AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · Recognized brands and an established store footprint are supported by realized price increases and subsequent positive volume growth. This supports a current differentiation advantage, without proving relative cost leadership or customer lock-in.
durability · 2/4 · Existing intellectual property, store expansion and a long sales-growth record support persistence. The record does not separate acquisition, price and organic volume contributions over time, while numerous competing offerings constrain confidence in long-run protection.
customer dependency · 2/4 · Positive second-quarter 2026 volume and comparable-store growth after price increases provide indirect evidence of continuing customer demand. Prior-year volume contraction and customer incentives temper that inference; material switching costs and customer-level dependency are unproven.
erosion resilience · 2/4 · Recent price and volume gains with stable Paint Stores Group gross margin show resistance to moderate input inflation. Earlier volume declines, weak housing demand and broad competition leave resilience through a prolonged adverse cycle only partly demonstrated.
Pricing power63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 3/4 · Paint Stores Group realized mid-single-digit pricing contributions in 2025 and second-quarter 2026. The latter also delivered volume growth. Performance Coatings pricing was primarily mix-related, limiting extrapolation across the company.
retention · 2/4 · Retention is assessed indirectly: second-quarter 2026 price increases coincided with positive volume and comparable-store growth, supporting continued demand. The 2025 volume decline and absence of customer-level data prevent a strong conclusion about repeat buying or price elasticity.
margin resilience · 3/4 · Paint Stores Group maintained its second-quarter gross-margin percentage while raw-material costs rose moderately, supported by price and volume gains. Consolidated margin slipped slightly because of acquisition dilution. Earlier flat or declining input costs limit evidence of resilience against severe inflation.
contractual freedom · 2/4 · Implemented price increases demonstrate practical pricing discretion in Paint Stores Group. Other revenue is subject to supply agreements specifying transaction-price components, rebates and discounts, with upfront incentives also disclosed. Contract coverage and unilateral repricing rights remain unclear.
Predictability100
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 4.11
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 2.05
Financial strength44
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 55.77
- netDebtEbitGrade
- 43.92
- interestCoverageGrade
- 65.26
- currentRatioGrade
- 9.45
- Debt / FCF (x)
- 4.10
- Net debt / operating income (x)
- 2.80
- Current ratio (x)
- 0.87
Capital allocation99
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 28.65
- 3-year average dilution (%)
- -1.36
- 3-year average SBC / revenue (%)
- 0.54
- cashConversionGrade
- 96.49
Management69
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Operating cash generation improved and the outstanding share count declined after issuance and repurchases. However, first-half 2026 repurchases of $1.837 billion plus $394.6 million of dividends exceeded $1.487 billion of operating cash before investing needs, alongside increased debt proceeds. The cash record supports a mixed assessment; acquisition returns and repurchase value creation are unproven.
incentive alignment · 3/4 · Actual long-term awards combine adjusted EPS, adjusted return on net assets employed and stock options. The 2023–2025 performance awards actually vested in February 2026 based on three-year outcomes, and dividend equivalents depend on vesting. These are implemented arrangements, although adjusted metrics, option incentives and unverified individual ownership limit conclusions about exceptional alignment.
execution · 3/4 · Store expansion, realized pricing, recent positive volume, comparable-store growth and higher first-half earnings and operating cash provide strong operating evidence. Execution is assessed indirectly from results; working-capital effects and acquisition-led Consumer Brands growth limit attribution to management skill.
governance · 3/4 · Disclosed annual elections, independent committees, equal voting rights, proxy access and an independent Audit Committee provide substantial governance safeguards. Combined chair and CEO roles and discretion to reject a tendered director resignation are counterweights. The proposed special-meeting threshold amendment is not counted as enacted.
Evidence
Trademarks and Trade Names Customer recognition of trademarks and trade names owned or licensed by the Company collectively contribute significantly to our sales.
Business — Trademarks and Trade Names · Filed 19/02/2026
We have numerous patents, trade secrets, trademarks, trade names copyrights and know-how that are valuable to our business.
Risk factors — Intellectual property portfolio · Filed 19/02/2026
The total number of stores in operation at December 31, 2025 was 4,853 in the United States, Canada and the Caribbean region.
Results of operations — Paint Stores Group year-end 2025 store count · Filed 19/02/2026
Net sales in the Paint Stores Group increased 3.2% primarily due to selling price increases, which impacted Net sales by a mid-single digit percentage, partially offset by a low-single digit decrease in sales volume.
