LECO Lincoln Electric Holdings Inc

At the meeting, you will be asked to:

•  Elect seven Director nominees named in the proxy statement for a one-year term;

•  Ratify our independent auditors for the year ending December 31, 2016;

•  Approve, on an advisory basis, the compensation of our named executive officers; and

•  Address any other business that properly comes before the meeting.

Shareholders of record on the close of business on March 1, 2016, the record date, are entitled to vote at the Annual Meeting. Your vote is very important! Please vote your shares promptly in one of the four ways noted on page 5. We appreciate your continued confidence in Lincoln Electric and we look forward to seeing you at the Annual Meeting!

Sincerely,

Christopher L. Mapes

Chairman, President and Chief Executive Officer

Frederick G. Stueber

Executive Vice President,

General Counsel and Secretary

WE WILL BEGIN MAILING THIS PROXY STATEMENT ON OR ABOUT MARCH 21, 2016.

BUSINESS OVERVIEW //

Lincoln Electric is the world leader in the design, development and manufacture of arc welding products, robotic arc welding systems, plasma and oxyfuel cutting equipment and has a leading global position in the brazing and soldering alloys market. Headquartered in Cleveland, Ohio, U.S., we operate 48 manufacturing locations in 19 countries and distribute to over 160 countries. In 2015, we generated $2.5 billion in sales. As an innovation leader with the broadest portfolio of solutions and the industry’s largest team of technical sales representatives and application experts, we are known as the Welding Experts^®. Our portfolio of welding and cutting solutions are designed to help customers achieve greater productivity and quality in their manufacturing and fabrication processes. We leverage our global presence and broad distribution network to serve an array of customers across various end markets including: general metal fabrication, power generation and process industries, structural steel construction (buildings and bridges), heavy equipment fabrication (agricultural, mining, construction and rail), shipbuilding, automotive, pipe mills and pipelines, and oil and gas.

Key Financial Metrics

2020 Goal

2009–2015 Achievement

Key Initiatives and Focus

10% CAGR

through the cycle

8% CAGR (excludes FX and

Venezuela results)

•  Increased investment in R&D, increasing our new product vitality index

•  Active acquisition program

15% Average

through the cycle

12.1% Average

(Achieved a peak 15.1% margin in 2014)

•  Targeted growth opportunities

•  Richening the portfolio mix through differentiated technologies and applications

•  Operational excellence

15% Average

through the cycle

•  Disciplined acquisition program with stringent ROIC and IRR goals

•  Margin expansion

•  Cash management

Average Operating

Working Capital Ratio

17.1% at 2015

(610 basis point improvement)

•  Effective cash cycle management

•  Inventory management

LOCATION

RECORD DATE

Marriott Cleveland East

March 1, 2016

26300 Harvard Road

Warrensville Heights, Ohio

PROPOSAL 1

To elect 7 Director nominees named in this Proxy Statement to hold office until the 2017 Annual Meeting

PROPOSAL 2

To ratify the appointment of Ernst & Young LLP as independent auditor for the 2016 fiscal year

PROPOSAL 3

To approve, on an advisory (non-binding) basis, the compensation of our named executive officers (NEOs)

Board & Governance Information

Size of Board

Number of fully independent Board committees

Number of independent Directors

Independent Directors meet without management

Average age of Directors

Director attendance at Board & committee meetings

Percent female or ethnically diverse

Mandatory retirement age (75)

Board meetings held in 2015

Stock ownership requirements for Directors

New Directors in the last 5 years

Annual Board and committee self-assessments

Annual election of Directors

Code of Ethics for Directors, officers & employees

Majority voting policy for Directors

Succession planning and implementation process

Lead Independent Director

Environmental & risk management review

Name

  Age  

  Director  
Since

  Independent  

  Audit  

  Compensation  
& Executive
Development

Nominating
& Corporate

 Governance 

Finance 

Other Public
Company
Boards

Curtis E. Espeland

Executive Vice President and CFO,

Eastman Chemical Company

Stephen G. Hanks

Retired President and CEO,

Washington Group International

Michael F. Hilton

President and CEO, Nordson Corporation

Kathryn Jo Lincoln

Chair and CIO,

Lincoln Institute of Land Policy

William E. MacDonald, III

Retired Vice Chairman,

National City Corporation

Phillip J. Mason

Retired President,

EMEA Sector of Ecolab, Inc.

