DEF 14A of Ingersoll Rand Inc.
Filed Apr 25, 2025 · FY20240001140361-25-015748
Davidson, North Carolina
| Outstanding Equity Awards at 2024 Fiscal Year End | 58 | | Option Exercises and Stock Vested in 2024 | 60 | | Non-Qualified Deferred Compensation – Fiscal 2024 | 60 | | Potential Payments to Named Executive Officers upon Termination of Employment or Change in Control | 61 | | Severance Arrangements and Restrictive Covenants | 63 | | Treatment of Outstanding Equity Awards in the Event of Termination of Employment or Change in Control | 63 | | Director Compensation in Fiscal 2024 | 66 | | Description of Director Compensation | 66 | | Compensation Committee Interlocks and Insider Participation | 67 | | CEO Pay Ratio | 67 | | Pay vs. Performance (“PvP”) Disclosure | 68 | | Ownership of Securities | 71 | | Transactions with Related Persons | 73 | | Stockholder Proposals for the 2026 Annual Meeting | 74 | | Householding of Proxy Materials | 75 | | Other Business | 76 | | Annex A: Forward-Looking Statements and Reconciliation of GAAP Measures to Non-GAAP Measures | A-1 |
Election of Directors
Election of Directors Upon the recommendation of the Nominating and Corporate Governance Committee, the full Board of Directors has considered and nominated the following slate of nominees to stand for re-election for a one-year term expiring at the 2026 Annual Meeting of Stockholders or until his or her successor is duly elected and qualified:
Election of Directors
| Name | Age | Position | | Vicente Reynal | 50 | Chief Executive Officer, President and Chairman of the Board of Directors | | William P. Donnelly | 63 | Independent Lead Director | | Jennifer Hartsock | 48 | Independent Director | | John Humphrey | 59 | Independent Director | | Marc E. Jones | 66 | Independent Director | | JoAnna A. Sohovich | 53 | Independent Director | | Mark P. Stevenson | 62 | Independent Director | | Michelle Swanenburg | 58 | Independent Director |
Election of Directors
The biographies and qualifications of the eight director nominees in this Proposal No. 1 are set forth below under the heading “Director Biographies and Qualifications.” Mr. Gary D. Forsee and Ms. Kirk E. Arnold, after 18 years and seven years, respectively, of service as a director of Ingersoll Rand (and previously Ingersoll Rand, plc), have decided to retire at the end of their current terms. As such, Mr. Forsee and Ms. Arnold were not nominated for election at this year’s Annual Meeting. The Company gratefully acknowledges and thanks Mr. Forsee and Ms. Arnold for their years of service and dedication to our Board.
Election of Directors
| Your Board of Directors recommends that you vote “FOR” the election of each of the Director nominees named above. |
Election of Directors
Director Biographies and Qualifications The following information describes the offices held, other business directorships and the experiences, qualifications, attributes or skills that caused the Nominating and Corporate Governance Committee and the Board to determine that the director nominee should serve as a director.
Election of Directors
| Vicente Reynal Years of Service: 9 Age: 50 | Vicente Reynal has served as our chief executive officer, president and member of our Board of Directors since January 2016. Mr. Reynal was appointed chairman of our Board of Directors in November 2021. Mr. Reynal is responsible for leading the Company and driving its overall growth and profitability as a global supplier of innovative and application-critical flow control products, services and solutions. Mr. Reynal joined Gardner Denver in May 2015 as the president of our Industrials segment. Before joining Gardner Denver, Mr. Reynal spent 11 years at Danaher Corporation, a designer and manufacturer of professional, medical, industrial and commercial products and services, where he served in a progression of senior leadership roles. Prior to joining Danaher, Mr. Reynal served in various operational and executive roles at Thermo Fisher Scientific and AlliedSignal Corp. (which merged with Honeywell, Inc. to become Honeywell International, Inc. in 1999). Mr. Reynal serves on the board of directors for American Airlines. In addition, Mr. Reynal serves on the board of Ownership Works and is an active advocate of broad-based shared ownership programs that make every employee an owner. Mr. Reynal holds a bachelor of science degree in Mechanical Engineering from Georgia Institute of Technology and master of science degrees in both mechanical engineering and technology & policy from Massachusetts Institute of Technology. | | | Mr. Reynal has more than 25 years of experience in corporate strategy, new product development, general management processes and operations leadership with companies in the industrial, energy and life sciences industries. |
Election of Directors
| William P. Donnelly Years of Service: 8 Age: 63 | William P. Donnelly has been a member of our Board of Directors since May 2017 and was appointed Lead Director in November 2021. Mr. Donnelly joined Mettler- Toledo International Inc. in 1997 and from 2014 until his retirement in December 2018, was its executive vice president responsible for finance, investor relations, supply chain and information technology. From 1997 to 2002 and from 2004 to 2014 Mr. Donnelly served as Mettler-Toledo’s chief financial officer. From 2002 to 2004, he served as division head of Mettler-Toledo’s product inspection and certain lab businesses. From 1993 to 1997, Mr. Donnelly served in various senior financial roles, including chief financial officer, of Elsag Bailey Process Automation, NV and prior to that, he was an auditor with PricewaterhouseCoopers LLP from 1983 to 1993. Mr. Donnelly currently serves as the Chairman of the board of directors of Quanterix Corporation and as a member of the board of directors of T. Rowe Price Group, Inc. Mr. Donnelly received a bachelor of science in business administration from John Carroll University. | | | Mr. Donnelly has many years of experience with publicly held industrial and life science companies, including as chief financial officer and with leadership roles in strategy and operations and experience with respect to organic growth and product innovation. |
Election of Directors
| Jennifer Hartsock Years of Service: 2 Age: 48 | Jennifer Hartsock joined our Board of Directors in January 2023. Ms. Hartsock is an industry-recognized digital executive with international experience and proven success leading global technology organizations. She currently serves as the chief information and digital officer at Cargill, Inc., a privately held American corporation that provides products, services and insights to food, agriculture, financial and industrial customers in more than 125 countries. Ms. Hartsock manages the company’s global technology portfolio, which includes developing and executing technology, digital and data strategies to enable Cargill’s key growth priorities. Prior to joining Cargill, Ms. Hartsock served as chief information officer of Baker Hughes. While there, she also led the Digital Technology team that was responsible for delivering digital connectivity of devices and other technologies to enable connected customer solutions. Earlier in her career, she served as chief information officer at Cameron International and spent 17 years with Caterpillar Inc., during which she served as group chief information officer for its Construction Industries segment. Ms. Hartsock holds a bachelor’s degree in applied computer science from Illinois State University. | | | Ms. Hartsock has significant experience and leadership in digital transformation, which closely aligns with our focus on expanding our product and service innovation in the areas of digitization and IIoT. In addition, her deep understanding of global manufacturing and broad industrial technology experience supports our expansion into sustainable end markets and growth through strategic acquisitions. |
Election of Directors
| John Humphrey Years of Service: 7 Age: 59 | John Humphrey has been a member of our Board of Directors since February 2018. In 2017, Mr. Humphrey retired from Roper Technologies, a company that designs and develops software and engineered products and solutions for healthcare, transportation, food, energy, water, education and other niche markets worldwide. At Roper, he served from 2011 to 2017, as executive vice president and chief financial officer, and from 2006 to 2011, as vice president and chief financial officer. Prior to joining Roper, Mr. Humphrey spent 12 years with Honeywell International, Inc. and its predecessor company, AlliedSignal, in a variety of financial leadership positions. Mr. Humphrey’s earlier career included six years with Detroit Diesel Corporation, a manufacturer of heavy-duty engines, in a variety of engineering and manufacturing management positions. He is a member of the board of directors of EnPro Industries, Inc. and O-I Glass, Inc. Mr. Humphrey received a bachelor of science degree in industrial engineering from Purdue University and a master of business administration from the University of Michigan. | | | Mr. Humphrey has many years of experience at manufacturing companies and leading inorganic growth, including experience as the chief financial officer and board member of a publicly held company. His experience with respect to inorganic growth closely supports a pillar of our growth strategy. |