Results of operations — 2025 Paint Stores Group price and volume · Filed 19/02/2026
Net sales in the Paint Stores Group increased by 5.1% in the second quarter of 2026 primarily due to selling price increases, which impacted Net sales by a mid-single digit percentage, as well as low-single digit percentage sales volume growth.
Results of operations — Second-quarter 2026 Paint Stores Group price and volume · Filed 28/07/2026
Net sales from stores open for more than twelve calendar months increased by 4.2% in the second quarter of 2026 compared to last year’s comparable period.
Results of operations — Second-quarter 2026 comparable-store sales · Filed 28/07/2026
The Paint Stores Group’s Gross profit in the second quarter of 2026 was higher than the same period last year by $106.8 million due primarily to higher Net sales as a result of selling price increases and sales volume growth, partially offset by a moderate rise in raw material costs.
Results of operations — Paint Stores Group gross-profit drivers · Filed 28/07/2026
The Paint Stores Group’s Gross profit as a percent of Net sales was flat in the second quarter of 2026 compared to the same period last year for these same reasons.
Results of operations — Paint Stores Group gross-margin stability · Filed 28/07/2026
Compared to the prior year, our consolidated net sales increased to a record $23.57 billion in 2025—marking our fifteenth consecutive year of increased net sales.
Proxy — Financial and Operating Performance, sales history · Filed 11/03/2026
During 2025, the Paint Stores Group opened 83 new stores and closed 3 locations for a net increase of 80 stores.
Results of operations — 2025 store openings and closures · Filed 19/02/2026
Competition We experience competition from many local, regional, national and international competitors of various sizes in the manufacture, distribution and sale of our paint, coatings and related products.
Business — Competition · Filed 19/02/2026
Product quality, product innovation, breadth of product line, technical expertise, service and price determine the competitive advantage for this segment.
Business — Paint Stores Group competitive factors · Filed 19/02/2026
Although the 6 Table of Contents Federal Reserve cut interest rates in 2025, mortgage rates have remained high and we have not experienced meaningful positive impacts on demand for our products that serve these segments of the economy to date.
Risk factors — Realized weakness in housing-related demand · Filed 19/02/2026
Our competitive position and the value of our products and brands could be reduced and our business adversely affected if we are unable to maintain or adequately protect our intellectual property.
Risk factors — Potential intellectual-property erosion · Filed 19/02/2026
Net sales in the Performance Coatings Group increased by 6.3% in the second quarter of 2026 primarily due to selling price increases, mainly attributable to product mix, which impacted Net sales by a low-single digit percentage, low-single digit percentage sales volume growth and a 2.0% impact from favorable foreign currency translation.
Results of operations — Performance Coatings Group price, mix and volume · Filed 28/07/2026
The remaining revenue is governed by long-term supply agreements and related purchase orders (contracts) that specify shipping terms and aspects of the transaction price including rebates, discounts and other sales incentives, such as advertising support.
Revenue recognition — Long-term supply agreement pricing terms · Filed 19/02/2026
The Company has made payments or given credits for various incentives at the beginning of a long-term contract where future revenue is expected and before satisfaction of performance obligations.
Revenue recognition — Upfront customer incentives · Filed 19/02/2026
Consolidated Gross profit as a percent of consolidated Net sales in the second quarter of 2026 decreased slightly to 49.2% compared to 49.4% during the same period in 2025 primarily due to the dilutive impact of the Suvinil acquisition.
Results of operations — Consolidated gross margin and acquisition dilution · Filed 28/07/2026
Cash Flow Net operating cash for the six months ended June 30, 2026 was a source of $1.487 billion compared to a source of $1.052 billion for the same period in 2025.
Cash Flow — First-half 2026 operating cash generation · Filed 28/07/2026
The improvement in Net operating cash was primarily due to lower cash requirements for working capital, higher Net income, an increase in depreciation and a decrease in deferred income taxes.
Cash Flow — Working-capital and other operating cash drivers · Filed 28/07/2026
The table below summarizes the Company’s share repurchase activity: Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Treasury stock purchases (in millions) $ 1,261.4 $ 518.5 $ 1,837.0 $ 870.2 Treasury stock purchases (in shares) 4,000,000 1,450,000 5,600,000 2,450,000 Average price per share $ 315.37 $ 357.57 $ 328.04 $ 355.17 16 In June 2026, the Company entered into an accelerated share repurchase agreement (ASR) with a third-party financial institution to repurchase 2.5 million shares of the Company’s outstanding common stock.
