Acuity Brands, Inc.
Acuity Brands, Inc. in a DEF 14A on 11/22/2021   Download
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DEF 14A 1 a2021proxystatementdef14a.htm DEF 14A Document

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

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    Soliciting Material Pursuant to §240.14a-12
ACUITY BRANDS, INC.
(Name of Registrant as Specified in Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Our MissionOur Vision
We use technology to solve problems in spaces, light, and more things to come . . . for our customers, our communities, and our planet.We light the way to a more brilliant, productive, and connected world.
Our Shared Values
VALUES-DRIVEN COMPANY

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Integrity
We do the right thing,
the first time, every time.
Time
Time is the only constrained resource. We focus on
what is most important.
Curiosity
We are always searching for
a better way. We are willing
and able to change.
Customer Obsessed
We see the world through the eyes of customers and end-users. We deliver on their needs.
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People
We create an environment where the best people come to do their best work. We all succeed together.
Community
We care about the environment and our neighbors. We make communities better.

Owner’s Mindset
We think and act like owners. We focus on long-term, sustainable value creation.




Letter to Stockholders
Dear Stockholders:
The Board of Directors ("Board") would like to thank you for your investment and confidence in Acuity Brands, Inc. ("Acuity Brands" or the "Company"). The past year presented many unprecedented challenges. Despite these challenges, we remained focused on the transformation of the Company and the risks and opportunities facing it, and Acuity Brands delivered on its continuing efforts to create long-term value for you.
Company's Performance and Transformation
We continued to oversee the strategic corporate transformation that produced a solid financial performance in fiscal 2021. The new management team continued to drive the business forward, delivering a return to growth through solid revenue improvement and margin enhancements.
In addition, we generated strong cash flow and implemented a value-creative capital allocation strategy, highlighted by the acquisition of the ams OSRAM North American Digital Systems business and the execution of an accelerated share repurchase plan.

We are extremely proud of the Company’s accomplishments. As directors, we each take our oversight seriously. We continuously monitor business performance, review capital deployment opportunities, monitor risks, and examine other strategic options that have the potential to create additional value for stockholders.
Diversity, Equity, and Inclusion
Over the past year, the Board has supported management’s efforts to enhance our diversity, equity, and inclusion ("DEI") strategy. We are engaged with management on several initiatives and support the Company’s development of a three-year DEI strategy. We recognize that DEI continues to grow in importance to our stakeholders. We continue to prioritize these issues at the Board level and as part of Acuity’s broader environmental, social, and governance ("ESG") strategy.
Environmental, Social, and Governance Strategy
The Board continues its oversight of the Company’s EarthLIGHT program, which encompasses its ESG initiatives, through the Governance Committee. The Committee receives regular updates regarding the Company’s progress on these efforts, including feedback from our stockholders — which has been positive. We are proud of the Company's milestones in fiscal 2021 through its EarthLIGHT program, including its work to reach 100% carbon neutrality in its operations and its ongoing 100 Million Metric ton carbon reduction ambition.
Stockholder Engagement
We thank our stockholders and all of our other stakeholders for the time taken to engage with us. We always welcome the opportunity to hear feedback. We will continue to use your input to inform our practices and policies. See Contacting the Board of Directors, for information about how to reach the Board.
As we look to fiscal 2022, we are optimistic about the opportunities ahead for Acuity Brands.
Sincerely,
THE BOARD OF DIRECTORS
Neil M. Ashe, Chairman, President and CEO
James H. Hance, Jr., Lead Director
W. Patrick Battle
G. Douglas Dillard, Jr.
Maya Leibman
Laura G. O'Shaughnessy
Dominic J. Pileggi
Ray M. Robinson
Mark J. Sachleben
Mary A. Winston
November 22, 2021




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1170 Peachtree Street, NE
Suite 2300
Atlanta, Georgia 30309
Notice of Annual Meeting of Stockholders
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Date and Time
January 5, 2022
1:00 p.m. ET
Online check-in begins at 12:45 p.m. ET
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Place
Access the Virtual Annual Meeting at www.virtualshareholdermeeting.com/AYI2022
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Record Date
Stockholders of record at the close of business on November 10, 2021 are entitled to notice of and to vote at the Annual Meeting or any adjournments or postponements thereof.
Purpose
Voting ItemBoard Recommendation
1Elect ten directors
FOR each director nominee
2Ratify the appointment of our independent registered public accounting firm for fiscal 2022FOR
3Approval of advisory vote to approve named executive officer compensationFOR
4Approval of Amended and Restated Acuity Brands, Inc. 2012 Omnibus Stock Incentive Compensation PlanFOR
Stockholders will also consider and act upon such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.
Voting
Your vote is important. If you are a stockholder of record, you can vote by one of the following methods. In each case, please follow the instructions provided on the Notice of Internet Availability or Proxy Card. We encourage you to vote in advance, even if you plan to participate in the Annual Meeting.
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Internet
www.proxyvote.com
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Telephone
1-800-690-6903
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Mail
Sign, date, and return your proxy card
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During the Meeting
Vote electronically during the Annual Meeting
Virtual Stockholders' Meeting Information
We have determined that the Annual Meeting will be held in a virtual format only via the Internet. We believe a virtual meeting allows broader access by our stockholders and other interested parties. You will be able to participate in the Annual Meeting online and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/AYI2022. You will also be able to vote your shares electronically at the Annual Meeting. For more information about our virtual Annual Meeting processes, please see Questions Relating to this Proxy Statement.
On or about November 22, 2021, we plan to commence mailing of a Notice of Internet Availability of Proxy Materials containing instructions on how to access our Proxy Statement and our Annual Report on Form 10-K via the Internet and how to vote online. The Notice of Internet Availability of Proxy Materials also contains instructions on how you can receive a paper copy of the proxy materials.
A list of the stockholders entitled to vote at the Annual Meeting may be examined during regular business hours at our executive offices located at 1170 Peachtree Street, NE, Suite 2300, Atlanta, Georgia, 30309 during the ten-day period preceding the meeting. The stockholders list will also be made available to stockholders during the virtual Annual Meeting at www.virtualshareholdermeeting.com/AYI2022.
By order of the Board,
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JILL A. GILMER
Vice President, Corporate Secretary
November 22, 2021
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on January 5, 2022. The proxy statement and annual report are available at www.proxyvote.com



Table of Contents
Pages
LONG-TERM PLAN AMENDMENT
APPENDIX A—RECONCILIATION OF U.S. NON-GAAP FINANCIAL MEASURES
APPENDIX B—AMENDED AND RESTATED 2012 OMNIBUS STOCK INCENTIVE PLAN




Proxy Statement Summary
This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information you should consider, and you should read the entire proxy statement carefully before voting.
Key Fiscal 2021 Business Performance Highlights
Net Sales          Operating Profit          Gross Profit           
Free Cash Flow(1)
$3,461M$428M$1,475M$365M
Net Sales Growth
Operating Profit Margin
Gross Profit Margin
Diluted EPS
4.0%12.4%42.6%$8.38
(1) Free Cash Flow is reconciled in Appendix A.
Key Fiscal 2021 Achievements
Returned the Company to growth: Increased net sales, expanded gross profit margin and operating profit margin
Realigned businesses into Acuity Brands Lighting and Lighting Controls ("ABL") and Intelligent Spaces Group ("ISG")
Further established ABL as the market leader in North America
Broad product offering and strength in our key go-to-market channels
Elevated ISG as a collection of valuable technology assets led by exceptionally talented associates
Differentiated by open protocol and open-source distribution
Executed financially efficient business model: Generated solid cash flow and created value through effective capital allocation
Repurchased approximately 10% outstanding shares
Acquired ams OSRAM’s North American Digital Systems business on July 1, 2021 and Rockpile Ventures, Inc. on May 18, 2021
Built strong and diverse leadership team
Continued driving ESG (EarthLIGHT) enhancements as central tenets of our strategy
Allocating Capital Effectively as a Long-Term Source of Value
Our capital allocation strategy includes the following key elements:
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Invest in growth in our existing businesses
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Grow our existing businesses and enter new businesses through mergers and acquisitions
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Maintain our dividend
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Create permanent value through share repurchases

2022 Proxy Statement    1



PROXY STATEMENT SUMMARY
Sustainability and Social Responsibility Highlights
Acuity Brands creates long-term value for its stakeholders through execution of its strategies, including helping to create a better future in which our planet, communities, and business can thrive.
logo-earthlightxpg2a.jpg Highlights
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The Governance Committee of our Board of Directors oversees the EarthLIGHT program. Acuity Brands uses the EarthLIGHT program to manage and drive its ESG efforts. These efforts are central to the Company's strategy, enabling the Company to better assess risks and opportunities, provide products and solutions that lighten impacts on the environment, focus on the diversity and well-being of our associates, improve communities, and continue to enhance our governance activities.
The Company highlights many of its ESG-related achievements, including its progress in achievement of 100% carbon neutrality in its operations, in its most recent EarthLIGHT report available on its website at www.acuitybrands.com under For Investors, then Sustainability. Website references disclosed herein are not incorporated by reference.
Diversity, Equity, and Inclusion Highlights
We believe that diversity, equity, and inclusion ("DEI") are important factors in our ongoing success, and our goal is to ensure that all associates feel valued, respected, and accepted for their contributions regardless of their race, sex, religion, ethnicity, age, gender identity, disabilities, national origin, sexual orientation, or other unique characteristics. The Compensation and Management Development Committee (sometimes referred to as the "Compensation Committee") is responsible for the oversight of and receives regular updates on the Company's human capital programs.
To promote diversity and inclusion in the workplace, we have created a DEI Council that is responsible for setting our diversity strategy and creating a three-year roadmap of initiatives, many resulting from associate feedback. Our DEI Council consists of members of management as well as key human resource process leaders and leaders from our various employee resource groups. We currently have three employee resource groups: Minorities Amplifying Growth, Inclusion, and Community (“MAGIC”); the Women’s Network; and People Respecting Identity, Diversity, and Equity ("PRIDE"), formed in fiscal 2021. These groups are designed to help support, educate, and encourage associate groups as well as integrate the power of our diversity efforts into our business practices.
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2    Acuity Brands, Inc.



PROXY STATEMENT SUMMARY
Board Highlights
Director Nominees
The following table provides summary information about the ten director nominees to be elected by majority vote at the Annual Meeting.
Board Committees
Name and PositionIndependentTenure
Age
ACCCGCPublic Company Boards
Neil M. Ashe
Chairman,
President and Chief Executive Officer ("CEO")
153
Vericity, Inc.
W. Patrick Battle
Managing Partner,
Stillwater Family Holdings
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758
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MCBC Holdings, Inc. (MasterCraft)
G. Douglas Dillard, Jr.
Managing Partner, Slewgrass Capital, LLC and Slewgrass Partners, LLC
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450
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James H. Hance, Jr. Lead Director
Operating Executive,
The Carlyle Group LP
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777
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The Carlyle Group, Inc.
Maya Leibman
Executive Vice President and
Chief Information Officer,
American Airlines Group, Inc.
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155
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Laura G. O'Shaughnessy
Independent Consultant; Co-Founder and Former CEO, SocialCode, LLC
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144
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Vroom, Inc.
Dominic J. Pileggi
Retired Chairman and CEO,
Thomas & Betts Corporation
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970
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Ray M. Robinson
Non-Executive Chairman, Citizens Trust Bank; Retired President, Southern Region AT&T
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1973
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American Airlines Group Inc.
Fortress Transportation and Infrastructure Investors LLC
PROG Holdings, Inc.
Mark J. Sachleben
Chief Financial Officer and
Corporate Secretary, New Relic, Inc.
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< 156
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Mary A. Winston
President, Winsco Enterprises, Inc.; Former Executive Vice President and Chief Financial Officer, Family Dollar Stores, Inc.
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460
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Bed Bath & Beyond
Chipotle Mexican Grill
Dover Corporation
ACAudit CommitteeCCCompensation and Management Development Committee
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Chair
GCGovernance Committee
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Member


2022 Proxy Statement    3



PROXY STATEMENT SUMMARY
Board Composition
DIRECTOR
INDEPENDENCE
DIRECTOR TENURE
DIRECTOR AGE
DIRECTOR DIVERSITY
90%
independent
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3 Women
1 Woman committee chair
2 People of color

Board Skills and Experience
Description of Skill or Experience
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Executive Leadership:
Experience as a public company CEO or other NEO, either current or past; or as a senior executive, division president, or functional leader within a complex organization
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Corporate Governance:
Current or previous service on a public company board of directors; or understanding of public company operating responsibilities and with issues commonly faced by public companies
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Strategic Growth and Development:
Knowledge of strategic planning and mergers and acquisitions in large organizations operating in multiple geographies
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Operational/Manufacturing:
Experience in the oversight of large scale operations, including manufacturing in industries similar to the ones in which the Company operates
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Finance, Accounting, and Capital Markets:
Knowledge of finance or financial reporting; experience with debt/capital market transactions; or experience as a principal financial officer, principal accounting officer, controller, public accountant,or auditor
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Human Capital and Talent Management:
Experience in attracting, developing, and retaining talent and building strong cultures
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Enterprise Risk Management/Sustainability:
Experience in oversight of enterprise wide risk management, including cybersecurity; experience in creating long-term value by embracing opportunities and managing risks deriving from ESG developments
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Engineering, Technology, and Innovation:
Experience in leading edge engineering and technology innovation; experience in digital transformation of a business
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4    Acuity Brands, Inc.



PROXY STATEMENT SUMMARY
Corporate Governance Highlights
Stockholder Engagement
Ongoing engagement and dialogue with our stockholders is important to the Company. We have adopted a year-round engagement philosophy that includes outreach for various purposes, including to solicit feedback in advance of filing this Proxy Statement. Our outreach efforts, which were led by the Compensation and Management Development Committee of our Board of Directors ("Board"), encouraged stockholders that were receptive to speak with a member of the Board or a representative of the Compensation and Management Development Committee. During these engagements, we sought feedback on governance priorities, compensation programs, and environmental and social issues. We engaged in the following ways:
Off-Season Engagement
Engaged stockholders to understand their viewpoint and provide feedback to the Board around investor relations communications strategy
Engaged stockholders to understand any perception gaps between the Company's performance and stockholder interpretation of performance
Educated stockholders around the Company's financial position, corporate strategy, and developments deemed appropriate
Engagement Prior to Annual Meeting
Sought feedback on potential matters for stockholder consideration at the Annual Meeting
Discussed areas of concern that stockholders may voice
Engagement Around and After Annual Meeting
After Annual Meeting material is published, provide clarification on matters being voted upon
Seek feedback on areas of concern to inform the Board's future decisions
We solicited feedback from many of our stockholders on governance priorities, compensation programs, and environmental and social initiatives.

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We contacted
27
of our
stockholders
who hold approximately
70%
of our shares outstanding with updates about the Company and invitations to meet with our management and/or independent directors.
We held approximately
15
stockholder meetings, where we specifically engaged around matters regarding this Proxy Statement.
The stockholders we met with hold approximately
43%
of our shares outstanding.
At stockholders' request, independent members of our Board were in attendance at
13%
of the meetings held.

2022 Proxy Statement    5



PROXY STATEMENT SUMMARY
Corporate Governance Enhancements
In addition to our ongoing Board review and refreshment process, our Board regularly evaluates and enhances our corporate governance practices.
20172018201920202021
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Stockholders approved Charter Amendment to declassify the Board
——
Revised our Corporate Governance Guidelines to fix retirement age for directors at 75, except in unique or extenuating circumstances
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Amended Code of Conduct and Business Ethics to prohibit discrimination on the basis of sexual orientation, gender identity, and gender expression
Amended Code of Conduct and Business Ethics to prohibit child labor
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Launched website dedicated to reporting on the Company's efforts with respect to ESG matters
Completed declassification of our Board
——
Adopted a Board Diversity Policy
——
Amended Governance Committee Charter to provide for ESG oversight
——
Approved changes to executive compensation program
Elected New independent Lead Director
——
Elected New Chair of the Compensation and Management Development Committee
——
Elected New Chair of the Audit Committee
Amended Company's By-Laws and Certificate of Incorporation to eliminate supermajority voting provisions
——
Amended Company's Certificate of Incorporation to Allow By-Law Amendment Granting Stockholders' Right to Call a Special Meeting
Governance Best Practices
The Board takes seriously its responsibility to represent the interests of stockholders and is committed to good corporate governance. To that end, the Board has adopted a number of policies and processes, including:
majority voting for directors in uncontested elections
annual election of directors
strong independent Lead Director
oversight of ESG by Governance Committee
oversight of risk management by Board
robust director refreshment and succession planning process (5 new independent directors added in past 4 fiscal years)
annual, robust Board and committee self-evaluation process, including individual director assessments
executive and director stock ownership guidelines and retention requirements
prohibitions on hedging and pledging of our common stock
clawback policy for incentive compensation paid to current and former executive officers and their direct reports
no stockholder rights plan or “poison pill”
proxy access by-laws


6    Acuity Brands, Inc.



PROXY STATEMENT SUMMARY
Executive Compensation Highlights
The Compensation and Management Development Committee initiated a comprehensive review of the Company’s executive compensation program during fiscal 2020 and evaluated and implemented a number of changes designed to align our compensation programs with stockholder value creation. The changes we made in fiscal 2020 reshaped our compensation processes for fiscal 2021 and for future years. Some of the changes made in fiscal 2020 were:
Recruited and appointed a new CEO and a new Chief Human Resources Officer;
Recruited and appointed a new Chair of the Compensation and Management Development Committee, and made membership changes to the Compensation and Management Development Committee; and
Engaged a new independent compensation consultant.
Executive Compensation Strategy
Our compensation strategy is consistent with and supportive of our long-term goals. We aspire to be the premier lighting, lighting controls, location-aware applications, and intelligent building management solutions company capable of consistently delivering long-term financial performance. Our compensation strategy is founded on the following principles:
Alignment of pay and performance;
Alignment with Acuity's business and operating strategy;
Alignment with stockholder value creation;
Consistency with peer group and market practice;
Motivation and retention of key talent; and
Flexibility to withstand uncertainty and difficulty in current economic climate.
Design Changes Implemented during Fiscal 2021
Additionally, taking into account feedback we received during our engagement with stockholders, we delivered on our commitment to stockholders to make design changes to our fiscal 2021 compensation programs as outlined in the following table.
Eliminated overlapping performance metricsEliminated return on invested capital ("ROIC") as a performance measure in our short-term incentive plan; there is no overlap in the metrics used for the short-term and long-term incentive plans.
Limited payout maximum to 200%Limited maximum payout in short-term and long-term incentive plans to 200% of target.
Removed single trigger equity vesting Subject to approval of the Second Amended Plan at this Annual Meeting, equity would only become vested in the event of a change in control if plan not assumed by purchaser.
Closed participation in and grandfathered existing participants in the Supplemental Executive Retirement Plan ("SERP")Amended SERP to eliminate opportunity for new participants and grandfathered current participants at then-current benefit levels. There are currently four active participants in the SERP and there will be three active participants after Mr. Reece retires on November 30, 2021.
Discontinued retirement vesting in equity planDiscontinued the practice of full vesting for participants who are age 60 with ten years of service effective for awards made on or after October 26, 2020.
Removed excise tax gross-ups on new severance and change in control agreementsCommitted to excluding a provision for excise tax gross-ups in future severance or change in control agreements. Mr. Reece is the only named executive officer ("NEO") with a tax gross-up provision and he is expected retire from the Company on November 30, 2021, at which time we will no longer have any excise tax gross-ups in effect.
Enhanced stock ownership guidelinesIncreased CEO stock ownership multiple to 6x salary to demonstrate our commitment to ensuring alignment with stockholders.

