DEF 14A of Caterpillar Inc
Filed Apr 30, 2025 · FY20240001308179-25-000529
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| | Filed by the Registrant | | Filed by a Party other than the Registrant |
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| Check the appropriate box: | | | | Preliminary Proxy Statement | | | Confidential, for Use of the Commission Only (as permitted by Rule 14A-6(E)(2)) | | | Definitive Proxy Statement | | | Definitive Additional Materials | | | Soliciting Material under §240.14a-12 |
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CATERPILLAR INC. (Name of Registrant as Specified in Its Charter) (Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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| Payment of Filing Fee (Check all boxes that apply): | | | | No fee required. | | | Fee paid previously with preliminary materials. | | | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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We are sending you these proxy materials in connection with Caterpillar’s solicitation of proxies, on behalf of its board of directors, for the 2025 Annual Meeting of Shareholders (Annual Meeting). Distribution of these materials is scheduled to begin on May 1, 2025. Please submit your vote or proxy by telephone, mobile device, internet or, if you received your materials by mail, you can complete and return your proxy or voting instruction form by mail.
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| DEAR FELLOW SHAREHOLDERS | 2 | | PROXY SUMMARY | 4 | | ANNUAL MEETING OF SHAREHOLDERS | 4 | | SHAREHOLDER VOTING MATTERS | 4 | | OUR DIRECTOR NOMINEES | 5 | | GOVERNANCE HIGHLIGHTS | 6 | | 2024 PERFORMANCE HIGHLIGHTS | 6 | | NOTICE OF ANNUAL MEETING OF SHAREHOLDERS | 7 | | DIRECTORS & GOVERNANCE | 8 | | PROPOSAL 1 – ELECTION OF DIRECTORS | 8 | | OVERVIEW OF OUR DIRECTOR NOMINEES | 8 | | BOARD ATTENDANCE - 2024 | 9 | | BOARD REFRESHMENT AND EVOLUTION SINCE 2020 | 10 | | DIVERSITY OF SKILLS AND EXPERTISE | 11 | | DIRECTOR CONTINUOUS EDUCATION AND DEVELOPMENT | 13 | | BOARD’S ROLE IN COMPANY STRATEGY | 13 | | BOARD’S ROLE IN RISK OVERSIGHT | 13 | | DIRECTOR NOMINATIONS AND EVALUATIONS | 14 | | DIRECTOR CANDIDATE BIOGRAPHIES AND QUALIFICATIONS | 16 | | DIRECTOR COMPENSATION | 26 | | BOARD ELECTION | 27 | | BOARD LEADERSHIP STRUCTURE AND CHAIR SUCCESSION | 28 | | BOARD LEADERSHIP STRUCTURE – PRESIDING DIRECTOR | 28 | | DUTIES AND RESPONSIBILITIES OF PRESIDING DIRECTOR | 29 | | CORPORATE GOVERNANCE GUIDELINES AND CODE OF CONDUCT | 30 | | INSIDER TRADING POLICY | 30 | | BOARD EVALUATION PROCESS | 30 | | BOARD COMMITTEES | 31 | | DIRECTOR INDEPENDENCE DETERMINATIONS | 33 | | COMMUNICATION WITH THE BOARD | 33 | | CONTACTING CATERPILLAR | 34 | | INVESTOR OUTREACH | 34 | | POLITICAL CONTRIBUTIONS AND LOBBYING | 36 | | RELATED PARTY TRANSACTIONS | 36 | | AUDIT | 37 | | PROPOSAL 2 – RATIFICATION OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 37 | | AUDIT FEES AND APPROVAL PROCESS | 37 | | INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEE INFORMATION | 38 |
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| ANONYMOUS REPORTING OF ACCOUNTING AND OTHER CONCERNS | 38 | | AUDIT COMMITTEE REPORT | 39 | | COMPENSATION | 40 | | PROPOSAL 3 – ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION | 40 | | COMPENSATION DISCUSSION & ANALYSIS | 41 | | EXECUTIVE SUMMARY | 41 | | 2024 SUMMARY COMPENSATION TABLE | 59 | | 2024 ALL OTHER COMPENSATION TABLE | 60 | | GRANTS OF PLAN-BASED AWARDS IN 2024 | 61 | | OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR END | 62 | | 2024 OPTION EXERCISES AND STOCK VESTED | 64 | | 2024 PENSION BENEFITS | 64 | | 2024 NONQUALIFIED DEFERRED COMPENSATION | 65 | | POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL | 66 | | CEO PAY RATIO | 68 | | PAY VERSUS PERFORMANCE | 69 | | SHAREHOLDER PROPOSALS | 72 | | PROPOSAL 4 – SHAREHOLDER PROPOSAL - CIVIL RIGHTS AUDIT | 72 | | PROPOSAL 5 – SHAREHOLDER PROPOSAL - REPORT ON EMPLOYEE CHARITABLE GIVING MATCH | 74 | | PROPOSAL 6 – SHAREHOLDER PROPOSAL - REQUEST TO CEASE DEI EFFORTS | 76 | | OTHER IMPORTANT INFORMATION | 79 | | MATTERS RAISED AT THE ANNUAL MEETING NOT INCLUDED IN THIS STATEMENT | 79 | | SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS FOR THE 2026 ANNUAL MEETING | 79 | | PERSONS OWNING MORE THAN FIVE PERCENT OF CATERPILLAR COMMON STOCK | 80 | | SECURITY OWNERSHIP OF EXECUTIVE OFFICERS AND DIRECTORS | 81 | | DELINQUENT SECTION 16(a) REPORTS | 81 | | ACCESS TO FORM 10-K | 81 | | NON-GAAP FINANCIAL MEASURES | 82 | | FREQUENTLY ASKED QUESTIONS REGARDING MEETING ATTENDANCE AND VOTING | 83 | | OTHER RESOURCES | 87 |
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| | 2025 PROXY STATEMENT | 1 |
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DEAR FELLOW SHAREHOLDERS,
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| D. JAMES UMPLEBY III Executive Chairman | On behalf of the board of directors and our Caterpillar team, I cordially invite you to attend the Annual Meeting of Shareholders on June 11, 2025, at 8 a.m. Central Time. This year’s meeting will be held virtually. We will provide an update on the company’s performance and ask for your vote on several business-related items. Information on participating in this year’s shareholder meeting is on page 83. Please review this proxy statement to learn more about your board of directors, our governance practices, compensation programs and philosophy, and other key items. Your vote is important. We encourage you to vote your shares by virtually attending the annual meeting, by voting online, by telephone or by mail. I would like to recognize Dan Dickinson, who has decided to not stand for re-election. Dan has served as a director since 2006, including as chairman of the Audit Committee from 2019-2025. The board of directors is very grateful to Dan for his valuable contributions and many years of dedicated and excellent service. We also welcome our newest board members, Nazzic Keene and Joe Creed. Nazzic is the former chief executive officer of Science Applications International Corporation and joined the board on November 1, 2024. Joe is assuming the role of chief executive officer of Caterpillar on May 1, 2025 and is joining the board on the same date. As we celebrate our 100th anniversary, I’d like to thank our global team for their commitment to serving our customers. It’s been an honor and privilege to serve as chief executive officer for the past eight years. I have great confidence in Joe and the entire executive office to lead our global team as Caterpillar embarks upon our second century of helping our customers build a better, more sustainable world. In order to ensure an orderly leadership transition, the board has asked me to serve as executive chairman. In this role, I will support Joe and the board to facilitate a smooth transition. Thank you to our shareholders for your ongoing investment in and support of Caterpillar. |
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| Sincerely, | | | | D. James Umpleby III | | Executive Chairman |
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| 2 | | 2025 PROXY STATEMENT |
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DEAR FELLOW SHAREHOLDERS,
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| DEBRA L. REED-KLAGES Presiding Director | On behalf of the board of directors, thank you for your investment in Caterpillar and for trusting us to oversee your interests. I write to also express my sincere gratitude to Caterpillar’s employees and management, who continue to drive profitable growth of our company. You are at the center of the company’s success, and your dedication to serving our customers, implementing our strategy and adhering to our values is significant and impressive. I am honored that the independent directors have entrusted me to help guide the board in its independent oversight of the company over the past three years. Ensuring that your diverse and accomplished board is well-informed about Caterpillar’s business performance is a critical focus area for me as presiding director. Throughout 2024, we had regular discussions with management, which included reviewing the company’s performance, corporate strategy, significant business initiatives, capital allocation priorities, and business development opportunities. I personally worked closely with our outgoing and incoming chief executive officers to maintain effective working relationships between the independent directors and Caterpillar’s management. I also take very seriously the responsibility of reviewing and supporting the effectiveness and independence of your board of directors. Succession planning is one of the most important responsibilities of our board. We understand the importance of strong stewardship, leadership continuity and talent development—both at the board and management level. In April 2025, we announced the appointment of Joe Creed as chief executive officer as a result of an intentional, robust, methodical and multi-year, succession planning process. Jim Umpleby was appointed executive chairman and will continue to provide counsel to Joe and the board to ensure a smooth transition of leadership. We are deeply grateful to Jim for his leadership and appreciate the outstanding results he achieved during his tenure. His impact on our customers, dealers, shareholders and employees will continue for years to come. Joe is a proven leader with significant experience in Caterpillar’s global businesses. The board is confident that Joe will continue Caterpillar’s successful journey and continue to position us for long-term profitable growth. In 2024, I personally met with many of our largest shareholders alongside senior Caterpillar management. Those meetings have been an invaluable part of my tenure as presiding director and have allowed me to better understand shareholders’ interests and share their perspectives with the board during topical discussions and decision making. Thank you – our shareholders – for your ongoing investment and support of Caterpillar as we continue to execute our enterprise strategy for long-term profitable growth and create shareholder value. We encourage you to vote your shares at the annual meeting. |
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| Very truly yours, | | | | DEBRA L. REED-KLAGES | | Presiding Director |
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| | 2025 PROXY STATEMENT | 3 |
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This summary does not contain all of the information you should consider when casting your vote. You should read the complete proxy statement before voting.