Election of Directors
| Marc E. Jones Years of Service: 6 Age: 66 | Marc E. Jones has been a member of our Board of Directors since December 2018. He has served as the chairman, president and chief executive officer of Aeris Communications, Inc., a provider of machine to machine and Internet of Things communications services, since 2008, and as the chairman of Aeris since 2005. Mr. Jones also served as chairman of Visionael Corporation, a network service business software and service provider, from 2004 to 2009 and as president and chief executive officer of Visionael from 1998 to 2004. Prior to joining Visionael, Mr. Jones served as president and chief operating officer of Madge Networks, a supplier of networking hardware, from 1993 to 1997; senior vice president, Integrated System Products at Chips and Technologies, Inc., one of the first fabless semiconductor companies, from 1988 to 1992; and senior vice president, corporate finance at LF Rothschild Unterberg Towbin & Co., a merchant and investment banking firm, from 1986 to 1987. Mr. Jones currently serves on the board of trustees of Stanford University and as the chair of the board of Stanford Healthcare. In addition, he serves on the board of directors of CDW Corporation. Mr. Jones holds both a bachelor of arts in political science and a juris doctor from Stanford University. | | | Mr. Jones has held senior leadership roles, including chief executive officer, at several technology companies and also has experience in senior financial leadership roles and a background in law. His technology background is invaluable as we harness the megatrend of digitization and its impact on our business. |
Election of Directors
| JoAnna L. Sohovich Years of Service: 2 Age: 53 | JoAnna L. Sohovich joined our Board of Directors in 2023. Ms. Sohovich is the Chair of the Board of Directors for Chamberlain Group, a role she assumed on January 1, 2022 after serving as the Chief Executive Officer of Chamberlain Group from February 2016 until December 31, 2021. Prior to that, from January 2015 to February 2016, she was the Global President, STANLEY Engineered Fastening at Stanley Black & Decker, Inc. where she led a global technology and manufactured goods business. Before being appointed to this position in 2015, she served as Global President, Industrial & Automotive Repair since 2012 and, prior to that, Industrial & Automotive Repair President – North America, Asia and Emerging Regions since 2011, both at Stanley Black & Decker, Inc. From 2001 to 2011, Ms. Sohovich served in several roles of increasing responsibility at Honeywell International, including President, Security & Communications from 2010 to 2011 emphasizing new product development and innovation, Vice President & General Manager, Commercial Building Controls from 2008 to 2010 leading growth initiatives across a broad commercial building controls portfolio, and Integration Leader from 2007 to 2008 resulting in Honeywell’s successful acquisition and integration of Maxon Corporation. Ms. Sohovich served as General Manager, Building Controls Field Devices from 2005 to 2007 and Vice President, Six Sigma for Honeywell from 2004 to 2005. Her earlier experience includes plant management, repair and overhaul shop management, quality management and service as an officer in the United States Navy. From 2014 until 2025, Ms. Sohovich also served on the Board of Directors of Barnes Group Inc. and as Chair of the Compensation and Management Development Committee and as a member of the Executive Committee of the Board of Directors for Barnes Group Inc. She received a bachelor of science in economics from the United States Naval Academy and a master of business administration from Santa Clara University. | | | Ms. Sohovich has extensive executive management and leadership experience, broad knowledge of industrial manufacturers, and direct experience in driving digitally focused product innovation and strategic growth initiatives, which experience is relevant to our product and service innovation in the areas of digitization and IIoT. |
Election of Directors
| Mark P. Stevenson Years of Service: 3 Age: 62 | Mark P. Stevenson joined our Board of Directors in July 2022. Mr. Stevenson currently serves as senior advisor for General Atlantic, a leading global growth equity firm and as a senior partner at Flagship Pioneering, a life sciences venture capital company that invests in biotechnology, life sciences, health and sustainability companies. He is the former executive vice president and chief operating officer of Thermo Fisher Scientific Inc., a Fortune 100 company and world leader in serving science through its life science solutions, analytical instruments, specialty diagnostics and laboratory products and biopharma services. He held this role from 2017 until his retirement in 2022. He joined the company in 2014 as executive vice president and president of Life Sciences Solutions through the acquisition of Life Technologies. Mr. Stevenson previously served as president and chief operating officer of Life Technologies, and president and chief operating officer of Applied Biosystems prior to its merger with Invitrogen Corporation in 2008. He has a master of business administration from Henley Management College, United Kingdom, and a bachelor’s degree in chemistry from the University of Reading, United Kingdom. | | | Mr. Stevenson’s experience in leading a growth compounder in sustainable end markets such as life sciences and medical aligns closely with our long-term strategy of expansion in high growth sustainable end markets, and his experience with machine learning systems supports our innovation in the areas of digitalization and IIoT. |
Election of Directors
| Michelle Swanenburg Years of Service: <1 Age: 58 | Michelle Swanenburg joined our Board of Directors in April 2025. Ms. Swanenburg is the Head of Human Resources at T. Rowe Price (NASDAQ: TROW), a premier global asset management organization with total assets under management of $1.61 trillion as of December 31, 2024. She is a member of the firm’s Management Committee, the Strategic Operating Committee, the Enterprise Risk Management Committee, the Management Compensation and Development Committee, and the Corporate Strategy Committee. Prior to her current role, which commenced in December 2019, she served as the Head of Human Resources at Oaktree Capital Management for four years. Before joining Oaktree Capital Management, she began her career at T. Rowe Price, holding roles of increasing responsibility in human resources. She earned a bachelor's degree and a master’s degree in human resources development from Towson University. She currently serves as a board member for The Waterfront Partnership of Baltimore Inc. and is a member of the President’s Advisory Council at Stevenson University. | | | Ms. Swanenburg’s experience in human resources, succession planning, talent acquisition, performance management, and compensation supports our Deploy Talent strategic imperative and the development of our corporate culture and leadership teams. |
Ingersoll Rand’s TSR Performance(1)
Our incentive plans motivated our executive team and yielded very strong operating and stock price performance in 2024 and in the 2022-2024 PSU period. For the 2024 Management Incentive Plan (“MIP”), our performance yielded a 100% payout and our PSUS paid out at 200%. Separate analysis by our compensation consultant also demonstrated strong pay for performance alignment. In addition, our 2024 performance was led by the hard work and dedication of our more than 21,000 employees whose ownership mindset drives our Company forward as they live our purpose of Making Life Better each and every day. Our employees created tangible value for stockholders that goes beyond these financial highlights. The following are just some of the significant accomplishments we achieved across each of our five strategic imperatives:
Ingersoll Rand’s TSR Performance(1)
| 9 | Our long-term commitment defined in our 2023 Investor Day presentation published on November 30, 2023. |
Compensation Governance Practices and Policies
| | WHAT WE DO | | WHAT WE DON’T DO | | | Significant Portion of Pay Focused on Long-Term Value Creation | | No Guaranteed Bonuses | | | 50% of Annual Long-Term Incentive Compensation in Performance-Vesting Equity Awards | | No Tax Gross-Ups in Connection with Change-in-Control Severance | | | Incentive Plan Goals Aligned with Stockholder Interests | | No Executive Pensions | | | Minimum one-year vesting on all equity awards | | No Fixed-Term Employment Agreements | | | Market-Leading Stock Ownership and Retention Guidelines | | No Stock Option Repricing | | | Capped Incentive Opportunities | | No Hedging or Pledging of Company Stock | | | Mitigation of Risk Through Compensation Risk Assessments | | | | | Incentive Compensation Clawback Policy | | | | | Independent Compensation Consultant | | |
2024 Executive Compensation Decisions