2022 Proxy Statement    7



PROXY STATEMENT SUMMARY
We believe the changes we have made to our compensation programs responded to concerns expressed by our stockholders, enhanced the pay-for-performance alignment of our program with stockholders' interests, and achieved our desire to retain and appropriately incentivize our NEOs.
Compensation Best Practices
WHAT WE DOWHAT WE DON’T DO
We align pay and performance
We conduct an annual compensation risk assessment to ensure designs of short-term and long-term incentive plans discourage excessive risk taking
We retain an independent compensation consultant to advise on director and executive compensation matters
We have stock ownership guidelines for all executive officers and directors
We have a clawback policy
We limit perquisites
We vote annually on Say on Pay
We do not have employment agreements with executive officers
We do not have "single-trigger" provisions for payout of benefits under change in control agreements
We do not have tax gross-ups in new severance or change in control agreements
We do not allow new SERP participants or enhanced SERP benefits
We do not allow executive loans
We do not permit hedging or pledging of stock by directors and executive officers
We do not pay dividends on equity awards until performance units are earned or time-based awards vest
We do not allow repricing or backdating of stock options


8    Acuity Brands, Inc.



PROXY STATEMENT SUMMARY
Pay and Performance Alignment
At Acuity, the core tenet of our executive compensation philosophy continues to be to "pay for performance." As such, a significant portion of the compensation opportunity for our NEOs is variable and "at-risk" since it is based on the achievement of financial performance measures and an individual performance assessment. The following graphic and table show the various elements of direct compensation and target pay mix for our NEOs.
ELEMENTS OF FISCAL 2021 DIRECT COMPENSATION
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Vehicle and MeasuresObjective
Long-Term Incentive Award
For the CEO, 100% stock options with stock price performance targets (new hire award; see Fiscal 2021 Long-Term Incentive Awards to CEO below).
For all other NEOs, 50% restricted stock units ("RSUs") and 50% performance stock units ("PSUs") based on three-year adjusted ROIC.
Provide variable equity compensation opportunity based on achievement of annual performance goals;
Reward individual performance and overall Company performance;
Encourage and reward long-term appreciation of stockholder value;
Encourage long-term retention through three-year performance period associated with PSUs and four-year vesting periods for RSUs; and
Align interests of executives with those of stockholders.
Short-Term Incentive Award
For all NEOs:
Company Performance (80%):
Net sales (34%)
Adjusted operating profit (33%)
Free cash flow (33%)
Individual Performance (20%):
Including individual ESG Goal
Provide variable cash compensation opportunity based on achievement of annual performance goals aligned with business objectives;
Reward focus on operational performance, profitability, and cash flow generation; and
Reward individual performance.
Base Salary
Provide a competitive level of fixed cash compensation for high-performing executives; and
Reward individual performance, level of experience, and responsibility.
Compensation of the CEO
In determining the appropriate total compensation package for Mr. Ashe, including the type of equity to be awarded, the Committee considered the comparative total compensation packages of our peer companies, of companies in similar industries that were recruiting Mr. Ashe, and other publicly available market data. Once the components of Mr. Ashe's compensation package were determined, the Committee further considered additional provisions for his equity awards that would incentivize Mr. Ashe to achieve an extraordinary level of performance as well as align his compensation with the long-term growth expected by our stockholders. The performance-based stock options with stock price targets were determined to properly incentivize and reward Mr. Ashe for extraordinary performance that would be in line with the expectations of our stockholders. A portion of the equity awards outlined in his January 2020 employment letter was also granted in fiscal 2020 and was described in detail in the fiscal 2020 Proxy Statement.

2022 Proxy Statement    9



PROXY STATEMENT SUMMARY
On September 1, 2020 in accordance with his January 2020 employment letter, we granted Mr. Ashe two performance-based stock option grants, one with a stock price target of $275 per share and another with a stock price target of $225 per share. The stock price targets have to be maintained for ten consecutive trading days before the awards become exercisable. These stock price targets were set after a review of the Company's historic closing stock prices and, based on that review, deemed to represent a significant premium over the stock price of the Company at the time Mr. Ashe joined the Company. These awards were deemed to be in keeping with our core tenet, "pay for performance."
As shown in the table below, the awards granted during fiscal 2021 will not have any realizable value unless our stock price achieves the ten-day consecutive price targets. Mr. Ashe was not eligible to receive additional long-term incentive awards until our fiscal 2022 awards (granted in October 2021).
FISCAL 2021 LONG-TERM INCENTIVE AWARDS TO CEO
DescriptionGrant DateNumber of OptionsExercise PriceTen-Day Consecutive Stock Price TargetEstimated Grant Date ValueCurrent Stock Price at 8/31/2021Realizable Value
Performance Stock Options 9/1/2020225,000 $108.96$275.00$9,028,125$184.53$0.00
Performance Stock Options9/1/202052,200 $108.96$225.00$2,184,440$184.53$0.00
Total277,200 $11,212,565$0.00
Stockholder Value Creation
We believe our stockholders have benefited from the strategies and results that were created under Mr. Ashe's leadership. Since he joined the Company in January 2020, the Company has:
returned to profitable growth;
expanded gross margins;
improved operating profit margins and adjusted operating profit margins;
generated strong cash flow;
allocated capital effectively;
realigned the business into two operating units - ABL and ISG;
improved transparency and disclosure; and
centered ESG and DEI as operational imperatives.


Fiscal 2021 Total Stockholder Return
During fiscal 2021, our stock price increased from $108.96 to $184.53 (nearly a 70% increase).
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10    Acuity Brands, Inc.



PROXY STATEMENT SUMMARY
Fiscal 2021 Performance
In fiscal 2021, we achieved the following:
($ millions, except diluted earnings per share) Fiscal Year Ended August 31202120202019
Net sales$3,461.0 $3,326.3 $3,672.7 
Operating profit$427.6 $353.9 $462.9 
Operating profit margin12.4 %10.6 %12.6 %
Diluted earnings per share $8.38 $6.27 $8.29 
Net cash provided by operating activities$408.7 $504.8 $494.7 
Free cash flow(1)
$364.9 $455.5 $441.7 
Adjusted return on invested capital(1)
16.1 %13.6 %18.0 %
(1) Represents a non-U.S. Generally Accepted Accounting Principles ("GAAP") measure that the Board and management utilize to assess the performance of the business. See Appendix A for calculation of such financial measure and reconciliation to the most directly comparable GAAP measure.
Net sales of $3.46 billion for the year ended August 31, 2021 increased by $134.7 million, or 4.0%, compared with the prior-year period. This increase was driven by improved sales performance in the second half of fiscal 2021. Sales in our ABL segment of $3.29 billion increased $106.4 million, or 3.3%, compared to the prior year. Within our ABL segment, sales through the independent sales network and direct sales network increased 5% and 9%, respectively, due primarily to these channels continuing to benefit from improved service levels and an improving economy. However, corporate accounts sales for fiscal 2021 were 12% lower year over year due to fewer nonessential renovations from large retailers in the first half of the fiscal year, and retail sales declined 17% due primarily to a customer inventory rebalancing in fiscal 2021. Sales within our ISG segment increased 21% to $190.0 million due primarily to strong demand for building and HVAC controls. Changes in foreign currency rates and revenues from acquired companies did not have a meaningful impact on net sales for fiscal 2021.
Operating profit for fiscal 2021 was $427.6 million compared with $353.9 million reported for the prior-year period, an increase of $73.7 million, or 20.8%. Operating profit margin increased 180 basis points to 12.4% for fiscal 2021 compared with 10.6% for fiscal 2020. The increase in operating profit margin reflects favorable gross profit margin, a decline in special charges, and our ability to leverage our operating costs.
Diluted earnings per share for fiscal 2021 was $8.38 compared with $6.27 for the prior-year period, an increase of $2.11 per share or 33.7%. This increase reflects higher net income as well as lower outstanding diluted shares.
We generated $408.7 million of net cash flow from operating activities in fiscal 2021 compared with $504.8 million in the prior-year period, a decrease of $96.1 million due primarily to increased operating working capital requirements to support the improvement in year-over-year sales as well as higher payments for income taxes, partially offset by payroll tax deferrals under the Coronavirus Aid, Relief, and Economic Security Act of 2020 and lower interest payments on long-term borrowings due to timing. Cash generated from operating activities, cash on hand, and additional long-term debt borrowings were used during fiscal 2021 to fund our capital allocation priorities, including: $43.8 million in capital expenditures to support organic growth in our business, $75.3 million in strategic acquisitions, $19.1 million in dividends paid to stockholders, and $434.9 million, or 3.8 million, of share repurchases.
In fiscal 2021, we delivered adjusted ROIC of 16.1%, well above our estimated weighted average cost of capital ("WACC") of 9.4%.
Financial Performance Measures for Short-Term Incentive Plan
The financial performance measures and their relative weightings are established by the Compensation and Management Development Committee and ratified by the Board early in the fiscal year. In selecting appropriate performance measures the Committee considers management's recommendations and reviews available peer company information and other market data provided by its compensation consultant.
Each of the financial performance measures shown below may be adjusted to exclude the impact of: (a) special charges for streamlining efforts and impairments, (b) the distortive effect of business acquisitions and/or dispositions, (c) Purchase Accounting adjustments, (d) significant changes in income tax provision, (e) significant changes in foreign currency, (f) refinancing or extinguishment of debt, (g) changes in accounting principles or accounting policies, (h) capital expenditures related to facility renovations, and (i) any other unusual gain or loss or event deemed appropriate by the Committee.

2022 Proxy Statement    11



PROXY STATEMENT SUMMARY
SHORT-TERM INCENTIVE PLAN FINANCIAL PERFORMANCE MEASURES
Performance Measure(2)
Performance Objectives(1)
Weighted Payout
(rounded)
ThresholdTargetMaximumWeightingPayout %
Net sales
graphic_perfobjsxnetsales-a.jpg
piechart_perfmeasxnetsalesc.jpg
140%48%
Adjusted operating profit
graphic_perfobjxaop-pg12x55.jpg
piechart_perfmeasxaop-pg12.jpg
181%60%
Free cash flow
graphic_perfobjxfcf-pg12x55a.jpg
piechart_perfmeasxfcf-pg12b.jpg
83%27%
Company Payout Percentage135%
(1)    Target, threshold, and maximum are payable at 50%, 100%, and 200%, respectively.
(2)    See Short-Term Incentive Awards and Appendix A for information on calculation of these performance measures.
We eliminated ROIC from the short-term incentive plan to ensure that there is no overlap in incentive metrics in our compensation program on a go-forward basis. We believe ROIC is better utilized in our long-term incentive plan.
Performance-Based Incentive Compensation
The Compensation and Management Development Committee made key compensation decisions for our NEOs for fiscal 2021 as discussed below. During fiscal 2021, the Compensation and Management Development Committee considered whether it would be appropriate to adjust the performance measures and targets related to our incentive programs in light of the COVID-19 pandemic. Based on a review of the Company's financial performance and other relevant factors, the Compensation and Management Development Committee again in fiscal 2021 determined that no modification of our performance measures related to the COVID-19 pandemic was necessary.
Short-Term Incentive payouts for fiscal 2021 were based on the achievement of previously established financial performance measures and achievement of personal performance goals. Eighty percent (80%) of the cash incentive opportunity could be earned based on the Company's performance relative to net sales, adjusted operating profit, and free cash flow. The financial performance achieved was due to performance in net sales at 140% of target, adjusted operating profit at 181% of target, and free cash flow at 83% of target. Twenty percent (20%) of the cash incentive opportunity could be earned based on achievement of personal performance goals. Each individual's final short-term incentive payout was calculated by taking the sum of the individual participant's base salary multiplied by their short-term incentive target percent, then applying the achievement level of the financial performance measures and the individual performance level of each individual.
The Board approved Long-Term Incentive awards for all NEOs, except the CEO, in October 2020 as follows: (a) 50% in the form of RSUs that vest ratably over a four-year period and (b) 50% in the form of PSUs that vest, if at all, three years from date of grant. The PSUs are further subject to the achievement of adjusted ROIC in excess of the Company’s WACC over a three-year period. The actual number of performance shares earned will be determined at the end of the three-year period based on the level of achievement of adjusted ROIC in excess of established thresholds, which may allow for an earned payout up to two times the units originally awarded. Our CEO did not receive an equity award under the annual grant program during fiscal 2021. As previously described, he did receive stock options on September 1, 2020, in accordance with the terms of his January 2020 employment letter.
Fiscal 2022 Compensation Changes
For fiscal 2022, the Compensation and Management Development Committee approved certain changes to our compensation program designs after a review of the Company's various compensation components. The Company continuously reviews its compensation programs to ensure (1) alignment with the Company's strategies, (2) delivery of competitive programs with those of companies with whom we compete for talent, and (3) appropriate allocation of compensation components between elements of total direct compensation and other compensation (including post-

12    Acuity Brands, Inc.



PROXY STATEMENT SUMMARY
termination or retirement programs). These changes will be reflected in our proxy statement for fiscal 2022. The most notable changes are as follows:
The vesting period for RSUs was changed to three years from four years to align their vesting period with that of our PSUs.
To ensure alignment of the executive team's goals to the Company's objectives, Mr. Ashe's long-term incentive award will be tied to the same goals and metrics as that of the other NEOs. Mr. Ashe's long-term incentive award for fiscal 2022, the first award he received outside of the awards outlined in his January 2020 employment letter, was in the form of 75% PSUs with a three-year performance period and 25% RSUs with a three-year vesting period. It is expected that the allocation of the award between PSUs and RSUs will track median market rates.
We amended certain provisions of the 2005 Supplemental Deferred Compensation Plan in October 2021 to remove a 3% Company contribution previously provided to all eligible participants regardless of their election to participate in the plan. This amendment aligns this plan with market practices for deferred compensation plans. Ms. Holcom, Mr. Goldman, and Ms. Mills are participants in this plan and will no longer receive this 3% Company contribution.



13    Acuity Brands, Inc.


Corporate Governance at Acuity Brands
ITEM 1: ELECTION OF DIRECTORS

All of our directors will be elected for a one-year term. Our By-Laws provide that the number of directors constituting the Board shall be determined from time to time by the Board. Currently, the number of directors constituting the Board is fixed at ten and consists of the following members: Neil M. Ashe, W. Patrick Battle, G. Douglas Dillard, Jr., James H. Hance, Jr., Maya Leibman, Laura G. O'Shaughnessy, Dominic J. Pileggi, Ray M. Robinson, Mark J. Sachleben, and Mary A. Winston. All directors have been nominated for re-election at this Annual Meeting after being recommended by the members of the Governance Committee. If elected, each of the nominees will hold office for a one-year term expiring at the next annual meeting or until a successor is elected or qualified.
Our Corporate Governance Guidelines provide that persons will not be nominated for election after their 75th birthday unless the Board determines that due to unique or extenuating circumstances it is in the best interests of the Company and its stockholders to waive such limitation. Directors are expected to offer to resign as of the annual meeting following their 75th birthday. The Board waived the age requirement for Mr. Hance, age 77, who has been nominated for election at this Annual Meeting. The additional one-year term for Mr. Hance will allow for an orderly transition of our Board as part of our ongoing board review and refreshment process and for the Company to continue to benefit from his valuable skills and experience.
The persons named in the accompanying proxy, or their substitutes, will vote for the election of the ten nominees. No proposed nominee is being elected pursuant to any arrangement or understanding between the nominee and any other person or persons. All nominees have consented to stand for election at this meeting. If any of the proposed nominees become unable or unwilling to serve, the persons named as proxies in the accompanying proxy, or their substitutes, shall have full discretion and authority to vote or refrain from voting for any substitute nominees in accordance with their judgment.
The following is a summary of each director nominee’s business experience and qualifications, other public company directorships held currently or in the last five years, and membership on the standing committees of the Board of the Company.
The Board recommends that you vote FOR each of the Director Nominees.