George H. Walls, Jr.

Retired Chief Deputy Auditor,

State of North Carolina

Name

  Age  

  Director  
Since

  Independent  

  Audit  

  Compensation  
& Executive
Development

Nominating
& Corporate
Governance

Finance

Other Public
Company
Boards

David H. Gunning (Lead Director)

Retired Vice Chairman,

Cliffs Natural Resources, Inc.

G. Russell Lincoln

President, N.A.S.T. Inc.

(personal investment firm)

Christopher L. Mapes (Chairman)

President and CEO, Lincoln Electric

Hellene S. Runtagh

Retired President and CEO,

Berwind Group

•  Incentivize our executives to deliver above-market financial results;

•  Align management’s interests with the long-term interests of our shareholders;

•  Define performance drivers that support key financial and strategic business objectives;

•  Address specific business challenges; and

•  Maintain good governance practices in the design and operation of our executive compensation programs, including consideration of compensation risk in the execution of business strategies.

•  Modified the annual bonus (EMIP) matrix in 2015 to improve the alignment of pay and performance, impacting 2015 payouts made in the first quarter of 2016.

•  Modified the vesting period on RSUs to three years from five years to align with market trends, beginning with grants awarded after October 2015.

•  Adjusted the 2016 peer group to exclude companies with sales greater than 2.5 times that of the Company, with the exception of Illinois Tool Works (ITW), as ITW is a global competitor of Lincoln Electric, with its largest presence in the U.S.

•  Replaced the cash portion of long-term incentives with performance shares, beginning with 2016 grants associated with the 2016 to 2018 performance cycle.

In addition, the Committee took actions to respond to challenging business conditions, including:

•  Supported a 5% temporary reduction in base salary for all officers and other key management, including the NEOs, in support of Lincoln Electric’s cost-cutting measures implemented during 2015.

•  Held NEO base salaries and bonus targets flat for 2016 in light of continued cost-cutting measures.

We have long-term, compensation programs focused on profitability, net income growth, ROIC and total shareholder returns

We use targeted performance metrics to align pay with performance

We maintain stock ownership requirements (5x base salary for CEO; 3x base salary for other NEOs)

We have shareholder-approved incentive plans

We have a broad clawback policy

We have a double-trigger change of control policy

Our executive compensation program is structured as follows:

•  Base salary is targeted to be the smallest component of total direct compensation

•  Short-term incentive compensation is based on annual corporate and segment/business unit performance

•  Long-term incentive compensation is based on our financial performance over a 3-year cycle

•  Equity is a significant percentage of compensation

Christopher L. Mapes

Vincent K. Petrella

George D. Blankenship

Frederick G. Stueber

Steven B. Hedlund

Audit Fees

Audit-Related Fees

Tax Fees

All Other Fees

 Total Fees

OUR BOARD RECOMMENDS A VOTE FOR EACH DIRECTOR NOMINEE LISTED ABOVE

Recent Business Experience:

Mr. Espeland has been Executive Vice President and Chief Financial Officer of Eastman Chemical Company (a chemical, fiber and plastic manufacturer) since January 2014. Prior to his service as Executive Vice President and Chief Financial Officer, Mr. Espeland was Senior Vice President and Chief Financial Officer from 2008 to January 2014 and Vice President, Finance and Chief Accounting Officer of Eastman Chemical from 2005 to 2008.