| Name/Title | Annual Salary | | | 2024 MIP Target | | LTI Target Grant Value | Target TDC | | | 12/31/23 | 12/31/24 | % Change | as % of Salary | Value | | | | Vicente Reynal, Pres. & CEO | $1,144,000 | $1,144,000 | 0% | 150% | $1,716,000 | $7,500,000 | $10,360,000 | | Vikram Kini, SVP & CFO | $625,000 | $655,000 | 5% | 85% | $556,750 | $1,950,000 | $3,161,750 | | Michael Weatherred, SVP, Ingersoll Rand Execution Excellence (IRX), Business and Commercial Excellence | $460,000 | $496,000 | 8% | 75% | $372,000 | $1,100,000 | $1,968,000 | | Andrew Schiesl, GC & CCO (Compliance) & Sec. | $520,000 | $535,000 | 3% | 75% | $401,250 | $1,175,000 | $2,111,250 | | Kathleen Keene, SVP, Chief Human Resource Officer | $400,000 | $432,000 | 8% | 65% | $280,800 | $650,000 | $1,362,800 |
2024 Executive Compensation Decisions
Base Salary In assessing potential adjustments to compensation for its NEOs, the Committee considers each executive’s positioning relative to the market data provided by its independent compensation consultant, as well as other factors such as individual performance, historical compensation adjustments, tenure and succession. Base salary is the only fixed component of NEO cash compensation. An NEO’s base salary is commensurate with the individual’s level of responsibility and provides them with a level of predictable and stable cash income. The Committee believes that base salaries for executives should reflect competitive levels of pay and factors unique to each executive such as experience and breadth of responsibilities, performance, individual skill set, time in the role and internal pay parity. Base salaries are reviewed annually or at other times when appropriate (for example, promotions, changes in job scope and/or responsibilities, etc.) and may be increased from time to time pursuant to such review. Except for our CEO, who did not receive a base salary increase, all NEOs received a base salary increase in 2024 to keep compensation competitive with market medians and our compensation philosophy. Annual Cash Bonus Opportunity To tie a significant portion of their annual cash compensation to actual performance, each NEO is eligible for an annual cash bonus award under our Management Incentive Plan (MIP) based on the achievement of our financial goals for the Company and their respective business units against preset goals. The MIP pays out to participants based on levels of performance against preset goals for financial metrics established by the Committee. To be eligible for a payout, a participant must be employed by the Company through the payment date or have an Approved Retirement (as defined below under “Potential Payments to Named Executive Officers upon Termination of Employment or Change in Control—Treatment of Outstanding Equity Awards in the Event of Termination of Employment or Change in Control”) on or after the end of the year but before the payment date. A target annual bonus opportunity, expressed as a percentage of an NEO’s base salary rate at year-end, is established annually and may be adjusted from time to time by the Committee in connection with a NEO’s promotion or performance. None of NEOs received an increase in their target annual bonus opportunity in 2024. 2024 Performance Measures For 2024, annual cash bonus awards for Corporate NEOs (Messrs. Reynal, Kini, Weatherred and Schiesl, and Ms. Keene) were based on the achievement of overall corporate performance relative to Adjusted EPS and Free Cash Flow goals. The following tables detail the MIP targets and resulting payout levels associated with a corresponding performance level against the Adjusted EBITDA and Free Cash Flow targets for our NEOs who received a payout under the MIP plan. The payout percentage for performance between such levels is determined on a linear basis.
2024 Executive Compensation Decisions
| 2024 MIP Structure Program Payout | | | | | | | | Corporate Metrics | Metric Weighting | Threshold 50% Payout | Target 100% Payout | Maximum 200% Payout | Actual Result | Weighted Payout(1) | | Adjusted EPS | 75% | $2.95 | $3.28 | $3.60 | $3.39 | 105% | | Free Cash Flow(2) | 25% | $1,158 | $1,287 | $1,413 | $1,247 | 85% | | Total Weighting | 100% | | | | | |
2024 Executive Compensation Decisions
The Committee did not apply any adjustments to the calculated results for NEOs under the MIP in 2024. The actual calculated MIP payout for our NEOs resulted in a formulaic payout factor of 100% of target. The following table sets forth our actual payout percentage with respect to each performance metric applicable to our NEOs and illustrates the annual cash incentive awards payable to our NEOs under the 2024 MIP in light of these performance results.
2024 Executive Compensation Decisions
| | | Adjusted EPS (75%) | | Free cash flow (25%) | | | | | | NEO | Target MIP Amount $ | 2024 % of Tgt Achieved | Weighted Payout % | 2024 % of tgt achieved | weighted Payout % | Calc’d Payout Factor | Approved Payout Factor | 2024 MIP Payout $ | | Vicente Reynal | 1,716,000 | 101% | 79% | 97% | 21% | 100% | 100% | 1,716,000 | | Vikram Kini | 556,750 | 101% | 79% | 97% | 21% | 100% | 100% | 556,750 | | Michael Weatherred | 372,000 | 101% | 79% | 97% | 21% | 100% | 100% | 372,000 | | Andrew Schiesl | 401,250 | 101% | 79% | 97% | 21% | 100% | 100% | 401,250 | | Kathleen Keene | 280,800 | 101% | 79% | 97% | 21% | 100% | 100% | 280,800 |
2024 Executive Compensation Decisions
Long-Term Equity Incentive Awards 2024 Annual PSU, RSU and Stock Option Awards Our long-term incentive awards, established through the Company’s Amended and Restated 2017 Omnibus Incentive Plan (as amended by the First Amendment, dated April 27, 2021, the “2017 Omnibus Incentive Plan”), are intended to drive executives to deliver strong stock performance, align our executives’ compensation with long-term value creation, and to attract and retain highly qualified executives. The details of these awards are as follows:
2024 Executive Compensation Decisions
| • | 50% in Performance Stock Units (PSUs). The PSUs have a 3-year performance period that runs from January 1, 2024 through December 31, 2026 (the “Performance Period”) with vesting based on Relative TSR vs. the S&P 500 Industrials as follows: |
2024 Executive Compensation Decisions
○ Threshold Performance: 35th percentile ranking vs. index = 50% payout ○ Target Performance: 55th percentile ranking vs. index = 100% payout ○ Superior Performance: 75th (or greater) percentile ranking vs. index = 200% payout (capped) To ensure better alignment of payouts with stockholder value creation, even if relative performance would have resulted in a payout above target, the payout under the PSUs is capped at target if the Company’s absolute TSR is negative. TSR is calculated as the appreciation in the price per share of a company’s common stock during the Performance Period (assuming any dividends or distributions are reinvested), expressed as a percentage. Relative TSR is based on the percentile rank of the Company’s TSR against the TSRs of the companies and entities that, on January 1, 2024, comprised the S&P 500 Industrials.(4)
2024 Executive Compensation Decisions
| • | 25% in Time-Vesting Stock Options. Stock Options vest in equal, annual installments over a four-year period, and expire 10 years from the grant date. |
2024 Executive Compensation Decisions
| • | 25% in Time-Vesting Restricted Stock Units (RSUs). RSUs vest in equal, annual installments over a four-year period. |
2024 Executive Compensation Decisions
| NEO | PSUs (50%) $ | RSUs (25%) $ | Stock Options (25%) $ | | Vicente Reynal | 3,750,000 | 1,875,000 | 1,875,000 | | Vikram Kini | 975,000 | 487,500 | 487,500 | | Michael Weatherred | 550,000 | 275,000 | 275,000 | | Andrew Schiesl | 587,500 | 293,750 | 293,750 | | Kathleen Keene | 325,000 | 162,500 | 162,500 |
2024 Executive Compensation Decisions
Target annual equity award values were determined based on our competitive market analysis and our compensation philosophy. The awards do not vest until the vesting criteria and/or time periods are satisfied, and actual value realized by executives is dependent on the stock price at the time of vesting thereby aligning payouts with the change in stockholder value. These grant amounts were translated into a target number of performance stock units, restricted stock units and stock options by taking such dollar amount and dividing it by the per share or per option “fair value” that was used for reporting the compensation expense associated with the grant under applicable accounting guidance. This “fair value” was based in part on the per share closing price of our common stock on the NYSE on the date of grant. Following a market assessment of executive compensation levels conducted by its independent compensation consultant, the Committee noted that compensation levels for certain executives were below market median and well below the Company’s intended compensation philosophy (based on the Company’s 2024 Peer Group as defined below). As a result, the Committee approved additional long-term incentive awards which were granted in August 2024, to Vikram Kini, Michael Weatherred, and Kathleen Keene as a modification to their annual compensation packages. These grants were intended to be 2024 market adjustments and are expected to be included going forward in the annual long-term compensation grants that the Company provides to these executives. This additional value will be delivered in the same mix as approved by the Committee each year for long-term compensation grants generally (i.e., a combination of PSUs, stock options and RSUs) with at least 50% being in the form of PSUs.