2022 Proxy Statement    14



CORPORATE GOVERNANCE AT ACUITY BRANDS
Director Information
Board Skills and Experience Summary
icon_leadershipxpg415a.jpg
Executive Leadership:
Experience as a public company CEO or other NEO, either current or past; or a senior executive, division president, or functional leader within a complex organization
10/10
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Corporate Governance:
Current or previous service on a public company board of directors; or understanding of public company operating responsibilities and with issues commonly faced by public companies
10/10
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Strategic Growth and Development:
Knowledge of strategic planning and mergers and acquisitions in large organizations operating in multiple geographies
10/10
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Operational/Manufacturing:
Experience in the oversight of large scale operations, including manufacturing in industries similar to the ones in which the Company operates
5/10
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Finance, Accounting, and Capital Markets:
Knowledge of finance or financial reporting; experience with debt/capital market transactions; or experience as a principal financial officer, principal accounting officer, controller, public accountant, or auditor
6/10
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Human Capital and Talent Management:
Experience in attracting, developing, and retaining talent and building strong cultures
10/10
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Enterprise Risk Management/Sustainability:
Experience in oversight of enterprise wide risk management, including cybersecurity; experience in creating long-term value by embracing opportunities and managing risks deriving from ESG developments
7/10
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Engineering, Technology, and Innovation:
Experience in leading edge engineering and technology innovation; experience in digital transformation of a business
7/10
Director Nominees
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Career Highlights
Chairman of the Board of the Company since January 2021
President and CEO of the Company since January 2020
CEO of Faster Horses LLC from February 2017 to December 2019
President and CEO, Global eCommerce & Technology of Walmart, Inc. from January 2012 through January 2017
President of CBS Interactive from July 2008 through July 2011
CEO of CNET Networks, Inc. from 2006 to 2008
Board Service
Public Company Directorships: Vericity, Inc.
Former Public Company Directorships: CNET Networks, Inc. and AMC Networks, Inc.
Skills and Experience
Mr. Ashe’s expertise, including in the following areas, qualifies him to serve as a director of our Board: executive leadership; corporate governance; strategic growth and development; operations and manufacturing; finance, accounting, and capital markets; human capital and talent management; enterprise risk management and sustainability; and engineering, technology, and innovation.
NEIL M. ASHE
53
Chairman, President and CEO of Acuity Brands, Inc.
Director since:
January 2020
Committees: None

2022 Proxy Statement    15



CORPORATE GOVERNANCE AT ACUITY BRANDS
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Career Highlights
Managing Partner of Stillwater Family Holdings since 2010
Chairman of IMG College (formerly known as The Collegiate Licensing Company, “CLC”) from 2007 to 2011; prior to joining IMG in 2007, Mr. Battle was President and CEO of CLC, where he worked since 1984. CLC is the nation’s oldest and largest marketing agency dedicated to providing domestic and international trademark licensing services to the collegiate market
Board Service
Public Company Directorships: MasterCraft Boat Holdings, Inc.
Skills and Experience
Mr. Battle’s expertise, including in the following areas, qualifies him to serve as a director of our Board: executive leadership; corporate governance; strategic growth and development; operational and manufacturing; human capital and talent management; and engineering, technology, and innovation.
W. PATRICK
BATTLE
58
Independent
Managing Partner of
Stillwater Family Holdings
Director since:
September 2014
Committees:
Compensation and Governance

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Career Highlights
Founder and Managing Partner of Slewgrass Capital, LLC and Slewgrass Partners, LLC, since 2017
Co-Managing Partner of Standard Pacific Capital (“Standard Pacific”) from 2005 to 2016
Investment Partner of Standard Pacific from 1998 to 2005, responsible for the firm’s investments in software and business service companies and non-Asia emerging markets
Co-Portfolio Manager of Standard Pacific’s flagship Global Fund from 2005 to 2016
Adjunct professor at the McDonough School of Business at Georgetown University since 2017
Board Service
Public Company Directorships: None
Skills and Experience
Mr. Dillard’s expertise, including in the following areas, qualifies him to serve as a director of our Board: executive leadership; corporate governance; strategic growth and development; finance, accounting, and capital markets; human capital and talent management; enterprise risk management and sustainability; and engineering, technology, and innovation.
G. DOUGLAS DILLARD, JR.
50
Independent
Managing Partner of Slewgrass Capital, LLC and Slewgrass Partners, LLC
Director since:
September 2017
Committees:
Compensation and Governance


16    Acuity Brands, Inc.



CORPORATE GOVERNANCE AT ACUITY BRANDS
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Career Highlights
Operating executive of The Carlyle Group LP since 2005
Vice Chairman of Bank of America from 1993 to 2005; Chief Financial Officer from 1988 to 2004
Chairman and co-owner of Consolidated Coin Caterers Corporation from 1985 to 1986
Joined the audit staff of Price Waterhouse in 1969, served as Partner from 1979 until 1985
Certified Public Accountant
Board Service
Public Company Directorships: The Carlyle Group, Inc.
Former Public Company Directorships: Cousins Properties, Inc., Duke Energy Corporation, Ford Motor Company, Parkway, Inc., Sprint-Nextel Corporation, Rayonier, Inc., Enpro Industries, Morgan Stanley, and Bank of America Corporation
Skills and Experience
Mr. Hance’s expertise, including in the following areas, qualifies him to serve as a director of our Board: executive leadership; corporate governance; strategic growth and development; operational and manufacturing; finance, accounting, and capital markets; human capital and talent management; enterprise risk management and sustainability; and engineering, technology, and innovation.
JAMES H. HANCE, JR.
77
Independent, Lead Director
Operating Executive of The Carlyle Group LP
Director since:
August 2014
Committees: Audit and Governance (Chair)

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Career Highlights
Executive Vice President and Chief Information Officer of American Airlines Group, Inc. ("AA") since November 2015
Senior Vice President and Chief Information Officer of AA from December 2011 to November 2015
President of AAdvantage Loyalty Program from July 2010 to December 2011
Various roles of increasing responsibility at AA from September 1994 to July 2010
Board Service
Public Company Directorships: None
Skills and Experience
Ms. Leibman's expertise, including in the following areas, qualifies her to serve as a director of our Board: executive leadership; corporate governance; strategic growth and development; human capital and talent management; enterprise risk management and sustainability; engineering, technology, and innovation.
MAYA LEIBMAN
55
Independent
Executive Vice President and Chief Information Officer, American Airlines Group, Inc.
Director since:
February 2020
Committees:
Compensation and Governance


2022 Proxy Statement    17



CORPORATE GOVERNANCE AT ACUITY BRANDS
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Career Highlights
Independent Consultant since August 2020
Co-Founder of SocialCode, Inc.; served as CEO from 2009 to August 2020
Business and Product Strategy, Slate Group from 2009 to 2010
Board Service
Public Company Directorships: Vroom, Inc.
Skills and Experience
Ms. O'Shaughnessy's expertise, including in the following areas, qualifies her to serve as a director of our Board: executive leadership; corporate governance; strategic growth and development; finance, accounting, and capital markets; human capital and talent management; and engineering, technology, and innovation.
LAURA G. O'SHAUGHNESSY
44
Independent
Board Director and Independent Consultant
Director since:
June 2020
Committees:
Audit and Governance
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Career Highlights
Chairman of Thomas & Betts Corporation from 2006 to 2013; Thomas & Betts Corporation was acquired by ABB Ltd. in 2012
CEO of Thomas & Betts from 2004 until his retirement in 2012; held other management positions at Thomas & Betts, including Chief Operating Officer (2003 to 2004) and President-Electrical Products (2000 to 2003)
Held senior executive positions at Casco Plastic, Inc., Jordan Telecommunications and Viasystems Group, Inc. from 1995 to 2000
Former Chairman of the Board of Governors of the National Electrical Manufacturers Association
Board Service
Former Public Company Directorships: Exide Corporation, Lubrizol Corporation, and Viasystems Group
Skills and Experience
Mr. Pileggi’s expertise, including in the following areas, qualifies him to serve as a director of our Board: executive leadership; corporate governance; strategic growth and development; operational and manufacturing; human capital and talent management; and enterprise risk management and sustainability.
DOMINIC J. PILEGGI
70
Independent
Retired Chairman and CEO of Thomas & Betts Corporation
Director since:
September 2012
Committees:
Compensation (Chair) and Governance

18    Acuity Brands, Inc.



CORPORATE GOVERNANCE AT ACUITY BRANDS
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Career Highlights
Director and non-executive Chairman of Citizens Trust Bank(1) since 2003
President of the Southern Region of AT&T Corporation from 1996 to May 2003
President of Atlanta’s East Lake Golf Club from May 2003 to December 2005 and President Emeritus since December 2005
Chairman of Atlanta’s East Lake Community Foundation from November 2003 to January 2005 and Vice Chairman since January 2005
Board Service
Public Company Directorships: PROG Holdings, Inc. (Chairman), American Airlines Group, Inc., and Fortress Transportation and Infrastructure Investors LLC
Former Public Company Directorships: Aaron's Inc., Avnet, Inc., Choicepoint Inc., Citizens Bancshares Corporation(1), and RailAmerica, Inc.
Skills and Experience
Mr. Robinson’s expertise, including in the following areas, qualifies him to serve as a director of our Board: executive leadership; corporate governance; strategic growth and development; operations and manufacturing; and human capital and talent management.
RAY M. ROBINSON
73
Independent
Non-Executive Chairman, Citizens Trust Bank
Director since:
December 2001
Committees:
Audit and Governance
(1) Citizens Trust Bank is not a public company and its parent, Citizens Bancshares Corporation, ceased to be a publicly-traded company in January 2017.
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Career Highlights
Chief Financial Officer of New Relic, Inc. ("New Relic") since April 2008 and Corporate Secretary of New Relic since February 2018
Vice President of Finance for Wily Technology, Inc. from December 1999 to March 2006
Board Service
Public Company Directorships: None
Former Public Company Directorships: None
Skills and Experience
Mr. Sachleben's expertise, including in the following areas, qualifies him to serve as a director of our Board: executive leadership; corporate governance; strategic growth and development; finance, accounting, and capital markets; human capital and talent management; enterprise risk management and sustainability; and engineering, technology, and innovation.
MARK J. SACHLEBEN
56
Independent
Chief Financial Officer and Corporate Secretary, New Relic, Inc.
Director since:
August 2021
Committees:
Compensation and Governance


2022 Proxy Statement    19



CORPORATE GOVERNANCE AT ACUITY BRANDS
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Career Highlights
President and Founder of WinsCo Enterprises, Inc. since 2016
Interim CEO of Bed Bath & Beyond Inc. from May 2019 to November 2019
Executive Vice President and Chief Financial Officer of Family Dollar Stores, Inc. from 2012 to 2015
Senior Vice President and Chief Financial Officer of Giant Eagle, Inc. from 2008 to 2012
Executive Vice President and Chief Financial Officer of Scholastic Corporation from 2004 to 2007
Held senior executive positions at Visteon Corporation and Pfizer Inc. from 1995 to 2004
Certified Public Accountant (inactive)
Board Service
Public Company Directorships: Bed Bath & Beyond, Inc., Chipotle Mexican Grill, and Dover Corporation
Former Public Company Directorships: Domtar Corporation, Plexus Corporation and SUPERVALU Inc.
Skills and Experience
Ms. Winston’s expertise, including in the following areas, qualifies her to serve as a director of our Board: executive leadership; corporate governance; strategic growth and development; finance, accounting, and capital markets; human capital and talent management; and enterprise risk management and sustainability.
MARY A. WINSTON
60
Independent
President of WinsCo
Enterprises, Inc.
Director since:
March 2017
Committees:
Audit (Chair) and Governance


20    Acuity Brands, Inc.



CORPORATE GOVERNANCE AT ACUITY BRANDS
Director Nomination Process
Annual Assessment of Size, Composition, and Structure
The Governance Committee, composed of all of our independent directors, is responsible for recommending to the Board a slate of director nominees for the Board to consider recommending to the stockholders and for recommending to the Board nominees for appointment to fill a new Board seat or any Board vacancy. To fulfill these responsibilities, the Committee annually assesses the requirements of the Board and makes recommendations to the Board regarding its size, composition, and structure.
Incumbent Nominations
In determining whether to nominate an incumbent director for re-election, the Governance Committee, in consultation with the Board Chair and the Lead Director, evaluates each incumbent director’s continued service in light of the current assessment of the Board’s requirements taking into account factors such as evaluation of the incumbent’s performance.
Identification and Consideration Process of New Nominees
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Identification of Qualified Candidates
The Governance Committee proceeds to identify a qualified candidate or candidates. Candidates may be identified through the engagement of an outside search firm; recommendations from independent directors, the Board Chair, management, or other advisors to the Company; and stockholder recommendations.
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Review of Qualifications
The Governance Committee reviews the qualifications of each candidate. As expressed in our Corporate Governance Guidelines, we do not set specific criteria for directors, but the Governance Committee reviews the qualifications and skills of each candidate, including, but not limited to, the candidate’s experience, judgment, diversity, marketing, innovation, manufacturing, cyber security, software, electronic and distribution technologies, international operations, and accounting or financial management.
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Candidate Interview
Final candidates are interviewed by multiple Governance Committee members as well as the Board Chair and the Lead Director.
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Recommendation
The Governance Committee makes a recommendation to the Board based on its review, the results of interviews with the candidates, and all other available information.
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Final Decision
The Board then makes the final decision on whether to invite a candidate to join the Board after completion of reference and background checks.
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Invitation
The Board-approved invitation is then extended by the Governance Committee Chair and the Board Chair.

2022 Proxy Statement    21



CORPORATE GOVERNANCE AT ACUITY BRANDS
Importance of Board Diversity
Our Corporate Governance Guidelines provide that the Governance Committee should consider diversity when reviewing the appropriate experience, skills, and characteristics required of directors. In evaluating director candidates, the Governance Committee considers the diversity of the experience, skills, and characteristics that each candidate brings to the Board and whether the candidate’s background, qualifications and characteristics will complement the overall membership of the Board. For purposes of Board composition, diversity also may include, among other unique characteristics, age, gender, ethnicity, race, national origin, and/or geographic background. The Governance Committee and the Board seek to maintain a Board comprised of talented and dedicated directors with a diverse mix of skills, backgrounds, and expertise in areas that will foster the Company's continued business success and that will reflect the diverse nature of the business environment in which we operate. The Board maintains a Board Diversity Policy which is available on the Company's website at www.acuitybrands.com under For Investors then Corporate—Corporate Governance.
Importance of Time Commitment
The Board believes that directors must be willing to devote sufficient time to carrying out their duties and responsibilities effectively and should be committed to serve on the Board for an extended period of time. Therefore, our Corporate Governance Guidelines generally prohibit an outside director from serving on more than four public company boards (including our Board) at one time.
Stockholder Recommendations for Candidates for Director
Pursuant to a policy adopted by the Board, the Governance Committee will consider recommendations for candidates for director from stockholders made in writing via certified mail and addressed to the attention of the Chair of the Governance Committee, c/o Corporate Secretary, Acuity Brands, Inc., 1170 Peachtree Street, NE, Suite 2300, Atlanta, Georgia 30309. The Governance Committee will consider such recommendations on the same basis as those from other sources. Stockholders making recommendations for candidates for director should provide the same information required for director nominations by stockholders at an annual meeting, and such recommendations must be received by the Company in accordance with the advance notice provision of our By-Laws, each as explained in the section entitled Next Annual Meeting—Stockholder Proposals and Director Nominations.
Proxy Access Nominations
Additionally, our By-Laws enable a stockholder or a group of up to 20 stockholders owning 3% or more of our outstanding common stock continuously for at least three years to nominate and include in our proxy materials director candidates constituting up to the greater of 20% of the number of directors then in office or two directors, subject to the requirements specified in our By-Laws. Stockholders who wish to nominate director candidates for inclusion in our proxy materials under our proxy access By-Law provisions must satisfy the requirements in our By-Laws as described in the section entitled Next Annual Meeting—Stockholder Proposals and Director Nominations. The Board expects to evaluate any director candidates nominated through the proxy access process in a manner similar to that used to evaluate other director candidates.
Board Refreshment and Succession Planning
We have added skills, expertise, and diversity to the Board during the past few years with the addition of Mr. Dillard, Ms. Leibman, Ms. O'Shaughnessy, and Mr. Sachleben. It is the intention of the Board to continue this refreshment process over the coming years as we plan for the retirement of certain members of the Board or when additional skills and expertise are identified during the annual assessment process or as a result of our strategic planning process.
5 new independent directors in four fiscal years
Decreased average tenure from
10 years in 2018 to
6 years in 2021

22    Acuity Brands, Inc.



CORPORATE GOVERNANCE AT ACUITY BRANDS
Director Independence
The Board is responsible for supervising the management of the Company. The Board has reviewed and determined that all of its current members, except Neil M. Ashe, the Chairman, President and CEO, have no material relationship with the Company, and are therefore independent, based on the listing standards of the New York Stock Exchange ("NYSE"), the categorical standards set forth in our Governance Guidelines, and a finding of no other material relationships. Our Governance Guidelines are available on our website at www.acuitybrands.com under For Investors then Corporate—Corporate Governance.
Board and Committees
Board Leadership Structure
The Board believes that no single leadership structure fits all organizations. The Board, using its diverse skills and experience, considers the most appropriate leadership structure for our Company based on the specific circumstances and challenges we face. The independent Board members challenge management and demonstrate independence and free thinking as necessary to ensure effective oversight. The Board also prioritizes stockholder engagement and discusses feedback received. As a result, the Board is in the best position to evaluate the relative benefits and challenges of different Board leadership structures, and ultimately decides which one best serves the interests of our stakeholders. The independent directors, therefore, believe that the Company's current structure, with an independent Lead Director and standing committees consisting entirely of independent Directors, provides strong independent leadership and oversight as well as efficient and clear leadership, communication, and administration.
Duties and Responsibilities of the Board Chair
Our Corporate Governance Guidelines provide that whenever the Board Chair is a member of management, there will be a Lead Director. Some of the responsibilities of the Board Chair include:
Facilitating the flow of information between management and the Board;
Providing an appropriate amount of management oversight;
Facilitating the efficient operation of the Board by ensuring the Board is fulfilling its obligations and duties; and
Framing effective strategic alternatives based on extensive knowledge of the Company and the industry in which it operates.
Duties and Responsibilities of the Lead Director
Our Lead Director is an independent director appointed each year by the independent members of the Board after the annual meeting of stockholders. The Lead Director’s responsibilities, as set forth in our Corporate Governance Guidelines, include:
Providing oversight to ensure the Board works in an independent, cohesive fashion;
Ensuring Board leadership in the absence or incapacitation of the Board Chair;
Chairing Board meetings when the Board Chair is not in attendance;
Coordinating with the Board Chair to ensure the conduct of the Board meeting provides adequate time for serious discussion of appropriate issues and that appropriate information is made available to Board members on a timely basis;
Chairing executive sessions and acting as liaison between the independent directors and the Board Chair on matters raised in such sessions; and
Coordinating development of agendas and discussing other matters, as needed, directly with our General Counsel.
In addition, the Lead Director is entitled to request material and receive notice of and attend all Board committee meetings.
The Board believes that having an independent Lead Director whose responsibilities closely parallel those of an independent chair ensures that the appropriate level of independent oversight is applied to all Board decisions.