OUR DIRECTOR NOMINEES
OUR DIRECTOR NOMINEES
OUR DIRECTOR NOMINEES
| | | | Director | | Caterpillar Committees | | | | | | Nominee and Principal Occupation | Independent | Age | Since | Other Public Company Boards | AC | CHRC | SPPC | NGC | EC | | Joseph E. Creed Chief Executive Officer of Caterpillar Inc (1) | No | 49 | 2025 | None | | | | | | | James C. Fish, Jr.(2) President and CEO of Waste Management, Inc. | Yes | 62 | 2023 | Waste Management, Inc. | | | | | | | Gerald Johnson Retired Executive Vice President, Global Manufacturing and Sustainability of General Motors Company | Yes | 62 | 2021 | None | | | | | | | Nazzic S. Keene Former CEO of Science Applications International Corp. | Yes | 64 | 2024 | ITT Inc. Automatic Data Processing, Inc. | | | | | | | David W. MacLennan(2) Former Chair and CEO of Cargill, Inc. | Yes | 65 | 2021 | Ecolab Inc. | | | | | | | Judith F. Marks Chair, CEO and President of Otis Worldwide Corporation | Yes | 61 | 2023 | Otis Worldwide Corporation | | | | | | | Debra L. Reed-Klages Presiding Director of Caterpillar Inc. Former Chairman and CEO of Sempra Energy | Yes | 68 | 2015 | Chevron Corporation Lockheed Martin Corporation | | | | | | | Susan C. Schwab Professor Emerita at the University of Maryland School of Public Policy and Strategic Advisor for Mayer Brown LLP; former United States Trade Representative | Yes | 70 | 2009 | FedEx Corporation Marriott International, Inc. | | | | | | | D. James Umpleby III Executive Chairman of Caterpillar Inc.(1) | No | 67 | 2017 | Chevron Corporation | | | | | | | Rayford Wilkins, Jr. Former CEO of Diversified Businesses at AT&T Inc. | Yes | 73 | 2017 | Morgan Stanley Valero Energy Corporation | | | | | | | AC: Audit Committee CHRC: Compensation and Human Resources Committee SPPC: Sustainability and other Public Policy Committee NGC: Nominating and Governance Committee EC: Executive Committee | | | | | | Chair | | | Member |
OUR DIRECTOR NOMINEES
| (1) Effective May 1, 2025 | | (2) Mr. Dickinson is not standing for re-election at the annual meeting. As a result, Mr. MacLennan is expected to become the chairman of the Audit Committee, and Mr. Fish is expected to become the chairman of the Sustainability and other Public Policy Committee and member of the Executive Committee, effective following the regular meeting of the board scheduled for June 11, 2025. |
OUR DIRECTOR NOMINEES
| | 2025 PROXY STATEMENT | 5 |
OUR DIRECTOR NOMINEES
GOVERNANCE HIGHLIGHTS
PROPOSAL 1 – ELECTION OF DIRECTORS
PROPOSAL 1 – ELECTION OF DIRECTORS
OVERVIEW OF OUR DIRECTOR NOMINEES
OVERVIEW OF OUR DIRECTOR NOMINEES
OVERVIEW OF OUR DIRECTOR NOMINEES
| GENDER AND DIVERSITY | DIRECTOR AGE | TENURE OF DIRECTOR NOMINEES | | | | | | * In addition to gender, which is identified separately in the graphic, diversity is the representation of the director nominees’ current percentage of racial/ethnic diversity. | 70% of director nominees are seven or more years from mandatory retirement age of 74. | |
OVERVIEW OF OUR DIRECTOR NOMINEES
| 8 | | 2025 PROXY STATEMENT |
OVERVIEW OF OUR DIRECTOR NOMINEES
BOARD ATTENDANCE - 2024
SUMMARY OF INDIVIDUAL DIRECTOR NOMINEE SKILLS, CORE COMPETENCIES AND ATTRIBUTES
SUMMARY OF INDIVIDUAL DIRECTOR NOMINEE SKILLS, CORE COMPETENCIES AND ATTRIBUTES
SUMMARY OF INDIVIDUAL DIRECTOR NOMINEE SKILLS, CORE COMPETENCIES AND ATTRIBUTES
| | | | | | | | | | | | | | | Caterpillar Board Tenure (Years) | | 0 | 2 | 4 | 0 | 4 | 2 | 10 | 16 | 8 | 8 | 5.4 years Average Tenure | | | Board of Directors Experience (other boards) Directors with experience on other boards and board committees understand the function of a board, corporate governance best practices, agenda setting, succession planning and relations between the board, the CEO and senior management. | | | | | | | | | | | 80% | | | Audit Committee Financial Expert Experience as an audit committee financial expert is important given our use of financial targets as measures of performance and the importance of accurate financial reporting and robust internal auditing. | | | | | | | | | | | 100% of AC Members | | | CEO Directors with experience in a CEO role enhance the board’s ability to evaluate and advise our CEO on leading a large, complex, multinational corporation, as well as oversee strategic planning, values, and environmental, social and governance issues. | | | | | | | | | | | 70% | | | Leadership Directors with significant leadership experience enhance the board’s ability to oversee strategic planning, values, and environmental, social and governance issues. | | | | | | | | | | | 100% | | | Business Development and Strategy Directors with a background in business development provide insight into developing and implementing strategies for growing our business, including the opportunities represented by the evolving energy landscape. | | | | | | | | | | | 100% | | | Government/Regulatory Affairs Directors with experience in government or regulatory affairs provide experience and insights that help us understand opportunities across global markets and address regulatory issues, government affairs and present-day issues affecting business. | | | | | | | | | | | 50% |
SUMMARY OF INDIVIDUAL DIRECTOR NOMINEE SKILLS, CORE COMPETENCIES AND ATTRIBUTES
| | 2025 PROXY STATEMENT | 11 |
SUMMARY OF INDIVIDUAL DIRECTOR NOMINEE SKILLS, CORE COMPETENCIES AND ATTRIBUTES
| | | | | | | | | | | | | | | | Customer and Product Support Services Expertise in customer and product support services greatly increases a director’s understanding of our complex business operations and our focus to grow services to better support our customers. | | | | | | | | | | | 70% | | | Finance & Accounting Knowledge of finance and accounting assists our directors in understanding, advising on and monitoring the company’s capital structure, financing and investing activities, as well as our financial reporting and internal controls. | | | | | | | | | | | 70% | | | Risk Management Directors with experience in risk management, including with respect to environmental, social and cybersecurity matters, enhance oversight of the evaluation, assessment and mitigation of the most significant risks facing the company. | | | | | | | | | | | 90% | | | Technology Directors with expertise in technology fields offer insights on technology innovations, product development, digital solutions, innovative business models, data analytics, eCommerce applications and cybersecurity risks, and understand the importance of investing in new technologies for future growth. | | | | | | | | | | | 90% | | | Global Experience Directors with experience conducting business or operations outside of the United States provide political, economic and cultural perspectives and insights that are valuable to our global company and help us better understand opportunities and challenges across global markets. | | | | | | | | | | | 90% | | | Manufacturing/Logistics Relevant experience in manufacturing provides a valuable perspective and is important in understanding the business operations and capital needs of the company. | | | | | | | | | | | 50% | | Women | | | | | | | | | | | | 40% | | Racial/Ethnic Diversity | | | | | | | | | | | | 30% | | Age | | 49 | 62 | 62 | 64 | 65 | 61 | 68 | 70 | 67 | 73 | 64 years Average Age |
SUMMARY OF INDIVIDUAL DIRECTOR NOMINEE SKILLS, CORE COMPETENCIES AND ATTRIBUTES
| 12 | | 2025 PROXY STATEMENT |
SUMMARY OF INDIVIDUAL DIRECTOR NOMINEE SKILLS, CORE COMPETENCIES AND ATTRIBUTES
DIRECTOR CONTINUOUS EDUCATION AND DEVELOPMENT
DIRECTOR CANDIDATE BIOGRAPHIES AND QUALIFICATIONS
DIRECTOR CANDIDATE BIOGRAPHIES AND QUALIFICATIONS Directors have been in their current positions for the past five years unless otherwise noted. Information is current as of May 1, 2025. The board has nominated the following individuals to stand for election for a one-year term expiring at the Annual Meeting of Shareholders in 2026. The experiences and qualifications of each of the director nominees enable each of them to provide meaningful input and guidance to the board.
DIRECTOR CANDIDATE BIOGRAPHIES AND QUALIFICATIONS
| | JOSEPH E. CREED Chief Executive Officer of Caterpillar Inc. Age: 49 Director since: 2025 | OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS: ■ None | CATERPILLAR BOARD COMMITTEES: ■ None OTHER DIRECTORSHIPS WITHIN THE LAST FIVE YEARS: ■ None |
Experience
Experience
Experience
| ■ | Chief Executive Officer (2025) | | ■ | Chief Operating Officer (2023-2025) | | ■ | Group President, Energy & Transportation (2021-2023) | | ■ | Senior Vice President, Electric Power (2020-2021) | | ■ | Senior Vice President, Oil & Gas and Marine (2019-2021) | | ■ | Senior Vice President, Finance Services and President, Caterpillar Venture Capital (2017-2019) | | ■ | Interim Chief Financial Officer (2018) | | ■ | Chief Financial Officer, Energy & Transportation (2013-2016) | | ■ | Joined Caterpillar in 1997. |
Experience
| ■ | Audit Committee Financial Expert, CEO, Leadership, Business Development and Strategy, Finance & Accounting and Risk Management - obtained during his nearly three decades of experience at Caterpillar in senior management and executive positions. This includes extensive knowledge and oversight of all aspects of Caterpillar’s financial and accounting functions, corporate strategy, as well as the introduction of advancements in engine power density, establishment of a dedicated battery and advanced power organization, and acquisitions to amplify the company’s capabilities in both oil and gas, and distributed power generation. | | ■ | Customer and Product Support Services, Technology, Global Experience and Manufacturing / Logistics - developed during his long career at Caterpillar, the world’s leading manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives with extensive international operations. |
Experience
| 16 | | 2025 PROXY STATEMENT |
Experience
| | JAMES C. FISH, JR. President and CEO of Waste Management, Inc. (waste and environmental services) Age: 62 Director since: 2023 INDEPENDENT | OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS: ■ Waste Management, Inc. | CATERPILLAR BOARD COMMITTEES: ■ Audit ■ Sustainability and other Public Policy OTHER DIRECTORSHIPS WITHIN THE LAST FIVE YEARS: ■ None |
Experience
Experience
Experience
| ■ | President and Chief Executive Officer (2016–present), Chief Financial Officer (2012–2016), Executive Vice President (2012–2016), Senior Vice President – Eastern Group (2011–2012), Vice President – PA/WV Area (2009–2011), Vice President – Pricing (2003–2006), Director – Financial Planning (2001–2003), Waste Management, Inc. | | ■ | Vice President – Finance (1999–2001), Westex | | ■ | Vice President – Revenue Management (1995–1999), Trans World Airlines, Inc. | | ■ | Director of Yield Management (1986–1995), America West Airlines, Inc. |
Experience
| ■ | CEO, Leadership, Business Development and Strategy, and Risk Management – obtained while serving in leadership roles, including CEO, of Waste Management, North America’s largest comprehensive waste management environmental solutions provider. As President and CEO of Waste Management, he has shifted the company’s sustainability strategy to focus on minimizing its environmental impact by reducing carbon emissions, investing in differentiated, innovative technologies and automation, and expanding recycling and renewable energy infrastructure to help Waste Management’s customers achieve their sustainability goals. As CEO of a heavily regulated business, he leads a large government affairs team that interacts with all levels of government. | | ■ | Audit Committee Financial Expert and Finance & Accounting – obtained while serving as CFO of Waste Management where he gained valuable expertise in accounting and external reporting. | | ■ | Board of Directors Experience (other boards) – gained while serving as a director of Waste Management. |
Experience
| | 2025 PROXY STATEMENT | 17 |
Experience
| | GERALD JOHNSON Retired Executive Vice President, Global Manufacturing and Sustainability of General Motors Company (manufacturing) Age: 62 Director since: 2021 INDEPENDENT | OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS: ■ None | CATERPILLAR BOARD COMMITTEES: ■ Compensation and Human Resources ■ Sustainability and other Public Policy OTHER DIRECTORSHIPS WITHIN THE LAST FIVE YEARS: ■ None |
Experience
Experience
Experience
| ■ | Executive Vice President, Global Manufacturing and Sustainability (2019–2024), Vice President North America Manufacturing and Labor Relations (2017–2019), Vice President Global Operational Excellence (2014–2017), joined the company in 1980, General Motors Company (GM). |
Experience
| ■ | Audit Committee Financial Expert, Leadership, Business Development and Strategy, Customer and Product Support Services, Technology, Global Experience and Manufacturing/Logistics – obtained during his over 40-year career at GM, where he was responsible for the quality and safety performance for 103,000 employees representing more than 129 manufacturing facilities in 16 countries on five continents, which allowed him to provide valuable insight and perspective to the board on strategic and business matters. He led global manufacturing and sustainability at GM where he was responsible for ensuring GM’s governance and training programs effectively addressed human rights issues. He actively contributed to GM’s ethical sourcing and human rights initiatives, collaborating with NGOs and implementing robust due diligence programs to ensure responsible practices across GM’s operations and supply chain. This includes supporting the release of GM’s Human Rights Report and Responsible Material Policy, which set new standards for supplier conduct and material sourcing. He has also led GM’s Manufacturing Engineering and Labor Relations organizations. He was a founding member of GM’s Inclusion Advisory Board, created to foster and grow an inclusive and engaged internal culture. He has also served as a member of the GM Political Action Committee Board and Steering Committee since 2020. |
Experience
| 18 | | 2025 PROXY STATEMENT |
Experience
| | NAZZIC S. KEENE Former CEO of Science Applications International Corp Age: 64 Director since: 2024 INDEPENDENT | OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS: ■ ITT Inc. ■ Automatic Data Processing Inc. | CATERPILLAR BOARD COMMITTEES: ■ Compensation and Human Resources ■ Nominating and Governance OTHER DIRECTORSHIPS WITHIN THE LAST FIVE YEARS: ■ Science Applications International Corporation |
Experience
Ms. Keene was brought to the attention of the board through a professional search firm.