Qualifications:

Mr. Espeland has extensive experience in corporate finance and accounting, having served in various finance and accounting roles, and ultimately as the Chief Financial Officer, at a large publicly traded company (Eastman Chemical) for the past several years. Mr. Espeland also has significant experience in the areas of mergers and acquisitions, taxation and enterprise risk management. Mr. Espeland also served as an independent auditor at Arthur Andersen LLP having worked in both the United States and abroad (Europe and Australia). Mr. Espeland’s extensive accounting and finance experience, the Board has determined, qualifies him as an “audit committee financial expert.” This expertise makes Mr. Espeland an important member of the Audit Committee (where he is Chair) and the Finance Committee. In addition, Mr. Espeland’s international business experience is a valued asset for our global operations.

Recent Business Experience:

Mr. Hanks spent 30 years with global engineering and construction company Morrison Knudsen Corporation and its successor Washington Group International, Inc., serving the last eight years as President, CEO and a member of its Board of Directors and retiring in January 2008.

Directorships:

Mr. Hanks is a member of the Board of McDermott International, Inc. (NYSE: MDR), a position he has held since 2009, and Babcock & Wilcox Enterprises, Inc. (NYSE: BWC), a position he has held since July 2010. Mr. Hanks is also a member of the Board of The Washington Companies, which is privately-owned.

Qualifications: Mr. Hanks’ executive leadership of a U.S. publicly-held company with international reach has provided him with extensive experience dealing with the issues that these companies confront. His diverse professional skill set, including finance (having served as CFO of Morrison Knudsen) and legal competencies (such as enterprise risk management, corporate compliance and legal strategy), make him a valuable member of the Board, the Finance Committee (where he is Chair) and the Compensation and Executive Development Committee. Mr. Hanks’ experience as a Chief Executive Officer and Chief Financial Officer of a publicly-held company qualifies him as an “audit committee financial expert.”

Recent Business Experience:

Mr. Hilton is President and Chief Executive Officer of Nordson Corporation (a company that engineers, manufactures and markets differentiated products and systems used for the precision dispensing of adhesives, coatings, sealants, biomaterials, polymers, plastics and other materials, fluid management, test and inspection, UV curing and plasma surface treatment), a position he has held since 2010. Prior to joining Nordson, Mr. Hilton was the Senior Vice President and General Manager for Air Products and Chemicals, Inc. (a company that provides a unique portfolio of atmospheric gases, process and specialty gases, performance materials, and equipment and services) with specific responsibility for leading its $2B global Electronics and Performance Materials segment. Air Products serves customers in industrial, energy, technology and healthcare markets globally.

Directorships:

Mr. Hilton has served on the Board of Ryder System, Inc. (NYSE: R) since 2012 and Nordson Corporation (Nasdaq: NDSN) since 2010.

Qualifications:

With over 30 years of global manufacturing experience, Mr. Hilton brings to the Lincoln Electric Board an intimate understanding of management leadership, strategy development and day-to-day operations of a multi-national company, including product line management, new product technology, talent development, manufacturing, distribution and other sales channels, business processes, international operations and global markets expertise.

Recent Business Experience:

Ms. Lincoln is Chair and Chief Investment Officer of the Lincoln Institute of Land Policy—a leading educational institution teaching land economics and taxation. She has held this position since 1996, and in her role as CIO currently manages and directs all aspects of the Institute’s $550 million endowment. In her role as Chair, she is responsible for all Board development and governance and takes a leadership position in strategic planning. From 1999 through 2006, Ms. Lincoln previously served as President of the Lincoln Foundation, the non-profit foundation that supported the Lincoln Institute until the two entities merged in 2006.

Directorships:

Ms. Lincoln is an Advisory Board Member of the Johnson Bank, Arizona Region, a position she has held since 2006, before which she was a Board member of the Johnson Bank, Arizona, N.A., beginning in 2001.