2022 Proxy Statement    23



CORPORATE GOVERNANCE AT ACUITY BRANDS

Our Corporate Governance Guidelines provide that our Board will include a majority of independent directors.
As described in Item 1—Election of Directors, nine of our ten director nominees are independent. In addition, only independent directors serve as members of the Audit Committee, the Compensation and Management Development Committee, and the Governance Committee. Each of the standing committees is led by a committee chair that sets the agenda for the committee and reports to the full Board on the committee’s work. The independent members of the Board and the independent members of each of the standing committees meet quarterly in executive session.
90%
Independent
Directors
Committees of the Board
The Board has delegated certain functions to the Audit Committee, the Compensation and Management Development Committee, and the Governance Committee. Our Committee charters set forth the responsibilities of each standing committee. For information about where to find the charters, see Governance Policies and Procedures.
AUDIT COMMITTEE
Fiscal 2020 Committee Members
Rotated In/New Director:
No new members
Fiscal 2021 Committee Members
Mary A. Winston (Chair)
James. H. Hance, Jr.
Robert F. McCullough
Laura G. O'Shaughnessy
Ray M. Robinson
Mary A. Winston (Chair)
James. H. Hance, Jr.
Laura G. O'Shaughnessy
Ray M. Robinson
Rotated Out/Retired:
Robert F. McCullough (Jan 2021)
Meetings in FY 2021: 5
Attendance: 95%
Report: page 35
Roles and Responsibilities of the Committee
Matters pertaining to our auditing, internal control, financial reporting, and financial risk exposures (including cybersecurity), as set forth in the Committee’s report (see Report of the Audit Committee) and in its charter.
Each quarter, the Audit Committee meets separately with the independent registered public accounting firm and the internal auditor without other management present.
Periodically, and when necessary, the Audit Committee meets separately with the Chief Financial Officer and the General Counsel without other management present to review legal and compliance matters.
Each member of the Committee is independent under the requirements of the Securities and Exchange Commission ("SEC") and the Sarbanes-Oxley Act of 2002. In addition, the Board has determined that each member of the Committee meets the current independence and financial literacy requirements of the listing standards of the NYSE. The Board has determined that each of the members of the Committee, except Ray M. Robinson, satisfy the “audit committee financial expert” criteria adopted by the SEC and that each of them has accounting and related financial management expertise required by the listing standards of the NYSE.
COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE
Fiscal 2020 Committee Members
Rotated In/New Director:
Mark J. Sachleben (Aug 2021)
Fiscal 2021 Committee Members
Dominic Pileggi (Chair)
W. Patrick Battle
Peter C. Browning
G. Douglas Dillard, Jr.
Maya Leibman
Dominic Pileggi (Chair)
W. Patrick Battle
G. Douglas Dillard, Jr.
Maya Leibman
Mark J. Sachleben
Rotated Out/Retired:
Peter C. Browning (Aug 2021)
Meetings in FY 2021: 6
Attendance: 100%
Report: page 61

24    Acuity Brands, Inc.



CORPORATE GOVERNANCE AT ACUITY BRANDS
Roles and Responsibilities of the Committee
Matters relating to the evaluation and compensation of the executive officers and non-employee directors, as set forth in its charter.
Matters relating to management development and succession, as well as oversight of DEI.
At most regularly scheduled meetings, the Compensation and Management Development Committee meets privately with an independent compensation consultant without management present.
Annually, the Compensation and Management Development Committee evaluates the performance of the independent compensation consultant in relation to the Committee’s functions and responsibilities.
Each member of the Committee is independent under the listing standards of the NYSE and a non-employee director under Section 16(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In addition, the Board has determined that each member of the Committee meets the additional independence requirements applicable to compensation committees under NYSE listing standards.
Compensation Committee Interlocks and Insider Participation
The directors who served on the Compensation and Management Development Committee of the Board during the fiscal year ended August 31, 2021, were W. Patrick Battle, Peter C. Browning (who retired in August 2021), G. Douglas Dillard, Jr., Maya Leibman, Dominic Pileggi, and Mark J. Sachleben. None of these individuals are, or ever have been, officers or associates of the Company. During fiscal 2021, none of our executive officers served as a director or on the compensation committee of any entity for which any of these individuals served as an executive officer, and there were no other compensation committee interlocks with the entities with which these individuals or our other directors are affiliated.
GOVERNANCE COMMITTEE
Fiscal 2020 Committee MembersRotated In/New Director:Fiscal 2021 Committee Members
James H. Hance, Jr. (Chair)
W. Patrick Battle
Peter C. Browning
G. Douglas Dillard, Jr.
James H. Hance, Jr.
Maya Leibman
Robert F. McCullough
Dominic J. Pileggi
Ray M. Robinson
Mary A. Winston
  Mark J. Sachleben (Aug 2021)

Rotated Out/Retired:
Robert F. McCullough (Jan 2021)
Peter C. Browning (Aug 2021)

James H. Hance, Jr. (Chair)
W. Patrick Battle
G. Douglas Dillard, Jr.
James H. Hance, Jr.
Maya Leibman
Dominic J. Pileggi
Ray M. Robinson
Mark J. Sachleben
Mary A. Winston
Meetings in FY 2021: 5
Attendance: 100%
Roles and Responsibilities of the Committee
Reviewing matters pertaining to the composition, organization, and practices of the Board
Recommending changes to the Corporate Governance Guidelines
Recommending changes to and overseeing the administration of the Code of Ethics and Business Conduct
Overseeing our ESG initiatives
Periodic evaluation of the Board
Periodic evaluation of individual directors
Recommending to the full Board a slate of directors for election by stockholders at the annual meeting and candidates to fill a new Board position or any vacancies on the Board as explained in greater detail in the section entitled Director Nomination Process.
The Board has determined that each member of the Committee is independent under the listing standards of the NYSE.

2022 Proxy Statement    25



CORPORATE GOVERNANCE AT ACUITY BRANDS
Director Engagement
Board Meetings and Attendance
During the fiscal year ended August 31, 2021, the Board held five regular meetings. All of our directors attended 100% of these regular Board meetings. We typically expect that each continuing director will participate in the annual meeting of stockholders, absent a valid reason. Nine of our continuing directors attended last year's annual meeting. One was not in attendance due to an unexpected emergency.
Meetings of Non-Management Directors
Our Corporate Governance Guidelines provide that all non-management directors meet in executive session outside the presence of the CEO and other Company personnel during a portion of each of the Board’s in-person meetings. As noted above, the Lead Director chairs these executive sessions and develops the agenda for each executive session.
Beyond the Boardroom
Our directors routinely receive updates on the Company's strategy and operations from members of the management team during quarterly meetings that allow continued engagement with our associates who are involved in day-to-day operations. In addition, the Board may have an operational site visit each year but due to restrictions related to COVID-19 did not conduct a site visit during fiscal 2021.
When a new director is elected to the Board, the Company's senior leadership team conducts an orientation that covers such topics as strategy, product innovation, industry overview, sales and marketing strategies, supply chain and sourcing management, financial highlights/plan, legal entity structure, and a general overview of the Company's governance policies and practices, including a review of a director's fiduciary duties.
Board Evaluation Process
The Board believes in a robust self-evaluation process, including peer-to-peer assessment of individual directors. Each year, the Board performs a full Board evaluation, and each director performs a self-evaluation and a peer evaluation of each of the other directors. The evaluation process described below is managed by the Corporate Secretary's office with oversight by the Governance Committee. The Governance Committee may retain an independent third party to assist in the evaluation process if deemed appropriate.

26    Acuity Brands, Inc.



CORPORATE GOVERNANCE AT ACUITY BRANDS
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Completion of Questionnaires
All members of the Board complete a detailed confidential questionnaire on the performance of the full Board and each of the standing committees on such topics as board meeting effectiveness; board and committee structure; appropriateness of meeting topics; communication effectiveness within the board, with management, and with key leaders of the Company; and effectiveness of crisis management and succession planning. In addition, each director provides a peer assessment of each of the other directors, reviewing each member's values, knowledge, judgment, engagement, and relationships with management.
graphic_number2xpg27a.jpg
Committee Self-Evaluation
Each standing committee also conducts self-evaluations with results being reported by each standing committee chair to the Board. The committee self-evaluations consider committee size; experience and skills of each committee member; appropriateness of committee responsibilities; length and content of quarterly meetings; communication among committee members; and other topics as deemed specifically appropriate by each standing committee.
graphic_number3xpg27a.jpg
Data Analysis
Information is collected and analyzed, and a written report summarizing the responses is prepared and provided to the Board Chair and the Lead Director.
graphic_number4xpg27a.jpg
Discussion
The Board Chair and Lead Director review and discuss the summary report with the Governance Committee and/or the Board.
graphic_number5xpg27.jpg
Follow-Up
Matters requiring follow-up are addressed by the Lead Director/Chair of the Governance Committee and the Board Chair.
Board Responsibilities
Strategic Oversight
The Board and its standing committees are involved in oversight of our strategy, including, but not limited to, major business and organizational initiatives, capital allocation, and potential business development opportunities. Each quarter the Board receives operational reports from senior leaders on key business activities and discusses one or more of the aforementioned areas. At least annually, the Board discusses the Company's long-term strategy, one-year plan, and three-year plan. The standing committees oversee elements of our strategy associated with their respective areas of responsibility.
Board Risk Oversight
While our management team is responsible for the day-to-day management of risk, the Board has broad oversight responsibility of our risk-management programs. In this role, the Board is responsible for ensuring that our risk-management processes and/or programs are designed and implemented effectively by management and that they function in the intended manner.
As outlined below, the Board delegates to its various standing committees certain elements of its risk oversight function. Each committee then discusses with the entire Board all aspects of their individual risk oversight. We believe that our risk oversight structure supports effective risk oversight by the Board. We also encourage open communication between management and directors with respect to risk oversight.

2022 Proxy Statement    27



CORPORATE GOVERNANCE AT ACUITY BRANDS
FULL BOARD AND COMMITTEES
Board Oversight
Pursuant to our Corporate Governance Guidelines, it is the Board’s role to provide oversight of the Company’s risk management processes. The Board receives quarterly updates on various risks from the committee chairs. In addition to the committees’ work in overseeing risk management, our Board regularly discusses significant risks that the Company may be facing.
graphic_greyarrowupdownxp28.jpg
Audit Committee
Compensation and Management Development CommitteeGovernance Committee
Specifically charged with the responsibility of meeting periodically with management to discuss major financial risk exposures (including cybersecurity) and the steps management has taken to monitor and control the Company’s exposure to risk, including policies with respect to financial risk assessment and risk management.
Considers risk in designing the compensation programs, with the goal of appropriately balancing short-term incentives and long-term performance. A discussion of the compensation risk analysis conducted by the Compensation and Management Development Committee is included in the Compensation Discussion and Analysis later in this proxy statement.
Responsible for the composition and evaluation of the Board and its standing committees. Also, specifically charged with oversight of the Company's ESG programs (EarthLIGHT) and policies and any associated risks, and with oversight of the Company's Code of Ethics and Business Conduct.
graphic_greyarrowupdownxp28.jpg
Management routinely prepares and presents to the Board an enterprise risk management report identifying and evaluating key risks, including cyber risk, and how these risks are being managed. In addition, management provides updates during the year of any material changes to the risk profile and reports on any newly identified risks.
Succession Planning and Human Capital Management
The Board and our Compensation and Management Development Committee routinely review succession plans for key management positions and provide guidance to management on such succession plans. In addition, human capital management, including DEI initiatives previously discussed, is important to our ongoing business success and we recognize that it requires continued investment in our associates. Acuity Brands is an equal opportunity employer, and we are committed to making employment decisions without regard to race, color, religion, national or ethnic origin, sex, sexual orientation, gender identity or expression, age, disability, protected veteran status or other characteristics protected by law. We seek to retain our associates through competitive compensation and benefits, as well as challenging work experiences with increasing levels of responsibility. We strive to engage our associates in ways that will enhance their personal well-being and promote job satisfaction.
Safety of our associates is also important. At COVID-19's onset, we immediately launched several cross-functional workstreams focused on helping us determine how to change our workplace and how to work to accommodate the new world created by the virus. Our priorities were the health and well-being of our associates and their families and ensuring that we could continue to operate effectively. In addition to the day-to-day efforts of balancing work life and family priorities, our associates continued to identify ways to make a positive impact on the communities where we operate and they live.

28    Acuity Brands, Inc.



CORPORATE GOVERNANCE AT ACUITY BRANDS
Human Capital Management in Fiscal 2021
icon_emplyeeengagementxpg29.jpg
Employee Engagement and Workplace Culture
Launched a Listening Strategy through a DEI survey and a full engagement survey.
icon_diversityandinclusiona.jpg
Diversity, Equity, and Inclusion
Formed a DEI Council that led efforts to create a comprehensive DEI strategy and a three-year roadmap of efforts.
icon_healthxpg29.jpg
Health and Well-Being
Continued focus on promoting programs to support associate well-being.
icon_employeetrainingsxpg29.jpg
Associate Training
Developed new programs and evolved processes to focus associates and managers on the importance of development and a personal growth mindset for the transformation and growth of our Company.
icon_compensationandbenefia.jpg
Associate Compensation and Benefits
Retooled incentive plans to ensure alignment of the interests of associates and stockholders. Used market data to enhance benefits and time away plans to improve employee value proposition. Invested in a new career and compensation architecture.
Contacting the Board of Directors
The Board has adopted a policy that allows stockholders and other interested parties to communicate directly with the Board as a group by writing to the Board Chair, with our non-management directors as a group by writing to the Chair of the Governance Committee, and with members of the Audit Committee as a group by writing to the Chair of the Audit Committee, each in care of the Corporate Secretary at our principal executive offices. Our principal executive offices are located at 1170 Peachtree Street, NE, Suite 2300, Atlanta, Georgia 30309. All communications will be forwarded promptly by the Corporate Secretary to the appropriate Board member.
Governance Policies and Procedures
Corporate Governance Practices
Our Board has approved a number of changes to our corporate governance practices over the past several of years, including:
By-Law Amendment to Provide Proxy Access. We amended our By-Laws to include proxy access rights, which enable a stockholder or a group of up to 20 stockholders owning 3% or more of our outstanding common stock continuously for at least three years to nominate and include in our proxy materials director candidates constituting up to the greater of 20% of the number of directors then in office or two directors, subject to the requirements specified in our By-Laws. The amendment to our By-Laws to include proxy access was the result of the Board’s ongoing review of our corporate governance structure and current trends in corporate governance. The Board believes the proxy access bylaw provisions adopted by the Company conform generally with prevailing terms of proxy access bylaw provisions adopted by other public companies and reflect consideration of various factors identified by proxy advisory firms and corporate governance experts as critical to providing meaningful proxy access rights for stockholders.
Amendment of our Certificate of Incorporation to Declassify our Board of Directors. At the Annual Meeting for fiscal 2016, the stockholders approved the amendment to our Certificate of Incorporation to phase out the classified structure of our Board. After completion of the phase out of the classified structure beginning with elections held at our Annual Meeting for fiscal 2017, all directors are now elected for one-year terms.
Amendments to our Corporate Governance Guidelines. We approved amendments to our Corporate Governance Guidelines to increase the retirement age of directors from 72 to 75, to provide that persons will not be nominated for election after their 75th birthday unless the Board determines that due to unique or extenuating circumstances it is in the best interest of the Company and its stockholders to waive such limitation. In October 2020, we also amended the Corporate Governance Guidelines to reduce the number of public boards that our outside directors may serve on from five to four.

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CORPORATE GOVERNANCE AT ACUITY BRANDS
Amendment of our Certificate of Incorporation and By-Laws to Remove Supermajority Provisions. At the Annual Meeting for fiscal 2020, the stockholders approved amendments to our Amended and Restated Certificate of Incorporation and our Amended and Restated By-Laws to eliminate supermajority voting provisions relating to amendments to the Amended and Restated Certificate of Incorporation and the Amended and Restated By-Laws and the removal of directors.
Amendment of our Certificate of Incorporation and By-Laws to Permit Stockholders to Call a Special Meeting. At the Annual Meeting for fiscal 2020, the stockholders approved amendments to our Amended and Restated Certificate of Incorporation and our Amended and Restated By-Laws granting stockholders holding 20% or more of the Company's outstanding common stock the ability to call a special meeting of stockholders.
Corporate Documents and SEC Filings
The following governance documents are available on our website at www.acuitybrands.com under For Investors then Corporate—Corporate Governance.
Certificate of Incorporation
By-Laws
Corporate Governance Guidelines
Audit Committee Charter
Compensation and Management Development Committee Charter
Governance Committee Charter
Board Diversity Policy
Policy Regarding Interested Party Communications with Directors
Policy on Stockholder Recommendations for Board of Director Candidates
Anti-Bribery and Anti-Corruption Policy
Code of Ethics and Business Conduct
Whistleblower and Non-Retaliation Policy
Stock Ownership Guidelines Policy
Copies of any of these documents will be furnished to any interested party if requested in writing to Corporate Secretary, Acuity Brands, Inc., 1170 Peachtree Street, NE, Suite 2300, Atlanta, Georgia 30309. Our SEC filings, including Section 16 filings, are available on our website at www.acuitybrands.com under For Investors then Financial—SEC Filings. Our proxy materials and annual report are available on our website at www.acuitybrands.com under For Investors then Financial—Annual Reports & Proxy Statements. Information on or connected to our website is not, and should not be, considered a part of this proxy statement.

30    Acuity Brands, Inc.



CORPORATE GOVERNANCE AT ACUITY BRANDS
Compensation of Directors
Non-Employee Director Compensation
The compensation program of our non-employee directors is designed to achieve the following goals:
compensation should fairly pay directors for work required for a company of our size and scope;
compensation should align directors’ interests with the long-term interests of stockholders; and
the structure of the compensation should be simple, transparent, and easy for stockholders and directors to understand.
Mr. Ashe, who is an employee of the Company, receives no additional compensation for serving as a director.
Director Fees
The compensation paid to our non-employee directors for their service on our Board and its committees is reviewed periodically with the assistance of the Compensation and Management Development Committee's independent compensation consultant using comparative data from the same peer companies that the Compensation and Management Development Committee uses to evaluate executive officer compensation. The Compensation and Management Development Committee last reviewed the non-employee director compensation program in January 2021. At that time no changes were made to the amount of fees to be paid to our non-employee directors; however, the frequency of payments was changed from quarterly to annually. Annual payment of fees will occur upon the election of each director just after the annual meeting at which the director is elected for a one-year term. A summary of the director fees follows.
ANNUAL FEES
Since Fiscal 2019
OTHER COMPENSATION
piechart_annualfeesxpg31.jpg
Governance Committee Chair(3):
$25,000
Audit Committee Chair(3):
$20,000
Compensation and Management Development Committee Chair(3):
$15,000
Board Meeting Fee (for meetings in
excess of six per fiscal year):
$2,000
Committee Meeting Fee (for meetings in excess of six per fiscal year):
$1,500
(1) Approximately 36% of the annual fee is payable in cash. This portion of the annual fee may, at the director's election, be deferred into the Deferred Compensation Plan described below.
(2) Approximately 64% of the annual fee is required to be deferred into stock units in the Deferred Compensation Plan until the director exceeds the Stock Ownership Requirement described below. Once the Stock Ownership Requirement has been met, non-employee directors may annually elect to receive this non-cash portion of the annual fee in vested stock grants issued pursuant to the Deferred Compensation Plan.
(3) Any chair or meeting fees, which are payable in cash, may be deferred into the Deferred Compensation Plan described below.
Equity Award
The non-employee directors do not routinely receive equity awards. Newly appointed or elected non-employee directors may receive an initial equity award valued at $20,000 in the form of restricted stock. The new director equity award will generally vest ratably over a three-year period and accumulate dividends during the vesting period at a rate that is equal to the dividends paid to other common stockholders. Upon vesting, accumulated dividends are paid in cash to the directors. Mr. Sachleben received such an award during fiscal 2021.
Director Deferred Compensation Plan
We maintain the Acuity Brands, Inc. 2011 Nonemployee Director Deferred Compensation Plan (the “2011 NEDC”), which was originally approved by stockholders in January 2012. The 2011 NEDC was amended and restated on October 25, 2021 (the "Amended 2011 NEDC") to extend the expiration date to October 25, 2031 and to provide that stock or deferred stock units that are issued to directors in connection with their fee payments be allocated from the shares reserved under the Company's Amended and Restated 2021 Omnibus Stock Incentive Compensation Plan (the "Long-