Experience
Experience
Experience
| ■ | Chief Executive Officer (2019-2023), Chief Operating Officer (2017-2019), President of Global Markets & Missions (2013-2017), joined the company in 2012, Science Applications International Corporation (SAIC). |
Experience
| ■ | CEO, Leadership, Business Development & Strategy, Government/Regulatory Affairs, Customer and Product Support Services, Risk Management and Global Experience – gained from her executive positions at SAIC, a multi-billion dollar global company engaged in integrating information technology systems that manage engineering, large-scale IT modernization and security logistics, simulation and data analytics for government bodies where she was responsible for, among other things, overseeing daily operations of the company including its long-term strategy for profitable growth. | | ■ | Technology - gained over her three decades of experience in the information systems and technology services industry, with 25 years of experience in executive management positions. | | ■ | Board of Directors Experience (other boards) – gained while serving as a director of other publicly-traded companies such as ITT Inc. and Automatic Data Processing Inc. (ADP). She currently serves on the Nominating & Governance Committee of ITT Inc., chairs the Nominating & Governance Committee and serves on the Audit Committee of ADP. |
Experience
| | 2025 PROXY STATEMENT | 19 |
Experience
| | DAVID W. MACLENNAN Former Chair and CEO of Cargill, Inc. (food and agriculture) Age: 65 Director since: 2021 INDEPENDENT | OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS: ■ Ecolab Inc. | CATERPILLAR BOARD COMMITTEES: ■ Audit ■ Sustainability and other Public Policy, Chair ■ Executive OTHER DIRECTORSHIPS WITHIN THE LAST FIVE YEARS: ■ None |
Experience
Experience
Experience
| ■ | Executive Chair (2023), Chair (2015–2022), Chief Executive Officer (2013–2022), Chief Operating Officer (2011–2013), Chief Financial Officer (2008–2011), joined the company in 1991, Cargill, Inc. |
Experience
| ■ | CEO, Leadership, Business Development and Strategy, Government/Regulatory Affairs, Risk Management, Technology, Global Experience and Manufacturing/Logistics – obtained while serving in leadership roles including as former CEO of Cargill, a large multinational corporation, where he helped develop a business model and culture to position Cargill for long-term success. He oversaw Cargill’s building of expertise in alternative proteins and development of technologies and digital solutions to transform farming, supply chains and food delivery, and undertook several large acquisitions during his tenure. As CEO of Cargill, he worked to address climate change and water risks by investing in renewable diesel, decarbonize maritime shipping by developing new wind propulsion technology that aimed to reduce shipping carbon dioxide emissions by as much as 30% and strengthen the food system by training over five million farmers globally on regenerative agriculture practices that sequester carbon, improve soil health and increase crop yields. He also directed numerous human capital management initiatives including particular focus on safety and reduction of injuries in Cargill’s facilities. His CEO responsibilities also included frequent interaction with government officials and NGOs throughout the world and he also served on Cargill’s Board of Directors for over 15 years. | | ■ | Finance & Accounting and Audit Committee Financial Expert – developed while serving as CFO of Cargill, where he was responsible for all financial aspects of the business, including financing, internal controls and reporting, capital investments and budgeting. | | ■ | Board of Directors Experience (other boards) – gained while serving as a director since 2016 on the board of Ecolab where he is a member of the Compensation & Human Capital Management Committee, Chair of the Governance Committee and is the Lead Independent Director. |
Experience
| 20 | | 2025 PROXY STATEMENT |
Experience
| | JUDITH F. MARKS Chair, CEO and President of Otis Worldwide Corporation (elevator and escalator manufacturing, installation and service) Age: 61 Director since: 2023 INDEPENDENT | OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS: ■ Otis Worldwide Corporation | CATERPILLAR BOARD COMMITTEES: ■ Audit ■ Compensation and Human Resources OTHER DIRECTORSHIPS WITHIN THE LAST FIVE YEARS: ■ Hubbell Incorporated |
Experience
Experience
Experience
| ■ | Chair of the Board (2022–present), Chief Executive Officer (2019–present), President (2017–present), Otis Worldwide Corporation | | ■ | Chief Executive Officer (2017), Executive Vice President of New Equipment Solutions (2016–2017), Executive Vice President of Global Solutions (2015–2016), Dresser-Rand Group, Inc. | | ■ | Chief Executive Officer (2017), Siemens USA, President and Chief Executive Officer (2011–2015), Siemens Government Technologies, Inc. | | ■ | Vice President of Strategy & Business Development, Electronic Systems (2009–2011), President of Transportation & Security Solutions (2005–2009), President of Information Systems & Global Services (2005–2009), Executive Vice President of Transportation and Security Solutions (2005), President of Distribution Technologies Division (2001–2005), Lockheed Martin Corporation |
Experience
| ■ | Audit Committee Financial Expert, CEO, Leadership, Business Development and Strategy, Customer and Product Support Services, Finance & Accounting, Risk Management, Technology, Global Experience and Manufacturing/Logistics – gained from her experience in executive positions at Otis Worldwide Corporation, the world’s leading provider and maintainer of elevators, escalators and moving walkways; as Executive Vice President of New Equipment Solutions and Executive Vice President of Global Solutions, and CEO of Dresser-Rand Group, Inc.; as President and CEO of Siemens USA and Siemens Government Technologies, Inc.; and in various senior leadership positions at Lockheed Martin Corporation. During her current tenure at Otis, she led the successful spin-off of Otis to an independent publicly traded company over the past five years, drove the successful implementation of Otis’ service-driven business model, prioritized and advanced Otis’ sustainability program by embedding it into the company strategy as a key element to drive added value for all stakeholders and initiated the company’s focus on modernization of aging equipment to drive enhanced mobility and energy efficiency and adoption of safer modern products and services. She lives The Absolutes at Otis (Safety, Ethics, and Quality) which establish standards of conduct and ethical principles that guide the way the company works. She also sponsored Made to Move Communities, Otis’ signature corporate social responsibility program that focuses on advancing youth STEM education. In her role as CEO of Siemens USA, she led a $24 billion global organization in the areas of electrification, automation and digitalization with 50,000 employees and 60 manufacturing locations. She served as Chair of the Siemens Foundation which advances workforce development, health equity, and clean economy jobs in the United States. | | ■ | Board of Directors Experience (other boards) – gained while serving as a director and Chair of the Board of Otis Worldwide Corporation and as a director on the board of the Business Roundtable and AdvanceCT. She also previously served as a director on the boards of Hubbell Incorporated and Siemens Government Technologies, Inc. |
Experience
| | 2025 PROXY STATEMENT | 21 |
Experience
| | DEBRA L. REED-KLAGES Former Chairman and CEO of Sempra Energy (energy infrastructure and utilities) Age: 68 Director since: 2015 INDEPENDENT Presiding Director | OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS: ■ Chevron Corporation ■ Lockheed Martin Corporation | CATERPILLAR BOARD COMMITTEES: ■ Nominating and Governance, Chair ■ Executive, Chair OTHER DIRECTORSHIPS WITHIN THE LAST FIVE YEARS: ■ Halliburton Company ■ Oncor Electric Delivery Company LLC ■ Sempra Energy |
Experience
Experience
Experience
| ■ | Chairman of the Board (2012–2018), Chief Executive Officer (2011–2018), Executive Vice President (2010–2011), President and Chief Executive Officer, San Diego Gas and Electric and Southern California Gas Co., joined the company in 1978, Sempra Energy |
Experience
| ■ | Audit Committee Financial Expert, CEO, Leadership, Business Development and Strategy, Customer and Product Support Services, Finance & Accounting, Risk Management, Technology and Global Experience – gained over her three decades of experience in senior management and executive positions, including as former CEO at Sempra, an energy infrastructure and utilities company, which also conducts business in Mexico and South America. While leading Sempra, she oversaw significant growth in the use of renewable generation, allowing her to provide valuable insights into trends in the power, oil and gas industries, which are key end-user markets for Caterpillar products. As Chair and CEO of Sempra Energy, she led the transformation of San Diego Gas & Electric from all fossil fuel generation to become one of the utilities with the highest percentage of renewables in its portfolio and oversaw initiatives such as developing infrastructure in Mexico. Sempra Energy led renewable development, building wind and solar projects in the U.S. and Mexico to provide clean energy to customers. While at Sempra, she oversaw construction of multibillion dollar LNG and transmission projects and worked with EPC contractors to provide project oversight. She also led diversity and inclusion and supplier diversity at Sempra. In her role as Vice President of Human Resources at Southern California Gas Co., she led diversity and inclusion and succession planning and development efforts and oversaw labor relations and union negotiations. Additionally, she also led compliance efforts enacting the corporate ethics policy at Sempra and ensuring proper governance and compliance frameworks were in place. | | ■ | Government/Regulatory Affairs – gained while in leadership roles at Sempra while serving four years on the National Petroleum Council, an advisory committee to the United States Secretary of Energy to study energy policy. In her leadership roles at Sempra, she led highly regulated energy businesses in numerous states and internationally and worked extensively with a wide array of government entities and regulators. | | ■ | Board of Directors Experience (other boards) – gained while a director of other large, publicly traded corporations such as Chevron, Lockheed Martin and Halliburton. She previously chaired the Nominating and Corporate Governance Committee at Haliburton and currently serves on the Management Development and Compensation Committee and Nominating and Corporate Governance Committee at Lockheed Martin and chairs the Audit Committee at Chevron. |
Experience
| 22 | | 2025 PROXY STATEMENT |
Experience
| | SUSAN C. SCHWAB Professor Emerita at the University of Maryland School of Public Policy and Strategic Advisor for Mayer Brown LLP (global law firm) Age: 70 Director since: 2009 INDEPENDENT | OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS: ■ FedEx Corporation ■ Marriott International, Inc. | CATERPILLAR BOARD COMMITTEES: ■ Sustainability and other Public Policy ■ Nominating and Governance OTHER DIRECTORSHIPS WITHIN THE LAST FIVE YEARS: ■ The Boeing Company |
Experience
Experience
Experience
| ■ | Board Chair (2022–present), National Foreign Trade Council | | ■ | Professor Emerita (2019–present), Professor (2009–2019), University of Maryland School of Public Policy | | ■ | Strategic Advisor (2010–present), Mayer Brown LLP | | ■ | U.S. Trade Representative (2006–2009), Deputy U.S. Trade Representative (2005–2006), United States Government | | ■ | President and Chief Executive Officer (2004–2005), University System of Maryland Foundation | | ■ | Consultant (2003), U.S. Department of Treasury | | ■ | Dean (1995–2003), University of Maryland School of Public Policy | | ■ | Director of Corporate Business Development (1993–1995), Motorola, Inc. | | ■ | Assistant Secretary of Commerce and Director General (1989–1993), U.S. and Foreign Commercial Service |
Experience
| ■ | Leadership, Business Development and Strategy, Risk Management and Global Experience – obtained over her 30-year career in international trade, commerce and public policy education, which allows her to provide important insights for the company’s global business model and long-standing support of open trade, as well as meaningful input and guidance to the board on strategy and geopolitics and the evaluation of global economic conditions. As Dean of the University of Maryland School of Public Policy, she led a strategic realignment of the school’s curriculum that led to a new specialization in philanthropy and non-profit management and also co-founded a non-profit to fund students of color to benefit from graduate programs and consider careers in public policy and international affairs. While working as U.S. Trade Representative, a Cabinet post, she worked to eliminate tariff barriers to environmental goods, such as clean energy technologies, worked with key non-governmental organizations to help champion negotiations to eliminate subsidization of industrial fishing fleets that contribute to overfishing of the oceans, helped build enforceable environmental and labor provisions into U.S. trade agreements for the first time, and helped negotiate and achieve Congressional passage of trade agreements. | | ■ | Government/Regulatory Affairs – gained as U.S. Trade Representative and Director-General of the U.S. and Foreign Commercial Service, the export promotion arm of the U.S. government. As Director General of U.S. and Foreign Commercial Service, she was responsible for over 200 field offices in the U.S. and 70 countries, with supervisory responsibility for American and international employees in multiple employment systems. She also introduced the agency’s first training curriculum with diversity, equity and inclusion components. | | ■ | Board of Directors Experience (other boards) and Technology – gained while serving as a director of other large, publicly traded multinational corporations, including FedEx, Marriott and Boeing. |
Experience
| | 2025 PROXY STATEMENT | 23 |
Experience
| | D. JAMES UMPLEBY III Executive Chairman Age: 67 Director since: 2017 MANAGEMENT | OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS: ■ Chevron Corporation | CATERPILLAR BOARD COMMITTEES: ■ None OTHER DIRECTORSHIPS WITHIN THE LAST FIVE YEARS: ■ None |
Experience
Experience
Experience
| ■ | Executive Chairman (2025–present), Chairman (2018-2025), Chief Executive Officer (2017–2025), Group President, Energy & Transportation segment (2013–2016), Vice President and President of Solar Turbines (2010–2012), joined a company subsidiary in 1980, Caterpillar Inc. |
Experience
| ■ | Audit Committee Financial Expert, CEO, Leadership, Business Development and Strategy, Finance & Accounting and Risk Management – obtained during his more than three decades of experience in senior management and executive positions and more than a decade of financial responsibility and experience at Caterpillar. This includes leading business transformation by developing and implementing a strategy for profitable growth based on operational excellence, expanded offerings, services and sustainability. He oversaw all aspects of Caterpillar’s environmental and sustainability policies and strategies, such as the introduction of new products and services that contribute to sustainability efforts by reducing waste and fuel consumption and increasing safety and operator ease of use. Additionally, through his leadership the company continues to reinforce its culture in which employees feel valued, respected and have a sense of belonging. | | ■ | Customer and Product Support Services, Technology, Global Experience and Manufacturing/Logistics – developed during his long career at Caterpillar, the world’s leading manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives with extensive international operations. | | ■ | Board of Directors Experience (other boards) – gained while serving as a director of Chevron Corporation, where he is a member of the Board Nominating and Governance Committee and the Public Policy and Sustainability Committee. He also serves on the U.S.-India Strategic Partnership Forum and the Peterson Institute for International Economics. He is a trustee of Rose-Hulman Institute of Technology and a member of Business Roundtable, The Business Council and the National Petroleum Council. |
Experience
| 24 | | 2025 PROXY STATEMENT |
Experience
| | RAYFORD WILKINS, JR. Former CEO of Diversified Businesses at AT&T Inc. (telecommunications) Age: 73 Director since: 2017 INDEPENDENT | OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS: ■ Morgan Stanley ■ Valero Energy Corporation | CATERPILLAR BOARD COMMITTEES: ■ Compensation and Human Resources, Chair ■ Nominating and Governance ■ Executive OTHER DIRECTORSHIPS WITHIN THE LAST FIVE YEARS: ■ None |
Experience
Experience
Experience
| ■ | CEO of Diversified Businesses (2007–2012), held other leadership roles including Group President of Marketing and Sales, SBC Communications, President and CEO, SBC and Pacific Bell, and President and CEO Southwestern Bell Telephone, joined in 1974, AT&T Inc. |
Experience
| ■ | Audit Committee Financial Expert, Leadership, Business Development & Strategy, Government/Regulatory Affairs, Customer and Product Support Services, Finance & Accounting, Risk Management, Technology and Global Experience – gained while in leadership roles at AT&T, where he was responsible for international investments, AT&T Interactive, AT&T Advertising Solutions, customer information services and the consumer wireless initiative in India; his service on the Advisory Council of the McCombs School of Business at the University of Texas at Austin and his service as a director at Valero Energy Corporation and Morgan Stanley. As chair of Valero’s Human Resources and Compensation Committee, he was integral to Valero’s progress in linking pay with HSE (health, safety and environmental) and ESG performance. He also served on the Institute for Inclusion Advisory Board at Morgan Stanley, which aims to develop and accelerate an integrated and transparent diversity, equity and inclusion strategy. | | ■ | Board of Directors Experience (other boards) – gained while a director and committee chair of other large, publicly traded corporations, including as chair of the Governance and Sustainability Committee at Morgan Stanley and chair of the Human Resources and Compensation Committee and the newly established Sustainability and Public Policy Committee at Valero Energy Corporation. |
Experience
| | 2025 PROXY STATEMENT | 25 |
Experience
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION The following table sets forth information concerning the compensation for our non-employee directors during the year ended December 31, 2024. Mr. Umpleby, who served as chairman and chief executive officer during 2024, did not receive separate compensation for his service on the board. Annual compensation for non-employee directors for 2024 was comprised of the following components:
DIRECTOR COMPENSATION
| Restricted Stock Units (1 Year Vesting) | $170,000 | | Cash Retainer | $150,000 | | Cash Stipends: | | | Presiding Director (Executive Committee Chair) | $50,000 | | Audit Committee Chair | $35,000 | | Compensation and Human Resources Committee Chair | $25,000 | | Nominating and Governance Committee Chair | $25,000 | | Sustainability and other Public Policy Committee Chair | $25,000 |
DIRECTOR COMPENSATION
The board has set a minimum Caterpillar stock ownership target for directors equal to five times the director’s annual cash retainer. Directors have a five-year period from the date of their election or appointment to meet the target and must maintain their target stock ownership while serving on the board and for a post-service period. Until a director has met the target, the director is precluded from disposing of shares. Once a director achieves the target, this restriction no longer applies unless a disposition would cause the director’s stock ownership to fall below the target. For purposes of determining whether the target has been met, the following shares are considered: shares owned directly or indirectly by the director or the director’s spouse; shares held in trust for the benefit of the director, the director’s spouse or the director’s children; and phantom shares under the Directors’ Deferred Compensation Plan. Unvested restricted stock units are not considered. As of the date of this proxy statement, all directors have met the target or are within the five-year accumulation period. Directors that joined the board prior to April 1, 2008, are also able to participate in a Charitable Award Program. A donation of up to $500,000 will be made by the company in the director’s name to charitable organizations selected by the director and a donation of up to $500,000 also will be made by the company in the director’s name to the Caterpillar Foundation. Directors derive no financial benefit from the Charitable Award Program.