Qualifications:

Ms. Lincoln’s leadership experience with the Lincoln Institute, where she plays a crucial role in strategic planning and asset allocation, as well as her extensive experience with the Chautauqua Institution in New York, a major Arizona health care provider, and an international non-profit organization related to land use and policy, make Ms. Lincoln a valuable contributor to a well-rounded Board. Ms. Lincoln serves as a member of the Compensation and Executive Development Committee and Chairs the Nominating and Corporate Governance Committee. In addition, as a Lincoln family member and long-standing Director of Lincoln Electric, Ms. Lincoln has a keen sense of knowledge about Lincoln Electric, its culture and the founding principles.

Recent Business Experience:

Mr. MacDonald is the former Vice Chairman of National City Corporation (a diversified financial holding company), a position he held from 2001 until his retirement in 2006, where he was responsible for its seven-state regional and national corporate banking businesses, the Risk Management and Credit Administration unit, Capital Markets and the Private Client Group. Mr. MacDonald joined National City in 1968 and, during his tenure, held a number of key management positions, including Senior Executive Vice President of National City Corporation and President and Chief Executive Officer of National City’s Ohio bank.

Directorships:

Mr. MacDonald was a member of the Board of American Greetings Corporation from 2007 until September 2013 when the company was privatized. In addition, Mr. MacDonald served on the Board of MTC Technologies, Inc. from 2002 to 2008 and The Lamson & Sessions Co. from 2006 to 2007 when, in each case, the boards were dismantled as a result of divestitures.

Qualifications:

Mr. MacDonald brings experience in leading a large corporate organization with over 35,000 employees and structuring complex financing solutions for large and middle-market businesses to the Board and its Compensation and Executive Development Committee (where he is Chair) and Finance Committee. In addition to his expertise in economic issues, Mr. MacDonald appreciates the human resources and development challenges facing a global, publicly-traded company.

Recent Business Experience:

Mr. Mason is the former President of the Europe, Middle East & Africa Sector (EMEA Sector) of Ecolab, Inc. (a leading provider of food safety, public health and infection prevention products and services), a position he held from 2010 until his retirement in 2012. Mr. Mason brings 35 years of international business experience to the Board and its Audit and Finance Committees, including starting, developing and growing businesses abroad in both mature and emerging markets. Prior to leading Ecolab’s EMEA Sector, Mr. Mason had responsibility for Ecolab’s Asia Pacific and Latin America businesses as President of Ecolab’s International Sector from 2005 to 2010 and as Senior Vice President, Strategic Planning in 2004.

Directorships:

Mr. Mason is a member of the Board of GCP Applied Technologies (NYSE: GCP). GCP Applied Technologies was spun off from W.R. Grace & Co. as of February 3, 2016.

Qualifications:

Mr. Mason has over 35 years of international business experience with experience in establishing businesses in China, South Korea, Southeast Asia, Brazil, India, Russia, Africa and the Middle East. Mr. Mason’s executive leadership of an international business sector for a U.S. publicly-held company provides him with extensive international business expertise in a business-to-business environment, including industrial sectors. Additionally, he brings a strong finance and strategic planning background, including merger and acquisition experience, along with significant experience working with and advising boards on diverse issues confronting companies with international operations.

Recent Business Experience:

General Walls is the former Chief Deputy Auditor of the State of North Carolina, a position he held from 2001 through 2004. General Walls retired from the U.S. Marine Corps in 1993 with the rank of Brigadier General, after nearly 29 years of distinguished service.

Directorships:

General Walls served on the Board of The PNC Financial Services Group, Inc. from 2006 to 2015 and Thomas Industries, Inc. from 2003 to 2005 when the board was dismantled as a result of a divestiture.

Qualifications:

General Walls brings to the Board substantial financial acumen and experience supervising the audits of various government entities, including the Office of the Governor of North Carolina, all state agencies of North Carolina, all Clerks of Superior Court for North Carolina and all not-for-profit agencies that received state or federal funds during his tenure as Chief Deputy Auditor of the State of North Carolina, which serves him well as a member of the Audit Committee of the Board. General Walls also has significant experience in the leadership, management and ethics of large, complex organizations, aiding him in his services on the Nominating and Corporate Governance Committee of the Board. General Walls is also a National Association of Corporate Directors (NACD) Board Leadership Fellow. In addition, General Walls understands the welding industry and at one point in time had oversight responsibility for the Marine Corps welding school and development program.

