Warren E. Hoffner
Vice President, General Manager – Fluid Power & Flow Control at 
APPLIED INDUSTRIAL TECHNOLOGIES
APPLIED INDUSTRIAL TECHNOLOGIESExecutive
About Warren E. Hoffner
Warren E. Hoffner is Vice President, General Manager – Fluid Power & Flow Control at Applied Industrial Technologies (AIT). He joined AIT in 1996 via acquisition of a distribution business he and his father owned; he was designated an executive officer in 2015 and is age 65 as of FY2025 . Recent enterprise performance relevant to incentive metrics shows steady growth: revenues rose year-over-year from FY2021–FY2025, adjusted EBITDA expanded, and the company TSR index increased from 148.43 (FY2021) to 394.04 (FY2025) . See multi-year results below.
| Metric | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|---|---|
| Revenue ($USD) | $3,235,919,000 | $3,810,676,000 | $4,412,794,000 | $4,479,406,000 | $4,563,424,000 |
| EBITDA ($USD) | $309,844,000* | $410,803,000* | $525,936,000* | $548,063,000* | $560,472,000* |
| Company TSR Index (Value of $100) | 148.43 | 158.89 | 241.87 | 326.62 | 394.04 |
Values retrieved from S&P Global.*
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Applied Industrial Technologies | Vice President, General Manager – Fluid Power | 2003–Oct 2018 | Executive leadership of Fluid Power operations (title history) |
| Applied Industrial Technologies | Vice President, General Manager – Engineered Solutions | Oct 2018–present (per 10-K officer bio) | Oversight of Engineered Solutions portfolio (title history) |
| Applied Industrial Technologies | Executive Officer designation | 2015 | Elevated to NEO status |
| Applied Industrial Technologies | Joined via acquisition of family-owned distributor | 1996 | Integration of acquired operations into AIT |
External Roles
No external public-company directorships or committee roles are disclosed in AIT’s 10-K and proxy materials reviewed .
Fixed Compensation
Base salary and annual incentive targets (FY2025 program):
| Item | Value |
|---|---|
| Base Salary (annualized) | $427,500 |
| Target Bonus % | 60% of base salary |
| Target Bonus ($) | $256,500 |
| Actual Salary Paid (FY2025) | $392,768 (reflects temporary 1H FY2025 reduction) |
All Other Compensation detail (FY2025):
| Component | Amount ($) |
|---|---|
| Retirement Savings Plan contributions | $6,413 |
| Key Executive Restoration Plan (KERP) account credits | $33,624 |
| Gross-up payments | $0 |
| Life insurance benefits | $1,126 |
| Perquisites and other personal benefits | $58 |
Multi-year reported compensation (Summary Compensation Table):
| Year | Salary ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|---|
| FY2023 | 415,000 | 354,408 | 111,538 | 384,157 | 52,033 | 1,317,136 |
| FY2024 | 427,500 | 371,449 | 146,863 | 258,142 | 52,207 | 1,256,161 |
| FY2025 | 392,768 | 374,841 | 160,000 | 271,326 | 41,221 | 1,240,156 |
| FY2022 | 400,000 | 310,212 | 90,372 | 398,400 | 53,643 | 1,252,627 |
Performance Compensation
Management Incentive Plan (MIP) – FY2025 structure and outcomes:
| Metric | Weighting | Threshold | Target | Maximum | FY2025 Actual | Payout as % of Prorated Target |
|---|---|---|---|---|---|---|
| Net Income | 60% | $327.6M | $385.4M | $462.5M | $389.8M (adjusted) | 105.8% |
| Avg. Working Capital as % of Sales | 20% | 28.5% | 25.9% | 23.3% | 25.6% | 111.5% |
| Individual Performance | 20% | — | — | — | Committee-evaluated | $51,300 payout for Hoffner |
Annual incentive payout (FY2025): $271,326 for Hoffner .