DIRECTOR COMPENSATION
| 26 | | 2025 PROXY STATEMENT |
DIRECTOR COMPENSATION
BOARD ELECTION
DIRECTOR COMPENSATION FOR 2024
DIRECTOR COMPENSATION FOR 2024
DIRECTOR COMPENSATION FOR 2024
| Director | Fees Earned or Paid in Cash | Restricted Stock Units(1) | All Other Compensation(2) | Total | | David L. Calhoun | $67,582(3) | $— | $— | $67,582 | | Daniel M. Dickinson | $185,000 | $169,953 | $4,627 | $359,580 | | James C. Fish, Jr. | $150,000 | $169,953 | $5,000 | $324,953 | | Gerald Johnson | $150,000 | $169,953 | $— | $319,953 | | Nazzic Keene | $25,000(4) | $— | $— | $25,000 | | Judith Fran Marks | $150,000 | $169,953 | $— | $319,953 | | David W. MacLennan | $175,000 | $169,953 | $— | $344,953 | | Debra L. Reed-Klages | $225,000 | $169,953 | $— | $394,953 | | Susan C Schwab | $150,000 | $169,953 | $5,000 | $324,953 | | Rayford Wilkins, Jr. | $175,000 | $169,953 | $5,000 | $349,953 |
DIRECTOR COMPENSATION FOR 2024
| (1) As of December 31, 2024, the number of RSUs (including accrued dividend equivalent units) and Phantom Shares held by those serving as non-employee directors during 2024 was: Mr. Calhoun: 24,063 Phantom Shares; Mr. Dickinson: 14,590 (which consists of 521 RSUs and 14,069 Phantom Shares); Mr. Fish: 521 RSUs; Mr. Johnson: 1,237 (which consists of 521 RSUs and 716 Phantom Shares); Ms. Marks: 521 RSUs; Mr. MacLennan: 1,742 (which consists of 521 RSUs and 1,221 Phantom Shares); Ms. Reed-Klages: 13,290 (which consists of 521 RSUs and 12,769 Phantom Shares); Ms. Schwab: 24,521 (which consists of 521 RSUs and 24,000 Phantom Shares); Mr. Wilkins: 521 RSUs. Mr. Calhoun and Ms. Schwab elected to defer 100% of their 2024 Cash Retainer and Cash Stipend (as applicable) into Phantom Shares of Caterpillar stock in the Directors’ Deferred Compensation Plan. Mr. MacLennan elected to defer 50% of his 2024 Cash Retainer into the Directors’ Deferred Compensation Plan and invested 75% into Phantom Shares of Caterpillar Stock. These deferrals, plus the accumulated value of previous retainer deferrals for each of Mr. Dickinson and Ms. Reed-Klages, are included in the Phantom Shares totals above. Mr. Johnson and Ms. Marks elected to defer 100% of their 2024 Cash Retainer into the Interest Fund in the Directors’ Deferred Compensation Plan. Mr. MacLennan elected to invest the remaining 25% of his 50% deferral into the Interest Fund. Mr. Calhoun, Mr. Johnson, Mr. MacLennan, Ms. Reed-Klages and Ms. Schwab elected to defer a portion of their equity award that vested on June 14, 2024, into the Directors’ Deferred Compensation Plan. These deferrals, plus the accumulated deferrals of previous equity awards, are also included in the Phantom Share totals above. Mr. MacLennan elected to defer 50%, and Mr. Johnson, Ms. Marks, Ms. Reed-Klages and Ms. Schwab elected to defer 100% of the equity award granted on June 12, 2024. | | (2) All Other Compensation represents amounts paid in connection with the Directors’ Charitable Award Program and the Caterpillar Political Action Committee Charitable Matching Program (CATPAC’s PACMATCH program). For directors eligible to participate in the Directors’ Charitable Award Program, the amounts listed include the insurance premium and administrative fees as follows: Mr. Dickinson $4,627. As part of CATPAC’s PACMATCH program, Caterpillar Inc. will contribute to up to four charities on behalf of eligible members who contribute at the suggested giving level. The annual CATPAC contribution limit is $5,000. Mr. Fish, Ms. Schwab and Mr. Wilkins had contributions matched. | | (3) Mr. Calhoun did not stand for re-election, thereby concluding his board service June 12, 2024. His cash compensation includes pro-ration to the date his board service ceased. | | (4) Cash compensation for Ms. Keene reflects pro-ration from November 1, 2024, the date she joined the board. |
GOVERNANCE AND PAY FOR PERFORMANCE PHILOSOPHY
The CHRC conducts an ongoing review of the company’s executive compensation program to evaluate whether the program supports the company’s compensation philosophy and objectives and to monitor the program’s alignment with its strategic business objectives. The CHRC also considers feedback received from our shareholders through outreach efforts and “say on pay” results as well as peer benchmarking information. In connection with this ongoing review and based on shareholder feedback and benchmarking data, the CHRC made changes for 2024 to simplify how it determines the annual incentive target opportunity for our Named Executive Officers (NEOs) and to modify the form of equity compensation awarded and performance measures for long-term incentive (LTI) awards as described on pages 48 and 53, respectively. The CHRC continues to implement and maintain what it believes are best practices for executive compensation and governance. Below is a summary of those practices:
GOVERNANCE AND PAY FOR PERFORMANCE PHILOSOPHY
| | WHAT WE DO | | WHAT WE DON’T DO | | | Robust stock ownership requirements | | No individual change-in-control agreements | | | Thorough annual benchmarking process | | No tax gross-ups on change-in-control benefits | | | Rigorous CHRC oversight of incentive metrics, goals and pay/performance relationship | | No backdating, repricing or granting of option awards retroactively | | | Clawback Policy | | | | | Limited executive perquisites | | | | | Strict anti-hedging and anti-pledging policies | | | | | Independent compensation consultant | | |
COMPENSATION PROGRAM STRUCTURE
| BASE SALARY | | ANNUAL INCENTIVE PLAN (AIP) | | LONG-TERM INCENTIVE | | Competitive pay to attract and retain talented executives | | An opportunity to earn an annual cash award based on the company’s financial performance and strategic business objectives | | A mix of performance-based restricted stock units (PRSUs), time-based restricted stock units (RSUs) and stock options to align management’s interests with long-term shareholders’ interests |
COMPENSATION PROGRAM STRUCTURE
Approximately 91 percent of our CEO’s 2024 total targeted compensation was variable and/or at-risk compensation, including 50 percent of long-term incentives delivered in the form of performance-based PRSUs with two equally-weighted performance metrics, Return on Invested Capital (ROIC) and relative Total Shareholder Return (rTSR) as compared to the S&P Capital Goods peer group, 25 percent delivered in the form of time-based RSUs, and 25 percent delivered in the form of stock options. See page 53 for additional information about the 2024 Long-Term Incentive (LTI) design.
2024 CEO COMPENSATION ELEMENTS
| * 50% of long-term incentives have performance-based vesting conditions. |
PAY OUTCOMES DEMONSTRATE ALIGNMENT WITH COMPANY PERFORMANCE
| BASE SALARY | ■ Named Executive Officers (other than the CEO) received an average base salary adjustment of 3.0% in April 2024. | | ANNUAL INCENTIVE | ■ Annual incentive awards for 2024 paid out, on average, at 129% of target. | | LONG-TERM INCENTIVE | ■ Based on a benchmark of the median LTI value for the company’s Compensation Peer Group at the end of 2023, the 2024 equity grant to the CEO was set at approximately the 60th percentile of the compensation peer group and around the 50th percentile for the other NEOs.(1) |
PAY OUTCOMES DEMONSTRATE ALIGNMENT WITH COMPANY PERFORMANCE
| (1) Long-Term Incentive Grant Sizing detail is provided on page 55 |
CEO COMPENSATION
| * Target Value Includes: Salary of $1,825,000; annual incentive of $3,350,952 and LTI grant of $14,602,848. Total Target Value: $19,778,800 | | ** Actual Value Includes: Salary of $1,811,325 (due to proration); annual incentive of $4,363,800 and LTI grant of $16,500,000. Total Actual Value: $22,675,125 |
COMPENSATION CONSIDERATIONS
| ■ | Long-term shareholder value creation | | ■ | Cyclical nature of the business | | ■ | Performance relative to financial guidance provided throughout the year | | ■ | Enterprise and Business Unit operational performance | | ■ | Performance relative to peers and competitors | | ■ | Historic absolute and relative performance | | ■ | Key areas management can influence over the short- and long-term | | ■ | Development and retention of top talent | | ■ | Skills, experience and tenure of executive incumbents | | ■ | Market values for comparably situated executives among our peer group | | ■ | Environmental, social & governance considerations |
INDEPENDENT COMPENSATION CONSULTANT
INDEPENDENT COMPENSATION CONSULTANT The CHRC retained Meridian Compensation Partners, LLC (“Meridian”) as its independent compensation consultant during 2024. Meridian provides executive and director compensation consulting services, including advice regarding the design and implementation of compensation programs, market information, regulatory updates and analyses, and trends on executive compensation and benefits. Interactions between Meridian and management are generally limited to discussions on behalf of the CHRC or as required to fulfill requests at the CHRC’s direction. During 2024, Meridian did not provide any other services to the company. Based on these factors, the CHRC’s evaluation of Meridian’s independence pursuant to the requirements approved and adopted by the SEC and NYSE, and information provided by Meridian, the CHRC determined that the work performed by Meridian did not raise any conflicts of interest.
INDEPENDENT COMPENSATION CONSULTANT
| | 2025 PROXY STATEMENT | 45 |
BENCHMARKING COMPENSATION TO PEERS
BENCHMARKING COMPENSATION TO PEERS
2024 COMPENSATION PEER GROUP
2024 COMPENSATION PEER GROUP The CHRC regularly assesses the market competitiveness of the company’s executive compensation programs based on peer group data. The 2024 Compensation Peer Group was established based on the following criteria:
2024 COMPENSATION PEER GROUP
| ■ | Total sales and revenues and market capitalization of the peer companies relative to Caterpillar; | | ■ | Competitors and industry segment; | | ■ | Potential sources for top talent; | | ■ | Global presence with a significant portion of revenues coming from non-U.S. operations; and | | ■ | Geographic footprint. |
2024 COMPENSATION PEER GROUP
| 2024 Compensation Peer Group | | | 3M Company | General Electric Company | | Archer-Daniels-Midland Company | General Motors Company(1) | | The Boeing Company | Halliburton Company | | Cisco Systems, Inc. | Honeywell International Inc. | | Cummins Inc. | Intel Corporation | | Deere & Company | Johnson Controls International plc | | Emerson Electric Co. | PACCAR Inc. | | FedEx Corporation | RTX Corporation | | Ford Motor Company | |
2024 COMPENSATION PEER GROUP
| (1) In August 2023, the CHRC approved the addition of General Motors Company to the Compensation Peer Group. Otherwise, the 2024 Compensation Peer Group remained unchanged from the previous year. |
BENCHMARKING METHODOLOGY
BENCHMARKING METHODOLOGY To account for differences in the size of the compensation peer group companies, market data is statistically adjusted allowing for a comparison of the compensation levels to similarly sized companies. Market data provided by the independent consultant is sourced from the Aon Total Compensation Measurement Database, and size-adjusted to Caterpillar’s three-year average revenues using regression analysis. Each element of our NEOs’ compensation is then targeted to the median of the peer group and adjusted above or below based on performance. To the extent an NEO’s total actual compensation exceeds the peer group median, it is due to outstanding performance, critical skills and notable experience. If an NEO’s compensation is below the median, it is generally due to underperformance against relevant metrics or reflective of an individual who is newer in his or her role.
BENCHMARKING METHODOLOGY
| 46 | | 2025 PROXY STATEMENT |
BASE SALARY
BASE SALARY Base salary is the only fixed component of NEO compensation. The CHRC targets base salaries at the size-adjusted median level of the peer group. Each NEO’s base salary is determined by the individual’s level of responsibility and historic performance with reference to the market median. Base salary increases, if any, are based on achievement of individual and company objectives, contributions to Caterpillar’s performance and culture, leadership accomplishments and a comparison to those in comparable positions at peer companies. In 2024, Mr. Umpleby’s salary was increased from $1.77 million to $1.83 million in recognition of his performance. Except as otherwise noted, salary adjustments for all NEOs were made effective April 1, 2024.