2022 Proxy Statement    31



CORPORATE GOVERNANCE AT ACUITY BRANDS
Term Incentive Plan") if approved by stockholders at this Annual Meeting. See Long-Term Plan Amendment for more information.
The Amended 2011 NEDC allows for fees deferred by non-employee directors to either be credited into a deferred stock units account and be paid in shares following retirement from the Board or be credited to an interest-bearing account to be paid in cash following retirement from the Board. Cash dividend equivalents earned on deferred stock units are credited to the interest-bearing account.
Stock Ownership Guidelines
Each non-employee director is subject to a stock ownership guideline that requires each director to attain ownership in our common stock valued at $400,000, equal to five times the $80,000 annual cash fee, within five years of joining our Board. For purposes of the stock ownership guideline, directly held shares, deferred stock units, and unvested restricted stock are counted. During fiscal 2021, each of our non-employee directors who have served for at least five years have met the stock ownership guideline. See Beneficial Ownership of the Company’s Securities.
Fiscal 2021 Director Compensation
The following table sets forth the fiscal 2021 compensation of our non-employee directors. Our Chairman, President and CEO, Mr. Ashe, did not receive any additional compensation for serving as a director. Our non-employee directors did not receive any option awards or any non-equity incentive plan compensation, and did not have any earnings in a non-qualified deferred compensation plan in excess of the applicable federal rate to disclose in the table.
During fiscal 2021, we changed the timing of payments to our non-employee directors from quarterly to annually. The annual fee payment is now made just after our Annual Meeting at which each director is elected by stockholders. Due to this payment timing change, amounts shown in the table as paid are in excess of our normal annual fees as outlined above.
Name
Fees Paid in Cash ($)(1)
Fees Paid in Stock Awards ($)(1)
Total Fees Paid
($)
(2)(3)
W. Patrick Battle
$108,000$195,750$303,750
Peter C. Browning (5)
108,000195,750303,750
G. Douglas Dillard, Jr.
108,000195,750303,750
James H. Hance, Jr.
141,750195,750337,500
Maya Leibman108,000195,750303,750
Robert F. McCullough
28,00050,75078,750
Laura G. O'Shaughnessy303,750303,750
Dominic J. Pileggi
128,250195,750324,000
Ray M. Robinson
108,000195,750303,750
Mark J. Sachleben (4)(5)
113,128113,128
Mary A. Winston
135,000195,750330,750
(1) The cash portion of the annual director fees, along with any chair or excess meeting fees, may be deferred into the Amended 2011 NEDC at the election of the director into either stock units to be paid in shares following retirement from the Board or credited to an interest-bearing account to be paid in cash following retirement from the Board. The non-cash portion of the annual director fee may, at the election of the director, be granted in stock if the director’s stock ownership exceeds the Stock Ownership Guideline. The amounts shown for fiscal 2021 consist of prorated fees for the period September 1, 2020 through January 5, 2021, as well as a payment on January 6, 2021 of fees for services to be performed for the one-year period from January 6, 2021 to our next Annual Meeting date, January 5, 2022 (see footnote 2 for additional details). As of August 31, 2021, each director had unvested restricted stock outstanding as follows: Mr. Battle, Mr. Dillard, Mr. Hance, Mr. Pileggi, Mr. Robinson, and Ms. Winston, 143 shares each; Ms. Leibman and Mr. Sachleben, 112 shares each; and Ms. O'Shaughnessy, 153 shares. The following table sets forth the allocation of the non-cash portion of the annual retainer paid to each applicable director and any restricted stock award ("RSA") received:

32    Acuity Brands, Inc.



CORPORATE GOVERNANCE AT ACUITY BRANDS
Paid as Vested
Stock Grants
Paid as Deferred
Stock Units
Restricted Stock Award
Name
$
#
$
#
$
#
W. Patrick Battle
— — 195,7501,722— — 
Peter C. Browning
— — 195,7501,722— — 
G. Douglas Dillard, Jr.
— — 195,7501,722— — 
James H. Hance, Jr.
195,7501,723— — — — 
Maya Leibman— — 195,7501,722— — 
Robert F. McCullough
50,750521— — — — 
Laura G. O'Shaughnessy— — 303,7502,672— — 
Dominic J. Pileggi
— — 195,7501,722— — 
Ray M. Robinson
195,7501,723— — — — 
Mark J. Sachleben— — 93,08253220,046112
Mary A. Winston
195,7501,723— — — — 
(2) The only perquisite received by directors is a match on charitable contributions. The maximum match in any fiscal year is $5,000 and is below the required reporting threshold.
(3) During fiscal 2021, we changed the payment date and payment frequency of fees to our independent directors. The following table shows the allocation of total fees paid for services provided between fiscal 2021 and fiscal 2022:
NameFees Attributable to Fiscal 2021Fees Attributable to Fiscal 2022Total Total Fees
W. Patrick Battle
$225,000$78,750$303,750
Peter C. Browning
225,00078,750303,750
G. Douglas Dillard, Jr.
225,00078,750303,750
James H. Hance, Jr.
250,00087,500337,500
Maya Leibman225,00078,750303,750
Robert F. McCullough
78,75078,750
Laura G. O'Shaughnessy225,00078,750303,750
Dominic J. Pileggi
240,00084,000324,000
Ray M. Robinson
225,00078,750303,750
Mark J. Sachleben34,37878,750113,128
Mary A. Winston
245,00085,750330,750
(4) Amounts shown for Mr. Sachleben represent a pro-rata portion of the annual director fees paid from his date of election, August 6, 2021, to January 5, 2022, the Annual Meeting date. Also as of the date of his election, Mr. Sachleben received a RSA valued at approximately $20,000 that vests ratably over three years. The number of shares received by Mr. Sachleben was determined by dividing the grant value by the closing price of our common stock on the grant date ($178.98) rounded to the nearest whole share (112 shares).
(5) Mr. Browning retired from the Board on August 6, 2021. Mr. Sachleben joined the Board on August 6, 2021.

2022 Proxy Statement    33


Audit Committee Matters
ITEM 2: RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

At the 2021 Annual Meeting, a proposal will be presented to ratify the appointment of Ernst & Young LLP ("EY") as the independent registered public accounting firm to audit our financial statements for the fiscal year ending August 31, 2022. EY has performed this function for us since 2002. One or more representatives of EY are expected to be present at the 2021 Annual Meeting and will be afforded the opportunity to make a statement if they so desire and to respond to appropriate questions. Information regarding fees paid to EY during fiscal 2021 and fiscal 2020 is set out below in Audit Fees and Other Fees.
Based on the Audit Committee’s evaluation discussed below in Selection and Engagement of the Independent Registered Public Accounting Firm, the Audit Committee believes that EY is independent and that it is in the best interests of the Company and our stockholders to retain EY to serve as our independent auditor for fiscal 2022.
The Board recommends that you vote FOR the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm.
Selection and Engagement of the Independent Registered Public Accounting Firm
The Audit Committee is directly responsible for the appointment, oversight, evaluation, and compensation of our independent registered public accounting firm, including review of their qualifications, independence, and performance. Additionally, the Audit Committee is involved in the selection of the lead engagement partner from the audit firm, which is required to be rotated every five years.
In determining whether to reappoint EY as the Company’s independent auditor, the Audit Committee took into consideration a number of factors, including the length of time the firm has been engaged, the quality of the Audit Committee’s ongoing discussions with EY, an annual assessment of the professional qualifications and past performance of the audit team, the appropriateness of fees, and external data regarding the firm’s audit quality and performance, including recent Public Company Accounting Oversight Board (United States) (“PCAOB”) reports on EY and its peer firms. Based on this evaluation, the Audit Committee believes that EY is independent and that it is in the best interests of the Company and our stockholders to retain EY to serve as our independent auditor for fiscal 2022.
Audit Fees and Other Fees
The following table sets forth the aggregate fees billed during the fiscal years ended August 31, 2021 and 2020:
Fees Billed:
2021
2020
Audit Fees (1)
Audit Fees include fees for services rendered for the audit of our annual financial statements, the review of the interim financial statements included in quarterly reports, comfort letters, consents, assistance with and review of documents filed with the SEC, and/or audits of statutory financial statements. Audit fees also include fees associated with rendering an opinion on our internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002.
$2,332,000 $2,050,000 
Tax Fees (1)
Tax Fees primarily include international tax compliance and assistance with transfer pricing in various foreign jurisdictions.166,000 81,000 
All Other FeesAll Other Fees include amounts billed to the Company for the use of an online accounting research tool.1,000 — 
Total2,499,000 2,131,000 
(1)    The increase in fees for fiscal 2021 is primarily related to services performed in connection with filing of the Registration Statement on Form S-3 and an offering of senior notes with the SEC as well as the timing of tax compliance and transfer pricing services.
2022 Proxy Statement    34



AUDIT COMMITTEE MATTERS
Preapproval Policies and Procedures
The Audit Committee has established policies and procedures for the approval and preapproval of audit services and permitted non-audit services. The Audit Committee has the responsibility to engage and terminate our independent registered public accounting firm, to preapprove the performance of all audit and permitted non-audit services provided to us by our independent registered public accounting firm in accordance with Section 10A of the Exchange Act, and to review with our independent registered public accounting firm their fees and plans for all services. All fees paid to EY were preapproved by the Audit Committee, and there were no instances of waiver of approval requirements or guidelines.
The Audit Committee considered the provision of non-audit services by the independent registered public accounting firm and determined that provision of those services was compatible with maintaining auditor independence.
There were no “reportable events” as that term is described in Item 304(a)(1)(v) of Regulation S-K.
Report of the Audit Committee
The Audit Committee and the Board previously adopted a written charter to set forth the Audit Committee’s responsibilities. The charter is reviewed annually and amended as necessary to comply with new regulatory requirements. A copy of the Audit Committee charter is available on the Company’s website at www.acuitybrands.com under For Investor then Corporate—Corporate Governance. The Audit Committee is comprised solely of independent directors, as such term is defined by the listing standards of the NYSE. The Committee held five meetings during fiscal 2021.
The Company’s management has the primary responsibility for the financial statements, for maintaining effective internal control over financial reporting, and for assessing the effectiveness of internal control over financial reporting. As required by the charter, the Audit Committee reviewed the Company’s audited financial statements and met with management to discuss the audited financial statements in the Company’s Annual Report on Form 10-K, including the quality, not just the acceptability, of the accounting policies; the reasonableness of significant judgments; and the clarity of disclosures in the financial statements.
The Audit Committee received from the independent registered public accounting firm the required written disclosures regarding its independence and the report regarding the results of its integrated audit. The Committee reviewed with the independent registered public accounting firm, which is responsible for expressing an opinion on the conformity of those audited financial statements with U.S. GAAP and on our internal controls over financial reporting, its judgments as to the quality, not just the acceptability, of the Company’s accounting policies and such other matters as are required to be discussed with the Committee under the rules adopted by the PCAOB, the rules of the SEC, and other applicable regulations. In addition, the Committee has discussed with the independent registered public accounting firm the firm’s independence from Company management and the Company, including the matters in the letter from the firm required by PCAOB Rule 3526, “Communication with Audit Committees Concerning Independence,” and considered whether the non-audit services provided by them during fiscal 2021 were compatible with the independent registered public accounting firm’s independence.
The Committee also reviewed and discussed together with management and the independent registered public accounting firm the Company’s audited financial statements for the year ended August 31, 2021 and the results of management’s assessment of the effectiveness of the Company’s internal control over financial reporting, including their knowledge of any fraud, whether or not material, that involved management or other associates who had a significant role in the Company’s internal controls and the independent registered public accounting firm’s audit of internal control over financial reporting.
The Committee discussed with the Company’s internal auditors and independent registered public accounting firm the overall scope and plans for their respective audits. The Committee meets with the internal auditors and the independent registered public accounting firm on a quarterly basis, with and without management present, to discuss the results of their examinations; their evaluations of the Company’s internal control, including internal control over financial reporting; and the overall quality of the Company’s financial reporting.
35    Acuity Brands, Inc.



AUDIT COMMITTEE MATTERS
Based on its discussions with management and the Company’s independent registered public accounting firm referenced above, the Audit Committee did not become aware of any material misstatements or omissions in the audited financial statements. Accordingly, the Audit Committee recommended to the Board that the audited financial statements and management’s assessment of the effectiveness of the Company’s internal control over financial reporting be included in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2021 for filing with the SEC.
AUDIT COMMITTEE
Mary A. Winston, Chair
James H. Hance, Jr.
Laura G. O'Shaughnessy
Ray M. Robinson

36    Acuity Brands, Inc.


Executive Officers
Executive officers are elected annually by the Board and serve at the discretion of the Board. Neil M. Ashe serves as a Director and as an executive officer. His business experience is discussed in Item 1—Election of Directors—Director Information–Director Nominees. Our other executive officers as of the date of this proxy statement are described below.
photo-reecea.jpg
Executive Vice President of the Company since September 2006*
President of Acuity Brands Lighting, Inc. from September 2019 to March 2021
Chief Financial Officer of the Company from December 2005 to September 2019
Senior Vice President of the Company from December 2005 to September 2006
Vice President, Finance and Chief Financial Officer of Belden, Inc. (“Belden”) from April 2002 to November 2005
President of Belden’s Communications Division from June 1999 to April 2002
Vice-President Finance, Treasurer and Chief Financial Officer of Belden from August 1993 to June 1999
Certified Public Accountant (inactive)
Serves on the Atlanta Police Foundation and as a member of the Board of Governors of the National Electrical Manufacturers Association

*Mr * Mr. Reece will retire from the Company on November 30, 2021.
Richard K. Reece
Executive Vice President
Age: 65
photo-holcoma.jpg
Senior Vice President and Chief Financial Officer of the Company since September 2019
Senior Vice President, Finance and Associate Engagement of Acuity Brands Lighting, Inc. from January 2019 to September 2019
Senior Vice President, Finance of Acuity Brands Lighting, Inc. from 2006 to December 2018
Vice President and Controller of the Company from 2004 to 2006
Vice President, Financial Services of the Company from 2001 to 2004
Prior to joining Acuity Brands, she served in various roles in accounting, reporting and financial planning at National Service Industries, Inc. from 1998 to 2001
Certified Public Accountant
Serves on the Georgia Chamber of Commerce
Karen J. Holcom
Senior Vice President and Chief Financial Officer
Age: 52


2022 Proxy Statement    37



EXECUTIVE OFFICERS
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Senior Vice President and General Counsel of the Company since January 2015
Senior Vice President and General Counsel of Acuity Brands Lighting, Inc. from January 2007 to January 2015
Vice President and Associate Counsel of Acuity Brands Lighting, Inc. from April 2003 to January 2007
Associate Counsel of the Company from August 2001 to April 2003
Prior to joining Acuity Brands, he served as Associate Counsel of National Service Industries, Inc. from August 1997 to August 2001
Serves on the Boards of the Southface Institute, The McClung Lighting Research Foundation, and the National Association of Manufacturers
Barry R. Goldman
Senior Vice President and General Counsel
Age: 55
photo-millsa.jpg
Senior Vice President and Chief Human Resources Officer of the Company since March 2020
Principal, Mills Consulting from November 2017 to February 2020
Senior Vice President, People Officer at Walmart eCommerce from August 2014 to January 2017
Senior Vice President and Chief Human Resources Officer of PayPal from February 2009 to July 2014
She served in various business and human resources roles of increasing responsibility at Bank of America from September 1999 to January 2009
Dianne S. Mills
Senior Vice President and Chief Human Resources Officer
Age: 61

38    Acuity Brands, Inc.


Executive Compensation
ITEM 3: ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION

The Board is asking you to approve, on an advisory basis, the compensation of our NEOs. The Board believes that our compensation policies and practices are effective in achieving our goals of paying for financial and operating performance and aligning the interests of our NEOs with the interests of our stockholders. As required by Section 14A of the Exchange Act, stockholders have the opportunity to vote, on an advisory basis, to approve the compensation of our NEOs. This vote is often referred to as “say on pay.” Stockholders are being asked to vote on the following resolution:
“Resolved, that the stockholders approve, on an advisory basis, the compensation of the NEOs as disclosed in the compensation discussion and analysis, the accompanying compensation tables, and the related narrative disclosure in this proxy statement.”
As described in detail in this proxy statement under Compensation Discussion and Analysis, our compensation programs are designed to:
Consistently recognize and reward superior performers, measured by achievement of results and demonstration of desired behaviors;
Attract and retain executives by providing a competitive reward and recognition program that drives our success;
Provide rewards to executives who create value for stockholders;
Align the interest of executives with those of stockholders;
Encourage executives to achieve ambitious goals while mitigating unnecessary or excessive risk taking; and
Provide a framework for the fair and consistent administration of pay policies.
We continue to engage with stockholders to seek feedback on other improvements that we could make to our executive compensation program to improve our fiscal 2021 "say on pay" vote results. We continue to believe that our comprehensive executive compensation program, with its focus on performance-based compensation, aligns with long-term stockholder interests by creating long-term stockholder value.
Based on feedback received during stockholder engagement in 2020 and 2021, as well as our review of best practices and competitive alignment, we made significant changes that shaped our compensation processes and plan designs for fiscal 2021. We will continue to review and implement best practices when appropriate for our Company. See Executive Compensation Strategy for additional information.
Stockholders are encouraged to read the Compensation Discussion and Analysis, the accompanying compensation tables, and the related narrative disclosures contained in this proxy statement to see how the enhancements we implemented during fiscal 2021 impacted our executive compensation programs.
Although this annual vote is non-binding, the Compensation and Management Development Committee will take into account the outcome of the vote when considering future executive compensation decisions. The frequency of our “say on pay” advisory vote was determined to be held annually by a vote of our stockholders that occurred at our Annual Meeting held in January 2018 and as such, we expect to include our "say on pay" vote annually until otherwise determined by our stockholders at the next vote on frequency, which is expected to be held at our annual meeting that will be held in January 2024.
The Board recommends that you vote FOR the approval of named executive officer compensation.

2022 Proxy Statement    39



EXECUTIVE COMPENSATION
Message from the Compensation and Management Development Committee
Dear Stockholders:
The Compensation and Management Development Committee members are responsible for oversight of the design and implementation of a comprehensive competitive compensation program that aligns the interests of our executive management team with those of our stockholders and other stakeholders.
Our compensation philosophy aligns with a "pay for performance" model. The objective is to achieve a comprehensive executive compensation program that balances base salary, short-term incentives, long-term equity incentive awards, and retirement benefits. We are focused on rewarding sustained performance that delivers value creation for stockholders.
Alongside our Chief Human Resources Officer, Dianne Mills, the Committee regularly reviews talent management processes. Reviews include succession planning for the executive leadership team, direct reports, and other key positions throughout the business. We believe that the active management of our associates’ development and our increased focus on DEI are significant advantages in attracting and retaining the best talent that will enable the Company's continued success.
After reviewing the results of the Company's "say on pay" vote from last year's Annual Meeting, the Committee worked with an outreach team, led by our Chief Financial Officer, Karen Holcom, to obtain additional feedback from stockholders on our current compensation strategies and program. The results are detailed under Stockholder Feedback and Responsiveness in this Proxy Statement. We continue to take this feedback seriously. As a result, the changes for fiscal 2021, which are highlighted in various sections of this Proxy Statement, include:
Eliminated Return on Invested Capital as a metric in our short-term incentive plan
Limited the maximum payout on the short-term incentive plan to 200%
Removed single trigger equity vesting
Closed participation for new entrants in the SERP and committed not to amend the plan to enhance benefits
Discontinued retirement vesting in the long-term incentive plan
Eliminated excise tax gross-ups
Enhanced stock ownership restriction guidelines for the CEO
The Committee remains committed to the ongoing evaluation and improvement of our executive compensation programs. We look forward to future dialogue with stockholders and encourage you to reach out with any questions or concerns you may have related to our programs.