2024 Executive Compensation Decisions
| NEO | RSUs (50%) $ | Stock Options (50%) $ | | Vikram Kini | 325,000 | 325,000 | | Michael Weatherred | 350,000 | 350,000 | | Kathleen Keene | 175,000 | 175,000 |
2024 Executive Compensation Decisions
CEO Performance-Conditioned Stock Options Earned in Respect of 2023 Performance and Granted in 2024 An important part of Mr. Reynal’s Performance-Based Award approved by the Committee in 2022 was an agreement to grant Mr. Reynal stock options to purchase 100,000 shares for each fiscal year from 2022 through 2026 in which the Company achieves adjusted EPS (as defined in the Performance-Based Award) growth of more than 12% over the prior year. For fiscal year 2023, the Company achieved adjusted EPS growth of 26%. As a result, in February 2024, the Committee certified that the second tranche of the CEO’s performance-conditioned stock options had been earned, and Mr. Reynal was awarded stock options to purchase 100,000 shares. Although the commitment to grant these options was contained in the 2022 Performance Based Award, since these options were granted in 2024, they are required to be treated as 2024 compensation in the Summary Compensation Table. However, the Committee views this grant of 100,000 options as an integral part of the overall terms of the 2022 Performance Based Award and does not view them as part of Mr. Reynal’s annual 2024 compensation. These options do not vest until the fifth anniversary of the grant date and will be forfeited if Mr. Reynal resigns before such date, and as such, provide a significant retention incentive.
2022 CEO Performance-Based Leadership Equity Incentive Award
2022 CEO Performance-Based Leadership Equity Incentive Award Background As previously disclosed, in September 2022, the Committee approved the grant of a Performance-Based Leadership Equity Incentive Award (the “Performance-Based Award”) to Vicente Reynal, CEO and Chairman of the Board, under the 2017 Omnibus Incentive Plan. The Committee also approved, effective as of September 1, 2022, a new employment agreement with Mr. Reynal (the “Employment Agreement”). Rationale The Committee believes that Mr. Reynal’s vision and leadership have been integral to the Company’s growth and success, as reflected by the significant stockholder value creation during his tenure as CEO. Therefore, the Committee approved the Performance-Based Award and Employment Agreement to incentivize Mr. Reynal to continue this track record of financial outperformance and retain him as the Company’s CEO for the foreseeable future. In order to make the Performance-Based Award more effective at achieving its goal of retention, the Company entered into a revised Employment Agreement with Mr. Reynal for an initial term of five years. This new agreement also includes increased non-competition and non-solicitation covenants, which would remain in effect for two years after termination – an increase from the one year stipulated in the prior agreement. In line with its executive compensation philosophy, the Committee expressly designed the Performance-Based Award to: (i) drive the creation of long-term stockholder value, (ii) further strengthen the alignment of Mr. Reynal’s interests with those of long-term stockholders, and (iii) encourage the retention of Mr. Reynal for the next five to ten years. The Committee deliberately set very challenging, double-digit Adjusted EPS and stock price growth goals. During the first two years following the grant, we have exceeded these targets, resulting in industry-leading stock price performance. The Committee views this as confirmation of the challenging nature of the goals. Design Features of The Performance-Based Award
2022 CEO Performance-Based Leadership Equity Incentive Award
| Features of the Performance-Based Award | Drives Exceptional Long-Term Stockholder Value Creation | Aligns Interests With Those of Long-term Stockholders | Encourages Retention | | 100% Performance-based Incentive | | | | | 5-year Performance Period | | | | | Drives Robust Earnings Growth and Stockholder Value Creation | | | | | No Guaranteed Compensation | | | | | Payout Aligned with Value Creation | | | | | Distinct and Discrete Metrics | | | | | 5-year Cliff-Vesting Performance-Contingent Stock Option Grant Extends Retentive Value and Performance Period | | | | | Change in Control (“CIC”) Provisions Protect Against Windfall Payouts and Require “Double Trigger” for Accelerated Vesting | | | |
Components of the Performance-Based Award
| (i) Performance Stock Units (PSUs) that vest only if the Company achieves earnings growth objectives and robust stockholder value creation and Mr. Reynal remains employed for at least five years. PSUs would be earned and vested based upon the Company achieving earnings growth objectives (the “Adjusted EPS PSUs”) and robust stockholder value creation (the “TSR PSUs”). In the event that the threshold Adjusted EPS CAGR Goal (as described below) is not achieved during the five-year performance period, the Adjusted EPS PSUs will be automatically forfeited. Similarly, should the TSR Target Price (as defined below) not be achieved during the five-year performance period, the TSR PSUs will automatically be forfeited. The TSR Target Price was achieved on March 6, 2024. | | (ii) Stock Options will be granted only with respect to fiscal years 2022 through 2026 if, and only if, the Company’s Adjusted EPS growth (determined using the same standard used for the Adjusted EPS PSUs) in any such fiscal year is at least 12%, with any stock options granted in the following fiscal year on the same date on which the Company grants its annual long-term incentive plan awards to its senior executives. a. To increase the incentive and retentive value, each grant of stock options will have an exercise price equal to the closing price of the Company’s common stock on the date of grant, and will cliff vest on the fifth anniversary of the grant date, subject to Mr. Reynal’s continued employment through such respective vesting date. b. If the Adjusted EPS goal is not achieved, no stock options would be granted for that fiscal year under this component of the award. | | a. Adjusted EPS PSUs: 75% of the PSUs (750,000 PSUs) are eligible to vest at the end of the 5-year period based on the level of compounded annual growth rate (“CAGR”) of the Company’s Adjusted EPS over the 5-year performance period beginning on January 1, 2022 and ending on December 31, 2026 (the “EPS Performance Period”) relative to the fiscal year 2021 Adjusted EPS baseline. | | | | Adj. EPS CAGR Goals | # of PSUs Eligible to Vest | | | ≥10% | 250,000 | | | ≥12% | 500,000 | | | ≥15% | 750,000 | | | b. TSR PSUs: 25% of the PSUs (250,000) would be earned (but not vested) only if the TSR Target Price(5) is achieved during the five-year period commencing on the date of grant (“TSR Performance Period”). If earned, the award vests at the end of TSR Performance Period only if Mr. Reynal has been continuously employed by the Company throughout the TSR Performance Period. The TSR Target Price was achieved on March 6, 2024. | | |
Components of the Performance-Based Award
A discussion of the termination and Change in Control provisions of Mr. Reynal’s Performance-Based Award is provided later under “Compensation Discussion and Analysis – Treatment of Outstanding Equity Awards in the Event of Termination of Employment or Change in Control” below.