Note 10 — Actual share repurchases and accelerated repurchase agreement · Filed 28/07/2026
NOTE 10 - SHAREHOLDERS’ EQUITY Dividends The following table summarizes the dividends declared and paid on common stock: 2026 2025 Cash Dividend Per Share Total Dividends (in millions) Cash Dividend Per Share Total Dividends (in millions) First Quarter $ 0.80 $ 197.1 $ 0.79 $ 200.4 Second Quarter 0.80 197.5 0.79 197.9 Total $ 1.60 $ 394.6 $ 1.58 $ 398.3 Treasury Stock The Company acquires its common stock for general corporate purposes through its publicly announced share repurchase program.
Note 10 — Actual first-half dividends · Filed 28/07/2026
Net financing cash usage increased $573.6 million in the first six months of 2026 compared to the same period in 2025 primarily due to an increase in treasury stock purchases, an increase in payments of long-term debt and a decrease in proceeds from real estate financing transactions, partially offset by an increase in proceeds from long-term debt.
Cash Flow — Financing uses and debt proceeds · Filed 28/07/2026
In the twelve month period from July 1, 2025 through June 30, 2026, the Company generated Net operating cash of $3.887 billion, used $1.887 billion in investing activities and used $1.952 billion in financing activities.
Cash Flow — Trailing twelve-month operating, investing and financing cash flows · Filed 28/07/2026
79 Table of Contents Shares in Treasury Shares Outstanding Balance at January 1, 2023 14,717,347 258,875,999 Shares issued for exercise of option rights — 1,081,815 Shares tendered as payment for option rights exercised 10,467 (10,467) Shares issued for vesting of restricted stock units — 302,713 Shares tendered in connection with vesting of restricted stock units 106,770 (106,770) Treasury stock purchased 5,600,000 (5,600,000) Balance at December 31, 2023 20,434,584 254,543,290 Shares issued for exercise of option rights — 1,879,285 Shares tendered as payment for option rights exercised 11,884 (11,884) Shares issued for vesting of restricted stock units — 122,276 Shares tendered in connection with vesting of restricted stock units 41,867 (41,867) Treasury stock purchased 5,200,000 (5,200,000) Balance at December 31, 2024 25,688,335 251,291,100 Shares issued for exercise of option rights — 1,103,257 Shares tendered as payment for option rights exercised 7,885 (7,885) Shares issued for vesting of restricted stock units — 176,018 Shares tendered in connection with vesting of restricted stock units 61,027 (61,027) Treasury stock purchased 4,800,000 (4,800,000) Treasury stock retired (29,491,963) — Balance at December 31, 2025 1,065,284 247,701,463 Treasury Stock The Company acquires its common stock for general corporate purposes through its publicly announced share repurchase program.
Note 12 — Share issuance, repurchases and outstanding share count · Filed 19/02/2026
Type of Equity Award % Allocation PRSUs Adjusted EPS Goal 40% Adjusted RONAE Goal 20% Stock Options 40% We believe this mix of equity awards provides an appropriate balance aligning executive interests with those of our shareholders, encouraging executive retention, and rewarding executives for sustained performance results.
Executive Compensation — 2025 long-term incentive allocation · Filed 11/03/2026
} 55 Sherwin-Williams 2026 Proxy Statement 3.Amounts reflect 200% of the target number of PRSUs granted February 14, 2023 that vested in February 2026, based upon achievement of the Adjusted EPS and Adjusted RONAE performance goals for the three-year performance period that ended December 31, 2025.
Outstanding Equity Awards — Actual February 2026 performance-award vesting · Filed 11/03/2026
The payment of dividend equivalents on unvested PRSUs is deferred, and dividend equivalents are paid only if and to the extent the PRSUs vest based on the achievement of the performance goals.