COMPENSATION AND MANAGEMENT
DEVELOPMENT COMMITTEE
Dominic J. Pileggi, Chair
W. Patrick Battle
Peter C. Browning (until August 6, 2021)
G. Douglas Dillard, Jr.
Maya Leibman
Mark J. Sachleben (effective August 6, 2021)


40    Acuity Brands, Inc.



EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
This section of the proxy statement describes the material elements of the fiscal 2021 compensation program for the NEOs listed in the Summary Compensation Table.
For fiscal 2021, our NEOs were:
Neil M. Ashe (1)
Richard K. Reece (2)
Karen J. HolcomBarry R. GoldmanDianne S. Mills
Chairman, President
and CEO
Executive Vice
President
Senior Vice President
and Chief Financial Officer
Senior Vice President
and General Counsel
Senior Vice President
and Chief Human Resources Officer
(1)    On January 6, 2021, Mr. Ashe was elected Board Chair. He also serves as our President and CEO.
(2) On September 14, 2021, Mr. Reece notified the Company of his intention to retire effective as of November 30, 2021.
Included in our Compensation Discussion and Analysis are:
details of stockholder feedback and engagement and our response to stockholder concerns;
a business overview including a summary of fiscal 2021 financial performance;
a review of our compensation decisions and actions;
a detailed description of our executive compensation program design and philosophy and each element of compensation provided; and
a description of the process and key factors the Compensation and Management Development Committee considered in determining fiscal 2021 compensation for the NEOs.
Stockholder Feedback and Responsiveness
Consideration of “Say on Pay” Voting Result
At our fiscal 2019 and fiscal 2020 Annual Meetings, our "say on pay" proposal received only 33% support, down from 53% support in fiscal 2018 and over 90% support received in prior fiscal years.
2014201520162017201820192020
Historic "say on pay" support98 %96 %94 %94 %53 %33 %33 %
In response to continued concern from our stockholders relating to our compensation programs, the Compensation and Management Development Committee reviewed the Company's programs to evaluate potential changes or enhancements that would be responsive to the feedback we received from stockholders.
At Acuity, the core of our executive compensation philosophy continues to be to “pay for performance." As highlighted in last year's proxy statement, we updated our compensation strategy to reflect our continuing view of our strategic compensation programs to align more closely to those of our peer group and to allow successful recruitment of associates critical to our strategic plan. Those changes consisted of:
Eliminated overlapping performance metricsEliminated ROIC as a performance measure in our short-term incentive plan; there is no overlap in the metrics used for the short-term and long-term incentive plans.
Limited payout maximum to 200%Limited maximum payout in short-term and long-term incentive plans to 200% of target.
Removed single trigger equity vestingSubject to approval of the Second Amended Plan at this Annual Meeting, equity would only become vested in the event of a change in control if plan not assumed by purchaser.
Closed participation in and grandfathered existing participants in the Supplemental Executive Retirement Plan ("SERP")Amended SERP to eliminate opportunity for new participants and grandfathered current participants at then-current benefit levels. There are currently four active participants in the SERP and there will be three active participants after Mr. Reece retires on November 30, 2021.

2022 Proxy Statement    41



EXECUTIVE COMPENSATION
Discontinued retirement vesting in equity planDiscontinued the practice of full vesting for participants who are age 60 with ten years of service effective for awards made on or after October 26, 2020.
Removed excise tax gross-ups on new severance and change in control agreementsCommitted to excluding a provision for excise tax gross-ups in future severance or change in control agreements. Mr. Reece is the only NEO with a tax gross-up provision and he is expected to retire from the Company on November 30, 2021, at which time we will no longer have any excise tax gross-ups in effect.
Enhanced stock ownership guidelinesIncreased CEO stock ownership multiple to 6x salary to demonstrate our commitment to ensuring alignment with stockholders.
In addition to the changes made in our compensation programs, we also continued to review and make appropriate governance changes in fiscal 2021 that are in line with our shared values and good governance trends, including:
Continued the Board refreshment, including the appointment of one new director to the Board in August 2021, which resulted in the enhancement of skills that support the Company's operating strategies and provided new perspectives to the Board and its Committees;
Recommended and obtained approval by stockholders on amendments to our By-Laws and Certificate of Incorporation that eliminated supermajority voting and provided stockholders the right to call a special meeting; and
Established executive-level councils for ESG and DEI that support and enhance the Company's commitments in these areas and enables regular reporting of the Company's progress to the Governance Committee and Compensation and Management Development Committees, who have oversight of these respective areas.
We continued and enhanced our stockholder outreach to better understand current areas of concerns, to provide a preview of incentive design changes being contemplated, and to review the CEO's compensation program details. Our continued outreach reinforces our commitment to our stockholders.
Stockholder Engagement
Ongoing engagement and dialogue with our stockholders is important to the Company. We have adopted a year-round engagement philosophy that includes outreach for various purposes, including to solicit feedback in advance of filing this Proxy Statement. Our outreach efforts, which were led by the Compensation and Management Development Committee of our Board, instructed management to encourage all stockholders that were receptive to speak with a member of the Board or a representative of the Compensation and Management Development Committee. During these engagements, we sought feedback on governance priorities, compensation programs, and environmental and social issues.
graphic-bluearrow_pg42a.jpg
graphic-bluearrow_pg42a.jpg
graphic-bluearrow_pg42a.jpg
graphic-bluearrow_pg42a.jpg
We contacted
27
of our
stockholders
who hold approximately
70%
of our shares outstanding with updates about the Company and invitations to meet with our management and/or independent directors.
We held approximately
15
stockholder meetings, where we specifically engaged around matters regarding this Proxy Statement.
The stockholders we met with hold approximately
43%
of our shares outstanding.
At stockholders' request, independent members of our Board were in attendance at
13%
of the meetings held.
Feedback/Response Chart
The Compensation and Management Development Committee carefully considered the additional feedback from our stockholders following our "say on pay" vote last year. In addition, the Compensation and Management Development Committee reviewed and considered other compensation and governance best practices for changes to our executive compensation program that may be implemented during fiscal 2022. The following table summarizes the stockholder feedback received from stockholders during engagement and our response:

42    Acuity Brands, Inc.



EXECUTIVE COMPENSATION
Feedback/What We HeardResponse/What We Did
Support of removal of ROIC performance measure previously included in both Short-Term and Long-Term Incentive Plans
Reviewed performance measures used in our incentive compensation plans during fiscal 2021 and discussed appropriateness of selected performance measures to drive increased stockholder value.
For fiscal 2021, eliminated overlapping performance measures by removing ROIC from Short-Term Incentive Plan.
Interest in understanding the value to be delivered to our CEO via long-term incentive awards
Discussed rationale and received feedback on the Company's analysis used in determining a long-term incentive award that would entice Mr. Ashe to join the Company, that would encourage exceptional performance, and that would be aligned with stockholder value creation.
Interest in disclosure relating to Company's human capital management and DEI programs
Discussed the Company's commitment to human capital management and what actions and steps were being taken to allow enhanced disclosure.
Reviewed fiscal 2021 initiatives including establishing an executive-level DEI Council, launching a new resource group, PRIDE, and conducting a Company-wide DEI survey with 78% participation.
Discussed the refinement of our talent acquisition and associate development programs which will support the Company's strategic direction.
Interest in enhancement of the Company's environmental, social, and governance disclosure and programs
Discussed the Company's progress and commitment to sustainability in all aspects of the business.
Reviewed fiscal 2021 initiatives including establishing an executive-level ESG Council, our achievement of carbon neutrality in operations, and setting a carbon reduction target of 100 million metric tons from our put in place products and services.
Reviewed the Company's ESG priorities for fiscal 2022 and beyond and discussed the Governance Committee's oversight of these priorities.
Business Overview
Acuity Brands is a market-leading industrial technology company. We use technology to solve problems in spaces and light for our communities, and our planet. Through our two business segments, ABL and ISG, we design, manufacture, and bring to market products and services that make the world more brilliant, productive, and connected. We achieve growth through the development of innovative new products and services, including lighting, lighting controls, building management systems, and location-aware applications.
Acuity Brands is based in Atlanta, Georgia, with operations across North America, Europe, and Asia. The Company is powered by approximately 13,000 dedicated and talented associates worldwide.
Fiscal 2021 Performance
2021 Financial Highlights
In fiscal 2021, we achieved the following:
($ millions, except diluted earnings per share) Fiscal Year Ended August 31202120202019
Net sales$3,461.0 $3,326.3 $3,672.7 
Operating profit$427.6 $353.9 $462.9 
Operating profit margin12.4 %10.6 %12.6 %
Diluted earnings per share$8.38 $6.27 $8.29 
Net cash provided by operating activities$408.7 $504.8 $494.7 
Free cash flow(1)
$364.9 $455.5 $441.7 
Adjusted return on invested capital(1)
16.1 %13.6 %18.0 %
(1) Represents a non-U.S. GAAP measure that the Board and management utilize to assess the performance of the business. See Appendix A for calculation of such financial measure and reconciliation to the most directly comparable GAAP measure.

2022 Proxy Statement    43



EXECUTIVE COMPENSATION
Net sales of $3.46 billion for the year ended August 31, 2021 increased by $134.7 million, or 4.0%, compared with the prior-year period. This increase was driven by improved sales performance in the second half of fiscal 2021. Sales in our ABL segment of $3.29 billion increased $106.4 million, or 3.3%, compared to the prior year. Within our ABL segment, sales through the independent sales network and direct sales network increased 5% and 9%, respectively, due primarily to these channels continuing to benefit from improved service levels and an improving economy. However, corporate accounts sales for fiscal 2021 were 12% lower year over year due to fewer nonessential renovations from large retailers in the first half of the fiscal year, and retail sales declined 17% due primarily to a customer inventory rebalancing in fiscal 2021. Sales within our ISG segment increased 21% to $190.0 million due primarily to strong demand for building and HVAC controls. Changes in foreign currency rates and revenues from acquired companies did not have a meaningful impact on net sales for fiscal 2021.
Operating profit for fiscal 2021 was $427.6 million compared with $353.9 million reported for the prior-year period, an increase of $73.7 million, or 20.8%. Operating profit margin increased 180 basis points to 12.4% for fiscal 2021 compared with 10.6% for fiscal 2020. The increase in operating profit margin reflects favorable gross profit margin, a decline in special charges, and our ability to leverage our operating costs.
Diluted earnings per share for fiscal 2021 was $8.38 compared with $6.27 for the prior-year period, an increase of $2.11 per share or 33.7%. This increase reflects higher net income as well as lower outstanding diluted shares.
We generated $408.7 million of net cash flow from operating activities in fiscal 2021 compared with $504.8 million in the prior-year period, a decrease of $96.1 million due primarily to increased operating working capital requirements to support the improvement in year-over-year sales as well as higher payments for income taxes, partially offset by payroll tax deferrals under the Coronavirus Aid, Relief, and Economic Security Act of 2020 and lower interest payments on long-term borrowings due to timing. Cash generated from operating activities, cash on hand, and additional long-term debt borrowings were used during fiscal 2021 to fund our capital allocation priorities, including: $43.8 million in capital expenditures to support organic growth in our business, $75.3 million in strategic acquisitions, $19.1 million in dividends paid to stockholders, and $434.9 million, or 3.8 million, of share repurchases.
In fiscal 2021 we delivered adjusted ROIC of 16.1%, well above our estimated WACC of 9.4%.
2021 Strategic Highlights
Fiscal 2021 was a pivotal year for Acuity Brands as we advanced our corporate transformation. Acuity Brands realigned into two segments, ABL and ISG. This alignment creates the necessary strategic focus on each business and allows the leadership teams to develop and deliver on their potential. ABL's portfolio of lighting solutions includes commercial, architectural, specialty lighting in addition to lighting controls and components that can be combined to create integrated lighting controls systems. ISG offers building management systems and location-aware applications, selling through system integrators and directly to end customers. Following are some additional strategic highlights from fiscal 2021:
We returned the Company to growth with net sales growth in the third quarter, in the fourth quarter, and for the full year.
We expanded gross profit margins for the full year, despite a challenging cost environment.
We generated strong cash flow and allocated capital in a way that creates permanent value for stockholders, highlighted by the acquisitions of the ams OSRAM’s North American Digital Systems business, one of the largest LED driver companies in North America, and Rockpile Ventures, Inc., and through our stock repurchase program.
We held our first ever investor day that laid out progress of our transformation journey and provided a framework in which to think about our future performance.
We built a strong and diverse leadership team, and we continued to attract talent throughout the organization.
DEI was also an important focus during fiscal 2021. We established an executive level DEI Council and developed a DEI road map with related action items in support of our belief that our organization works best when we have diversity of people and thoughts. In addition, we established a new employee resource group that supports PRIDE, introduced a parental leave policy, refreshed our vacation policy, and overhauled our total rewards program to align associate pay more closely to outcomes they can influence. We also demonstrated a new way of working through our Acuity Anywhere program, which classifies our workforce into three categories: Onsite, Hybrid, and Remote.
In our continuing sustainability efforts, we established an executive-level ESG council, worked to achieve carbon neutrality in our operations, set a 100 million metric tons carbon reduction target from our put in place products and service by 2030, donated portable healthcare lights for use throughout the Americas, disclosed climate-related risks and opportunities through submission with CDP, began calculating Scope 3 emissions, and increased focus on diversity and

44    Acuity Brands, Inc.



EXECUTIVE COMPENSATION
other human capital metrics. See the EarthLIGHT report for more information at www.acuitybrands.com under For Investors then Sustainability.
Total Stockholder Returns
At August 31, 2021, the one, three, five, and ten-year total returns on the Company’s common stock compared to that of the respective benchmark indices is as follows:
barchart_tsrxpg45.jpg

2022 Proxy Statement    45



EXECUTIVE COMPENSATION
2021 Executive Compensation
Executive Compensation Strategy
Our compensation strategy is consistent with and supportive of our long-term goals. We aspire to be the premier lighting, lighting controls, intelligent building management solutions, and location-aware applications company capable of consistently delivering long-term financial performance. Our compensation strategy is founded on the following principles:
Alignment of pay and performance;
Alignment with Acuity's business and operating strategy;
Alignment with stockholder value creation;
Consistency with peer group and market practice;
Motivation and retention of key talent; and
Flexibility to withstand uncertainty and difficulty in the current economic climate.
Compensation Best Practices
WHAT WE DOWHAT WE DON’T DO
We align pay and performance
We conduct an annual compensation risk assessment to ensure design of short-term and long-term performance-based plans discourage excessive risk taking
We retain an independent compensation consultant to advise on director and executive compensation matters
We have stock ownership guidelines for all executive officers and directors
We have a clawback policy
We limit perquisites
We vote annually on Say on Pay
We do not have employment agreements with executive officers
We do not have "single-trigger" provisions for payout of benefits under change in control agreements
We do not have tax gross-ups in new severance or change in control agreements
We do not allow new SERP participants or enhanced SERP benefits
We do not allow executive loans
We do not permit hedging or pledging of stock by directors and executive officers
We do not pay dividends on equity awards until performance units are earned or time-based awards vest
We do not allow repricing or backdating of stock options

46    Acuity Brands, Inc.



EXECUTIVE COMPENSATION
Pay and Performance Alignment
At Acuity, the core of our executive compensation philosophy continues to be to “pay for performance.” As such, a significant portion of the compensation opportunity for our NEOs is variable and "at-risk" since it is based on the achievement of financial performance measures and an individual performance assessment. The following graphic and table show the various elements of the direct compensation and target pay mix for our NEOs.
ELEMENTS OF FISCAL 2021 DIRECT COMPENSATION
graphic-compensation_ceoxp.jpg
graphic_compensationxotherb.jpg
Vehicle and MeasuresObjective
Long-Term Incentive Award
For the CEO, 100% stock options with stock price performance targets (new hire award; see Fiscal 2021 Long-Term Incentive Awards to CEO below).
For all other NEOs, 50% RSUs and 50% PSUs based on three-year adjusted ROIC.
Provide variable equity compensation opportunity based on achievement of annual performance goals;
Reward individual performance and overall Company performance;
Encourage and reward long-term appreciation of stockholder value;
Encourage long-term retention through three-year performance period associated with PSUs and four-year vesting periods for RSUs; and
Align interests of executives with those of stockholders.
Short-Term Incentive Award
For all NEOs:
Company Performance (80%):
Net sales (34%)
Adjusted operating profit (33%)
Free cash flow (33%)
Individual Performance (20%):
Including individual ESG Goal
Provide variable cash compensation opportunity based on achievement of annual performance goals aligned with business objectives;
Reward focus on operational performance, profitability, and cash flow generation; and
Reward individual performance.
Base Salary
Provide a competitive level of fixed cash compensation for high-performing executives; and
Reward individual performance, level of experience, and responsibility.
Compensation of the CEO
In determining the appropriate total compensation package for Mr. Ashe, including the type of equity to be awarded, the Committee considered the comparative total compensation packages of our peer companies, of companies in similar industries that were recruiting Mr. Ashe, and other publicly available market data. Once the components of Mr. Ashe's compensation package were determined, the Committee further considered additional provisions for his equity awards that would incentivize Mr. Ashe to achieve an extraordinary level of performance as well as align his compensation with the long-term growth expected by our stockholders. The performance-based stock options with stock price targets were determined to properly incentivize and reward Mr. Ashe for extraordinary performance that would be in line with the expectations of our stockholders. A portion of the equity awards outlined in his January 2020 employment letter was received in fiscal 2020 and was described in detail in the fiscal 2020 Proxy Statement.

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EXECUTIVE COMPENSATION
On September 1, 2020, in accordance with his January 2020 employment letter, we granted Mr. Ashe two performance-based stock option grants, one with a stock price target of $275 per share and another with a stock price target of $225 per share. The stock price targets have to be maintained for ten consecutive trading days before the awards become exercisable. These stock price targets were set after a review of the Company's historic closing stock prices and, based on that review, deemed to represent a significant premium over the stock price of the Company at the time Mr. Ashe joined the Company. These awards were deemed to be in keeping with our core tenet, "pay for performance."
As shown in the table below, the awards granted during fiscal 2021 will not have any realizable value unless our stock price achieves the ten-day consecutive price target. Mr. Ashe was not eligible to receive additional long-term incentive awards until our fiscal 2022 awards (granted in October 2021).
FISCAL 2021 LONG-TERM INCENTIVE AWARDS TO CEO
DescriptionGrant DateNumber of OptionsExercise PriceTen Day Consecutive Stock Price TargetEstimated Grant Date ValueCurrent Stock Price at 8/31/2021Realizable Value
Performance Stock Options 9/1/2020225,000 $108.96$275.00$9,028,125$184.53$0.00
Performance Stock Options9/1/202052,200 $108.96$225.00$2,184,440$184.53$0.00
Total277,200 $11,212,565$0.00
Stockholder Value Creation
We believe our stockholders have benefited from the strategies and results that were created under Mr. Ashe's leadership. Since he joined the Company in January 2020, the Company has:
returned to profitable growth;
expanded gross margins;
improved operating profit margins and adjusted operating profit margins;
generated strong cash flow;
allocated capital effectively;
realigned the business into two operating units - ABL and ISG;
improved transparency and disclosure; and
centered ESG and DEI as operational imperatives.