ANNUAL INCENTIVE
ANNUAL INCENTIVE
2024 ANNUAL INCENTIVE PLAN DESIGN
2024 ANNUAL INCENTIVE PLAN DESIGN The company’s Annual Incentive Plan (AIP) is designed to provide each NEO with the opportunity to earn an annual cash payout based on the short-term performance of the company and each NEO’s respective business. The AIP places a significant percentage of each NEO’s annual cash compensation at risk and aligns the interests of executives and shareholders. For 2024, AIP measures and weightings remained unchanged from the prior year. Information about the 2024 measures, weightings and results can be found in the section below entitled “2024 Annual Incentive Performance Measures and Results.” After careful consideration and consultation with its independent compensation consultant, the CHRC eliminated the “up year/down year” component of the AIP for 2024. The CHRC concluded that a formulaic adjustment to the target opportunity of each NEO and capping payouts at unadjusted target levels based on the company’s forecasted operating profit was rigid, unnecessarily complex and did not align to market practice. After review and consideration of relevant market data, the CHRC approved the AIP target opportunity for each NEO, as shown in following the table. The target opportunity for Mr. Umpleby was increased from 175% to 185% to align with the market median, while the target opportunities for all other NEOs remained unchanged from the prior year.
2024 ANNUAL INCENTIVE PLAN DESIGN
| | Umpleby | Creed | Johnson | De Lange | Bonfield | | Target Opportunity | 185% | 130% | 115% | 115% | 115% |
2024 ANNUAL INCENTIVE PLAN DESIGN
As in prior years, the 2024 AIP design included two strategic objectives modifiers, Services Growth and ESG Strategy. The Services Growth modifier focuses on the execution of services revenue growth plans across the enterprise working with our independent dealer network. ESG Strategy prioritizes focus on climate-related objectives as an important element of how Caterpillar is strategically addressing evolving customer demand and stakeholder expectations for a range of ESG considerations. More information about the modifiers and the assessed performance levels can be found in the section entitled Strategic Objectives Modifiers found on page 52. Each NEO’s AIP 2024 payment was determined using the following formula: The AIP target opportunities, performance measures and weightings, as well as the strategic objectives modifiers, were communicated to the NEOs at the beginning of the performance period. All NEOs participated in AIP in 2024.
2024 ANNUAL INCENTIVE PLAN DESIGN
| 48 | | 2025 PROXY STATEMENT |
2024 ANNUAL INCENTIVE PERFORMANCE MEASURES AND RESULTS
2024 ANNUAL INCENTIVE PERFORMANCE MEASURES AND RESULTS For 2024, the CHRC approved the following annual incentive performance measures (1) Enterprise Operating Profit, (2) Operating Profit After Capital Charge (OPACC) and (3) Services Revenues, along with the Strategic Objectives Modifiers, described on page 52, which were unchanged from the prior year. The company’s strong weighting on financial metrics is similar to typical market practice and the company’s use of non-financial modifiers is consistent with the majority of peers with non-financial metrics. The largest portion of financial measures (ranging from 50 percent to 66 percent) of each NEO’s 2024 annual incentive opportunity was based on Enterprise Operating Profit and, where applicable, the OPACC for their respective business. The remaining portion of each NEO’s annual incentive award opportunity was based on the Services Revenues metric for the enterprise or their respective businesses. Consistent with the Operating & Execution model, Services Revenues align the company’s emphasis on the Services Growth strategy with variable incentive opportunity. When establishing the performance targets for 2024, the CHRC reviewed the company’s business plan, historical performance, management recommendations and feedback provided by the independent compensation consultant. Targets were set for each of the performance measures at levels that were designed to be reasonably achievable with strong management performance. Maximum performance levels were designed to be difficult to achieve in light of historical performance and the company’s business forecast at the time the measures were approved. The business forecast includes consideration of market, economic and geopolitical factors. The performance measures were also weighted according to the company’s business priorities and the responsibilities of each NEO.
2024 ANNUAL INCENTIVE PERFORMANCE MEASURES AND RESULTS
| | 2025 PROXY STATEMENT | 49 |
2024 ANNUAL INCENTIVE PERFORMANCE MEASURES AND RESULTS
The charts below and the text that follows summarize the performance measures, weightings, strategic objectives modifiers, and results that the CHRC reviewed and approved for the 2024 annual incentive for each NEO.
DESCRIPTION OF PERFORMANCE MEASURES
DESCRIPTION OF PERFORMANCE MEASURES
DESCRIPTION OF PERFORMANCE MEASURES
| | PERFORMANCE MEASURE | DEFINITION | RATIONALE | | | ENTERPRISE OPERATING PROFIT | Enterprise Operating Profit measures the overall profitability of all of Caterpillar’s operations (including Machine, Energy & Transportation (ME&T) and Financial Products) before taxes, interest and other non-operating items. For AIP purposes, the Enterprise Operating Profit metric is calculated as Caterpillar Consolidated Operating Profit excluding restructuring costs. | The CHRC approved Enterprise Operating Profit as a performance measure to incentivize management to enhance the overall profitability of the company. The CHRC believes that Enterprise Operating Profit is an important corporate metric for shareholders to be able to assess the financial health of the company. | | | ENTERPRISE OPERATING PROFIT AFTER CAPITAL CHARGE (OPACC) | Enterprise Operating Profit After Capital Charge (OPACC) measures how productively and efficiently Caterpillar is utilizing assets to generate shareholder value. For AIP purposes, Enterprise OPACC is calculated as ME&T adjusted operating profit excluding restructuring costs less the capital charge. For Enterprise OPACC, the capital charge equals average quarterly ME&T net assets multiplied by a pre-tax capital charge rate of 13 percent. | OPACC is designed to measure how productively and efficiently the company’s assets are being utilized by examining the relationship between the value of the company’s assets and the operating profit that those assets generate. An increase in OPACC means that the company’s management is utilizing assets more efficiently to generate shareholder value, which the CHRC views as key to Caterpillar’s long-term success. | | | SEGMENT OPERATING PROFIT AFTER CAPITAL CHARGE (OPACC) | For each segment, OPACC is calculated as segment profit less the capital charge. The capital charge is calculated as the average monthly net accountable assets multiplied by a pre-tax capital charge rate of 13 percent. | OPACC is designed to measure how productively and efficiently the company’s assets are being utilized by examining the relationship between the value of the company’s assets and the operating profit that those assets generate. An increase in OPACC means that the company’s management is utilizing assets more efficiently to generate shareholder value, which the CHRC views as key to Caterpillar’s long-term success. | | | SERVICES REVENUES | ME&T Services Revenues include, but are not limited to, aftermarket parts and other service-related revenues and exclude most Financial Products’ revenues, discontinued products and captive dealer services. Due to the competitively sensitive nature of this measure, the threshold, target and result levels have all been indexed and reported as such. | The CHRC approved Services Revenues as an important measure intended to further strengthen profitability realized by growth in aftermarket parts and services. |
DESCRIPTION OF PERFORMANCE MEASURES
| 50 | | 2025 PROXY STATEMENT |
2024 ANNUAL INCENTIVE PERFORMANCE MEASURES, GOALS AND RESULTS
2024 ANNUAL INCENTIVE PERFORMANCE MEASURES, GOALS AND RESULTS
2024 EARNED INCENTIVE PAYMENTS
| (1) All payments were calculated using a daily weighted average salary. | | (2) May not recalculate exactly due to rounding. AIP Payments were rounded up to the nearest hundred. |
LONG-TERM INCENTIVE
LONG-TERM INCENTIVE
Changes to 2024 LTI Design
Changes to 2024 LTI Design
Changes to 2024 LTI Design
| Components | Previous | New in 2024 | | Mix & Weighting | 50% PRSUs 50% Stock Options | 50% PRSUs 25% Time-Based RSUs 25% Stock Options | | Performance Metrics | Single PRSU metric: Return on Equity (ROE) | Two equally weighted PRSU metrics: Return on Invested Capital (ROIC) Relative TSR (rTSR) | | PRSU Payout Opportunity | PRSU: All or Nothing Vesting/Payout | PRSU Leveraged Vesting/Payout with: Threshold (50%), Target (100%), Maximum (200%) |
Changes to 2024 LTI Design
Performance-based restricted stock units (PRSUs) are subject to a three-year performance cycle. Any earned award is determined at the end of that cycle. Time-based restricted stock units (RSUs) and stock options vest annually in one-third increments beginning on the first anniversary of the grant date, with the stock options expiring ten years after grant. Dividend Equivalent Units (DEUs) accrue on unvested RSUs and PRSUs and will only vest to the extent the underlying units’ vest. DEUs settle in additional shares.
Changes to 2024 LTI Design
| | 2025 PROXY STATEMENT | 53 |
Changes to 2024 LTI Design
For the 2024 PRSU grants, the CHRC adopted two new equally weighted performance metrics: 50% measured on three-year average ROIC and 50% measured on annualized total shareholder return relative to the S&P Capital Goods index over three full calendar years. ROIC is a broadly used LTI metric amongst our peers. Moreover, ROIC and the corresponding need to deliver returns above the cost of capital are critical elements of long-term shareholder value creation. The ROIC target for the 2024 grant was set at a level that was designed to be reasonably achievable with strong management performance, with the maximum performance level designed to be difficult to achieve in light of historical performance and the company’s business forecast at the time the PRSU grant was made. Relative TSR highlights shareholder returns (stock price appreciation and dividends) in comparison to a pre-determined comparator group and is the most prevalent LTI metric amongst our peers. Performance is compared against the companies comprising the S&P Capital Goods index. This index includes a cross-section of approximately 45 large, global, manufacturing enterprises, including companies in the company’s compensation peer group. This index contains a robust sample of companies in similar industries or with comparable operations, which is reflective of the company’s investor base. The rTSR performance/ reward structure is shown below. If results fall between specific goals, the associated payout will be determined by straight-line interpolation.
2024 GRANT SIZING
| 1 | Benchmark the median LTI value for the company’s Compensation Peer Group | | 2 | Adjust award values above or below the median to reflect individual performance, including consistency of performance against goals, leadership contributions, time in role and other relevant factors |
2022 – 2024 PERFORMANCE RESTRICTED STOCK UNITS (PRSUs)
2022 – 2024 PERFORMANCE RESTRICTED STOCK UNITS (PRSUs) For the 2022 – 2024 performance period, adjustments were made to the ROE to exclude the impact of restructuring costs, pension and other post-employment benefits (OPEB) mark-to-market gains/losses resulting from plan remeasurements, a discrete tax benefit for a tax law change related to currency translation in 2024, deferred tax valuation allowance adjustments, and a goodwill impairment charge. In each case, the CHRC determined that these adjustments were an appropriate use of its discretion and in the best interests of the company and its shareholders. For the 2022 grant, the PRSUs were earned based on a three-year average adjusted ROE of 53.9% percent, which exceeded the goal of 18 percent. As a result, 100% of the PRSUs granted for the 2022 - 2024 award cycle were earned. The chart below describes the company’s ROE performance and results for the 2022 – 2024 performance period:
POST-TERMINATION AND CHANGE IN CONTROL BENEFITS
POST-TERMINATION AND CHANGE IN CONTROL BENEFITS Except for customary provisions in employee benefit plans and as required by applicable law, the NEOs do not have any pre-existing executive severance packages or contracts; however, the CHRC will consider the particular facts and circumstances of an NEO’s separation to determine whether payment of any severance or other benefit to such NEO is appropriate. Change in control benefits are provided under the company’s long-term and annual incentive plans and represent customary provisions for these types of plans and have no direct correlation with other compensation decisions. There is no cash severance or other benefits for a termination related to change in control beyond what is provided under the long-term and annual incentive plans. The company’s change in control provisions is subject to a “double trigger” and, when both a change in control and involuntary termination of employment without cause occur, provide accelerated vesting and target payouts under the incentive plans, as described further below. In the event of a qualifying termination of employment following a change in control, target payouts are provided under the incentive plans.
POST-TERMINATION AND CHANGE IN CONTROL BENEFITS
| ■ | All unvested stock options, performance-based restricted stock units and restricted stock units vest immediately. | | ■ | Stock options remain exercisable over the normal life of the grant. |
POST-TERMINATION AND CHANGE IN CONTROL BENEFITS
The annual incentive plan allows for the target award opportunity, prorated based on the individual’s time of employment from the beginning of the performance period through the latter of: (1) the change in control or (2) termination of employment. Additional information is disclosed in the “Potential Payments Upon Termination or Change in Control” section of this proxy statement.
SPECIAL RETENTION AWARDS
SPECIAL RETENTION AWARDS Following the creation of the chief operating officer position and promotion of Mr. Creed to this role, and the related organizational realignment of our executive office, Ms. Johnson and Mr. De Lange were each granted special retention awards on January 12, 2024, consisting of service-based RSUs with a grant date value of $2.0 million, with 25% of the units vesting on each of the first and second anniversaries of the grant date and the remaining 50% vesting on the third anniversary of the grant date. Under the terms of the special retention awards, if the NEO’s employment with the company terminates for any reason other than death or in connection with a change of control, the unvested units are forfeited. The quality and continuity of the company’s leadership team is important to the achievement of our enterprise strategy. Therefore, the CHRC determined that making these grants will minimize the risk of disruption to that team and is in the best interests of our shareholders.
