeting. If you are a beneficial owner of shares registered in the name of a broker, bank, or other nominee, as part of the registration process, you will also need to provide the registered name on your account and the name of your broker, bank, or other nominee.

The Annual Meeting will start promptly at 10:30 a.m, CDT. Stockholders may begin to log in to the Annual Meeting 15 minutes prior to the start time. If you encounter any difficulties accessing the virtual Annual Meeting platform, including any difficulties voting, you may call the technical support number that will be included in your instructional email.

If we receive substantially similar questions, to avoid repetition we will group those questions together and provide a single response. Questions regarding personal matters or matters not relevant to the Annual Meeting will not be answered. We will also post questions submitted by stockholders and our answers on our website for a period of 60 days following the Annual Meeting.

At the Annual Meeting, you will be asked to vote on three proposals. Our Board recommends you vote “for” each of the director nominees in Proposal 1 and “for” Proposals 2 and 3. The proposals to be voted on at the Annual Meeting are:

If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are the “stockholder of record” with respect to those shares. If you are a stockholder of record, we sent our proxy materials directly to you. If your shares are held in a stock brokerage account or by a bank, you are considered the “beneficial owner” of shares held in street name. In that case, our proxy materials will be forwarded to you by your broker or bank, which is considered the stockholder of record with respect to those shares. Your broker or bank will also send you instructions on how to vote. If you have not heard from your broker or bank, please contact them as soon as possible.

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Lennox (NYSE: LII) is a leader in energy-efficient climate-control solutions. Dedicated to sustainability and creating comfortable and healthier environments for our residential and commercial customers while reducing their carbon footprint, we lead the field in innovation with our cooling, heating, indoor air quality, and refrigeration systems.

With high-efficiency ratings and the latest innovative, mobile technology, our home heating and cooling equipment for the residential replacement and new construction markets in the United States and Canada provide the ultimate in comfort and climate control. Our product lines include air conditioners, furnaces, heat pumps, comfort controls, and indoor air quality equipment.		We provide indoor comfort solutions and services plus refrigeration systems for office buildings, schools, supermarkets restaurants, retail establishments, and other light commercial applications in North America. Products include packaged rooftop units, curb adaptors, split systems, chillers, commercial controls, indoor air quality systems, coolers, condensing units, packaged systems, and related equipment.

*See appendix for reconciliation to GAAP performance.

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Across Lennox, we are dedicated to progressing our commitment to sustainability for the benefit of our stakeholders. We are proud of the continuous advancements we make in efficient climate-control solutions for our customers. We also champion diversity and inclusion not only across our business, but in the communities where we live and work. The steps we take today towards bettering our planet, communities and all other stakeholders will positively impact the long-term sustainability of our business.

The information on our website is not, and will not be deemed to be, a part of this Proxy Statement or incorporated into any of our other filings with the SEC.

Our management team and the Board are focused on serving the long-term interests of Lennox’s stockholders. The Board’s primary responsibility is the oversight of the Company’s management team, and the Board has a number of measures in place to continually enhance Board composition, efficiency, and effectiveness, demonstrated through the following:

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Name

Age

Start Date

Background

Indep.

Committee Memberships

Other Public Company Boards

AC

BGC

CHRC

PPC

Class II

Sherry L. Buck

60

2019

CFO, W.L. Gore & Associates

F

Gregory T. Swienton

74

2010

Former Chairman and CEO, Ryder System, Inc.

C,F

Todd J. Teske

59

2011

Chairman of the Board Former Interim CEO, Lennox International Inc. Former Chair, President and CEO, Briggs & Stratton Corporation

F

Class III

Janet K. Cooper

70

1999

Former SVP and Treasurer, Qwest Communications International Inc.

F

C

Alok Maskara

53

2022

Chief Executive Officer, Lennox International Inc.

CEO

Franklin Electric Co., Inc.

Sivasankaran Somasundaram

58

2024

President and CEO, ChampionX

ChampionX

Class I

John W. Norris, III

66

2001

Co-Founder, Maine Network Partners

Karen H. Quintos

60

2014

Former EVP and Chief Customer Officer, Dell Technologies Inc.

C

Cummins Inc.

Shane D. Wall

59

2020

Former Chief Technology Officer and Global Head HP Labs of HP Inc.

C

AC – Audit Committee; BGC – Board Governance Committee; CHRC – Compensation & Human Resources Committee;

PPC – Public Policy Committee; C – Chair; F – Financial expert

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Our directors bring a well-rounded variety of experience and skills and represent a mix of deep knowledge of the Company and fresh perspectives. The experience and skills that the Board considers in evaluating its membership, and which inform Board succession planning and our director nomination processes, are highlighted in the following table. The table also identifies which directors have particularly strong experience and skills in the areas described below. Further information about each individual director is set forth in the director biographies in this Proxy Statement.

Director Skills and Experience

Financial/Accounting Finance & financial accounting expertise, including experience as a financial officer, accounting officer, controller, accountant, or auditor

Executive Leadership Experience as a C-Suite executive of a public company

Manufacturing/Distribution Experience managing large scale manufacturing or distribution operations

Environmental Sustainability/Climate-Related Risks Experience in environmental sustainability/ climate-related risks

ERM Experience in enterprise risk management, including identifying, assessing & managing significant risks

Human Capital Management Experience establishing and leading compensation and benefit programs, career development programs & diversity & inclusion efforts

Marketing/Sales Experience growing market share and revenue through a variety of go-to-market channels

Cybersecurity Work experience or a certification in cybersecurity or experience in security architecture

Innovation/Technology Experience in engineering, design & technology innovation

Strategic Planning/Oversight Experience in strategic planning, developing business strategies & mergers & acquisitions in large organizations operating in multiple geographies

Other Board Demographics

Person of Color

White/Caucasian

Gender Identification (Male/Female/Other)

F

F

M

M

F

M

M

M

M

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The Board and its Committees have oversight of important topics, as shown below, and are highly engaged in working through issues and discussing plans in both formal and informal meetings.