Long-Term Incentives granted FY2025 (grant date 8/13/2024):
| Award Type | Units / Shares | Base/Strike | Vesting | Grant-Date Fair Value |
|---|---|---|---|---|
| RSUs | 632 units | N/A | Cliff vest at 3 years | $124,776 |
| Stock Appreciation Rights (SARs) | 2,070 | $197.43 per share | 25% per year over 4 years; 10-year term | $160,000 |
| Performance Shares (2025–2027) | Threshold 647; Target 1,294; Max 2,588 | N/A | Earn over 3-year period; annual goals | Included in Stock Awards |
Performance Shares – FY2025 goals (final year of 2023–2025 cycle) and results:
| Metric | Weighting | Threshold | Target | Maximum | FY2025 Actual | Banked Award (% of Target) |
|---|---|---|---|---|---|---|
| EBITDA | 75% | $427.5M | $534.4M | $668.0M | $550.9M (adjusted) | 112.3% |
| ROA | 25% | 10.9% | 13.6% | 17.0% | 13.6% | 100.0% |
| Overall | — | — | — | — | — | 109.2% |
Equity Ownership & Alignment
Beneficial ownership and ownership guidelines:
| Item | Value |
|---|---|
| Shares beneficially owned (Aug 25, 2025) | 57,050 |
| Included vested options/SARs (within total) | 5,024 shares |
| Ownership guideline (3x base salary) | $1,282,500 |
| Value of “owned” holdings (June 30, 2025) | $12,348,033 |
Outstanding equity awards at FY2025 year-end (June 30, 2025):
| Instrument | Exercisable (#) | Unexercisable (#) | Exercise/Base Price | Expiration | Notes |
|---|---|---|---|---|---|
| SARs/Options (grant 8/10/2031) | 850 | — | $88.79 | 8/10/2031 | — |
| SARs/Options (grant 8/9/2032) | 1,550 | 1,550 | $103.92 | 8/9/2032 | — |
| SARs/Options (grant 8/8/2033) | 666 | 1,996 | $142.92 | 8/8/2033 | — |
| SARs/Options (grant 8/13/2024) | — | 2,070 | $197.43 | 8/13/2034 | 25% vesting per year |
| RSUs (unvested units) | — | 1,100 | N/A | — | Market value $255,695 |
| Equity incentive plan shares (unearned PSUs) | — | 3,031 | N/A | — | Market value $704,556 |
| Additional PSU tranches | — | 848 | N/A | — | $197,118 market value |
| Additional PSU tranches | — | 1,552 | N/A | — | $360,762 market value |
Policy alignment and pledging/hedging:
- AIT prohibits hedging and pledging of company stock and prohibits buying on margin; insiders must retain net shares until ownership guidelines are met .
- No additional equity vests within 60 days after August 25, 2025 (reduces near-term selling pressure) .
Employment Terms
| Term | Disclosure |
|---|---|
| Employment start with AIT | 1996 (via acquisition of family-owned distributor) |
| Executive officer designation | 2015 |
| Contract/severance policy | No individual employment contract; no executive severance policy; committee retains discretion (except CIC agreements for other NEOs) |
| Change-in-control agreement | None for Hoffner; CIC agreements exist only for Schrimsher, Wells, Loring |
| Clawback | Mandatory recovery of cash/equity paid on financial metrics if a restatement impacts those metrics |
| Retirement/termination benefits | Upon retirement: pro-rata RSUs/PSUs per program rules; SARs retirement treatment as specified; Hoffner retirement scenario totals shown below |
Potential payments (FY2025 valuation):
- Retirement: Performance Shares $1,106,927; SARs $299,427; RSUs $436,076; KERP $33,624; Total $1,876,054 .
- Change-in-control: Not applicable for Hoffner; $0 under CIC columns .
Related Party Transactions (Governance Red Flags)
- AIT leases two buildings from entities owned by Hoffner’s family: $167,995 per year and $138,881 per year, terms expiring in 2026; rates negotiated via third-party broker and ratified by the Corporate Governance & Sustainability Committee as market competitive . Similar disclosure in 2024 proxy shows $164,299 and $135,825 per year with 2026 expirations .
Investment Implications
- Pay-for-performance alignment: Hoffner’s incentive mix emphasizes operational outcomes (Net Income and Working Capital for cash MIP) and three-year performance shares tied 75% to EBITDA and 25% to ROA; FY2025 achievements produced above-target payouts (MIP 106.2% average; PSUs 109.2%) .
- Retention risk: Unvested RSUs (three-year cliff) and multi-year PSU cycles with annual goals, plus SARs vesting over four years, create meaningful retention hooks; near-term selling pressure is limited by the “no vest within 60 days” disclosure and anti-hedging/pledging policy .
- Alignment: Hoffner’s “owned” holdings of $12.35M materially exceed the 3x salary guideline ($1.28M), reinforcing skin-in-the-game; policy prohibits pledging and hedging, reducing misalignment risks .
- Governance risk: The related-party leases with Hoffner’s family present a monitorable conflict-of-interest risk but are reviewed, negotiated with third-party broker support, and ratified by the board committee; maintain ongoing oversight .
- Severance/CIC economics: Hoffner lacks an individual CIC agreement or guaranteed severance, lowering shareholder exposure to parachute costs; retirement scenario values are primarily equity-related (PSUs/RSUs/SARs), tying payouts to performance and share price .