POLICIES AND PRACTICES RELATED TO THE GRANTS OF CERTAIN EQUITY AWARDS
POLICIES AND PRACTICES RELATED TO THE GRANTS OF CERTAIN EQUITY AWARDS In conjunction with promoting high ethical standards for the distribution of equity-based incentives, the CHRC has an established practice of granting stock options for all employees on a predetermined schedule, specifically the first Monday of March of each year (other than in limited circumstances such as newly hired or promoted employees). The CHRC’s practice of setting options grant dates on a predetermined schedule is designed to avoid the possibility that the company could grant stock option awards prior to the release of material, non-public information that is likely to result in an increase in its stock price or delay the grant of stock option awards until after the release of material, non-public information that is likely to result in a decrease in the company’s stock price. Exercise prices of stock options, when granted, are generally set at, and cannot be lower than, the closing price per share of the company’s common stock on the NYSE on the day of grant. During fiscal year 2024, (1) none of the company’s NEOs were awarded stock options with an effective grant date during any period beginning four business days before the filing or furnishing of a Form 10-Q, Form 10-K, or Form 8-K that disclosed material non-public information, and ending one business day after the filing or furnishing of such reports, and (2) the company did not time the disclosure of material non-public information for the purpose of affecting the value of executive compensation.
POLICIES AND PRACTICES RELATED TO THE GRANTS OF CERTAIN EQUITY AWARDS
| | 2025 PROXY STATEMENT | 57 |
2024 SUMMARY COMPENSATION TABLE
2024 SUMMARY COMPENSATION TABLE
2024 SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary | Bonus | Stock Awards(1) | Option Awards(2) | Non-equity Incentive Plan Compensation(3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(4) | All Other Compensation(5) | Total Compensation | Total Without Change in Pension Value(6) | | D. James Umpleby, III(7) Chairman and CEO | 2024 | $1,811,250 | $— | $14,079,975 | $4,125,037 | $4,363,800 | $— | $881,234 | $25,261,296 | $25,261,296 | | | 2023 | $1,752,500 | $— | $8,499,949 | $8,500,034 | $5,733,900 | $— | $1,343,949 | $25,830,332 | $25,830,332 | | | 2022 | $1,687,500 | $— | $6,749,957 | $6,749,994 | $4,614,800 | $— | $805,349 | $20,607,600 | $20,607,600 | | Joseph E. Creed Chief Operating Officer | 2024 | $1,115,000 | $— | $5,973,437 | $1,749,968 | $1,887,700 | $— | $404,460 | $11,130,565 | $11,130,565 | | | 2023 | $819,092 | $— | $2,199,975 | $2,199,962 | $1,771,700 | $— | $253,746 | $7,244,475 | $7,244,475 | | | 2022 | $702,425 | $— | $1,849,964 | $1,849,982 | $1,320,900 | $— | $257,654 | $5,980,925 | $5,980,925 | | Denise C. Johnson Group President | 2024 | $947,900 | $— | $5,157,307 | $924,982 | $1,374,500 | $— | $311,808 | $8,716,497 | $8,716,497 | | | 2023 | $911,450 | $— | $2,199,975 | $2,199,962 | $1,874,200 | $— | $312,957 | $7,498,544 | $7,498,544 | | | 2022 | $877,425 | $— | $1,849,964 | $1,849,982 | $1,544,800 | $— | $464,372 | $6,586,543 | $6,586,543 | | Bob De Lange Group President | 2024 | $889,950 | $— | $5,157,307 | $924,982 | $1,299,200 | $— | $285,416 | $8,556,855 | $8,556,855 | | | 2023 | $855,700 | $— | $2,199,975 | $2,199,962 | $1,651,200 | $— | $305,254 | $7,212,091 | $7,212,091 | | | 2022 | $821,850 | $— | $1,849,964 | $1,849,982 | $1,440,600 | $— | $689,900 | $6,652,296 | $6,652,296 | | Andrew R. J. Bonfield CFO | 2024 | $953,450 | $— | $4,095,869 | $1,200,047 | $1,434,400 | $— | $291,731 | $7,975,497 | $7,975,497 | | | 2023 | $916,800 | $— | $2,650,027 | $2,649,989 | $1,902,000 | $— | $241,123 | $8,359,939 | $8,359,939 | | | 2022 | $882,575 | $— | $2,200,090 | $2,199,994 | $1,501,900 | $— | $438,984 | $7,223,543 | $7,223,543 |
2024 SUMMARY COMPENSATION TABLE
| (1) The amounts reported in this column represent RSUs and PRSUs granted in 2024 under the Caterpillar Inc. 2023 Long-Term Incentive Plan (LTIP) that are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718, assuming the target level of performance is achieved for the PRSUs, which at the time of grant reflected the probable level of achievement. Assumptions made in the calculation of these amounts are included in Note 3 “Stock-based compensation” to the company’s consolidated financial statements for the fiscal year ended December 31, 2024, included in the company’s Form 10-K filed with the SEC on February 14, 2025. | | (2) The amounts reported in this column represent non-qualified stock options granted under the LTIP that are valued based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. Assumptions made in the calculation of these amounts are included in Note 3 “Stock-based compensation” to the company’s consolidated financial statements for the fiscal year ended December 31, 2024, included in the company’s Form 10-K filed with the SEC on February 14, 2025. | | (3) The amounts in this column reflect the AIP payments for 2024, paid in 2025. | | (4) No NEO receives preferential or above market earnings on nonqualified deferred compensation. Amounts above reflect the actuarial present value of the NEO’s change in accrued benefit under all defined benefit pension plans year over year using the pension plan measurement dates for financial statement reporting purposes. See Retirement and Other Benefits on page 56 for descriptions of the pension plans, and the 2024 Pension Benefits table and related footnotes on page 64 for the present value of each NEO’s accumulated pension benefits and information regarding actuarial assumptions used. | | (5) All Other Compensation detail for 2024 is shown in a separate table appearing on the next page. | | (6) To demonstrate how year-over-year changes in pension value impact total compensation, as determined under SEC rules, we have included this column to show total compensation without pension value changes. The amounts reported in this column are calculated by subtracting the change in pension value reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column, from the amounts reported in the Total Compensation column. To the extent amounts reported in this column differ from the amounts reported in the Total Compensation column, they are not a substitute for the amounts reported in the Total Compensation column. | | (7) Effective May 1, 2025, Mr. D. James Umpleby III will become Executive Chairman and Mr. Joseph E. Creed will become Chief Executive Officer. |
2024 SUMMARY COMPENSATION TABLE
| | 2025 PROXY STATEMENT | 59 |
2024 SUMMARY COMPENSATION TABLE
2024 ALL OTHER COMPENSATION TABLE
GRANTS OF PLAN-BASED AWARDS IN 2024
GRANTS OF PLAN-BASED AWARDS IN 2024
GRANTS OF PLAN-BASED AWARDS IN 2024
| | | Approval Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units(3) | All Other Option Awards: Number of Securities Underlying Options (4) | Exercise or Base Price of Option Awards ($/ Share) | Grant Date Fair Value of Stock and Option Awards ($)(5) | | Name | Grant Date | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | D. James Umpleby, III | 3/4/2024 | 2/14/2024 | | | | 12,181 | 24,361 | 48,722 | — | — | $— | $9,954,879 | | | 3/4/2024 | 2/14/2024 | | | | | | | 12,181 | — | $— | $4,125,096 | | | 3/4/2024 | 2/14/2024 | | | | | | | — | 39,561 | $338.65 | $4,125,037 | | | AIP(6) | | 1,675,476 | 3,350,952 | 6,701,904 | | | | | | | | | Joseph E. Creed | 3/4/2024 | 2/13/2024 | | | | 5,168 | 10,335 | 20,670 | — | — | $— | $4,223,294 | | | 3/4/2024 | 2/13/2024 | | | | | | | 5,168 | — | $— | $1,750,143 | | | 3/4/2024 | 2/13/2024 | | | | | | | — | 16,783 | $338.65 | $1,749,968 | | | AIP(6) | | 724,750 | 1,449,500 | 2,899,000 | | | | | | | | | Denise C. Johnson | 1/12/2024 | 1/8/2024 | | | | | | | 6,887 | — | $— | $2,000,054 | | | 3/4/2024 | 2/13/2024 | | | | 2,732 | 5,463 | 10,926 | — | — | $— | $2,232,400 | | | 3/4/2024 | 2/13/2024 | | | | | | | 2,731 | — | $— | $924,853 | | | 3/4/2024 | 2/13/2024 | | | | | | | — | 8,871 | $338.65 | $924,982 | | | AIP(6) | | 545,072 | 1,090,143 | 2,180,286 | | | | | | | | | Bob De Lange | 1/12/2024 | 1/8/2024 | | | | | | | 6,887 | — | $— | $2,000,054 | | | 3/4/2024 | 2/13/2024 | | | | 2,732 | 5,463 | 10,926 | — | — | $— | $2,232,400 | | | 3/4/2024 | 2/13/2024 | | | | | | | 2,731 | — | $— | $924,853 | | | 3/4/2024 | 2/13/2024 | | | | | | | — | 8,871 | $338.65 | $924,982 | | | AIP(6) | | 511,749 | 1,023,497 | 2,046,994 | | | | | | | | | Andrew R. J. Bonfield | 3/4/2024 | 2/13/2024 | | | | 3,544 | 7,087 | 14,174 | — | — | $— | $2,896,032 | | | 3/4/2024 | 2/13/2024 | | | | | | | 3,543 | — | — | 1,199,837 | | | 3/4/2024 | 2/13/2024 | | | | | | | — | 11,509 | $338.65 | $1,200,047 | | | AIP(6) | | 548,263 | 1,096,526 | 2,193,052 | | | | | | | |
GRANTS OF PLAN-BASED AWARDS IN 2024
| (1) The amounts reported represent estimated potential awards under the 2024 AIP. | | (2) The amounts reported represent estimated potential awards under the LTIP. PRSUs were granted on March 4, 2024, under the LTIP for the 2024-2026 performance period. PRSUs vest at the end of the three-year performance period to the extent that the company achieves the performance goals. Please refer to page 53 of the CD&A for a detailed explanation of the performance metrics and payout opportunity. | | (3) The amounts reported in this column represent restricted stock units granted under the LTIP. RSUs granted on January 12, 2024 vest in 25%-25%-50% increments on January 12, 2025, January 12, 2026 and January 12, 2027. RSUs granted on March 4, 2024 vest in one-third increments on March 4, 2025, March 4, 2026, and March 4, 2027. | | (4) The amounts reported in this column represent stock options granted under the LTIP. The exercise price for all stock options granted to the NEOs is the closing price of Caterpillar stock on the grant date, March 4, 2024. All stock options granted to the NEOs will vest in one-third increments on March 4, 2025, March 4, 2026, and March 4, 2027. | | (5) The amounts shown do not reflect realized compensation by the NEO. As reported in this column, the value of stock options and RSUs granted in 2024 are based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 and the value of PRSUs granted in 2024 under the LTIP are based on the aggregate grant date fair value computed in accordance with FASB ASC Topic 718, assuming the target level of performance is achieved for the PRSUs, which at the time of the grant reflected the probable level of achievement. | | (6) The 2024 AIP estimates shown are based on each executive’s base salary for 2024. The actual payout was based on the achievement of corporate and business unit performance metrics and the Strategic Objectives Modifiers. Please refer to page 50 of the CD&A for a detailed explanation of the various performance metrics. Annual payments to each NEO under AIP are limited by a plan cap of $15 million. The cash payouts for the 2024 plan year are included in the column “Non-Equity Incentive Plan Compensation” of the “2024 Summary Compensation Table.” |
GRANTS OF PLAN-BASED AWARDS IN 2024
| | 2025 PROXY STATEMENT | 61 |
GRANTS OF PLAN-BASED AWARDS IN 2024