Area of Board Oversight

Full Board

Public Policy

Audit

Board Governance

Comp & HR

Shareholder Rights

Executive Compensation

Accounting & Tax Transparency

Board Composition & Diversity

Risk Management

Business Ethics & Compliance

Public Policy

Cybersecurity & Data Privacy

Product Efficiency & Innovation

Energy Management

Waste Management

Refrigerant Management

Climate Change

Water Stewardship

Product Lifecycle Management & Materials Sourcing

Culture & Values

Employee Health & Safety

Employee Diversity, Inclusion & Engagement

Pay Equity

Employee Training & Development

Benefits & Pension

Product Safety

Supply Chain

Community Involvement & Charitable Giving

Strategy

Anti-Corruption

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Proposals Requiring Your Vote

Proposal 1

Election of Directors

Our Bylaws provide that our Board may be composed of no less than three and no more than 15 members. The size of our Board is currently fixed at nine members, divided into three classes, with each class serving a three-year term.

Upon the recommendation of the Board Governance Committee, the Board has nominated three Class II directors for re-election of a three-year term expiring at the 2027 Annual Meeting of Stockholders. The Board has nominated the directors using the process and criteria described in the “Corporate Governance—Board of Directors— Director Nomination Process and Nominee Criteria” section of this Proxy Statement.

For each director and director nominee, we have included a biographical description below that includes the specific experience, attributes, and skills that led to the Board’s conclusion that such person should serve as a director of the Company at this time in light of our business and structure.

If you do not wish to vote your shares for any particular nominee, you may withhold your vote. If any director nominee becomes unavailable to serve, the persons named in the accompanying Proxy Card may vote for any alternate designated by the incumbent Board, or the number of directors constituting the Board may be reduced.

The Board has nominated the following directors for re-election as Class II directors for three-year terms expiring at the 2027 Annual Meeting of Stockholders:

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THE BOARD RECOMMENDS A VOTE “FOR”

THE ELECTION OF EACH OF THE ABOVE NOMINEES.

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The following Class III directors’ terms will continue until the 2025 Annual Meeting of Stockholders:

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The following Class I directors’ terms will continue until the 2026 Annual Meeting of Stockholders:

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In accordance with Section 14A of the Securities Exchange Act of 1934 (the “Exchange Act”), we are asking our stockholders to vote to approve the compensation of our Company’s NEOs (the “Say-on-Pay vote”), as disclosed in this Proxy Statement. The Say-on-Pay vote is an advisory vote on the resolution below and is not binding. Although the vote is non-binding, the directors value stockholders’ opinions and will consider the voting results of this proposal when making future compensation decisions. Say-on-Pay advisory votes are currently conducted annually. Our next advisory vote on the frequency of Say-on-Pay votes is expected to take place at our annual meeting of stockholders in 2029.

As described more fully in the “Compensation Discussion and Analysis” section of this Proxy Statement, the Company designed its market-competitive NEO compensation program to reward successful execution of its business strategy and achievement of desired business results, with a focus on creating alignment with the interests of our stockholders. The program seeks to achieve these goals on both an annual and long-term basis through an appropriate combination of base pay, annual incentives, and long-term incentives.

For our NEOs, the majority of compensation in a typical year is both stock-based and contingent on performance. The annual incentive payout is based on Company financial performance metrics of core net income, free cash flow, and revenue, and for NEOs who are business segment leaders, a combination of Company and business segment performance. Our long-term incentives generally include: (1) performance share units, which are designed to link compensation to the Company’s three-year financial performance as measured by return on invested capital and core net income growth; (2) stock appreciation rights, which are designed to incentivize NEOs to grow our business and deliver increased returns to our stockholders; and (3) restricted stock units, which are designed to support our retention efforts. As discussed in the “Compensation Discussion and Analysis” section of this Proxy Statement, in 2023 the Compensation and Human Resources Committee made the decision to move our annual long-term incentive program grant date from December of each year to three trading days after our fourth quarter earnings release, so no equity awards were granted to the NEOs in the 2023 fiscal year.

The Company also has several governance policies in place to align executive compensation with stockholder interests and mitigate risk. These policies include stock ownership guidelines; a prohibition on hedging and pledging of Company stock; clawback policies; and post-employment restrictive covenants. These policies are discussed in detail in the “Compensation Discussion and Analysis” section of this Proxy Statement.

In 2023, the Company posted record highs for revenue and earnings per share, while navigating challenging residential end-markets. Highlights of our 2023 performance include the following:

Financial results, including those from prior periods, are described in more detail in our Form 10-K for the fiscal year ended December 31, 2023. For non-GAAP results, see reconciliation in Appendix A. All total stockholder return calculations assume reinvestment of dividends.

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We are asking stockholders to approve the following advisory resolution at the Annual Meeting:

RESOLVED, that the compensation of the Company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables, and narrative discussion is hereby APPROVED.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE

APPROVAL OF THE COMPENSATION OF THE NEOs AS DISCLOSED IN THIS PROXY

STATEMENT.

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The Audit Committee of the Board has appointed KPMG LLP to continue as our independent registered public accounting firm for the 2024 fiscal year. We are asking our stockholders to ratify the appointment of KPMG LLP as our independent registered public accounting firm. If our stockholders do not ratify this appointment, the Audit Committee will consider the reasons for the rejection and whether it should select a different firm; however, it is not required to do so. Even if the appointment is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time during the year if it determines that a change would be in the best interests of the Company and our stockholders.