Fiscal 2021 Total Stockholder Return
During fiscal 2021, our stock price increased from $108.96 to $184.53 (nearly a 70% increase).
linechart_stkpricegrowthxp.jpg

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EXECUTIVE COMPENSATION
Process for Setting Executive Compensation
Role of Compensation Consultant
Under its charter, the Compensation and Management Development Committee is authorized to engage outside advisors at our expense. In fiscal 2021, the Compensation and Management Development Committee engaged Exequity as its independent compensation consultant. Exequity does not provide any additional consulting services to the Company.
The Compensation and Management Development Committee approves the services to be performed by the consultant and the related costs. Under the terms of arrangement with Exequity, Exequity performed the following services for the Compensation and Management Development Committee in fiscal 2021 (in addition to preparation for and attendance at meetings of the Compensation and Management Development Committee):
Peer group assessment, market compensation analysis, and overall compensation program design for the CEO and the other NEOs;
Market compensation analysis for non-employee directors;
Assistance and support on various issues, including review of the long-term incentive plan (share request and award design), updates related to evolving executive compensation, and governance trends; and
Review of the draft proxy statement and input on various disclosures therein.
The Chair of the Compensation and Management Development Committee may make additional requests of the compensation consultant during the year on behalf of the Committee.
In October 2021, the Compensation and Management Development Committee considered the independence of its compensation consultant. The Compensation and Management Development Committee received confirmation from Exequity addressing its independence, including the following factors: (1) other services provided to us by the consultant; (2) fees paid by us as a percentage of the consulting firm’s total revenue; (3) policies or procedures maintained by the consulting firm that are designed to prevent a conflict of interest; (4) any business or personal relationships between the individual consultants involved in the engagement and a member of the Compensation and Management Development Committee; (5) any Company stock owned by the individual consultants involved in the engagement; and (6) any business or personal relationships between our executive officers and the consulting firm or the individual consultants involved in the engagement. The Compensation and Management Development Committee reviewed these factors and concluded that the consultant is independent and that the work of the consultant did not raise any conflict of interest.
Market Data
The Compensation and Management Development Committee annually compares the various elements of our executive compensation program with respect to the CEO and other NEOs in order to evaluate compensation levels relative to that of the market and our competitors through the use of publicly available proxy peer group data, market surveys, total compensation studies, and long-term incentive compensation analyses.
For purposes of analyzing NEO compensation relative to that of the market, the Compensation and Management Development Committee utilizes a list of peer companies that would be a representative example of organizations of comparable size and business focus and that are representative of the companies with whom we compete for executive talent. Although we focus on ensuring industry-representative peers, there is no individual or group of companies of similar size that exactly match the markets and industry that our Company serves. The compensation consultant and management developed a list of recommended peer companies based upon an assessment of the aforementioned representative factors, as well as the availability of publicly-disclosed compensation information, revenue and market capitalization of between approximately 0.5 times and 2.5 times the Company’s levels, and one-year and three-year levels of both historical profitability and total stockholder returns. The Compensation and Management Development Committee approved the recommended list of peer companies.
The peer group for purposes of analyzing executive compensation for fiscal 2021 was reviewed and it was determined that in connection with our current business strategy it was appropriate to add the following companies: Allegion plc, Dover Corporation, Generac Holdings, Inc., Keysight Technologies, Inc., Pentair plc, Snap-on Incorporated, Vishay Intertechnology, Inc., and Xylem Inc.

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EXECUTIVE COMPENSATION
The peer group for fiscal 2021 is comprised of the following list of 23 companies and includes electrical components and equipment, building products, construction, and engineering and industrial machinery companies with size and financial characteristics generally comparable to us:
A.O. Smith Corporation
Allegion plc
AMETEK Inc.
Amphenol Corporation
Belden Inc.
Carlisle Companies, Inc.
Dover Corporation
EnerSys
Generac Holdings, Inc.
Hubbell Incorporated
IDEX Corporation
Keysight Technologies, Inc.
Lennox International
Lincoln Electric Holdings, Inc.
Pentair plc
Regal Beloit Corporation
Rockwell Automation, Inc.
Roper Technologies
Snap-on Incorporated
Sensata Technologies Hldg. plc
Valmont Industries, Inc.
Vishay Intertechnology, Inc.
Xylem Inc.
Role of Executive Officers
As discussed above, the CEO reports to the Compensation and Management Development Committee on his evaluations of certain senior executives, including the other NEOs. He makes compensation recommendations for the other NEOs with respect to base salary, merit increases, and short-term and long-term incentive awards, which are the basis of discussion with the Compensation and Management Development Committee. The Chief Financial Officer evaluates the financial implications of any proposed Compensation and Management Development Committee action. The Chief Human Resources Officer makes recommendations to the CEO for his direct reports and certain senior leaders with respect to base salary, merit increases, and short-term and long-term incentive awards.
At the request of the Compensation and Management Development Committee, meetings of the Compensation and Management Development Committee are regularly attended by the CEO, the Chief Financial Officer, the Chief Human Resources Officer, the Corporate Secretary, and the Vice President of Total Rewards.
Executive Compensation Framework
General Compensation Levels
The total direct compensation opportunities offered to our executive officers have been designed to ensure that they have a strong relationship with the creation of long-term value for stockholders, are competitive with market practices, support our executive recruitment and retention objectives, and are internally equitable among executives based on skill levels and experience. The short-term and long-term incentive portions of total direct compensation are designed to be performance-based and to provide compensation in excess of base salary only when performance goals are met.
In determining total direct compensation opportunities, the Compensation and Management Development Committee considers: compensation information and input, including peer group comparisons and survey market data, provided by its compensation consultant; the evaluation by the Board of the CEO; and the CEO’s performance review and recommendation for each other executive officer. The peer group and survey market data provides competitive compensation information for positions of comparable responsibilities and experience with comparably-sized companies that are representative of the companies with whom we compete for executive talent.
Elements of Compensation
For fiscal 2021, our executive compensation program consisted of the following compensation elements for the NEOs, including:
Base salary;
Performance-based short-term incentive awards;
Performance-based stock options (with three-year or four-year vesting periods) (for the CEO only);
Time-vesting RSU awards with a four-year vesting period (for NEOs, other than the CEO);
Performance-based RSU awards with a three-year performance measure that vest after three years, if at all, subject to achievement of performance measure (for NEOs, other than the CEO); and
Post-termination compensation retirement benefits as well as severance and change in control arrangements.

50    Acuity Brands, Inc.



EXECUTIVE COMPENSATION
The compensation program for our NEOs also includes perquisites consisting of a charitable contribution match and personal use of the Company's aircraft, if any (see Executive Perquisites for more details). In addition, NEOs generally participate in our health and welfare plans on the same basis as other full-time associates.
The objective for each element of compensation is described below.
Pay ElementPerformance MetricRationaleTarget Pay
Total Direct Compensation
Base SalaryMarket competitive base pay allows for the attraction and retention of high-performing executives
Performance-Based Short-Term Incentive AwardNet Sales
Aligns objective financial performance metrics to our annual operating plan80% of
Base Salary
Adjusted Operating Profit
Rewards operational performance and profitability
Free Cash Flow
Rewards generating cash to invest in growth and return capital to stockholders
Individual PerformanceRewards individual contributions that positively impact overall Company performance and results20% of
Base Salary
Stock Option Awards (CEO only)Stock price targets must be met before exercisable
Encourages long-term appreciation of stockholder value and aligns interests of executives with those of stockholders
100% of
LTI Value
Performance Stock Units (Other NEOs)3-year ROIC in excess
of WACC
Encourages leaders to make sound investments that generate returns for stockholders50% of Target
LTI Value
Restricted Stock Units (Other NEOs)Directly aligns with value delivered to stockholders50% of Target
LTI Value
Other Compensation
Post-Termination Compensation
Encourages long-term retention through pension benefit and provides a measure of security against possible employment loss, through a change in control or severance agreement, in order to encourage the executive to act in the best interests of the Company and stockholders
2021 Elements and Determination of Executive Compensation
Base Salary
The base salary is designed to attract talented executives and provide a secure base of cash compensation. Salary adjustments may be made annually as merited or on promotion to a position of increased responsibility. The base salaries of executives generally are set near or below the 50th percentile depending on individual factors such as tenure, responsibilities, and performance. For the NEOs, the Compensation and Management Development Committee considers peer group data in determining market levels.
For fiscal 2021, the base salaries for our NEOs were set, based on individual performance (if applicable), peer group benchmarks, and survey market data, as follows:
Name2020 Base Salary2021 Base Salary% Change
Neil M. Ashe$1,000,000.00 $1,000,000.00 — %
Richard K. Reece$575,000.00 $600,000.00 4.3 %
Karen J. Holcom$425,000.00 $500,000.00 17.6 %
Barry R. Goldman$400,000.00 $425,000.00 6.3 %
Dianne S. Mills$400,000.00 $450,000.00 12.5 %
Short-Term Incentive Awards
Performance-based short-term incentive compensation is a key component of our executive compensation strategy. This element is designed to be a significant performance-based component of overall compensation. Short-term incentive awards are made under the 2017 Management Cash Incentive Plan ("Short-Term Incentive Plan"), which was

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EXECUTIVE COMPENSATION
approved by stockholders at the January 2018 Annual Meeting. The Short-Term Incentive Plan is designed to motivate executive officers to attain specific annual performance objectives that, in turn, further our long-term objectives.
Typically at the beginning of the fiscal year, the Compensation and Management Development Committee selects the annual financial performance measures and sets the annual financial performance goals at the threshold, target, and maximum levels, which determine payouts. Approximately 1,500 salaried associates participate in the Short-Term Incentive Plan, including the NEOs. Achieving target financial performance would yield an award of 100% of the target amount set at the beginning of the year, excluding any individual performance component.
Actual Company financial performance for the fiscal year and the sum of all individual performance targets at 100% determines the total amount of dollars available for the short-term incentive awards to all eligible associates, including the NEOs. Financial performance percentages are interpolated for performance falling between stated performance measures.
When deciding what Company financial measures to use and the threshold, target, and maximum levels of achievement of those measures, the Compensation and Management Development Committee carefully assesses financial measures that are most likely to focus the participants, including the NEOs, on making decisions that deliver annual results aligned with long-term goals. The Compensation and Management Development Committee considers management’s recommendations regarding the appropriate financial measures and the annual improvement targets for such measures.
At the start of a fiscal year, an individual short-term incentive target, stated as a percentage of base salary, is determined for each participant ("Target Opportunity"). In addition, specific metrics to measure the Company's financial performance for the fiscal year are determined. For fiscal 2021, 80% of the cash incentive opportunity could be earned based on the Company's performance relative to net sales, adjusted operating profit, and free cash flow, and 20% of the cash incentive opportunity could be earned based on achievement of personal performance goals. The individual performance rating for each NEO is determined using our performance management process ("PMP"), which results in the assignment of a personal performance percent using the rating scale described below ("PMP Rating").
Under the Short-Term Incentive Plan, the amount of each actual short-term incentive award, including the awards to the NEOs, would be determined as follows:
Base Salary x Short-Term Incentive Target % = Target Opportunity
Target Opportunity x
80% Financial Goal x
Corporate Performance %
Target Opportunity x
20% Individual Goal x
Personal Performance %
Total Short-Term
Incentive Payable
+=
Short-Term Incentive Target
The Target Opportunity, representing the percentage of base salary used in the determination of the award, is set by the Compensation and Management Development Committee for each of the NEOs and set forth in the table.
Name
Target Opportunity
Neil M. Ashe130%
Richard K. Reece130%
Karen J. Holcom100%
Barry R. Goldman75%
Dianne S. Mills75%
Fiscal 2021 Financial Performance Measures and Weighting
The performance measures and their relative weightings are typically established by the Compensation and Management Development Committee and ratified by the Board early in the fiscal year. In selecting appropriate performance measures the Committee considers management's recommendations and reviews available peer company information and other market data provided by its compensation consultant.
During fiscal 2021, the Compensation and Management Development Committee considered whether it would be appropriate to adjust the performance measures and targets related to our incentive programs in light of the COVID-19 pandemic. Based on a review of the Company's financial performance and other relevant factors, the Compensation and Management Development Committee again in fiscal 2021 determined that no modification of our performance measures for the COVID-19 pandemic was necessary.
Each of the performance measures shown below, which represents 80% of the short-term incentive opportunity, may be adjusted to exclude the impact of: (a) special charges for streamlining efforts and impairments, (b) the distortive effect

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EXECUTIVE COMPENSATION
of business acquisitions and/or dispositions, (c) Purchase Accounting adjustments, (d) significant changes in income tax provision, (e) significant changes in foreign currency, (f) refinancing or extinguishment of debt, (g) changes in accounting principles or accounting policies, (h) capital expenditures related to facility renovations, and (i) any other unusual gain or loss or event deemed appropriate by the Committee.
SHORT-TERM INCENTIVE PLAN FINANCIAL PERFORMANCE MEASURES
Measure(1)
WeightingCalculation
Net sales
piechart_perfmeasxnetsalesc.jpg
Net sales is calculated in the same manner as net sales in our income statement with no adjustments.
Adjusted operating profit
piechart_perfmeasxaop-pg12.jpg
Adjusted operating profit is calculated as operating profit and may be adjusted.
Free cash flow
piechart_perfmeasxfcf-pg12b.jpg
Free cash flow is calculated as cash provided by operating activities, minus purchases of property, plant, and equipment.
(1)    See Appendix A for information on calculation of these operating performance measures.
Performance Measurement Payout Levels
We strongly believe that our current performance measures, consisting of net sales (34%), adjusted operating profit (33%), and free cash flow (33%), are not only the leading indicators of how the Company performs but also the main drivers to enhance our stockholder value. Payout levels are set based on anticipated performance that is expected to drive long-term stockholder value in the upcoming year and may increase commensurately with higher performance up to a maximum payout of 200%. See table in Fiscal 2021 Short-Term Incentive Award for specific performance measures.
Individual Performance
Performance of individual participants in the Short-Term Incentive Plan, including the NEOs, is evaluated after the end of the fiscal year by:
Comparing actual performance to daily job responsibilities and pre-established individual objectives consistent with overall company objectives, and
Considering, on a qualitative basis, whether the individual’s performance reflects our corporate values, business philosophies, and our environmental, social, and governance goals.
The individual objectives for Mr. Ashe were set with the approval of the Compensation and Management Development Committee. The individual objectives for the other NEOs were set after individual discussion with Mr. Ashe. At the end of the fiscal year, each participant, including each NEO, is given a PMP Rating, which is translated to a PMP Payout Percentage. The objectives are common across all executives, with specific objectives set according to each individual’s role at our Company. The common objectives of the NEOs were:
Transformation of the business including creating operating business segments, recruiting appropriate talent to propel the Company forward, updating business strategies for the two operating business segments, and improving communications with our stakeholders (including our investors).
Drive Company-wide initiatives in environmental, social, and governance.
Drive Company-wide human capital management initiatives to support associate engagement, associate health and well-being, and safety.
Establish values-driven organizational tenet that will enhance Company-wide culture shift.
The maximum payout percentage that can be earned by any participant in the plan is 200%. At the end of the fiscal year, the Compensation and Management Development Committee or the Board, as applicable, selects the precise payout percentage within the range based on factors such as level of responsibility and impact on our performance, with calibrations made across comparable positions to achieve consistency of the percentages selected.

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EXECUTIVE COMPENSATION
The table below sets forth the PMP Rating Descriptions and the possible PMP Payout Percentages for all Short-Term Incentive Plan participants for fiscal 2021.
Range of PMP Payout
Percentage
PMP Rating Descriptions
MinimumMaximum
Consistently Exceeded Expectations130 %200 %
Met and Often Exceeded Expectations110 %130 %
Met Expectations85 %110 %
Met Some Expectations25 %85 %
Did Not Meet Expectations%%
Determination of Award
The level of financial performance is determined after the end of the fiscal year based on actual Company results compared to the financial measures set at the beginning of the fiscal year. In addition, the CEO summarizes the individual performance goals and achievements of each of the NEOs, including himself, to the Compensation and Management Development Committee. The Compensation and Management Development Committee considers this information in determining the awards.
Fiscal 2021 Short-Term Incentive Award
Our Compensation and Management Development Committee sets performance levels at threshold, target, and maximum based on improvement in annual financial measures that correlate with the long-term financial performance of mid-to-large cap companies. The “target” performance level set under the plan required that the annual growth in our financial performance be at the 50th percentile level as historically demonstrated by mid-to-large cap companies with the objective of providing target total compensation at the industry median-level. In order to achieve upper-quartile total compensation, annual improvement in our financial performance should be consistent with upper-quartile levels of improvement demonstrated by mid-to-large cap companies. The maximum award is designed to reward only exceptional performance.
Short-Term Incentive payouts for fiscal 2021 were based on the achievement of previously established financial performance measures and the achievement of personal performance goals. Eighty percent (80%) of the Short-Term Incentive opportunity could be earned based on the Company's performance relative to net sales, adjusted operating profit, and free cash flow. Twenty percent (20%) of the cash incentive opportunity could be earned based on achievement of personal performance goals. The individual's total Short-Term Incentive payout was established by taking the sum of each individual participant’s base salary multiplied by their short-term incentive target percent. The following table reflects each executive's respective target award opportunity:
Named Executive OfficerSalary
($)
Short-Term Incentive Target %Target
($)
Neil M. Ashe1,000,000 130 %1,300,000 
Richard K. Reece600,000 130 %780,000 
Karen J. Holcom500,000 100 %500,000 
Barry R. Goldman425,000 75 %318,750 
Dianne S. Mills450,000 75 %337,500 