| Option Awards | | | | | | Stock Awards | | | | | | | | | | | | | Equity Incentive Plan Awards | | | | Number of Securities Underlying Unexercised Options | | | Option Exercise Price | Option Expiration Date(1) | Number of Shares or Units of Stock that have not Vested(2) | Market Value of Shares or Units of Stock that have not Vested(3) | Number of Unearned Shares, Units or other Rights that have not Vested(4) | Market or Payout Value of Unearned Share, Units or other Rights that have not Vested(3) | | | Grant Date | Exercisable | Unexercisable | | | | | | | | D. James Umpleby, III | 3/1/2021 | 155,411 | — | $219.76 | 3/1/2031 | — | $— | — | $— | | | 3/7/2022 | — | — | $— | | — | $— | 36,126(5) | $13,105,068 | | | 3/7/2022 | — | 43,526 | $196.70 | 3/7/2032 | — | $— | — | $— | | | 3/6/2023 | — | — | $— | | — | $— | 34,505(6) | $12,517,034 | | | 3/6/2023 | 37,386 | 74,770 | $253.98 | 3/6/2033 | — | $— | — | $— | | | 3/4/2024 | — | — | $— | | 12,320 | $4,469,203 | — | $— | | | 3/4/2024 | — | — | $— | | — | $— | 49,278(7) | $17,876,087 | | | 3/4/2024 | — | 39,561 | $338.65 | 3/4/2034 | — | $— | — | $— | | Joseph E. Creed | 3/1/2021 | 44,403 | — | $219.76 | 3/1/2031 | — | $— | — | $— | | | 3/7/2022 | — | — | $— | | — | $— | 9,901(5) | $3,591,687 | | | 3/7/2022 | 23,859 | 11,929 | $196.70 | 3/7/2032 | — | $— | — | $— | | | 3/6/2023 | — | — | $— | | — | $— | 8,931(6) | $3,239,810 | | | 3/6/2023 | 9,676 | 19,352 | $253.98 | 3/6/2033 | — | $— | — | $— | | | 3/4/2024 | — | — | $— | | 5,227 | $1,896,147 | — | $— | | | 3/4/2024 | — | — | $— | | — | $— | 20,906(7) | $7,583,861 | | | 3/4/2024 | — | 16,783 | $338.65 | 3/4/2034 | — | $— | — | $— | | Denise C. Johnson | 3/1/2021 | 45,291 | — | $219.76 | 3/1/2031 | — | $— | — | $— | | | 3/7/2022 | — | — | $— | | — | $— | 9,901(5) | $3,591,687 | | | 3/7/2022 | 23,859 | 11,929 | $196.70 | 3/7/2032 | — | $— | — | $— | | | 3/6/2023 | — | — | $— | | — | $— | 8,931(6) | $3,239,810 | | | 3/6/2023 | 9,676 | 19,352 | $253.98 | 3/6/2033 | — | $— | — | $— | | | 1/12/2024 | — | — | $— | | 6,994 | $2,537,143 | — | $— | | | 3/4/2024 | — | — | $— | | 2,762 | $1,001,943 | — | $— | | | 3/4/2024 | — | — | $— | | — | $— | 11,050(7) | $4,008,498 | | | 3/4/2024 | — | 8,871 | $338.65 | 3/4/2034 | — | $— | — | $— | | Bob De Lange | 3/5/2018 | 40,512 | — | $151.12 | 3/5/2028 | — | $— | — | $— | | | 3/4/2019 | 48,034 | — | $138.35 | 3/4/2029 | — | $— | — | $— | | | 3/2/2020 | 71,210 | — | $127.60 | 3/2/2030 | — | $— | — | $— | | | 3/1/2021 | 44,403 | — | $219.76 | 3/1/2031 | — | $— | — | $— | | | 3/7/2022 | — | — | $— | | — | $— | 9,901(5) | $3,591,687 | | | 3/7/2022 | 23,859 | 11,929 | $196.70 | 3/7/2032 | — | $— | — | $— | | | 3/6/2023 | — | — | $— | | — | $— | 8,931(6) | $3,239,810 | | | 3/6/2023 | 9,676 | 19,352 | $253.98 | 3/6/2033 | — | $— | — | $— | | | 1/12/2024 | — | — | $— | | 6,994 | $2,537,143 | — | $— | | | 3/4/2024 | — | — | $— | | 2,762 | $1,001,943 | — | $— | | | 3/4/2024 | — | — | $— | | — | $— | 11,050(7) | $4,008,498 | | | 3/4/2024 | — | 8,871 | $338.65 | 3/4/2034 | — | $— | — | $— |
GRANTS OF PLAN-BASED AWARDS IN 2024
| 62 | | 2025 PROXY STATEMENT |
GRANTS OF PLAN-BASED AWARDS IN 2024
| Option Awards | | | | | | Stock Awards | | | | | | | | | | | Number | | Equity Incentive Plan Awards | | | | Number of Securities Underlying Unexercised Options | | | Option Exercise Price | Option Expiration Date(1) | of Shares or Units of Stock that have not Vested(2) | Market Value of Shares or Units of Stock that have not Vested(3) | Number of Unearned Shares, Units or other Rights that have not Vested(4) | Market or Payout Value of Unearned Share, Units or other Rights that have not Vested(3) | | | Grant Date | Exercisable | Unexercisable | | | | | | | | Andrew R. J. Bonfield | 3/7/2022 | — | — | $— | | — | $— | 11,775(5) | $4,271,499 | | | 3/7/2022 | — | 14,186 | $196.70 | 3/7/2032 | — | $— | — | $— | | | 3/6/2023 | — | — | $— | | — | $— | 10,757(6) | $3,902,209 | | | 3/6/2023 | 11,656 | 23,310 | $253.98 | 3/6/2033 | — | $— | — | $— | | | 3/4/2024 | — | — | $— | | 3,583 | $1,299,769 | — | $— | | | 3/4/2024 | — | — | $— | | — | $— | 14,336(7) | $5,200,527 | | | 3/4/2024 | — | 11,509 | $338.65 | 3/4/2034 | — | $— | — | $— |
GRANTS OF PLAN-BASED AWARDS IN 2024
| (1) Stock options granted in 2022, 2023 and 2024 are exercisable in one-third increments on each of the first through third year anniversaries of the date of grant for all NEOs. Stock options expire ten years from the grant date for an active employee. | | (2) The amounts shown include the portion of any RSU grants that were not vested as of December 31, 2024. The grants provide for DEUs to accrue on unvested RSUs when a dividend is paid by the company. The amount shown includes any applicable DEUs accrued as of December 31, 2024 (rounded to the nearest whole unit). RSUs granted on January 12, 2024 vest in 25%-25%-50% increments on each of the first through third year anniversaries of the date of grant. RSUs granted on March 4, 2024 vest in one-third increments on each of the first through third year anniversaries of the date of grant for all NEOs. | | (3) Market value is based on the number of RSUs or PRSUs, including DEUs, that have not vested (rounded to the nearest whole unit), multiplied by $362.76, the closing price of Caterpillar’s common stock on December 31, 2024. | | (4) The amounts shown include the portion of any PRSU grants that were not vested as of December 31, 2024. The grants provide for DEUs to accrue on unvested PRSUs when a dividend is paid by the company. The amount shown includes any applicable DEUs accrued as of December 31, 2024 (rounded to the nearest whole unit). PRSUs vest at the close of the three-year performance period, if, and to the extent that, the performance criteria are satisfied in the period. | | (5) This amount represents the PRSUs that vested based on the achievement of an average ROE performance hurdle over the three-year performance period ending December 31, 2024. The company achieved the ROE performance goal and, accordingly, the PRSUs vested and the shares were released February 11 2025. | | (6) This amount represents the PRSUs that are scheduled to vest in 2026 following the end of the performance period, based on the company’s achievement of an average ROE performance hurdle over the three-year performance period. The number of PRSUs reported in this table assumes the aggregate ROE performance hurdle is achieved for the three-year performance period ending December 31, 2025. | | (7) This amount represents the PRSUs that are scheduled to vest in 2027 following the end of the performance period, based on the company’s achievement of the applicable performance goals over the three-year performance period. The number of PRSUs reported in this table assumes maximum (200%) achievement of the aggregate ROIC and TSR performance goals for the three-year performance period ending December 31, 2026. |
GRANTS OF PLAN-BASED AWARDS IN 2024
| | 2025 PROXY STATEMENT | 63 |
GRANTS OF PLAN-BASED AWARDS IN 2024
COMPENSATION DISCUSSION & ANALYSIS 2024 OPTION EXERCISES AND STOCK VESTED
2024 OPTION EXERCISES AND STOCK VESTED
2024 OPTION EXERCISES AND STOCK VESTED
2024 OPTION EXERCISES AND STOCK VESTED
| | Option Awards(1) | | Stock Awards(2) | | | Name | Number of Shares Acquired on Exercise | Value Realized on Exercise | Number of Shares Acquired on Vesting | Value Realized on Vesting | | D. James Umpleby, III | 87,053 | $18,831,305 | 42,136 | $13,205,212 | | Joseph E. Creed | — | $— | 12,039 | $3,772,962 | | Denise C. Johnson | — | $— | 12,280 | $3,848,491 | | Bob De Lange | 80,551 | $20,090,181 | 12,039 | $3,772,962 | | Andrew R. J. Bonfield | 29,579 | $3,895,096 | 12,520 | $3,923,705 |
2024 OPTION EXERCISES AND STOCK VESTED
| (1) The number of shares acquired on exercise represents the total number of options exercised before taking into account any shares withheld to cover applicable tax obligations or the exercise price. Value realized on exercise is calculated by multiplying the options exercised by the difference between the price of our common stock at the time of exercise and the exercise price. | | (2) The number of shares acquired on vesting represents the number of PRSUs released upon vesting before taking into account any shares withheld to cover applicable tax obligations. Value realized on vesting is calculated by multiplying the number of vested PRSUs by the average of the high and low market price of our common stock on the vesting date. |
2024 PENSION BENEFITS
2024 PENSION BENEFITS
2024 PENSION BENEFITS
| Name | Plan Name(1) | Number of Years of Credited Service(2) | Present Value of Accumulated Benefit(3,4) | Payments During Last Fiscal Year | | D. James Umpleby, III | RIP - Solar RP | 25 | $2,125,634 | $— | | | Solar MRO | 25 | $27,761,637 | $— | | Joseph E. Creed | RIP | 13.58 | $209,807 | $— | | Denise C. Johnson | ---- | — | $— | $— | | Bob De Lange | ---- | — | $— | $— | | Andrew R. J. Bonfield | ---- | — | $— | $— |
2024 PENSION BENEFITS
| (1) Upon his initial hire with Solar Turbines Inc, a wholly owned subsidiary of Caterpillar, on July 7, 1980, Mr. Umpleby became eligible to participate in the Solar Turbines Inc. Retirement Plan (Solar RP) and the Solar Turbines Incorporated Managerial Retirement Objective Plan (Solar MRO). Mr. Creed participates in the Caterpillar, Inc. Retirement Income Plan (RIP). The Solar RP was merged into RIP as of January 1, 2015; however, all benefit and eligibility provisions of Solar RP remain unchanged. The RIP is a noncontributory U.S. qualified defined benefit pension plan and the Solar MRO is a U.S. non-qualified pension plan. Ms. Johnson, Mr. De Lange and Mr. Bonfield do not participate in a pension plan. | | (2) Mr. Umpleby has more than 44 years of service with the company and meets the normal retirement eligibility requirement of age 65 with at least five years of service. The Solar RP was merged into RIP as of January 1, 2015; however, all benefit and eligibility provisions of Solar RP remain unchanged. The total benefit formula for the Solar RP is 60 percent of final average salary minus 65 percent of the monthly Social Security benefit prorated for years of service less than 25. Final average salary is the average base salary for the highest consecutive 36-month period during the 120-month period prior to the determination date. The Solar MRO provides a benefit under the same benefit formula but includes base salary and cash incentive compensation. Amounts payable under both Solar RP and Solar MRO are based upon a maximum of 25 years of service. | | Mr. Creed has more than 27 years of service with the company. The Traditional benefit formula for the RIP is 1.5 percent of final average salary times years of service as of the freeze date of the plan (up to 35). Final average salary is the average base and cash incentive compensation for the 5 highest 12-month periods during the 120-month period prior to the determination date. Mr. Creed does not currently meet early retirement eligibility criteria as defined under RIP but would be eligible upon attainment of 30 years of service or age 55, whichever comes first. | | The NEOs’ annual retirement income benefits under RIP are restricted by the Internal Revenue Code limitations and the excess benefit is paid from the Solar MRO for Mr. Umpleby. Solar MRO is not funded. | | (3) The present value of accumulated benefits payable is determined assuming commencement on the NEO’s earliest unreduced retirement date using a discount rate of 5.54% and the PRI-2012 White Collar separate annuitant and non-annuitant mortality table with a load factor of 93.6% and projected forward using Scale MP-2021 fully generational. Mr. Umpleby satisfies the plans’ unreduced normal retirement criteria, attainment of age 65 with at least 5 years of service. Mr. Creed does not satisfy unreduced early retirement criteria; his benefit is valued at his normal retirement age. | | (4) Mr. Umpleby’s pension benefit is based on the average of the highest consecutive 36 months of pensionable earnings in the 120-month period prior to the determination date of December 31, 2019, the date on which the Solar RP and Solar MRO were frozen for all sunset employees. Mr. Creed’s pension benefit under RIP is based on the average of the 5 highest 12-month periods within the 120-month period preceding the determination date of December 31, 2010, the date on which RIP was frozen for all non-sunset employees. Pensionable earnings under these plans include base salary and cash incentive compensation. Although Mr. Umpleby and Mr. Creed no longer accrue additional benefits under these plans, the present value of the accumulated benefit as reported may increase or decrease each year based on the actuarial and interest rate assumptions used to calculate the benefits for financial reporting purposes. |
2024 PENSION BENEFITS
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2024 PENSION BENEFITS
COMPENSATION DISCUSSION & ANALYSIS 2024 NONQUALIFIED DEFERRED COMPENSATION
2024 NONQUALIFIED DEFERRED COMPENSATION
2024 NONQUALIFIED DEFERRED COMPENSATION The “2024 Nonqualified Deferred Compensation” table describes unfunded, non-qualified deferred compensation plans that permit the deferral of salary, bonus and short-term cash performance awards by NEOs. These plans also provide for matching and/or annual non-elective contributions by the company. NEOs are eligible to receive the amount in their deferred compensation accounts following termination under any termination scenario unless the NEO elected to further defer the payment as permitted by the plans.