A representative of KPMG LLP will be present at the Annual Meeting and will be available to respond to appropriate questions. The representative will also have an opportunity to make a statement at the Annual Meeting if he or she desires to do so.

THE BOARD RECOMMENDS A VOTE “FOR” THE RATIFICATION OF

KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING

FIRM FOR THE 2024 FISCAL YEAR.

Audit and Non-Audit Fees

The following table sets forth the fees for audit and other services rendered by KPMG LLP for each of the last two fiscal years (in thousands).

Audit Committee Approval of Audit and Non-Audit Services

The Audit Committee pre-approves all audit services provided by our independent registered public accountants. In addition, all non-audit services provided by KPMG LLP are pre-approved in accordance with our policy that prohibits our independent registered public accountants from providing services specifically prohibited by the Securities and Exchange Commission (the “SEC”). For permissible non-audit services, the Audit Committee has delegated pre-approval authority to the Audit Committee Chair. In addition, the Audit Committee has approved annual maximum amounts for tax advisory and tax return services. No engagements are commenced until the Audit Committee Chair’s approval has been received. All approved services are reported to the full Audit Committee at each quarterly meeting. In accordance with the foregoing, all services provided by KPMG LLP in 2022 and 2023 were pre-approved by the Audit Committee.

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The Audit Committee maintains effective working relationships with the Board, management, the Company’s internal auditors, and KPMG LLP, the Company’s independent registered public accounting firm (the “Independent Accountants”). As set forth in the Audit Committee Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that our Company’s consolidated financial statements and disclosures are complete and accurate and in accordance with U.S. generally accepted accounting principles and applicable rules and regulations. The Independent Accountants are responsible for auditing the Company’s consolidated financial statements and expressing an opinion as to the conformity of these financial statements with U.S. generally accepted accounting principles and on the Company’s internal control over financial reporting.

The Audit Committee has (1) reviewed and discussed the Company’s audited consolidated financial statements for the year ended December 31, 2023 with the Company’s management and with the Independent Accountants; (2) discussed with the Independent Accountants the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC; and (3) received the written disclosures and the letter from the Independent Accountants required by applicable requirements of the Public Company Accounting Oversight Board regarding the Independent Accountants’ communications with the Audit Committee concerning independence, and the Audit Committee has discussed with the Independent Accountants the Independent Accountants’ independence and considered whether the provision of non-audit services by the Independent Accountants to the Company is compatible with the Independent Accountants’ independence.

Members of the Audit Committee rely, without independent verification, on the information provided and on the representations made by management and the Independent Accountants. Accordingly, the Audit Committee’s oversight does not provide an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit Committee’s considerations and discussions referred to above do not assure that the audits of the Company’s consolidated financial statements have been carried out in accordance with generally accepted auditing standards, that the consolidated financial statements are presented in accordance with U.S. generally accepted accounting principles or that the Company’s Independent Accountants are in fact “independent.”

Based upon the reviews and discussions described above, and subject to the limitations on the role and responsibilities of the Audit Committee referred to in this report and in the Audit Committee Charter, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Submitted by the Audit Committee of the Board:

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Board of Directors

Director Independence

Our Corporate Governance Guidelines require that a majority of our directors be “independent,” and that the Compensation and Human Resources, Board Governance, and Audit Committees consist exclusively of independent directors as defined under the NYSE listing standards, the Exchange Act, and any other applicable laws or regulations regarding independence. No director qualifies as “independent” unless the Board affirmatively determines that the director has no material relationship with the Company.

Applying these standards, the Board has determined that all of our Board members are independent, except Alok Maskara, our Chief Executive Officer (“CEO”). All of the members of the Board’s Compensation and Human Resources, Board Governance, and Audit Committees are independent directors (see the table under “Board Committees” below).

In making its determination as to the independence of our directors, the Board Governance Committee and the Board considered that (a) Mr. Teske served as Interim CEO of the Company for less than two months from March 23, 2022 to May 9, 2022 and (b) during 2023, Mr. Wall served as a special advisor to the CEO of HP Inc., which provides computer equipment and related items to the Company in the ordinary course of business. The Board affirmatively determined that no director had a material relationship with the Company despite these facts.

Board Meetings and Leadership Structure

Mr. Teske serves as independent Chair of the Board. As independent Chair, Mr. Teske, among other things, presided at all meetings of the Board, including executive sessions of the independent directors, served as liaison between the CEO and the independent directors, assisted in planning agendas for Board meetings, and advised on the presentation of information provided to the Board.

The Board met eight times in 2023. All directors attended more than 75% of the total number of all meetings of the Board and committees of the Board on which they served. Our Corporate Governance Guidelines include a policy that Board members are expected to attend the Annual Meeting. All of the individuals serving as directors at the time of our 2023 Annual Meeting of Stockholders attended our 2023 Annual Meeting of Stockholders, and we expect all current directors to attend the 2024 Annual Meeting.

Board Committees

The standing committees of the Board are as follows: Audit, Board Governance, Compensation and Human Resources, and Public Policy. The Board has adopted charters for each of these committees, copies of which are available on our website at www.lennox.com by following the links “Investors — Corporate Governance — Documents & Charters.” Each of these Board committees is led by a different independent director and all members of our Board committees are independent directors.

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The following table provides current membership information for each of the Board committees and indicates which directors our Board determined are independent, as defined by the NYSE.