Recent Business Experience:

Mr. Gunning is the former Vice Chairman of Cliffs Natural Resources, Inc. (an iron ore and coal mining company formerly known as Cleveland-Cliffs Inc), a position he held from 2001 until his retirement in 2007. Prior to that, Mr. Gunning served as Chairman, President and Chief Executive Officer of Capital American Financial Corp. Mr. Gunning is also a lawyer and practiced law for many years as a corporate partner with Jones Day.

Directorships:

Mr. Gunning is a member of the Board of MFS Funds (since 2004), and is the Chair of the Board of the Funds. Mr. Gunning served on the Board of Cliffs Natural Resources, Inc. (2001 to 2007), Portman Mining Ltd. (2005 to 2008), Southwest Gas Corporation (2000 to 2004) and Development Alternatives, Inc. (pre-1993 to May 2013).

Qualifications:

Mr. Gunning brings to the Board chief executive officer and senior management experience (with public companies), public company board experience and corporate legal skills. Additionally, Mr. Gunning’s relatively long tenure as a Director provides the Board with a valuable perspective on Lincoln Electric’s challenges within its industry.

Recent Business Experience:

Mr. Lincoln is President of N.A.S.T. Inc. (a personal investment firm), a position he has held since 1996. Prior to joining N.A.S.T. Inc., Mr. Lincoln served as the Chairman and Chief Executive Officer of Algan, Inc.

Qualifications:

As an entrepreneurial businessman with experience, including 25 years running a $50 million business, Mr. Lincoln understands business risk and the importance of hands-on management. As the grandson of James F. Lincoln and as a long-term trustee, Mr. Lincoln provides the Board with his historic perspective on the Company’s unique culture and especially its incentive management system. His leadership role and his investment experience serve Lincoln Electric well as a member of the Audit and Finance Committees of the Board.

Recent Business Experience:

Mr. Mapes is Chairman, President and Chief Executive Officer of Lincoln Electric. Mr. Mapes has served as President and Chief Executive since December 31, 2012. On December 21, 2013, Mr. Mapes was appointed as Chairman of the Board in addition to his other responsibilities. From September 2011 to December 31, 2012, Mr. Mapes served as the Chief Operating Officer of Lincoln Electric. From 2004 to August 2011, Mr. Mapes served as an Executive Vice President of A.O. Smith Corporation (a global manufacturer with a water heating and water treatment technologies business, which has residential, commercial, industrial and consumer applications) and the President of its former Electrical Products unit. Prior to joining A.O. Smith, he was the President, Motor Sales and Marketing of Regal Beloit Corporation (a manufacturer of electrical and mechanical motion control products).

Directorships:

Mr. Mapes is a member of the Board of The Timken Company (NYSE: TKR), a position held since 2014.

Qualifications:

As an experienced executive officer of Lincoln Electric as well as other large, global public companies engaged in manufacturing operations for over thirty years, Mr. Mapes understands the manufacturing industry and the challenges of global growth. He is also familiar with the welding industry generally, given his service to Lincoln Electric as Chief Executive Officer and Chief Operating Officer. In addition to his business management experience, Mr. Mapes has an MBA and a law degree.

Recent Business Experience:

Ms. Runtagh is the former President and Chief Executive Officer of the Berwind Group (a diversified pharmaceutical services, industrial manufacturing and real estate company), a position she held in 2001. From 1997 through 2001, Ms. Runtagh was Executive Vice President of Universal Studios (a media and entertainment company). Prior to joining Universal Studios, Ms. Runtagh spent 27 years at General Electric Company (a diversified industrial company) in a variety of leadership positions.

Directorships:

Ms. Runtagh has served on the Board of Harman International Industries, Inc. (NYSE: HAR) since 2008 and NeuStar, Inc. (NYSE: NSR) since 2006. In addition, Ms. Runtagh is a former member of the Board of IKON Office Solutions Inc., Avaya Inc. and Covad Communications Group.