2024 NONQUALIFIED DEFERRED COMPENSATION
| Name | Plan Name(1) | Executive Contributions in 2024(2) | Registrant Contributions in 2024(2) | Aggregate Earnings in 2024(3) | Aggregate Balance At 12/31/ 2024(4) | | D. James Umpleby, III | SDCP | $432,009 | $733,874 | $3,316,210 | $18,228,965 | | | SEIP | $— | $— | $10,471 | $76,746 | | | DEIP | $— | $— | $1,327,342 | $8,132,957 | | Joseph E. Creed | SDCP | $152,502 | $243,002 | $600,474 | $3,366,530 | | Denise C. Johnson | SDCP | $148,626 | $254,939 | $2,009,651 | $10,560,590 | | Bob De Lange | SDCP | $131,769 | $230,084 | $636,431 | $3,673,840 | | Andrew R. J. Bonfield | SDCP | $204,402 | $255,062 | $134,159 | $1,954,454 |
2024 NONQUALIFIED DEFERRED COMPENSATION
| (1) The Supplemental Deferred Compensation Plan (SDCP) is a non-qualified deferred compensation plan, which effectively replaced the Supplemental Employees’ Investment Plan (SEIP) and Deferred Employees’ Investment Plan (DEIP). | | (2) SDCP allows eligible U.S. employees, including all NEOs, to voluntarily defer a portion of their base salary and annual incentive pay into the plan and receive a company matching contribution. Amounts deferred by executives in 2024 for base salary and annual incentive pay are included in the “2024 Summary Compensation Table.” Eligible U.S. employees, including all NEOs, also receive an annual non-elective contribution to SDCP by the company regardless of employee deferrals. Annual non-elective contributions and/or matching contributions to SDCP made by Caterpillar in 2024 are included in the “2024 All Other Compensation Table” under the “Company Contributions SDCP” column. SDCP participants may elect to receive a lump sum payment, or installment payments payable for up to 15 years, following their separation from service. | | (3) Aggregate earnings comprise interest, dividends, capital gains and appreciation/depreciation of notional investment results. The investment choices available to the participant mirror those of the company’s 401(k) plans. | | (4) Amounts in this column include the following amounts that have been reported in the “Summary Compensation Table” for the years 2022–2024 as follows: Mr. Umpleby, $3,007,566; Mr. Creed, $907,658; Ms. Johnson, $1,084,933; Mr. De Lange, $661,420; Mr. Bonfield, $1,170,462. |
2024 NONQUALIFIED DEFERRED COMPENSATION
| | 2025 PROXY STATEMENT | 65 |
2024 NONQUALIFIED DEFERRED COMPENSATION
COMPENSATION DISCUSSION & ANALYSIS POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL Except for customary provisions in employee compensation plans or as required by law, there are no pre-existing severance or change in control agreements with the NEOs. The following is a summary of the compensation that would become payable under the existing compensation plans if an NEO’s employment had terminated on December 31, 2024, in each of the following scenarios:
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| ■ | Voluntary Separation, including retirement that does not qualify as Long-Service Separation | | ■ | Long-Service Separation (separation after age 55 with five or more years of company service) | | ■ | Termination for Cause | | ■ | Termination without Cause or for Good Reason within one year following a change in control (termination following CIC) |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| EQUITY AWARDS | | | | Voluntary Separation | ■ | Stock Options: Vested awards are exercisable until the earlier of the expiration date or 60 days from the separation date; unvested awards are forfeited | | | ■ | RSUs and PRSUs: Unvested awards are forfeited | | Long-Service Separation | ■ | Stock Options: Vest over the normal vesting schedule and become exercisable for the remaining term of the award | | | ■ | RSUs: RSUs, other than those granted on January 12, 2024, remain outstanding and vest in accordance with the vesting schedule; Unvested awards granted on January 12, 2024 are forfeited | | | ■ | PRSUs: Remain outstanding and vest if and to the extent the performance goals are achieved | | Termination for Cause | ■ | Stock Options: Vested but unexercised awards and unvested awards are forfeited | | | ■ | RSUs and PRSUs: Unvested awards are forfeited | | Termination following CIC | ■ | Stock Options: Vest and become immediately exercisable for remaining term of the award | | | ■ | RSUs: Accelerated vesting of outstanding awards | | | ■ | PRSUs: For awards granted prior to 2024, accelerated vesting of outstanding awards; For awards granted in 2024 and after, accelerated vesting of outstanding awards at target levels |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| ANNUAL INCENTIVE AWARDS | | | | Voluntary Separation | ■ | Payment is forfeited | | Long-Service Separation | ■ | Payment for a pro-rated service period based on actual results | | Termination for Cause | ■ | Payment is forfeited | | Termination following CIC | ■ | Payment for a pro-rated service period assuming achievement of target opportunity |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
COMPENSATION DISCUSSION & ANALYSIS POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
TERMS AND POTENTIAL PAYMENTS – CHANGE IN CONTROL
TERMS AND POTENTIAL PAYMENTS – CHANGE IN CONTROL The following tabular information quantifies certain payments that would become payable under existing plans and arrangements if the NEO’s employment had terminated on December 31, 2024. The information is provided relative to the NEO’s compensation and service levels as of the date specified.
TERMS AND POTENTIAL PAYMENTS – CHANGE IN CONTROL
| | | Equity Awards | | | | | Name | Termination Scenario(1) | Stock Options(2) | PRSUs/ RSUs(3) | Annual Incentive(4) | Total | | D. James Umpleby, III | Voluntary Separation | $16,315,225 | $39,029,349 | $4,363,800 | $59,708,374 | | | Termination for Cause | $— | $— | $— | $— | | | Termination Following CIC | $16,315,225 | $39,029,349 | $3,350,952 | $58,695,526 | | Joseph E. Creed | Voluntary Separation | $— | $— | $— | $— | | | Termination for Cause | $— | $— | $— | $— | | | Termination Following CIC | $4,490,679 | $12,519,574 | $1,449,500 | $18,459,753 | | Denise C. Johnson | Voluntary Separation | $4,299,921 | $9,837,689 | $1,374,500 | $15,512,110 | | | Termination for Cause | $— | $— | $— | $— | | | Termination Following CIC | $4,299,921 | $12,374,832 | $1,090,143 | $17,764,896 | | Bob De Lange | Voluntary Separation | $4,299,921 | $9,837,689 | $1,299,200 | $15,436,810 | | | Termination for Cause | $— | $— | $— | $— | | | Termination Following CIC | $4,299,921 | $12,374,832 | $1,023,497 | $17,698,250 | | Andrew R. J. Bonfield | Voluntary Separation | $5,168,871 | $12,073,741 | $1,434,400 | $18,677,012 | | | Termination for Cause | $— | $— | $— | $— | | | Termination Following CIC | $5,168,871 | $12,073,741 | $1,096,526 | $18,339,138 |
TERMS AND POTENTIAL PAYMENTS – CHANGE IN CONTROL
| (1) If a NEO qualifies for Long-Service Separation and voluntarily separates from the company, Long-Service Separation rules will apply to all outstanding awards, with the exception of the retention awards granted on January 12, 2024. In 2024, Mr. Umpleby, Ms. Johnson, Mr. De Lange and Mr. Bonfield each qualified for Long-Service Separation and would therefore receive the amounts reported under “Voluntary Separation.” | | (2) For valuation purposes, as of December 31, 2024, the option exercise price was lower than the year-end closing price of $362.76 for all outstanding options. The 2022, 2023, and 2024 grants were not fully vested as of December 31, 2024. | | (3) The valuation shown is based on the number of RSUs and the number of PRSUs granted, including any applicable DEUs, that have not vested (rounded to the nearest whole unit) multiplied by the closing price of Caterpillar common stock on December 31, 2024, which was $362.76 per share. | | (4) The AIP provisions limit the payout to a maximum of $15.0 million per participant in any single year. Amounts shown for “Termination Following CIC” represent the target payout available under the AIP. |
TERMS AND POTENTIAL PAYMENTS – CHANGE IN CONTROL
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TERMS AND POTENTIAL PAYMENTS – CHANGE IN CONTROL
COMPENSATION DISCUSSION & ANALYSIS CEO PAY RATIO
CEO PAY RATIO
CEO PAY RATIO The company is providing the following disclosure about the relationship of the annual total compensation of its employees to the annual total compensation of Mr. Umpleby, who served as Chairman and CEO throughout 2024. To better understand this disclosure, it is important to emphasize that the company’s compensation programs are designed to reflect local market practices across our global operations. The company strives to create a competitive global compensation program in terms of both the position and the geographic location in which Caterpillar employees are located. As a result, the company’s compensation programs vary among each local market to provide for a competitive compensation package.
CEO PAY RATIO
| ■ | The median annual total compensation of all Caterpillar employees, other than Mr. Umpleby, was $63,238. | | ■ | Mr. Umpleby’s annual total compensation, as reported in the Summary Compensation Table, was $25,261,296. | | ■ | The ratio of Mr. Umpleby’s annual total compensation compared to the median of the annual total compensation of all employees was 399 to 1. |
CEO PAY RATIO
As permitted by SEC rules, we determined that for 2024 we could refer to the same median employee that was identified for 2023. Such employee’s 2023 compensation was substantially similar to the compensation of the median employee identified for 2022, who left the company in August 2023 and thus could not be used for 2023. There has been no change in either our employee population or our employee compensation arrangements in 2024 or 2023 that we believe would significantly impact our pay ratio disclosure. The median employee for 2022 was identified by including all full- and part-time employees as of October 1, 2022, of which approximately 44 percent were in the U.S. and 56 percent were outside of the United States. The company did not exclude any of its employees when determining the employee population from which to identify the median employee. For purposes of identifying the median employee, the company considered the base salary and annual cash incentive. Base salary and annual cash incentive were chosen because (i) they represent the principal forms of compensation delivered to all employees and (ii) this information is readily available in each country. In addition, compensation was measured using the 12-month period ending December 31, 2022. The company’s median employee’s total compensation for 2024 was calculated in accordance with Item 402(c)(2)(x) of Regulation S-K, as required pursuant to the SEC executive compensation disclosure rules.
CEO PAY RATIO
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PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE 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, we are providing the following information about the relationship between “compensation actually paid” as determined under SEC requirements to our CEO and to our other NEOs and certain financial performance of the company. Compensation actually paid does not reflect the actual amount of compensation earned by or paid to our executive officers during a covered year. For further information concerning the company’s pay-for-performance philosophy and how the company aligns executive compensation with company’s performance, see the Compensation Discussion and Analysis.
PAY VERSUS PERFORMANCE TABLE
PAY VERSUS PERFORMANCE TABLE
PAY VERSUS PERFORMANCE TABLE
| | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Year(1) | SCT Total Compensation for CEO | Compensation Actually Paid to CEO(2) | Average SCT Total Compensation for Other NEOs | Average Compensation Actually Paid to Other NEOs(2) | Cumulative TSR(3) | Cumulative Peer Group TSR (S&P 500 Industrials)(3) | Net Income ($M) | Return on Equity(4) | | 2024 | $25,261,296 | $45,738,387 | $9,094,854 | $15,172,848 | $274.14 | $176.44 | $10,792 | 55.0% | | 2023 | $25,830,332 | $39,641,382 | $7,698,819 | $11,525,285 | $219.91 | $150.20 | $10,335 | 61.5% | | 2022 | $20,607,600 | $34,096,694 | $6,610,827 | $10,398,658 | $174.60 | $127.15 | $6,705 | 45.3% | | 2021 | $24,298,032 | $34,172,491 | $7,610,248 | $10,084,611 | $147.22 | $134.52 | $6,489 | 37.2% | | 2020 | $13,676,551 | $28,536,469 | $4,749,102 | $9,387,400 | $126.97 | $111.06 | $2,998 | 24.0% |
PAY VERSUS PERFORMANCE TABLE
| (1) For each covered year, D. James Umpleby III served as our chief executive officer. Other Named Executive Officers are as follows: for 2024, 2022 and 2021, Joe Creed, Denise Johnson, Bob De Lange and Andrew Bonfield; for 2023, Andrew Bonfield, Suzette Long, Denise Johnson and Joe Creed; and for 2020, Andrew Bonfield, William Ainsworth, Bob De Lange and Denise Johnson. | | (2) Amounts reported in this column are based on total compensation reported for our CEO and for other NEOs, respectively, in the Summary Compensation Table for the indicated fiscal years and adjusted as shown in the table below. Fair value of equity awards was computed in accordance with the company’s methodology used for financial reporting purposes. |
PAY VERSUS PERFORMANCE TABLE
| | | SCT Total Compensation | Grant Date fair value of current year grants as disclosed in the SCT | Year-End fair value of awards granted in current year and unvested at year-end | Change in fair value of awards granted in prior years and unvested at year-end | Change in fair value of awards granted in prior years and vested in current year | Prior Year-End fair value of any awards forfeited during current year | Compensation Actually Paid | | 2024 | CEO(1) | $25,261,296 | $(18,205,012) | $24,510,628 | $7,650,777 | $6,520,698 | $— | $45,738,387 | | | NEO Average(1) | $9,094,854 | $(6,295,975) | $8,398,883 | $2,113,899 | $1,861,187 | $— | $15,172,848 |
PAY VERSUS PERFORMANCE TABLE
| (3) Total shareholder return amounts assume an initial investment of $100 on December 31, 2019. |
PAY VERSUS PERFORMANCE TABLE
| (4) In accordance with SEC rules, the company is required to include in the Pay Versus Performance Table the “most important” financial performance measure (as determined by the company) used to link compensation actually paid to our executive officers to company performance for the most recently completed fiscal year. The company determined Return on Equity, which is a metric included in our incentive program, meets this requirement, and therefore, we have included this performance measure in the Pay Versus Performance Table. See page 55 for information regarding adjustments made to ROE. |
PAY VERSUS PERFORMANCE TABLE
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PAY VERSUS PERFORMANCE TABLE
The graphs below provide descriptions of the relationship between compensation actually paid (CAP) to our CEO and the average of the CAP to our other NEOs and our total shareholder return (TSR), net income (referred to as profit in our consolidated financial statements) and ROE for the period indicated. In addition, the first graph below describes the relationship between Caterpillar’s TSR and our peer group’s TSR (S&P 500 Industrials) for the period indicated. Compensation Actually Paid and TSR Compensation Actually Paid and Net Income Compensation Actually Paid and ROE
PAY VERSUS PERFORMANCE TABLE
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