Name		Independent		Audit		Board Governance		Compensation and Human Resources		Public Policy
Sherry L. Buck
Janet K. Cooper						*
Alok Maskara
John W. Norris, III
Karen H. Quintos										*
Sivasankaran Somasundaram
Gregory T. Swienton				*
Todd J. Teske
Shane D. Wall								*

Audit Committee

The Audit Committee assists the Board in fulfilling its oversight responsibilities relating to the integrity of our financial statements and related systems of internal controls, our compliance with legal and regulatory requirements, the independent registered public accounting firm’s qualifications, independence and performance and the performance of our internal audit function. The Audit Committee also has the direct responsibility for the appointment, compensation, retention, and oversight of our Independent Accountants.

The Board has determined that each Audit Committee member is independent, as independence is defined for audit committee members by the SEC and the NYSE. The Board has also determined that each Audit Committee member is “financially literate” as defined by the NYSE, has accounting or related financial management expertise, and is an audit committee financial expert as defined by the SEC. The Audit Committee met nine times in 2023.

Board Governance Committee

The Board Governance Committee assists the Board by identifying individuals qualified to become Board members, developing qualification criteria for Board membership, making recommendations to the Board regarding the appropriate size of the Board and appointment of members to the Board’s committees, developing and recommending to the Board any changes to the Corporate Governance Guidelines and Code of Business Conduct applicable to our Company, and overseeing the evaluation of our Board and each of the Board’s committees. The Board Governance Committee also conducts an individual peer review for any directors who are scheduled to be re-nominated. The Board has determined that each member of the Board Governance Committee is independent as independence is defined by the NYSE. The Board Governance Committee met five times in 2023.

Compensation and Human Resources Committee

The Compensation and Human Resources Committee determines the compensation philosophy and oversees the compensation programs for the Company’s executive officers and the non-employee members of the Board. This Committee’s responsibilities include oversight of the short- and long-term incentive plans and the senior management succession plans. The Committee also reviews the funding requirements and investment policies for the defined benefit and defined contribution retirement plans, and the performance of investment funds, investment advisors, and investment managers under those plans. The Committee may delegate its responsibilities to a subcommittee comprised of Committee members.

Although the Committee seeks input from the CEO on various elements of executive compensation, the Committee determines and approves the final compensation elements and amounts to be provided to the Company’s NEOs. The independent members of the Board (rather than the Committee) have direct responsibility for approving CEO and Board compensation; however, the Committee reviews and recommends proposed changes to CEO and Board compensation to the independent members of the Board for approval. See “Executive Compensation — Compensation Discussion and Analysis” for information concerning the Committee’s philosophy and objectives in overseeing executive compensation. The Board has affirmatively determined that each member of the Committee is

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independent as defined for compensation committee members by the NYSE. The Board has also determined that each member of the Committee is a “non-employee director” for purposes of Section 16b-3 of the Exchange Act. The Committee met five times in 2023.

The Committee’s charter authorizes the Committee to retain third-party compensation consultants and to obtain advice and assistance from internal or external legal, accounting, or other advisors. For 2023, the Committee retained Pearl Meyer. Pearl Meyer does not provide any other services to the Company. See “Executive Compensation — Compensation Discussion and Analysis” for further information regarding our executive compensation programs and the scope of services provided by Pearl Meyer. The Committee has concluded that Pearl Meyer’s work does not raise any conflicts of interest that require disclosure under applicable SEC regulations.

Public Policy Committee

The Public Policy Committee is responsible for overseeing the Company’s (a) actions in furtherance of corporate environmental and social responsibilities and other sustainability issues of significance to investors and other key Company stakeholders and (b) health and safety issues. The Board has determined that each Public Policy Committee member is independent as defined by the NYSE. The Public Policy Committee met four times in 2023.

Director Nomination Process and Nominee Criteria

The Board is responsible for nominating candidates for Board membership. The Board has delegated the director screening and recruitment process to the Board Governance Committee. In this capacity, the Board Governance Committee develops and periodically reviews the qualification criteria for Board membership, identifies new director candidates, and makes recommendations to the Board regarding the appropriate size of the Board and appointment of members to the Board’s committees. The Board Governance Committee typically retains a third-party search firm to assist in identifying and evaluating potential new director candidates. We strive to maintain a well-rounded Board with a diversity of experience, functional expertise, and industry knowledge. Required qualifications for Board membership vary according to the particular areas of expertise, experience and skills being sought to complement the existing Board composition at the time of any vacancy.

According to our Corporate Governance Guidelines, the Board Governance Committee considers the following factors in evaluating candidates, in addition to other factors that the Board Governance Committee deems relevant:

Our Corporate Governance Guidelines specifically state that the Board believes in the value of Board diversity and is committed to developing a diverse pool of potential candidates for Board service. Consequently, when nominating new directors, the Board will seek the best qualified candidates. To achieve a high performing Board, diversity is essential, including diversity of professional experience, race, ethnicity, gender, age, and cultural background. The Board and the Board Governance Committee will consider race, ethnicity, and gender diversity when developing a pool of potential candidates for future Board service. Our current Board reflects this effort. Among other things, three of the Company’s directors are female, and two of the Company’s directors are racially diverse.

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In addition, we believe that diversity with respect to tenure is important to benefit from both fresh perspectives and deep experience and knowledge of our Company and our business. Therefore, we aim to maintain an appropriate balance of tenure among our directors. In furtherance of its succession planning responsibility, the Board has appointed almost half of its directors (four new directors) since 2019. The average tenure of our directors is 10.11 years.

When a vacancy occurs on the Board, a majority of the directors then in office may fill the vacancy or the size of the Board may be reduced. The Board Governance Committee considers nominees for election to the Board recommended by stockholders in the same manner as other candidates.