Executive Compensation — Performance-conditioned dividend equivalents · Filed 11/03/2026
{ Annual election of all directors { Robust independent lead director role and governance responsibilities { Orientation program for new directors { Majority voting standard and resignation policy for directors in uncontested elections { Board committees entirely composed of independent directors { Annual board and committee self- assessments { Director overboarding policy { Executive sessions of non-management directors are held in connection with each regularly scheduled Board meeting { Directors have complete access to management { Proxy access rights available to 3-year ownership, 3% shareholders, for up to 20% of the Board { Board and committee oversight of risk exposures { Prohibition on hedging and pledging of our securities { 8 out of 9 director nominees are independent { Mandatory retirement age of 72 for directors { Significant director and executive stock ownership guidelines { No supermajority voting requirements in our governance documents } 8 Sherwin-Williams 2026 Proxy Statement Executive Compensation Our Compensation Objectives We design and manage our Company-wide compensation programs to align with our overall business strategy and to focus our employees on delivering sustained financial and operating results, and creating value for our shareholders on a consistent, long-term basis.
Proxy — Governance practices and ownership guidelines · Filed 11/03/2026
Any incumbent nominee for director in an uncontested election who receives a greater number of “against” votes than “for” votes shall continue to serve on the Board pursuant to Ohio law, but is required to promptly tender his or her resignation to the Board under our Corporate Governance Guidelines.
Corporate Governance — Director resignation requirement · Filed 11/03/2026
The Nominating Committee will promptly consider the tendered resignation and will recommend to the Board whether to accept the tendered resignation or to take some other action, such as rejecting the tendered resignation and addressing the apparent underlying causes of the vote result.
Corporate Governance — Board discretion over tendered resignations · Filed 11/03/2026
•One Share, One Vote. We have equal voting rights for all of our shareholders.
Corporate Governance — Equal voting rights · Filed 11/03/2026
The Board of Directors fulfills its responsibility for the oversight of the Company’s accounting policies and procedures, financial statement preparation and internal control over financial reporting through the Audit Committee, comprised exclusively of independent directors.
Financial reporting oversight — Independent Audit Committee · Filed 19/02/2026
EDT Virtual Meeting Website: www.virtualshareholdermeeting.com/SHW2026 Record Date: Close of business on February 25, 2026 Agenda 1.Election of 9 directors 2.Advisory approval of the compensation of the named executive officers 3.Ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm 4.Advisory approval of management proposal to amend shareholders’ ability to call a special meeting to a 25% ownership threshold 5.Shareholder proposal regarding shareholder ability to call a special meeting 6.Transaction of such other business as may properly come before the Annual Meeting FIND MORE DETAILS ON HOW TO VOTE ON PAGE 78 Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to Be Held on April 22, 2026.
Annual meeting agenda — Proposed special-meeting threshold amendment · Filed 11/03/2026
SUMMARY •Consolidated Net sales increased 7.5% to $6.789 billion in the quarter and increased 7.2% to $12.456 billion in the year to date period ◦Net sales from stores in the Paint Stores Group open more than twelve calendar months increased 4.2% and 3.4% in the quarter and year to date period, respectively •Diluted net income per share increased 14.3% to $3.43 per share in the quarter compared to $3.00 per share in the second quarter of 2025 and increased 11.6% to $5.58 per share in the year to date period compared to $5.00 per share in the year to date period of 2025 ◦Adjusted diluted net income per share increased 9.5% to $3.70 per share in the quarter compared to $3.38 per share in the second quarter of 2025 and increased 7.7% to $6.05 per share in the year to date period compared to $5.62 per share in the year to date period of 2025 •Generated Net operating cash of $1.487 billion in the year to date period compared to $1.052 billion in the year to date period of 2025 OUTLOOK In an uncertain demand environment given current customer sentiment, our growth investments and execution on our differentiated strategy, Success by Design, continued to yield positive results.
Summary — First-half 2026 sales, earnings and operating cash results · Filed 28/07/2026
Net sales in the Consumer Brands Group increased by 21.5% in the second quarter of 2026 primarily as a result of the acquisition of Suvinil, increased Net sales in North America and a 1.6% impact from favorable foreign currency translation.
Results of operations — Consumer Brands acquisition-led sales growth · Filed 28/07/2026
Following two years of historic inflation, certain raw material and energy prices decreased in 2023 and 2024, and remained flat in 2025, particularly resins and solvents derived from petrochemical feedstock sources such as propylene and ethylene.
Risk factors — Historical raw-material and energy cost movements · Filed 19/02/2026
Heidi G. Petz Chair, President and Chief Executive Officer Benjamin E.
Financial reporting responsibility — Combined chair and chief executive roles · Filed 19/02/2026