Qualifications:

Ms. Runtagh has over 30 years of experience in management positions with global companies. Ms. Runtagh’s responsibilities in management have ranged from marketing and sales to finance, as well as engineering and manufacturing. Ms. Runtagh’s diverse management experience, including growing those businesses while maintaining high corporate governance standards, and her extensive experience as a director of public companies, make her well-positioned for her role as a Director, member of the Compensation and Executive Development Committee and member of the Nominating and Corporate Governance Committee.

•  Code of Corporate Conduct and Ethics

•  Guidelines on Significant Corporate Governance Issues

•  Charters for our Board Committees

•  Director Independence Standards

Corporate Governance Highlights

Board of Directors

•  Our Board held five meetings in 2015.

•  During 2015, each of our Directors attended at least 75% of the total full Board meetings and meetings of committees on which he or she served during the time he or she served as a Director.

•  Size of Board—11

•  Plurality vote with director resignation policy for failures to receive a majority vote in uncontested director elections

•  Combined Chairman and CEO

•  Lead Independent Director

•  All directors are expected to attend the Annual Meeting

Board Composition

•  Number of independent directors—10

•  Diverse Board including different backgrounds, experiences and expertise, as well as balanced mix of ages and tenure of service

•  Several current and former CEOs

•  Audit Committee has multiple financial experts

Board Processes

•  Independent directors meet without management present

•  Annual Board and Committee self-assessments

•  Board orientation/evaluation program

•  Governance Guidelines approved by Board

•  Board plays active role in risk oversight

•  Full Board review of succession planning

Board Alignment with Shareholders

•  Annual equity grants align interests of directors and officers with shareholders

•  Annual advisory approval of executive compensation

•  No poison pill

•  Stock ownership requirements for officers and directors

Compensation

•  No employment agreements

•  Executive compensation is tied to performance— 83% of CEO target pay and 76% of all NEO target pay is performance-based (at risk)

•  Anti-hedging and anti-pledging policies for directors and officers

•  Recoupment/claw-back policy

Integrity and Compliance

•  Code of Conduct for employees, officers and directors

•  Environmental, health and safety guidelines & goals, including long-term sustainability goals

•  Annual training on ethical behavior

          Audit          

Compensation    
& Executive    
Development    

Nominating      
& Corporate      
Governance       

        Finance          

  Number of Committee Meetings–2015

Audit Committee

Members

Messrs. Espeland (Chair),

Hilton, Lincoln, Mason and Walls

•   Appoints and determines whether to retain or terminate the independent auditors

•   Approves all audit engagement fees, terms and services

•   Approves any non-audit engagements

•   Reviews and discusses the independent auditors’ quality control

•   Reviews and discusses the independence of the auditors, the audit plan, the conduct of the audit and the results of the audit

•   Reviews and discusses with management Lincoln Electric’s financial statements and disclosures, its interim financial reports and its earnings press releases

•   Reviews with Lincoln Electric’s General Counsel legal matters that might have a significant impact on our financial statements

•   Oversees compliance with our Code of Corporate Conduct and Ethics, including annual reports from compliance officers

•   Reviews with management the appointment, replacement, reassignment or dismissal of the Senior Vice President, Internal Audit, the internal audit charter, internal audit plans and reports

•   Reviews with management the adequacy of internal control over financial reporting

Each of the members of our Audit Committee meets the independence standards set forth in the Nasdaq listing standards and have likewise been determined by the Board to have the financial competency required by the listing standards. In addition, because of the professional training and past employment experience of Messrs. Espeland and Hilton, the Board has determined that they are financially sophisticated Audit Committee Members under the Nasdaq listing standards and qualify as “audit committee financial experts” in accordance with Securities and Exchange Commission rules. Shareholders should understand that the designation of Messrs. Espeland and Hilton as “audit committee financial experts” is a disclosure requirement and that it does not impose upon them any duties, obligations or liabilities that are greater than those generally imposed on them as members of the Audit Committee and the Board.