2025 Compensation Actions
2025 Compensation Actions 2022-2024 PSU Award Certified in 2025 On February 10, 2025, the Committee certified that the TSR performance for the 2022-2024 performance period was 74%, which placed the Company in the 77th percentile of S&P 500 Industrial companies (which was the comparator group for TSR measurement approved at the time of grant), resulting in a maximum payout of 200% of target. The resulting PSUs that vested with respect to each NEO are shown below:
2025 Compensation Actions
| NEO | Target # PSUs Granted in 2022 | 2022-24 PSU Payout Factor | # PSUs Earned at 2024YE (Distributed in 2025) | | Vicente Reynal | 65,925 | 200% | 131,850 | | Vikram Kini | 13,185 | 200% | 26,370 | | Michael Weatherred | 8,005 | 200% | 16,010 | | Andrew Schiesl | 10,359 | 200% | 20,718 | | Kathleen Keene | 4,238 | 200% | 8,476 |
2025 Compensation Actions
CEO Performance-Conditioned Stock Options Earned in Respect of 2024 Performance and Granted in 2025 For fiscal year 2024, adjusted EPS calculated under the terms of the CEO’s Employment Agreement, which utilizes a fixed tax rate, would have resulted in as reported adjusted EPS growth of 12%. As a result, in February 2025, the Committee certified that the third tranche of the CEO’s performance-conditioned stock options had been earned, and on February 26, 2025, Mr. Reynal was awarded stock options to purchase 100,000 shares. These options do not vest until the fifth anniversary of the grant date and will be forfeited if Mr. Reynal resigns before such date, and as such, provide a significant retention incentive.
The Decision-Making Process
| • | Compensation practices of Peer Group companies (as defined below) |
The Decision-Making Process
The Role of Management. Our CEO makes recommendations to the Committee regarding compensation for the executive officers other than himself. No member of management participates in discussions with the Committee regarding his or her own compensation. The Role of the Independent Compensation Consultant. Pay Governance served as the Committee’s independent compensation consultant in 2024. During 2024, the Committee directed Pay Governance to provide its expertise and analysis on a variety of topics, including the compensation peer group review, a competitive market assessment for executive and non-employee director compensation levels, a review of governance matters pertaining to executive and employee compensation and the structure of short- and long-term incentive programs. The Committee determined that Pay Governance was independent from management and that Pay Governance’s work had not raised any conflicts of interest. Pay Governance reported directly to the Committee and the Committee had the sole authority to approve Pay Governance’s compensation and to terminate the relationship at any time. Compensation Peer Group. The Committee believes it is important to understand current trends in compensation practices and pay levels for companies that are comparable to Ingersoll Rand. To assist the Committee in this analysis, the Committee, together with its compensation consultant and input from management, develops a compensation peer group of comparable companies against which it performs benchmarking (the “Peer Group”). The Committee reviews the appropriateness of the Peer Group on an annual basis to determine if changes are required. When considering companies for inclusion or exclusion in the Peer Group, the Committee reviews companies that are comparable in revenue and market capitalization to the Company, as the Committee believes these metrics are key determinants of compensation levels. Companies selected generally have revenue ranging from 0.25x to 3x Ingersoll Rand’s revenue and market capitalization. In addition to size, companies are in comparable industries where we compete for executive talent. In 2024, the below companies comprised the Peer Group used for compensation decisions:
The Decision-Making Process
The Committee does not rely solely on data from the Peer Group in establishing compensation levels and practices but uses it to support the application of the Company’s compensation philosophy and other factors described above when setting executive compensation. In addition to Peer Group data, the Committee may also consider survey compensation data based on companies of similar size to Ingersoll Rand. The Committee recognized that the Company has had significant growth in revenue and market capitalization since the establishment of the current Peer Group as well as a significant change in focus toward high-growth sustainable end markets such as clean energy, food, life sciences, and water (e.g., in 2021, life science end markets represented 9% of revenue vs 18% in 2024). Given these changes, the Committee decided to conduct, in consultation with its independent compensation consultant, a wholesale review of the peer group to be used in 2025. As part of this process, the Committee approved changes to the peer group that included the removal of Flowserve, Nordson and Pentair plc and the addition of Agilent Technologies, Avantor, Becton Dickinson and TransDigm Group. The Committee believes that these changes resulted in a group of peer companies that are more comparable in size, complexity and end market exposure than the group was prior to such changes. The resulting 13-company peer group to be used for 2025 compensation decisions is set forth below:
Equity Grant Policies
Equity Grant Policies The Committee generally grants awards under the Company’s long-term equity incentive program in the first quarter of each fiscal year and the Company endeavors to avoid timing such grants around the filing of periodic reports or current reports that may contain material non-public information. The Company has not timed the disclosure of material non-public information for the purpose of affecting the value of executive compensation.
Employment Agreements
Employment Agreements As previously noted, we entered into a new employment agreement with Mr. Reynal in September 2022, which replaced his prior offer letter. We entered into offer letters setting forth initial compensation and benefits, as well as severance terms, with Messrs. Schiesl and Weatherred at the time of their initial employment. Full descriptions of the material terms of these offer letters and employment agreements, see “—Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards in 2024.”
Severance and Change in Control Agreements
Severance and Change in Control Agreements The Company believes that reasonable and appropriate severance and change in control benefits are necessary in order to be competitive in the Company’s executive attraction and retention efforts. As discussed below, with the exception of Mr. Kini and Ms. Keene who do not have an offer letter, the offer letters we entered into with our NEOs provide for certain payments, rights and benefits to the NEOs upon an involuntary termination of employment without “cause” or a termination by the NEO for “good reason” (as such terms are defined in “Potential Payments to Named Executive Officers Upon Termination of Employment or Change in Control-Severance Arrangements and Restrictive Covenants” below). In addition, our equity award agreements provide for accelerated vesting upon a change in control in certain circumstances and upon certain qualifying terminations of employment, as more fully described above under “—Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards in 2024—Treatment of Outstanding Equity Awards in the Event of Termination of Employment or Change in Control.”
Risk Management and Mitigation of Compensation Policies and Practices
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | | Vicente Reynal Chairman, President and Chief Executive Officer | 2024 | 1,144,000 | — | 7,392,406 | 6,094,979 | 1,716,000 | 372,697 | 16,720,080 | | | 2023 | 1,133,000 | — | 6,315,820 | 4,466,985 | 3,432,000 | 175,945 | 15,523,750 | | | 2022 | 1,075,000 | — | 49,547,938 | 1,749,996 | 1,963,500 | 185,343 | 54,521,777 | | Vikram Kini SVP and Chief Financial Officer | 2024 | 647,500 | — | 2,246,860 | 812,446 | 556,750 | 142,747 | 4,406,303 | | | 2023 | 600,000 | — | 1,624,013 | 449,980 | 1,062,500 | 68,599 | 3,805,091 | | | 2022 | 518,750 | — | 1,185,766 | 349,991 | 531,038 | 90,115 | 2,675,660 | | Michael Weatherred SVP, IR Execution Excellence (IRX), Business and Commercial Excellence | 2024 | 496,000 | — | 1,434,083 | 624,967 | 372,000 | 31,368 | 2,958,418 | | | 2023 | 452,500 | — | 902,235 | 249,994 | 690,000 | 62,755 | 2,357,485 | | | 2022 | 426,250 | — | 719,903 | 212,488 | 383,775 | 83,983 | 1,826,399 | | Andrew Schiesl SVP, General Counsel, Chief Compliance Officer and Secretary | 2024 | 531,250 | — | 1,158,105 | 293,718 | 401,250 | 114,740 | 2,499,062 | | | 2023 | 515,000 | — | 1,037,546 | 287,488 | 780,000 | 70,318 | 2,690,353 | | | 2022 | 500,000 | — | 931,610 | 274,985 | 446,250 | 108,427 | 2,261,272 | | Kathleen Keene SVP, Chief Human Resource Officer | 2024 | 424,000 | | 815,412 | 337,438 | 280,800 | 76,866 | 1,934,517 |
Treatment of Outstanding Equity Awards in the Event of Termination of Employment or Change in Control