Stockholder Nominations for Director

A stockholder wishing to nominate a candidate for election to the Board at a meeting of the stockholders (“Nominating Stockholder”) is required to give written notice to our Corporate Secretary of his or her intention to make a nomination in accordance with the terms of our Bylaws. The Nominating Stockholder must be a holder of record of stock of the Company entitled to vote at the annual meeting of stockholders and must appear at the annual meeting of stockholders to nominate such person. The Nominating Stockholder must include a written consent from its proposed director nominee. The proposed director nominee must also represent and agree that he or she (1) has not and will not give any assurance or commitment not disclosed to the Company on how he or she would vote on any issue or question, (2) has not and will not become party to any agreement not disclosed to the Company regarding direct or indirect compensation (other than from the Company) for his or her service as a director, and (3) if elected, will comply with all applicable policies and guidelines of the Company. We must receive the notice of nomination at least 60 days but no more than 90 days prior to the annual meeting of stockholders. However, if we give less than 70 days’ notice of the date of the annual meeting of stockholders, the notice of nomination must be received within 10 days following the date on which notice of the date of the annual meeting of stockholders was mailed or such public disclosure was made to our stockholders.

Pursuant to our Bylaws, the notice for the proposed director nominee must contain certain information about the nominee, the Nominating Stockholder and any person “acting in concert” with the Nominating Stockholder, including descriptions of any arrangements or understanding related to the nomination, the information that would be required if such person was making a stockholder proposal (as described under “Other Information – Stockholder Proposals for the 2025 Annual Meeting of Stockholders”), and other information sufficient to allow the Board Governance Committee to determine if the candidate meets our qualification criteria for Board membership. The Board Governance Committee may require the proposed director nominee to furnish additional information in order to determine that person’s eligibility to serve as a director. A nomination that does not comply with the above procedure will be disregarded. Nominating Stockholders whose nominations comply with the foregoing procedure and who meet the criteria described above under the heading “Director Nomination Process and Nominee Criteria” and in our Corporate Governance Guidelines, will be evaluated by the Board Governance Committee in the same manner as the Board Governance Committee’s nominees.

In addition to satisfying the requirements under our Bylaws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act, which notice must be postmarked or transmitted electronically to us at our principal executive offices no later than 60 calendar days prior to the first anniversary date of this year’s Annual Meeting. Accordingly, for the 2025 Annual Meeting of Stockholders, we must receive such notice no later than March 17, 2025. If the date of the 2025 Annual Meeting of Stockholders is changed by more than 30 calendar days from the anniversary of the Annual Meeting, then notice must be provided by the later of 60 calendar days prior to the date of the 2025 Annual Meeting of Stockholders or the 10th calendar day following the day on which public announcement of the date of the 2025 Annual Meeting of Stockholders is first made.

Communications with Directors

Stockholders and all other interested parties may send written communications to the Board by email to investor@lennox.com, or by regular mail to 2140 Lake Park Blvd., Richardson, Texas 75080, Attention: Board of Directors, c/o Corporate Secretary.

Communications received by the Corporate Secretary will be delivered to one or more members of the Board or management, as determined by the Corporate Secretary. Any allegations of accounting, internal controls, or auditing-related complaints or concerns will be directed to the Chair of the Audit Committee.

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Risk Management

While the Board oversees the Company’s risk management, our management is responsible for the development, implementation, and maintenance of our risk management processes. Management provides periodic reports to the Board and Board committees on its assessment of strategic, operational, legal and compliance, information security, and financial reporting risks to the Company. The Board and Board committees, as appropriate, review and consider the management reports provided on the Company’s enterprise risk and risk management strategy.

Enterprise Risk Management

In 2023, our Enterprise Risk Management program, identifying and addressing risk, was presented to the full Board twice. The Audit Committee oversees the guidelines and policies that govern the Company’s processes to assess and manage significant enterprise risk exposure.

Compensation Risk

The Board reviews the Company’s compensation policies and practices to determine if risks arising from those policies and practices are reasonably likely to have a material adverse effect on the Company. All of the Company’s material incentive compensation plans are reviewed at least annually. Based on these reviews, the Board has not identified any risks arising from the compensation policies and practices that are reasonably likely to have a material adverse effect on the Company. See “Executive Compensation — Compensation Discussion and Analysis” for more information about the design of our compensation program and risk mitigation compensation practices we have incorporated into our compensation program, including stock ownership guidelines and our Clawback Policy.

Other Corporate Governance Policies and Practices

Code of Business Conduct

The Company has adopted a Code of Ethics (which we call our Code of Business Conduct) that applies to all its directors and employees, including its senior financial and principal executive officers. The Code of Business Conduct covers a variety of matters, such as acting with integrity and compliance with laws, including anti-corruption laws. Amendments to and waivers, if any, of the Code of Business Conduct as it pertains to the principal executive officer, principal financial officer, and principal accounting officer, if any, will be disclosed on our website. The Code of Business Conduct is available on the Company’s website at www.lennox.com by following the links “Investors — Corporate Governance — Documents & Charters.”

Corporate Governance Guidelines

The Company has adopted Corporate Governance Guidelines that are available on the Company’s website at www.lennox.com by following the links “Investors — Corporate Governance — Corporate Governance Guidelines.”

Insider Trading Policy

The Company has adopted an insider trading policy and procedures designed to promote compliance with insider trading laws. This policy is available on the Company’s website at www.lennox.com by following the links “Investors — Corporate Governance — Documents & Charters.”

Executive Session Meetings

The non-management directors of our Board, all of whom are independent, meet regularly in executive session without the presence of management. In 2023, the independent Chair of the Board chaired the executive session meetings of our independent directors.

Whistleblower Procedures

The Audit Committee has established procedures for the handling of complaints regarding accounting, internal accounting controls, or auditing matters, including procedures for confidential and anonymous submission by our employees of concerns regarding such matters. The Company’s Code of Business Conduct prohibits retaliation against employees who report violations or suspected violations of the Code of Business Conduct.