Compensation and Executive Development Committee

Members

Messrs. MacDonald, III (Chair),

Gunning, Hanks, Ms. Lincoln and Ms. Runtagh

•   Reviews and establishes total compensation of our Chief Executive Officer and other executive officers

•   Annually assesses the performance of our Chief Executive Officer and other executive officers

•   Monitors our key management resources, structure, succession planning, development and selection processes and the performance of key executives

•   Reviews and recommends to the Board, in conjunction with the Nominating and Corporate Governance Committee, the appointment and removal of our elected officers

•   Has oversight for our employee stock and incentive plans and reviews and makes recommendations to the Board concerning all employee benefit plans

•   Reviews and recommends to the Board new or amended executive compensation plans

Each of the members of our Compensation and Executive Development Committee meets the independence standards set forth in the Nasdaq listing standards and each of whom is deemed to be (1) an outside Director within the meaning of Section 162(m) of the U.S. Internal Revenue Code, and (2) a “non-employee director” within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934. As part of the independence evaluation, the Board must consider all factors relevant to whether the Director has a relationship to the Company that is material to his or her ability to be independent, including the Director’s source of compensation and whether the Director is affiliated with the Company. None of the members of the Committee were determined to have an affiliation or source of income that was material to his or her ability to be independent.

The Committee does not generally delegate any of its authority to other persons, although it has the power to delegate authority. Two exceptions to the foregoing are that the authority to delegate is not permitted with respect to awards under our equity compensation plans to any executive officers or any person subject to Code Section 162(m) and the authority to delegate is limited by Section 162(m) under our 2007 Management Incentive Compensation Plan, a plan that relates to awards subject to Code Section 162(m).

Board Level

Lead Director⁴

Committee Chairs⁵

Retainer

& Executive Development

$10,000 for Finance and Nominating and
Corporate Governance

Meeting Fees¹

Annual Restricted

Stock Award (approx. value)²

Initial Restricted

Stock Award³

Director

Fees Earned or    

Paid in Cash   

Stock
Awards¹

All Other
Compensation

Total

  Harold L. Adams (retired April 2015)

  Curtis E. Espeland

  David H. Gunning

  Stephen G. Hanks

  Michael Hilton

  Robert J. Knoll (retired April 2015)

  G. Russell Lincoln

  Kathryn Jo Lincoln

  William E. MacDonald, III

  Phillip J. Mason

  Hellene S. Runtagh

  George H. Walls, Jr.

    Shares valued at 4 x annual retainer ($320,000)

2015 Named Executive Officers (NEOs)

Name

Title

Christopher L. Mapes

Chairman, President and Chief Executive Officer

Vincent K. Petrella

Executive Vice President, Chief Financial Officer and Treasurer

George D. Blankenship

Executive Vice President, President, Americas Welding¹

Frederick G. Stueber

Executive Vice President, General Counsel and Secretary

Steven B. Hedlund

Senior Vice President, President, Global Automation

Executive Compensation Table of Contents

Compensation Discussion & Analysis

Executive Compensation Tables

   Executive Summary

   Summary of 2015 Compensation Elements

p. 52

   Our Compensation Philosophy

   Summary Compensation Table

p. 53

   Elements of Executive Compensation

   2015 Grants of Plan-Based Awards

p. 55

   Other Arrangements, Policies and Practices

   Holdings of Equity-Related Interests

p. 57

   2015 Pension Benefits

p. 59

   Termination and Change in Control Arrangements

p. 63

•  Incentivize our executives to deliver above-market financial results;

•  Align management interests with the long-term interests of our shareholders;

•  Define performance drivers which support key financial and strategic business objectives;

•  Address specific business challenges; and

•  Maintain good governance practices in the design and operation of our executive compensation programs, including consideration of the risks associated with those practices.