Treatment of Outstanding Equity Awards in the Event of Termination of Employment or Change in Control The outstanding RSU and option awards we have granted to our NEOs provide for accelerated vesting in the event of certain qualifying terminations of employment as described below and/or, in certain circumstances described below, in connection with a change in control. Annual Equity Awards Effect of Qualifying Termination on Vesting of PSUs, RSUs, and Options. In the event of an NEO’s termination without Cause (as defined below) or Approved Retirement (as defined below), such NEO’s outstanding RSUs and options that would have vested on the first vesting date otherwise scheduled to occur immediately following the date of such termination without Cause or Approved Retirement will vest as of the date of such termination without Cause or Approved Retirement, as applicable. In the event of an NEO’s death or Disability (as defined in the 2017 Omnibus Incentive Plan), such NEO’s outstanding RSUs and options that would have vested on the first and second vesting date otherwise scheduled to occur immediately following the date of such death or Disability shall vest as of the date of death or Disability. Notwithstanding the foregoing, if the Company receives a legal opinion that there has been a legal judgment and/or legal development in the NEO’s jurisdiction that would likely result in the favorable treatment that applies to the RSUs and options if the NEO’s termination occurs as a result of NEO’s Approved Retirement being deemed unlawful and/or discriminatory, the Company may determine that the NEO’s Retirement (as defined below) is no longer an Approved Retirement. In the event of an NEO’s termination without Cause, Approved Retirement or death or Disability occurring after the expiration of the Performance Period and before the vesting date, the PSUs that would have vested on the vesting date will vest on the vesting date. Effect of a Change in Control on Vesting of PSUs, RSUs, and Options. In the event of an NEO’s termination without Cause during the two-year period following a Change in Control (as defined in our 2017 Omnibus Incentive Plan), all of such NEO’s outstanding RSUs and options will immediately vest as of the date of such termination without Cause. With respect to the PSUs, if a Change in Control occurs during the Performance Period, then the calculation of the number of PSUs that will vest is conducted as though (i) the last day of the Performance Period was the date of the Change in Control and (ii) the Company’s stock price at the end of the Performance Period was the price per share of the Company’s common stock payable in connection with such Change in Control. The number of PSUs resulting from such calculation will be the number that will vest upon the consummation of such Change in Control. For purposes of the foregoing: “Approved Retirement,” “Cause,” “Detrimental Activity,” and “Retirement” have the definitions set forth in the relevant grant agreement or the 2017 Omnibus Incentive Plan, as applicable. CEO Performance-Based Leadership Equity Incentive Award Effect of Qualifying Termination or Termination due to Death or Disability on Vesting of the Adjusted EPS PSUs Vesting of the Adjusted EPS PSUs is subject to Mr. Reynal’s continued employment through December 31, 2026; however, if he is terminated by the Company without Cause or he resigns for Good Reason (each, a “Qualifying Termination” and as defined in his employment agreement) or he dies or becomes permanently disabled, in each case, after the expiration of the EPS Performance Period and before the date on which the Committee certifies the level of performance achieved (the “EPS PSU Vesting Date”), he remains entitled to receive the number of Adjusted EPS PSUs that the Committee certifies has become vested. If Mr. Reynal dies, becomes permanently disabled or experiences a Qualifying Termination prior to the end of the EPS Performance Period, the calculation to determine the number of Adjusted EPS PSUs, if any, that will become vested will be conducted as though (i) the last day of the EPS Performance Period was the date on which such termination occurs and (ii) the Company’s Adjusted EPS will be the Adjusted EPS for the last four completed fiscal quarters during the EPS Performance Period prior to the date of such termination (or, if there are not four completed fiscal quarters at the time of such termination, then all of the Adjusted EPS PSUs will be forfeited on the date of such termination) and, if the reason for such termination is a Qualifying Termination, the number of Adjusted EPS PSUs that will become vested will be prorated by the number of days Mr. Reynal was employed during the EPS Performance Period. Effect of a Change in Control on Vesting of the Adjusted EPS PSUs If a change in control (as defined in the 2017 Omnibus Incentive Plan) occurs following the expiration of the EPS Performance Period but prior to the EPS PSU Vesting Date, then the Adjusted EPS PSUs will vest on the closing of such change in control based on the achievement of Adjusted EPS in accordance with the table above under “Potential Payments to Named Executive Officers upon Termination of Employment or Change in Control” so long as Mr. Reynal has remained in continuous employment with the Company through such change in control. If a change in control occurs during the EPS Performance Period and the award is not assumed, then the calculation to determine the number of Adjusted EPS PSUs that will become eligible to vest will be conducted as though (i) the last day of the EPS Performance Period was the date of the change in control and (ii) the Company’s Adjusted EPS will be measured based on the last four completed fiscal quarters (or, if there are not four completed fiscal quarters at the time of such change in control, then all of the Adjusted EPS PSUs will be forfeited upon the change in control). The number of Adjusted EPS PSUs, if any, resulting from such calculation will become vested on the closing of the change in control so long as Mr. Reynal has remained continuously employed through such change in control. If a change in control occurs prior to the expiration of the EPS Performance Period and the award is assumed by the successor to the Company, and Mr. Reynal is subsequently terminated due to death, permanent disability or a Qualifying Termination following such change in control but prior to the end of the EPS Performance Period, the Adjusted EPS PSUs will become vested in full on the date of such termination. Effect of Qualifying Termination or Termination due to Death or Disability on Vesting of the TSR PSUs If the TSR Target Price is achieved prior to the end of the TSR Performance Period and Mr. Reynal is terminated due to his death or permanent disability prior to the expiration of such performance period, then all of the TSR PSUs will vest upon such termination. If the TSR Target Price is achieved prior to the end of the TSR Performance Period and Mr. Reynal experiences a Qualifying Termination prior to the end of the TSR Performance Period, then he will vest pro-rata in a number of TSR PSUs based on the number of days he was employed with the Company during the TSR Performance Period. The TSR Target Price was achieved on March 6, 2024. Effect of a Change in Control on Vesting of the TSR PSUs If a change in control occurs following the date on which the TSR Target Price is achieved, then all of the TSR PSUs will become fully vested immediately prior to such change in control subject to Mr. Reynal’s continued employment through such change in control.
Treatment of Outstanding Equity Awards in the Event of Termination of Employment or Change in Control
Subject to Mr. Reynal’s continued employment through such change in control, if a change in control occurs during the TSR Performance Period and prior to the date on which the TSR Target Price is achieved, and the award is not assumed by the successor to the Company, then the TSR Performance Period will end on the date of the change in control and (i) if the sum of (A) the price per share of the Company’s common stock payable in connection with such change in control, plus (B) the cumulative value of any dividends paid during the TSR Performance Period through and including the date of the change in control equals or exceeds the TSR Target Price, the TSR PSUs will vest immediately prior to the closing of such change in control, and (ii) if such sum is less than the TSR Target Price, all of the TSR PSUs will automatically be forfeited immediately prior to the closing of such change in control. If a change in control had occurred on December 31, 2024 and the TSR PSUs were not assumed by the successor to the Company, no vesting of the TSR PSUs would have occurred based on the application of the above-described formula. If a change in control occurs prior to the date on which the TSR Target Price is achieved and the TSR PSUs are assumed by the successor to the Company and Mr. Reynal is terminated due to death, permanent disability or a Qualifying Termination following such change in control but prior to the end of the TSR Performance Period, the TSR PSUs will become fully vested on the date of such termination. The TSR Target Price was achieved on March 6, 2024. Effect of Qualifying Termination on Vesting of the Performance-Conditioned Stock Option Grants If Mr. Reynal experiences a Qualifying Termination or he dies or becomes permanently disabled, the number of shares subject to the stock options that will become vested on the date of such termination will be determined as if the stock options had instead vested 20% per year over five years from the date of grant and, solely in the event of a termination due to his death or permanent disability, Mr. Reynal will become immediately vested in an additional 20% of the stock options. Effect of a Change in Control on Vesting of the Performance-Conditioned Stock Option Grants If a change in control occurs and the stock options are not assumed, then the stock options will become vested in full immediately prior to the change in control. If the stock options are assumed by the successor to the Company, and Mr. Reynal is subsequently terminated due to death, disability or a Qualifying Termination, the stock options will become fully vested on the date of such termination. DIRECTOR COMPENSATION IN FISCAL 2024