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Our non-employee director compensation program uses a combination of cash and equity awards to provide market-competitive compensation to members of our Board.

Each year, the Committee reviews benchmark data from our Compensation Peer Group and other general industry surveys to assess the competitiveness of our director compensation program. If the Committee believes changes are warranted to the Board compensation program, the Committee recommends the proposed changes to the independent members of the Board for approval.

In 2023, at the recommendation of the Committee, the Board made the decision to (1) change the annual equity portion of non-employee director compensation from restricted stock unit awards with 3-year cliff vesting to common stock awards and (2) change the timing of annual equity grants from December to May, following the Annual Meeting. The Board believes the timing and form of these awards aligns with market-competitive compensation and practices.

As a result of the timing change, there were no equity awards delivered to non-employee directors during 2023.

2023 Annual Compensation

In 2023, we provided the following annual retainers, which are paid in quarterly installments to members of our Board.

No equity awards were delivered to non-employee directors during 2023.

Equity Awards

Non-employee directors receive 100% of their equity award in the form of common stock under the 2019 Equity and Incentive Compensation Plan. In 2024, each non-employee director continuing in service following the Annual Meeting will receive $150,000 in common stock on the date of the Annual Meeting.

Perquisites and Other Compensation

We allow our non-employee directors to participate in our employee rebate program, which provides rebates on eligible residential heating and air conditioning equipment, accessories, and supplies. We also reimburse all non-employee directors for their reasonable expenses incurred in connection with attendance at Board or Board committee meetings.

Stock Ownership Guidelines

Pursuant to our Corporate Governance Guidelines, each non-employee director is required to own shares of our common stock having a value of at least five times their annual retainer within five years after their first election to the Board. Directors must retain their shares until they have met their ownership requirement. Unvested RSUs and shares of common stock owned count towards this requirement.

As of December 31, 2023, all non-employee directors were in compliance with these stock ownership guidelines.

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2023 Director Compensation Table

The following table provides information regarding compensation earned in 2023 by each non-employee director who served as a non-employee director during 2023.

The following table provides information regarding the aggregate number of outstanding RSUs held by each non-employee director as of December 31, 2023. RSUs generally vest on the third anniversary of the date of grant.

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Compensation Discussion and Analysis

2023 CD&A At-A-Glance

This Compensation Discussion and Analysis (“CD&A”) reviews the philosophy, objectives, and elements of our executive compensation program, and describes the 2023 compensation of our named executive officers (“NEOs”). It also describes the process followed by the Compensation and Human Resources Committee (the “Committee”) for making pay decisions, as well as its rationale for specific pay decisions for 2023 executive compensation.

In 2022 and 2023, the Company implemented significant NEO compensation design changes in response to stockholder outreach efforts, including:

Concerns we heard:				Actions taken:
Retention equity granted in 2021, including lack of performance criteria and shorter vesting provisions.				Amidst the Company’s leadership transition in 2021, the Company granted one-time, first-ever retention awards to NEOs. The Company has no plans of granting similar awards in the future.
Single-trigger equity vesting in change-in-control (CIC) agreements.   Legacy excise tax gross-ups in CIC agreements.				In 2022, the Company terminated existing CIC agreements with NEOs and adopted a CIC severance plan, which includes double-trigger equity vesting and eliminates excise tax gross-ups for all employees. The plan also reduces cash severance payable to the CEO & NEOs and eliminates enhanced pension benefits.
Similar metrics for short-term and long-term incentive plans.				The Company added a revenue metric to the 2023 short-term incentive plan.
Lack of formal stock holding requirements.				Effective 2022, the Company revised its executive stock ownership requirements to require NEOs to retain net shares (after tax withholdings) until they have met the ownership requirement. The Company also increased the minimum stock ownership requirement for the CEO to six times annual base salary.

Following these important changes to our executive compensation programs, at our 2023 Annual Meeting of Stockholders, the advisory vote to approve the compensation of the Company’s NEOs received the approval of over 97% of the stockholders voting for or against this proposal. The Committee considered this vote to represent strong overall support for our NEO compensation program, and it did not make any changes to our executive compensation policies or practices that were significantly driven by the results of the vote.

Our business continued to strengthen in 2023 with the Company delivering year-over-year revenue growth of 6% in challenging residential end-markets. Record Company performance in 2023 resulted in STI and LTI payouts above target with a strong pay-for-performance relationship resulting in total shareholder return (“TSR”) of 90%. Operating profit margin was up 195 basis points and adjusted segment profit margin was up 300 basis points; net income increased 19% to $590 million and adjusted net income increased 26% to $641 million; and operating cash flow increased 144% to $736 million. For non-GAAP results, see reconciliation in Appendix A.

In 2024, the Company adopted new segment names to better reflect the growth opportunities of our portfolio. Our Residential Segment will now become Home Comfort Solutions and our Commercial Segment will become Building Climate Solutions. More information about our 2023 business achievements, and the resulting compensation actions taken by the Committee are summarized below.

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2023 Named Executive Officers (“NEOs”)

Leadership Transitions

On October 23, 2023, Joseph W. Reitmeier, Executive Vice President and Chief Financial Officer, notified the Company of his decision to retire as Chief Financial Officer effective December 31, 2023. Thereafter, Mr. Reitmeier continued to serve as Executive Vice President, with no changes to his compensation package, to assist in the Chief Financial Officer leadership transition until his retirement from the Company effective February 29, 2024.