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EXECUTIVE COMPENSATION
The following table shows the financial performance measures along with their weighting, payout percent, and weighted payout percent.
SHORT-TERM INCENTIVE PLAN FINANCIAL PERFORMANCE MEASURES
Measures(2)
Performance Objectives (1)
Weighted Payout
(rounded)
ThresholdTargetMaximumWeightingPayout %
Net sales
graphic_perfobjsxnetsales-a.jpg
piechart_perfmeasxnetsalesc.jpg
140%48%
Adjusted operating profit
graphic_perfobjxaop-pg12x55.jpg
piechart_perfmeasxaop-pg12.jpg
181%60%
Free cash flow
graphic_perfobjxfcf-pg12x55a.jpg
piechart_perfmeasxfcf-pg12b.jpg
83%27%
Company Payout Percentage135%
(1) Target, Threshold, and Maximum amounts are payable at 50%, 100%, and 200%, respectively.
(2) See Appendix A for information on calculation of these performance measures.
We eliminated ROIC from the short-term incentive plan to ensure that there is no overlap in incentive metrics in our compensation program on a go-forward basis. We believe ROIC is better utilized in our long-term incentive plan.
Eighty percent (80%) of each executive's target award opportunity was adjusted at the end of the performance year by the resulting financial goal achievements shown in the table above. Twenty percent (20%) of the award was adjusted for the individual performance component based on the level of achievement of individual performance goals.
In October 2021, the Compensation and Management Development Committee certified the achievement of fiscal 2021 financial performance objectives based upon information prepared by the Company’s finance department and approved the fiscal 2021 Short-Term Incentive Awards to the NEOs, other than Mr. Ashe. The independent members of the Board then approved the Compensation and Management Development Committee’s recommendations of the fiscal 2021 Short-Term Incentive award to Mr. Ashe.
The following table reflects the actual Short-Term Incentive awards for each of our NEOs based on our financial performance and their individual performance for fiscal 2021:
Named Executive OfficerFinancial
Performance Payout($) (1)
Personal Performance Payout ($) (2)Actual 2021 Short-Term Incentive Award Payout
($)
Neil M. Ashe1,404,000 +260,000 =1,664,000 
Richard K. Reece842,400 +156,000 =998,400 
Karen J. Holcom540,000 +110,000 =650,000 
Barry R. Goldman344,250 +70,125 =414,375 
Dianne S. Mills364,500 +87,750 =452,250 
(1)     Financial performance payout is equal to Target Opportunity multiplied by 80% of the Financial Goal achieved at 135%.
(2)    Personal performance payout is equal to Target Opportunity multiplied by 20% of the Individual Performance percent achieved. Individual performance percent achieved for each of the NEOs was: Mr. Ashe, 100%; Mr. Reece, 100%; Ms. Holcom, 110%; Mr. Goldman, 110%; and Ms. Mills, 130%.
Long-Term Incentive Awards
A substantial portion of the total direct compensation of our NEOs is delivered in the form of Long-Term Incentive Awards. Long-Term Incentive Awards are generally granted on an annual basis. The Compensation and Management Development Committee may also grant Long-Term Incentive Awards at the time an executive officer is hired or promoted, or to recognize an executive officer's outstanding performance.
The fiscal 2021 Long-Term Incentive Awards for NEOs other than the CEO were consistent with fiscal 2020 awards and included the following:

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EXECUTIVE COMPENSATION
Value of annual awards should approximate the median target value of awards for similar positions at our peer group. The value of the actual award may be slightly higher or lower based on individual performance;
50% of annual award is in the form of RSUs that vest ratably over a four-year period;
50% of annual award is in the form of PSUs that vest only if the three-year performance measure is achieved; and
Actual payout of the PSUs is dependent on the achievement of an established performance measure in excess of related thresholds, which may allow for payout up to two-times the shares originally awarded.
Awards are made under the stockholder-approved Amended and Restated 2012 Omnibus Stock Incentive Compensation Plan (the "Long-Term Incentive Plan"). The purpose of the Long-Term Incentive Plan is to enable executive officers and other eligible associates to accumulate capital through future managerial performance, which the Compensation and Management Development Committee believes contributes to the future success of our Company. In fiscal 2021, there were approximately 480 eligible participants in the Long-Term Incentive Plan. The Compensation and Management Development Committee believes that awards under the Long-Term Incentive Plan promote a long-term focus on our profitability due to the multi-year vesting period under the plan.
Fiscal 2021 Long-Term Incentive Awards for CEO
The long-term incentive awards for Mr. Ashe were in the form of performance-based stock options. These awards were granted in connection with the terms of Mr. Ashe's January 2020 employment letter and are tied directly with the Company's performance by requiring stock price targets to be met before they become exercisable. Mr. Ashe's long-term incentive awards are intended to demonstrate our commitment to value creation and alignment with stockholders, with the majority of his compensation delivered in the form of stock options with significant stock price targets as described in the table below.
DescriptionGrant DateNumber of OptionsExercise PriceTen Day Performance Stock Price TargetEstimated Grant Date ValueCurrent Stock Price at 8/31/2021Realizable Value
Performance Stock Options (1)
9/1/2020225,000 $108.96$275.00$9,028,125 $184.53$0.00
Performance Stock Options (2)
9/1/202052,200 $108.96$225.00$2,184,440 $184.53$0.00
Total277,200 $11,212,565 $0.00
(1) This tranche of stock options is not exercisable until the Company's stock price exceeds $275 per share for ten consecutive trading days and have an exercise price that was equal to the fair market value of our common stock on the grant date.
(2) This tranche of stock options is not exercisable until the Company's stock price exceeds $225 per share for ten consecutive trading days and have an exercise price that was equal to the fair market value of our common stock on the grant date.
Fiscal 2021 Long-Term Incentive Awards for all Other NEOs
The value of the awards for our NEOs other than the CEO is a percentage of base salary and based on median target values for similar positions in our peer group. The value of the actual award may be slightly higher or lower based on individual performance and consists of 50% RSUs and 50% PSUs (at Target).
The actual number of shares earned under the PSU award will be determined at the end of the three-year performance period (September 1, 2020 to August 31, 2023) based on the level of achievement as follows:
No shares earned if our average adjusted ROIC over the three-year period does not exceed or equal our average estimated WACC over the same period by at least 200 basis points.
Target shares earned (100%) if our average adjusted ROIC over the three-year period equals or exceeds our average estimated WACC over the same period by 200 basis points.
Maximum shares earned (200%) if our average adjusted ROIC over the three-year period equals our average estimated WACC over the same period by a minimum of 600 basis points.
Between Target (100%) and Maximum (200%), the number of shares earned will be interpolated.

56    Acuity Brands, Inc.



EXECUTIVE COMPENSATION
The following table shows the fiscal 2021 long-term incentive awards for the NEOs other than the CEO:
Value by Award TypeNumber of Shares by Award Type

Named Executive Officer
Grant Date Fair Value of Award ($)Restricted Stock Units ($)Performance Stock Units
($)
Restricted Stock UnitsPerformance Stock Units
 at Target
Richard K. Reece
1,625,000812,500812,5008,901 8,901 
Karen J. Holcom1,000,000500,000500,0005,478 5,478 
Barry R. Goldman400,000200,000200,0002,191 2,191 
Dianne S. Mills
400,000200,000200,0002,191 2,191 
Change in Disclosure: The Company has changed its disclosure methodology related to our Long-Term Incentive Plan awards in this Proxy Statement. As part of the continued review of the design of our Company's executive compensation programs, the Long-Term Incentive Plan design was changed such that the awards to our NEOs, other than the CEO, have forward-looking performance targets to be earned over a three-year performance period as well as time-vested awards. Previously, we granted long-term incentive awards based on the achievement of a performance measure in the prior fiscal year with awards having a time-vesting component after grant. We disclosed these long-term incentive awards in the Compensation Discussion and Analysis based on the year the performance was measured. With the change to forward-looking performance targets, the awards described for fiscal 2021 and those to be granted after fiscal 2021 will be reported based on the date of grant.
Vesting, Dividends, and Other Provisions
RSUs vest ratably over a four-year period and PSUs will vest at the end of three years, subject to achievement of a specified performance measure. Dividends accrue on RSUs and PSUs but are not paid until the underlying award vests.
For awards granted from October 24, 2019 to October 25, 2020, RSU and PSU award agreements provided for continued vesting of stock awards following retirement for all eligible participants who had attained age 60 having at a minimum ten years of service with the Company. Effective October 26, 2020, after review of the aforementioned retirement provision, the Board adopted forms of award agreements for RSUs and PSUs that no longer provide for continued vesting in the event of retirement. The newly adopted forms of award agreement for the PSUs will provide for payout of a portion of the award based on a participant's service during the performance period only if performance is achieved and paid to all participants. This new provision aligns the PSUs termination provision with those in the RSUs and also aligns with general market practices.
Executive Perquisites
The perquisites and other personal benefits available to our NEOs (that are not otherwise available to all of our associates) consist of personal use of the corporate aircraft, if any, and match of contributions to charitable organizations of not more than $5,000 per fiscal year.
With respect to personal use of the corporate aircraft, the Company calculates the incremental aggregate cost of personal use of the Company's aircraft based on the average direct operating costs over the prior 12-month period. Average direct operating costs include fuel, maintenance, and engine reserves. We also include other variable expenses, such as contract labor, crew travel and lodging expense, catering, and landing and parking fees. No incremental cost for personal use of the Company aircraft was attributed to an NEO where the plane was already traveling to the destination for business reasons. Since our aircraft is used primarily for business travel, we do not include fixed costs that do not change based on usage, such as crew salaries, depreciation, hangar rent, and insurance. The total incremental aggregate cost of personal flights are determined by multiplying the total actual flight time by the average direct operating costs, plus incremental variable costs associated with the flight, exclusive of any amount reimbursed by the NEO. Our NEOs reimburse for personal travel on the corporate aircraft at the maximum amount allowed by Federal Aviation Administration regulations.
For fiscal 2021, amounts related to matching charitable contributions for Mr. Reece, Ms. Holcom, and Mr. Goldman and the incremental costs to the Company for any personal use of the aircraft by Mr. Ashe and Mr. Reece are included in their respective "All Other Compensation" columns in the Summary Compensation Table.
Retirement Benefits
We provide retirement benefits under a number of defined benefit retirement plans. As of December 31, 2002, we froze the pension benefits under certain pension plans for all participants. This means that, while participants retain the pension benefits already accrued, no additional pension benefits accrue after the effective date of the freeze. However

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executives formerly covered by the frozen pension plan (Ms. Holcom and Mr. Goldman) receive a supplemental annual contribution under a deferred compensation plan to replace the benefits that were lost when the pension plan was frozen.
Effective January 1, 2003, we implemented the 2002 SERP, which was amended in October 2012, June 2015, July 2018, July 2019, and October 2020. The SERP provides for Mr. Ashe and Mr. Reece a standard accrued benefit equal to 2.8% and an incremental accrued benefit of 1.4%, for Mr. Reece a supplemental accrued benefit of 1.4%, and for Ms. Holcom and Mr. Goldman a modified accrued benefit of 2.8%, each applied to a participant's average cash compensation (i.e., base salary and short-term incentive payment, using the average for the three highest consecutive year period during the participant’s service with the Company) multiplied by years of service as a participant (up to a maximum of ten years) divided by 12. SERP benefits are generally payable for a fixed 15-year period following retirement (as defined in the SERP) although a participant may elect to receive the incremental accrued benefit and the supplemental accrued benefit, if applicable, in the form of a lump sum payment discounted using an interest rate equal to the lesser of 2.5% per annum or the yield on 10-Year U.S. Treasury Bonds.
In October 2020, the SERP was frozen to new participants. Benefits to existing participants were not affected. See Pension Benefits in Fiscal 2021 for more detailed information about the amendments to the SERP.
Each of our NEOs other than Ms. Mills participated in the SERP in fiscal 2021. Mr. Reece intends to retire from the Company effective November 30, 2021 and will not be an active participant after that date.
The table below summarizes the benefits of each of the NEOs:

Named Executive Officer
Standard Accrued
 Benefit
Incremental Accrued BenefitSupplemental Accrued BenefitModified Accrued BenefitTotal Benefit Percent
Neil M. Ashe2.8 %1.4 %NANA4.2 %
Richard K. Reece
2.8 %1.4 %1.4 %NA5.6 %
Karen J. HolcomNANANA2.8 %2.8 %
Barry R. GoldmanNANANA2.8 %2.8 %
Dianne S. Mills
NANANANANA
We amended the SERP in October 2020 to close participation for any new executive officers. Current participants will continue to accrue benefits as provided in the SERP, with no enhancement to benefits in the future.
We also maintain several deferred compensation plans described below under Fiscal 2021 Non-Qualified Deferred Compensation. The deferred compensation plans are designed to provide eligible participants an opportunity to defer compensation on a tax-efficient basis. Under certain plan provisions, we make contributions to participants’ accounts.
We maintain defined contribution plans (“401(k) plans”) for our eligible U.S. associates. The 401(k) plans provide for associate pre-tax contributions as well as employer matching contributions for salaried participants and certain hourly participants that do not participate in qualified defined benefit retirement plans.
Change in Control Agreements
We have change in control agreements with our NEOs that provide for separation payments and benefits, consistent with common market practices among our peers, upon qualifying terminations of employment in connection with a change in control of our Company. The change in control agreements are intended to promote meeting the business objectives and needs of our Company and our stockholders by providing the NEOs with some measure of security against the possibility of employment loss that may result following a change in control. Mr. Reece's change in control agreement will terminate when he retires from the Company on November 30, 2021.
For additional information on the change in control arrangements see Potential Payments upon Termination—Change in Control Agreements.
Severance Agreements
To ensure that we are offering a competitive executive compensation program, we believe it is important to provide reasonable severance benefits to our NEOs. Accordingly, we have entered into severance agreements with each of our NEOs.

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Severance agreements contain restrictive covenants with respect to confidentiality, non-solicitation, and non-competition and are subject to the execution of a release. Severance agreements for Mr. Ashe, Ms. Holcom, Mr. Goldman, and Ms. Mills are effective until terminated in accordance with the provisions of the agreement, except during a "Covered Period," which includes the six months prior to a change in control event and continues for two years following a change in control. The severance agreement for Mr. Reece is effective for a rolling two-year term, which will automatically extend each day for an additional day unless terminated by either party, in which case it will continue for two years after the notice of termination or for three years following a change in control. Mr. Reece's agreement will terminate when he retires from the Company on November 30, 2021, as previously announced.
For additional information on the severance arrangements see Potential Payments upon Termination—Severance Agreements.
Other Practices, Considerations, and Policies
Stock Ownership Guidelines
Our NEOs are subject to stock ownership guidelines. The guidelines are intended to ensure that our executive officers maintain an equity interest in our Company at a level sufficient to assure our stockholders of their commitment to value creation, while addressing their individual needs for portfolio diversification. The stock ownership guidelines provide that, over a five-year period, the NEOs will attain ownership in our common stock valued at a multiple of their annual base salary as set forth in the following table.
Multiple of Salary
Multiple of Salary
Neil M. Ashe6X
llllll
Barry R. Goldman3Xlll
Richard K. Reece
3X
lll
Dianne S. Mills
3Xlll
Karen J. Holcom3Xlll
The stock ownership levels of all NEOs, except Ms. Mills who joined the Company in March 2020, currently exceed the salary multiple set forth in the guidelines. For these purposes, ownership includes shares owned directly or indirectly, shares and/or units represented by amounts invested in the Company's 401(k) plans, unvested time-based RSAs, RSUs and phantom stock, in-the-money time-vested stock option awards, and performance stock options and stock unit awards if performance measures have been achieved.
We reviewed our stock ownership guidelines and adjusted the Equity Ownership Requirement for Mr. Ashe to be 6x his base salary. See Stock Ownership Guidelines Policy at www.acuitybrands.com under For Investors then Corporate–Corporate Governance.
Hedging, Pledging, and Insider Trading Policy
Our insider trading policy prohibits our associates, officers, and directors from hedging their ownership of our common stock, including the prohibition from engaging in short sales of our common stock and from purchasing or selling any derivative securities, or entering into any derivatives contracts relating to our securities. Our insider trading policy also prohibits our associates, officers, and directors from purchasing or selling Acuity Brands securities while in possession of material non-public information (except in limited circumstances, such as pursuant to a previously established trading plan).
Our insider trading policy prohibits our executive officers and directors from pledging our common stock. None of our NEOs or directors holds any of our stock subject to pledge.
Clawback Policy
We have a recoupment or “clawback” policy in order to further align the interests of key associates with the interests of our stockholders and strengthen the link between total compensation and the Company’s performance. Under this policy, we may seek to recover or “clawback” incentive-based compensation from any current or former NEO and their direct reports who received incentive-based compensation during the three-year period preceding the date on which we announce that we are required to restate any previously issued financial statements due to material noncompliance with any financial reporting requirement under federal securities laws. If the SEC adopts final rules regarding clawback

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requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), we will review our policies and plans, and, if necessary, amend them to comply with the new mandates.
Under the policy, the amount to be recovered will be based on the excess of the incentive based-compensation paid to the associate based on the erroneous data over the incentive based-compensation that would have been paid to the associate if the financial accounting statements had been as presented in the restatement. Incentive-based compensation is defined broadly to include bonuses, awards, or grants of cash or equity under any of the Company’s short or long-term incentive compensation or bonus plans (including, but not limited to, the Short-Term Incentive Plan and the Long-Term Incentive Plan) in each instance where the bonuses, awards, or grants are based in whole or in part on the achievement of financial results. The policy gives the Compensation and Management Development Committee discretion to interpret and apply the policy. To date, no NEO has been subject to any clawbacks.
Equity Award Grant Practices
Equity awards under our Long-Term Incentive Plan are approved by the Compensation and Management Development Committee and the independent members of the Board when necessary. The CEO may make interim equity awards to associates who are not executive officers from a previously approved discretionary stock pool on the first business day of each fiscal quarter based on prescribed criteria established by the Compensation and Management Development Committee. In certain circumstances, the Board may approve equity awards to key associates of newly acquired businesses in order to retain key talent or to incentivize their continued efforts on behalf of the Company. Interim equity awards may be granted upon initial hiring and following promotions or other special circumstances that occur during the year, subject to Compensation and Management Development Committee approval. We do not time the granting of equity awards to the disclosure of material information or to the fluctuation in the market value of the Company's common stock.
Compensation Risk Analysis
Because performance-based incentives play a large role in our overall executive compensation program, we believe that it is important to ensure that these incentives do not result in our executives taking actions that may conflict with our long-term best interests. The Compensation and Management Development Committee considers risk in designing the compensation program with the goal of appropriately balancing short-term incentives and long-term performance. We address this in several ways:
The various financial performance measures that are set under the Short-Term Incentive Plan and Long-Term Incentive Plan are balanced and are informed by prior year performance levels and multi-year performance targets that are reviewed and approved by the Board. We believe these performance targets are challenging, yet attainable, without the need to take inappropriate risks or make material changes to our business or strategy.
Awards under the Long-Term Incentive Plan are made in the form of equity grants that either vest over time or upon the achievement of three-year performance targets. We believe the three- and four-year vesting of the equity awards plays an important role in mitigating unnecessary or excessive risk taking.
The Short-Term Incentive Plan and the Long-Term Incentive Plan have maximum payout limitations for each participant and on the total amount of payments to all eligible associates in a fiscal year.
Because the value of the equity awards is best realized through long-term appreciation of stockholder value (especially when coupled with our stock ownership guidelines described below), we believe the equity awards encourage a long-term growth mentality among our executives and aligns their interests with those of our stockholders.
After reviewing the design of our compensation programs with management, the Compensation and Management Development Committee concluded that our compensation program does not encourage management to take excessive risks and serves the stockholders’ best interests in our sustained long-term performance by including an appropriate balance of financial performance measures, extended vesting schedules, and significant stock ownership requirements.
Fiscal 2022 Compensation Changes