Legence Corp

This non-binding management proposal asks stockholders to approve, on an advisory basis, the compensation of the Company’s named executive officers as disclosed in the Compensation Discussion and Analysis and accompanying tables. Management seeks shareholder endorsement to validate its pay-for-performance framework, which combines base salary, annual cash incentives tied mainly to EBITDA and safety measures, and long-term equity awards (RSUs, stock options and Series A Profits Interests) intended to align management with long‑term shareholder value. The Compensation Committee uses Adjusted EBITDA, safety TRIR and individual goals to determine short‑term payouts and awards sizable multi-year equity grants to promote retention and alignment after the IPO. The Say-on-Pay is non-binding, so while an affirmative vote does not change contract terms it serves as important feedback; conversely, a substantial negative vote would trigger Compensation Committee review and potential changes. The Board’s recommendation and the proxy language emphasize that the program is designed to attract, retain and motivate executives while aligning their interests with stockholders through both short‑ and long‑term incentives. Given the Company’s recent IPO and the prevalence of performance‑contingent Series A Profits Interests, management frames the proposal as part of a transition to public‑company governance and compensation norms. Analysts should weigh the mechanics of the awards (mix of cash, RSUs, options, and profits interests), the specific performance metrics used (notably Adjusted EBITDA and safety), and the potential dilution and expense implications of long‑term grants when assessing the merits of the advisory approval. The Board indicates it will consider stockholder feedback from the advisory vote in future compensation decisions, but retains discretion over pay programs and their administration.

This management proposal asks stockholders to indicate, on a non‑binding basis, whether future advisory votes on executive compensation should occur every one, two, or three years; the Board recommends an annual (one‑year) frequency. Management argues that an annual vote provides more frequent and direct feedback from shareholders to the Compensation Committee and senior management, enabling quicker assessment of responses to prior votes and facilitating governance oversight of pay practices, particularly meaningful given the Company’s recent transition to public status. The vote is advisory and non‑binding; the frequency favored by a majority of votes cast will be considered the shareholder preference, but the Board retains ultimate discretion while committing to review the outcome. The company’s recommendation for annual votes aligns with a governance posture that seeks regular engagement with investors on pay matters and reflects the Board’s view that more frequent say‑on‑pay votes enhance accountability. Practically, an annual vote means the Compensation Committee will have to consider and respond to shareholder feedback more frequently, which can accelerate iterative changes to pay design if investors signal dissatisfaction. Conversely, more frequent votes may increase administrative burden and the potential for recurring shareholder dissatisfaction cycles; investors preferring longer intervals often cite stability and reduced noise. Analysts assessing this proposal should consider the company’s shareholder base, the recent IPO context, and whether management’s engagement and disclosure practices suggest that more frequent advisory input will materially influence compensation outcomes. Because the proposal is non‑binding, its primary impact is signaling; however, a strong outcome for a non‑recommended frequency could influence the Board’s governance choices and investor relations strategy.

This management proposal requests shareholder approval to adopt the Legence Corp. 2026 Employee Stock Purchase Plan, which authorizes issuance of up to 1,580,053 shares and includes both a Section 423 qualified component and a Non‑Section 423 component to provide flexibility for international or other local needs. Management and the Board frame the ESPP as a retention and recruitment tool that aligns employees’ interests with stockholders by enabling broad‑based employee ownership via payroll deductions, subject to purchase price discounts (no less than 85% of the lower of enrollment or purchase date fair market value for the Section 423 Component) and plan limits (e.g., per‑employee 1,000‑share cap per offering unless modified). The plan permits offering periods of up to 27 months, allows the Administrator (the Compensation Committee) discretion over design and eligibility, and contains customary anti‑dilution, withholding and amendment provisions. The initial offering period was commenced April 1, 2026 and will end June 30, 2026, but is contingent on shareholder approval; executives did not enroll in the initial offering due to insider‑trading restrictions. The Company estimates approximately 5,730 employees are eligible to participate as of the record date, indicating broad potential participation; actual uptake, dilution and accounting impact will depend on employee elections, purchase prices and future offerings. From a governance and analytical perspective, the ESPP is a standard public‑company tool to promote employee ownership; analysts should note the sizeable share reserve and that the plan includes a Non‑Section 423 component enabling offerings that do not meet U.S. tax‑qualified requirements for foreign jurisdictions or other circumstances. The Board recommends a FOR vote, and approval requires a majority of votes cast by holders present or represented by proxy.