Effective January 1, 2024, Michael Quenzer, who previously served as Vice President, Financial Planning & Analysis and Investor Relations, succeeded Mr. Reitmeier as Executive Vice President and Chief Financial Officer of the Company. Mr. Quenzer served in his prior role since January 2023. Prior to that, he was the chief financial officer for the Company’s Commercial Segment from November 2016 until January 2023. Mr. Quenzer has served in various capacities of increasing responsibility within the Company’s Finance department since 2004.

In November 2022, the Company announced the retirement of Doug Young, the long-standing President of our Residential Segment, effective June 30, 2023, and the appointment of Gary Bedard as President of our Residential Segment, effective January 1, 2023. Mr. Young’s availability during the first half of 2023 helped ensure a seamless transition that maintained momentum on critical initiatives across the Residential Segment.

Executive Summary

The Company’s executive compensation program is designed to attract, retain, and motivate leadership talent, align with short- and long-term business goals, maintain market competitiveness and increase stockholder value by maintaining a strong alignment between pay and performance.

Highlights of our 2023 financial performance and the linkage between executive compensation and financial performance are set forth below.

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Financial Highlights

In 2023, the Company posted record highs for revenue and earnings per share, while navigating challenging residential end-markets. Highlights of our 2023 performance include the following (dollars in millions):

(1) See adjusted net income GAAP reconciliation in Appendix A

Financial results, including those from prior periods, are described in more detail in our Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on February 13, 2024 (“Form 10-K”). For non-GAAP results, see reconciliation in Appendix A. All total stockholder return calculations assume reinvestment of dividends.

Compensation Highlights

The Committee believes that the design of the Company’s executive compensation program provides a direct link between Company performance and the compensation to our NEOs. Our executive compensation program has three primary elements: base salary, short-term incentives (as part of our Short-Term Incentive (“STI”) Program), and long-term equity incentives (as part of our Long-Term Incentive (“LTI”) Program). Each of these compensation elements serves a specific purpose in our compensation strategy. Base salary is an essential component to any market-competitive executive compensation program. Short-term incentives reward the achievement of annual goals, while long-term incentives drive our NEOs to focus on continuous stockholder value creation.

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Compensation Program Changes – Timing of Annual LTI Grant

In 2023, the Committee and management made the decision to move the annual LTI Program grant date by approximately two months from December of each year to three trading days after the fourth quarter earnings release in the following year. This change is intended to generally align all of the Lennox compensation discussions with its executives to the beginning of each year and further maximize our pay for performance philosophy. The Committee also believes that granting awards following the earnings release is a more prevalent approach and best practice.

As a result of this change, the Company made no equity grants to NEOs during 2023. The LTI values were approved in December 2023, with the actual grants to be made in (and number of shares to be valued as of) February 2024. While the 2023 Summary Compensation Table will not include LTI grants for 2023, the February 2024 grants are included in this CD&A when describing pay mix and assessing pay versus performance. More information can be found in the LTI Program section along with a pro-forma summary compensation table that includes the February 2024 LTI awards as if they were granted in December 2023, consistent with our historical practice.

Positive Governance Practices

The Committee assesses trends and developments in executive compensation practices and implements those that best fit with the Company’s business strategy and our stockholders’ long-term interests. Below are some of the practices we have incorporated into our executive compensation program:

		What We Do				What We Don’t Do
		Median compensation philosophy				No excise tax gross-ups
		Pay-for-performance linkage				No hedging of Company stock
		Long-term balance in compensation structure				No pledging of Company stock
		Use of independent compensation consultant				No dividends on equity awards in annual grant
		Annual risk assessment				No repricing of stock appreciation rights or options
		Rigorous stock ownership guidelines				No cash buyouts of underwater stock appreciation rights or options
		Clawback policies and provisions				No significant annual perquisites
		Non-Competition / Non-Solicitation restrictions
		Annual review of share utilization
		Regular market assessment of our peer group
		Change-in-Control double-trigger for severance and equity vesting
		Minimum vesting requirement of at least one year for 95% or more of equity incentive plan awards

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What Guides Our Program

Pay-for-Performance

We maintain a pay-for-performance philosophy designed to reward successful execution of our business strategy and achievement of desired business results, with a focus on aligning compensation with stockholders’ interests. When our financial results exceed performance goals, monetary rewards to our NEOs generally pay out at higher levels. When our financial results fall below performance goals, monetary awards to our NEOs generally pay out at lower levels or not at all.

Recent payouts under our STI and LTI Programs demonstrate the alignment between Company performance and payments made to our NEOs. In 2023, the Company’s strong earnings, free cash flow, and revenue performance resulted in above target level payouts under our annual STI program for NEOs with performance goals tied solely to overall Company performance. The Company’s record performance substantially exceeded target goals, which resulted in an overall payout of 214% of target, up from a below target payout of 59% in 2022.

Under our LTI Program, record weighted average return on invested capital of 50.9% for the 2021-2023 performance period exceeded the maximum payout goal for that metric, while the core net income compound annual growth rate of 18.2% for that same period was above target achievement. As a result, our NEOs received a PSU payout of approximately 189% for the 2021-2023 performance period under our LTI Program, consistent with our pay-for-performance approach and results-oriented compensation.

The graph below illustrates the directional alignment of pay and performance by showing changes in CEO annual compensation (using totals from the Summary Compensation Table, excluding changes in pension value) versus changes in TSR over the last five years.

$ amounts are in thousands. CEO pay excludes changes in pension value for all years. TSR represents

the change in a $100 investment from December 31, 2018, assuming reinvestment of dividends.