OVERVIEW

•  We maintain a performance-driven culture, with pay for performance compensation programs

•  83% of CEO target pay was “at risk” and, on average, 76% of all NEO target pay was “at risk”

•  95% of the shareholders who voted on “say-on-pay” at last year’s Annual Meeting approved the compensation of our NEOs

•  Mindful of our shareholders strong support, we have retained our general approach and emphasis on incentive compensation

•  Adjusted operating income margin of 14.7%, a modest 40 basis point decline versus prior year. On a reported basis, operating income margin was 7.2% primarily reflecting pension settlement and rationalization and asset impairment charges;

•  Cash flow from operations of $311 million representing 100% free cash flow conversion of adjusted net income;

•  Average operating working capital to net sales ratio maintained at 17.1%;

•  ROIC of 21.1%; and

•  Record returns to shareholders of $486 million through the combination of increased dividend payments and record-level $399 million in share repurchases.

•   Adjusted earnings before interest, taxes and bonus (EBITB), and

•   Average operating working capital to net sales ratio (AOWC/Sales)

•   Adjusted net income growth (over a three-year cycle),

•   Three-year average ROIC indexed to peer performance, and

•   Share price appreciation, including dividends, (TSR) versus various indices over a three-year period.

3 Year (2013–2015) Average ROIC Performance

Percentile Rank to Peers and Select Indices

Peers

S&P Midcap    

400

S&P Midcap    

400 Mfg

75th

90th

90th

What We Do

What We Don’t Do

Pay for Performance Focus

We heavily weight our compensation programs toward variable, “at risk”, compensation in addition to performing annual reviews of market competitiveness and the relationship of compensation to financial performance.

No Guaranteed Pay

We do not provide multi-year guarantees for compensation increases, including base pay, and no guaranteed bonuses.

Balanced Compensation

We structure compensation opportunities that are linked to both short- and long-term periods of time, while aligning compensation with several financial performance metrics that are critical to achievement of sustained growth and shareholder value creation.

No Full Vesting of Equity upon Retirement

We have not provided for automatic full vesting of equity awards upon retirement [vesting was changed to pro-rata]–this change also applied to director equity awards.

Double Trigger Provisions for Change in Control

We have change in control arrangements that do not provide for tax gross-ups, do not provide for additional retirement service in the SERP, are limited to three times base pay and bonus [for the Chairman, President and CEO, but only two or one times base pay and bonus for other executives] and mainly provide for payments only upon a double [not single] trigger.

No Repricing or Replacement of Underwater Stock Options

We do not reprice or replace underwater stock options without prior shareholder approval.

What We Do

What We Don’t Do

Stock Ownership Policy

We maintain stock ownership requirements for our officers and directors, with a mid-cycle review to ensure they remain appropriate.

No Payment of Dividends on Unvested Equity

We do not pay dividend or dividend equivalents

while executive RSUs are unvested.

Clawback Policy

We maintain a broad clawback policy that applies to all recent incentive awards for officers.

No Excessive Perks

We do not pay excessive perks; our perks are modest, consisting of financial planning [for which imputed income is charged], an annual physical examination and reimbursement of club dues [for which, if not used exclusively for business purposes, imputed income is charged].

Independent Compensation Committee and Consultants

We utilize independent directors with significant experience and knowledge of the drivers of our long-term performance, coupled with independent compensation consultants and legal advisors, retained directly by the Committee, to provide input and recommendations on our executive compensation programs.

No Excise Tax Gross-Ups or Tax Reimbursements

We do not provide tax gross-up payments or tax reimbursements on compensation and benefits, other than tax equalization benefits that are available to all employees who are on international assignment and modest gross-up payments on employee relocation benefits [and which are a standard component of a U.S. company’s relocation benefits].

No Hedging or Pledging

We do not permit hedging activities, such as cashless collars, forward sales, equity swaps and other similar arrangements. In addition, our insider trading policy prohibits the pledging of Lincoln Electric stock on a going-forward basis.