Treatment of Outstanding Equity Awards in the Event of Termination of Employment or Change in Control
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Total ($) | | Kirk E. Arnold | 80,625 | 212,500 | 293,125 | | William P. Donnelly | 80,625 | 252,500 | 333,125 | | Gary D. Forsee | 80,625 | 202,500 | 283,125 | | Jennifer Hartsock | 80,625 | 202,500 | 283,125 | | John Humphrey | 80,625 | 217,500 | 298,125 | | Marc E. Jones | 80,625 | 207,500 | 288,125 | | Vicente Reynal | — | — | — | | Julie A. Schertell | 80,625 | 192,500 | 273,125 | | JoAnna L. Sohovich | 80,625 | 202,500 | 283,125 | | Mark P. Stevenson | 80,625 | 192,500 | 273,125 | | Tony L. White(2) | 39,375 | — | 39,375 |
Treatment of Outstanding Equity Awards in the Event of Termination of Employment or Change in Control
| 1. | Represents the aggregate grant date fair value of stock awards granted during 2024 computed in accordance with FASB ASC Topic 718. The aggregate number of RSUs outstanding as of December 31, 2024 for each director was as follows: Ms. Arnold: 2,351; Mr. Donnelly: 2,793; Mr. Forsee: 2,240; Ms. Hartsock: 2,240; Mr. Humphrey: 2,406; Mr. Jones: 2,295; Mr. Stevenson: 2,129; Ms. Schertell: 2,129; and Ms. Sohovich: 2,240. The RSUs of Mses. Arnold, Schertell, Sohovich and Hartsock and Messrs. Donnelly, Forsee, Humphrey, Jones, and Stevenson vested in full on February 27, 2025. The 663 RSUs and 700 RSUs granted to Mses. Schertell and Sohovich, respectively, in connection with their appointments to the Board of Directors on October 2, 2023, vested in full on November 7, 2024. |
Treatment of Outstanding Equity Awards in the Event of Termination of Employment or Change in Control
| 2. | Mr. White retired from our Board of Directors as of our 2024 Annual Meeting of Stockholders so was only paid cash fees for a portion of the year. In connection with his departure, he forfeited his 2,129 RSUs granted on February 27, 2024, which had a grant date fair value of $192,500. |
Description of Director Compensation
Description of Director Compensation At the beginning of 2024, the director compensation program consisted of the following components for our non-employee directors:
Description of Director Compensation
| • | Annual cash retainer of $75,000, payable quarterly in arrears and prorated for any partial year of service; |
Description of Director Compensation
| • | Annual equity award having a fair market value of $175,000, payable in RSUs, which vests on the anniversary of the grant date; |
Description of Director Compensation
| • | Additional annual equity award having a fair market value of $25,000, payable in RSUs, which vests on the anniversary of the grant date, for serving as the chairperson of our Audit Committee and an additional annual equity award having a fair market value of $10,000, payable in RSUs, which vests on the anniversary of the grant date, for serving as a member of such committee, prorated, in each case, for any partial year of service; |
Description of Director Compensation
| • | Additional annual equity award having a fair market value of $15,000, payable in RSUs, which vests on the anniversary of the grant date, for serving as the chairperson of our Committee, Nominating and Corporate Governance Committee or our Sustainability Committee, prorated, in each case, for any partial year of service; and |
Description of Director Compensation
| • | Additional annual equity award having a fair market value of $35,000, payable in RSUs, which vests on the anniversary of the grant date, for serving as our Lead Director. |
Description of Director Compensation
Following a market assessment of board of director compensation among the peers, the Board approved the following changes to the director compensation program for 2024:
Description of Director Compensation
| • | Increased annual retainer from $75,000 to $82,500 (effective April 1, 2024) |
Description of Director Compensation
| • | Increased annual RSU award from $175,000 to $192,500 (effective for February 2024 grant) |
Description of Director Compensation
| • | Increased annual retainer to chair of the Compensation Committee from $15,000 to $20,000 (effective April 1, 2024) |
Description of Director Compensation
Our directors are not paid any fees for attending meetings, however, our directors are reimbursed for reasonable travel and related expenses associated with attendance at Board or committee meetings. While the Board reviews director compensation annually, it generally makes adjustments every two to three years. As such, in February 2025, the Board determined that no changes to the director compensation program were necessary for 2025. Stock Ownership and Retention Policy Our directors are also subject to the stock ownership guidelines and retention policy described under “Compensation Discussion and Analysis—Other Compensation Practices and Policies that Align Our NEOs to Our Stockholders—Stock Ownership and Retention Policy.” Compensation Committee Interlocks and Insider Participation During 2024, each of Messrs. Jones, Stevenson and Ms. Arnold and Ms. Hartsock served on our Compensation Committee. None of the current members of our Compensation Committee has at any time been one of our executive officers or employees. None of our executive officers currently serves, or has served during the last completed fiscal year, on the compensation committee or board of directors of any other entity that has one or more executive officers serving as a member of our Board of Directors or Compensation Committee. CEO Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K (“Item 402(u)”), the Company is providing the following information regarding the relationship of the annual total compensation of Vicente Reynal, our Chief Executive Officer (“CEO”) to the median all of our employees (except Mr. Reynal), calculated in a manner consistent with Item 402(u). For 2024, our last completed fiscal year:
Description of Director Compensation
| • | The median of the annual total compensation of all of our employees, excluding our CEO, was $69,342. |
Description of Director Compensation
| • | The annual total compensation of our CEO was $16,720,080. |
Description of Director Compensation
Based on this information, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all of our employees except our CEO was 241:1. If the impact of the 100,000 performance-based stock options that were part of the terms of the 2022 CEO’s Performance-Based Award were removed from the calculations:
Description of Director Compensation
| • | The annual total compensation of the CEO would have been $12,500,080. |
Description of Director Compensation
| • | The ratio of the annual total compensation of our CEO to the median of the annual total compensation of all of our employees except our CEO would have been 180:1. |
Description of Director Compensation
The median employee identified for calculating the ratio of the CEO’s annualized total compensation to that of all employees remains unchanged from the one disclosed in last year’s proxy statement. We are confident that no significant changes have been made to our employee population or compensation arrangements that would have a significant impact on our pay ratio disclosure. We determined that, as of December 31, 2024, our employee population consisted of 21,000 individuals, including full time, part time, and temporary employees. To identify our “median employee” from this employee population, we obtained annual base salary and target annual bonus information as of December 31, 2024 from our internal payroll records for each employee in our employee population. We believe this consistently applied compensation measure reasonably reflects annual compensation across our employee base. Base salary amounts for employees located outside the United States and compensated in currencies other than U.S. dollars were converted to U.S. dollars based on the average annual exchange rate for 2024. We then ranked the resulting annual base salary plus target annual bonus amounts for all of the employees in the employee population other than our CEO to determine our median employee. Once we identified our median employee, we combined all of the elements of such employee’s compensation for 2024 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K for the Summary Compensation Table. With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column of our Summary Compensation Table set forth above in this Proxy Statement. Pay vs. Performance (“PvP”) Disclosure As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K (“Item 402(v)”), the Company is providing the following information regarding the relationship between the executive compensation actually paid by the Company and the financial performance of the Company over the applicable time period of the disclosure, calculated in a manner consistent with Item 402(v). Refer to the “Compensation Discussion and Analysis” section of this Proxy Statement for a discussion on how the Committee determines named executive officer pay.