The volatility in the chart above is primarily due to the Company’s prior CEO not receiving an LTI grant in December 2021 as a result of his impending resignation, and the subsequent one-time sign-on award to Mr. Maskara upon his hire in 2022 as compensation for incentive compensation forfeited from his prior employer. In addition, the LTI grant date change from December 2023 to February 2024 results in lower annual compensation for 2023. To provide a more consistent picture of CEO compensation, the chart below averages CEO pay for 2021 and 2022 and includes the February 2024 LTI grant as if it were made in December 2023 consistent with historical practice.

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$ amounts are in thousands. CEO pay excludes changes in pension value for all years. TSR represents

the change in a $100 investment from December 31, 2018, assuming reinvestment of dividends.

Compensation for the CEO reflects a strong relative pay-for-performance alignment versus the Compensation Peer Group (as defined below) across various metrics for 2021-2023. To provide a more consistent picture of CEO compensation, the chart below shows CEO total direct compensation (“TDC”) including both the February 2024 LTI grant as if it were made in December 2023 consistent with our historical practice and actual 2023 Summary Compensation Table compensation.

Key Strategic Objectives

The strategic objectives of our executive compensation program are to:

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The following table lists each element of executive compensation and how the Committee believes it correlates to our compensation philosophy and key objectives:

Pay Positioning and Compensation Mix

For 2023, the Committee targeted all elements of compensation for the Company’s NEOs at the 50^th percentile of the market and granted a majority of the NEOs’ total target compensation in the form of incentive compensation. The following chart shows the 2023 average total target direct compensation mix for the CEO and NEOs. For purposes of determining target compensation mix for the CEO and NEOs, the graphs below assume the February 2024 LTI grant was made in December 2023, consistent with historical practices.

CEO & NEOs – Target Compensation Mix

The Decision-Making Process

Role of the Compensation and Human Resources Committee

The Committee establishes and administers our executive compensation program, practices, and policies. The Committee receives input from management and its independent compensation consultant, and considers competitive practices, our business objectives, stockholder interests, regulatory requirements, and other relevant factors to develop our executive compensation program in an effort to most effectively drive the achievement of the Company’s business objectives.

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Role of Senior Management

The Committee obtains input from management and the Committee’s independent consultant when making NEO compensation decisions. The CEO makes recommendations to the Committee with respect to all elements of compensation for each NEO, excluding himself. The CEO’s recommendations on NEO pay are developed in consultation with the Chief Human Resources Officer and the Committee’s independent compensation consultant and are considered with market data. The Committee determines and approves the final compensation elements and amounts to be provided to the NEOs.

The Committee reviews and recommends proposed changes to CEO compensation to the independent members of the Board for approval. All independent members of the Board (rather than just the Committee) have responsibility for approving CEO compensation.

Role of the Independent Compensation Consultant

In 2023, the Committee engaged Pearl Meyer to provide analysis, advice, and recommendations on executive compensation to the Committee. At the Committee’s request, Pearl Meyer performed the following services in 2023:

The Committee analyzed and considered the information provided by management and its consultants to determine the program design and the level and mix of each compensation element for the NEOs. The Committee conducted an independence assessment of Pearl Meyer in accordance with SEC rules. Based on this review, we are not aware of any conflict of interest raised by the work performed by the consultant that would prevent Pearl Meyer from serving as independent consultants to the Committee. Pearl Meyer reported directly to the Committee and did not provide any additional services to the Company or its management.

Market Competitive Compensation

To maintain a market-competitive program, the Committee uses benchmarking data when establishing executive compensation. Benchmarking against a representative peer group assists the Committee in assessing the competitiveness of our executive compensation program.

For the purposes of setting 2023 compensation, our Company’s compensation peer group, as reviewed and approved by the Committee, included the following 15 companies (the “Compensation Peer Group”):

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The Committee selected the Compensation Peer Group using the following criteria:

In 2023, the Committee analyzed the Compensation Peer Group on the criteria above and made no adjustments. Lennox revenues are at the 50^th percentile of the peer group and market capitalization is at the 66^th percentile.

In addition to comparing our NEO compensation to the compensation of our Compensation Peer Group, the Committee also references published compensation data and other studies of compensation trends and market practices (these data and practices, including our Compensation Peer Group, are collectively referred to as the “Market”).

Beyond traditional Market analysis, the Committee also utilizes various other compensation analyses to assist with its decision-making process. Below are examples of information the Committee reviews and considers, as appropriate, when making compensation decisions:

Components and Analysis of 2023 Executive Compensation

Base Salary

In establishing each NEO’s annual base salary, the Committee considered Market data, each individual’s experience and responsibilities, our annual merit budget for all employees, achievement of performance objectives, internal equity and recommendations provided by the CEO for his direct reports.

The following table provides detail regarding base salaries for each NEO:

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In setting NEO base salaries, the Committee uses the 50^th percentile of the market as a guideline and may adjust the base salaries based on a number of factors, which may include merit increases, the executive’s unique job responsibilities, management experience, individual contributions, number of years in his or her position and market position of current salary.

Short-Term Incentive Program

Our STI Program, as established under the Lennox International Inc. 2019 Equity and Incentive Compensation Plan, is an annual cash-based program for our NEOs designed to reward the successful performance of our Company, our business segments, and each individual NEO. In February 2023, the Committee approved financial metrics and performance goals required to be achieved for any payouts to be made under our STI Program. Under the STI Program, once the calculated STI amount is determined based on performance against the pre-approved goals, 25% of that amount may be modified up or down from 0% to 225% based on each NEO’s individual performance. However, the individual performance modifier may not increase the STI payout above 225% of the NEO’s STI target. The chart below illustrates how STI payouts are calculated for our NEOs:

Financial Performance. The following table summarizes the 2023 STI Program performance goals and payout opportunities, along with Company and business segment performance for each metric as approved by the Committee.

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2023 Short-Term Incentive Program Summary – Financial Performance

($ in thousands)