Description of Director Compensation
| Year | Summary Compensation Table Total for CEO $ | Compensation Actually Paid to CEO(a)(b)(c) $ | Average Summary Compensation Table Total for Non-CEO NEOs(d) $ | Average Compensation Actually Paid to Non-CEO NEOs(a)(b)(d) $ | Year-end value of $100 invested on 12/31/2019 | | Net Income ($mm) $ | Adjusted Diluted EPS(e) $ | | | | | | | Company TSR $ | S&P 500 IndustriaLs (TR) $ | | | | 2024 | 16,720,080 | 42,145,967 | 2,949,575 | 4,207,311 | 247.63 | 162.25 | 846 | 3.29 | | 2023 | 15,523,750 | 66,810,613 | 2,832,341 | 4,490,942 | 211.53 | 140.30 | 785 | 2.96 | | 2022 | 54,521,777 | 51,245,570 | 2,248,514 | 1,167,175 | 142.73 | 120.91 | 609 | 2.36 | | 2021 | 11,367,565 | 26,768,202 | 2,287,667 | 4,355,177 | 168.73 | 130.16 | 565 | 2.09 | | 2020 | 12,373,829 | 24,423,018 | 2,627,334 | 3,169,464 | 124.21 | 109.01 | (32) | 1.28 |
Description of Director Compensation
| (a) Deductions from, and additions to, total compensation in the Summary Compensation Table by year to calculate Compensation Actually Paid include: |
Description of Director Compensation
| | CEO | | | | | Average Other NEOs | | | | | | | 2024 $ | 2023 $ | 2022 $ | 2021 $ | 2020 $ | 2024 $ | 2023 $ | 2022 $ | 2021 $ | 2020 $ | | Summary Compensation Table (“SCT”) Total | 16,720,080 | 15,523,750 | 54,521,777 | 11,367,565 | 12,373,829 | 2,949,575 | 2,832,341 | 2,248,514 | 2,287,667 | 2,627,334 | | Adjustments for Pension | | | | | | | | | | | | Deduct: Change in Pension Value reported in SCT | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | Add: Amount added for current year service cost | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | | Add: Amount added for prior service cost impacting current year | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | | Total Adjustments for Pension | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | Adjustments for Equity Awards | | | | | | | | | | | | Deduct: Grant date values in SCT | (13,487,385) | (10,782,805) | (51,297,935) | (7,454,041) | (8,607,596) | (1,930,757) | (1,647,674) | (1,240,928) | (1,070,766) | (1,943,350) | | Add: Year-end fair value of unvested awards granted in the current year | 12,382,957 | 16,644,546 | 55,421,266 | 11,389,717 | 17,782,559 | 1,802,890 | 1,750,701 | 1,150,403 | 1,636,124 | 2,178,885 | | Add: Year-over-year difference of year-end fair values for unvested awards granted in prior years | 23,336,851 | 42,677,302 | (4,849,563) | 11,342,130 | 2,711,819 | 1,018,944 | 1,741,390 | (643,997) | 1,466,034 | 459,596 | | Add: Fair values at vest date for awards granted and vested in current year | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | Add: Difference in fair values between prior year-end fair values and vest date fair values for awards granted in prior years | 3,193,464 | 2,747,820 | (2,549,976) | 122,831 | 162,409 | 366,660 | 312,802 | (346,817) | 36,118 | (153,000) |
Description of Director Compensation
| | CEO | | | | | Average Other NEOs | | | | | | | 2024 $ | 2023 $ | 2022 $ | 2021 $ | 2020 $ | 2024 $ | 2023 $ | 2022 $ | 2021 $ | 2020 $ | | Deduct: Forfeitures during current year equal to prior year-end fair value | 0 | 0 | 0 | 0 | 0 | 0 | (498,619) | 0 | 0 | 0 | | Add: Dividends or dividend equivalents not otherwise included in total compensation | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | Total Adjustments for Equity Awards | 25,425,887 | 51,286,863 | (3,276,208) | 15,400,636 | 12,049,190 | 1,257,737 | 1,658,601 | (1,081,338) | 2,067,510 | 542,130 | | Compensation Actually Paid | 42,145,967 | 66,810,613 | 51,245,570 | 26,768,202 | 24,423,018 | 4,207,311 | 4,490,942 | 1,167,175 | 4,355,177 | 3,169,464 |
Description of Director Compensation
| (b) The following summarizes the valuation assumptions used for stock option awards included as part of Compensation Actually Paid: |
Description of Director Compensation
| — | Expected life of each stock option is based on the “simplified method” using an average of the remaining vest and remaining term, as of the vest/FYE date. |
Description of Director Compensation
| — | Strike price is based on each grant date closing price and asset price is based on each vest/FYE closing price. |
Description of Director Compensation
| — | Risk free rate is based on the Treasury Constant Maturity rate closest to the remaining expected life as of the vest/FYE date. |
Description of Director Compensation
| — | Historical volatility is based on daily price history for each expected life (years) prior to each vest/FYE date. Closing prices provided by S&P Capital IQ are adjusted for dividends and splits. |
Description of Director Compensation
| — | Represents annual dividend yield on each vest/FYE date. |
Description of Director Compensation
| (c) CEO Compensation Actually Paid in 2022 would have been $2,943,070 if Mr. Reynal’s special one-time Performance-Based Award was excluded from the calculation. We believe this is an appropriate alternative way to view Compensation Actually Paid in 2022 given the long-term nature of the award with vesting events occurring five to ten years after the grant date. In our view, including all of this long-term compensation as Compensation Actually Paid in a single year does not reflect the long-term nature of the award and overstates the actual compensation paid to Mr. Reynal in 2022. |
Description of Director Compensation
| (d) For the non-CEO NEOs, the amounts in the table reflect the average Summary Compensation Table total compensation and average Compensation Actually Paid for the following executives by year: |
Description of Director Compensation
2024: Vikram Kini, Michael Weatherred, Andrew Schiesl, Kathleen Keene 2023: Vikram Kini, Andrew Schiesl, Enrique Minarro-Viseras, Michael Weatherred, Gary Gillespie 2022: Vikram Kini, Andrew Schiesl, Enrique Minarro-Viseras, Michael Weatherred 2021: Vikram Kini, Andrew Schiesl, Enrique Minarro-Viseras, Michael Weatherred 2020: Vikram Kini, Andrew Schiesl, Enrique Minarro-Viseras, Michael Weatherred, Emily Weaver
Description of Director Compensation
| (e) Adjusted Diluted EPS is our “Company-Selected Measure” pursuant to Item 402(v). Amount presented for 2020 represents Supplemental Adjusted Diluted EPS. Adjusted Diluted EPS and Supplemental Adjusted Diluted EPS are non-GAAP metrics. For a reconciliation of Adjusted Diluted EPS to Diluted EPS (2024, 2023, 2022 and 2021) and of Supplemental Adjusted Diluted EPS to Diluted EPS (2020), see Annex A to this Proxy Statement. |
Relationship Between Compensation Actually Paid and Company Performance
Relationship Between Compensation Actually Paid and Company Performance As demonstrated in the table above, the Compensation Actually Paid values for our CEO and non-CEO NEOs are directionally aligned with our performance. The data demonstrates consistent year-over-year improvement for each of the financial performance measures displayed in the table (Net Income and Adjusted EPS) and for Company TSR (with the exception of Company TSR in 2022). In years where stock price has appreciated, Compensation Actually Paid exceeds the values reported in the Summary Compensation Table, whereas in the one reported year of stock price depreciation, Compensation Actually Paid is lower than the amounts reported in the Summary Compensation Table. The correlation would be even stronger if Mr. Reynal’s special one-time Performance-Based Award was not included in the Compensation Actually Paid calculation for 2022. For a discussion of the special circumstances of this award, see “Compensation Discussion and Analysis—2022 CEO Performance-Based Leadership Equity Incentive Award.” Over time, we expect that continued strong financial performance will positively influence Company TSR and increase Compensation Actually Paid, re-enforcing our commitment to pay-for-performance. As one of the key tenets of our compensation philosophy is to deliver the majority of compensation in long-term pay, each of our NEOs’ total pay packages are comprised primarily of equity awards; accordingly, we expect that the Compensation Actually Paid figures will generally move in tandem with Company TSR. Additionally, in each of the years disclosed in the table, Company TSR directionally tracked the S&P 500 Industrials Total Return and outpaced the S&P 500 Industrials’ return over the same measurement period. Tabular List of Financial Performance Measures Linked to Compensation Actually Paid The following financial performance measures represent, in the Company’s view, the most important financial measures used to link Compensation Actually Paid to the NEOs in 2024 to Company performance:
Relationship Between Compensation Actually Paid and Company Performance
| Adjusted Diluted EPS | | Free Cash Flow | | Relative TSR vs. S&P 500 Industrials |