John Stone
AllegionAbout John Stone
John H. Stone, age 54, has served as Allegion’s President and CEO since July 2022 and as a director since 2022; he is not an independent director under NYSE standards . Under his leadership, Allegion reported FY 2024 net revenues of $3,772.2M (+3.3% YoY), operating income of $780.7M (+10.2% YoY) and adjusted EPS of $7.53; TSR for the 2022–2024 PSU performance period was 10.06% (30th percentile vs S&P 400 Capital Goods), resulting in a 117% PSU payout . Stone previously led integration of the Stanley Access Technologies acquisition (2022), and his remit emphasizes advanced technologies and operating excellence .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Deere & Company | President, Worldwide Construction, Forestry & Power Systems | 2020–2022 | Led significant global operations; drove innovation in smarter, safer, sustainable solutions . |
| Deere & Company | SVP, Intelligent Solutions Group | 2016–2020 | Directed robotics, machine learning and AI technology development; business development and growth strategy . |
External Roles
| Organization | Role | Years |
|---|---|---|
| Cummins Inc. (NYSE: CMI) | Director | Current |
Fixed Compensation
| Component | 2024 Target | Notes |
|---|---|---|
| Base Salary | $1,040,000 | Held flat YoY given market median positioning . |
| Target Bonus (% of Salary) | 125% | AIP target tied to corporate metrics and individual performance . |
| Long-Term Incentive Target | $5,500,000 | Mix: 50% PSUs, 25% options, 25% RSUs . |
| 2025 Targets | $1,075,000 base; 125% AIP; $5,800,000 LTI | Approved by Compensation Committee . |
Performance Compensation
| Metric (Plan) | Weighting | Target | Actual | Payout/Impact | Vesting/Design |
|---|---|---|---|---|---|
| AIP – Adjusted Revenue (Corporate) | Part of blended score | $3,794M | $3,734M | Contributed to 92.06% corporate financial score . | Annual cash, capped 200%; individual performance modifier 0–150% (with ESG modifier up to -3%) . |
| AIP – Adjusted Operating Income (Corporate) | Part of blended score | $857M | $842M | Contributed to 92.06% corporate financial score . | As above . |
| AIP – Adjusted Available Cash Flow (Corporate) | Part of blended score | $570M | $578M | Contributed to 92.06% corporate financial score . | As above . |
| CEO AIP Award (2024) | — | $1,300,000 target | Financial score 92.06%; individual score 100% | Paid $1,196,780 . | Cash; formulaic per plan . |
| PSUs – Adjusted EPS (50%) | 50% | Threshold $6.02; Target $6.74; Max $7.72 | $7.47 | 174% for EPS component; combined 117% payout for 2022–2024 PSUs . | 3-year performance; dividend equivalents accrue; payout 0–200% . |
| PSUs – Relative TSR vs S&P 400/500 Capital Goods (50%) | 50% | 50th percentile target | 30th percentile; TSR 10.1% | 60% for TSR component; combined 117% payout . | Payouts interpolated; TSR cap at target if TSR not positive . |
| Stock Options | 25% of LTI | — | — | Value only if stock appreciates | 10-year term; 3-year ratable vesting . |
| RSUs | 25% of LTI | — | — | Retention value; dividends accrue | 3-year ratable vesting; Stone’s Aug 2022 RSUs vest 25%, 25%, 50% over years 2–4 . |
2024 Annual Equity Awards (granted 2/22/2024):
- PSUs (at target): $3,287,520; 21,107 shares .
- Stock options: $1,375,035; 33,603 options at $130.290 strike .
- RSUs: $1,375,081; 10,554 shares .
Equity Ownership & Alignment
| Item | Amount/Policy | Notes |
|---|---|---|
| Shares owned (ordinary) | 68,181 | As of March 14, 2025 . |
| Options exercisable within 60 days | 86,884 | As of March 14, 2025 . |
| CEO ownership guideline | 6x base salary; 5-year compliance timeline | Unvested RSUs count; unvested PSUs and options excluded; executives compliant or on track (April 2024 evaluation) . |
| Hedging/pledging | Prohibited; zero pledged shares by directors/officers | Insider Trading Policy bans hedging and pledging; no pledges outstanding . |
| 2024 vesting/exercises | 17,079 shares vested; no option exercises | Value on vesting $2,287,351 . |
Employment Terms
| Provision | Terms |
|---|---|
| Employment agreement term | Company states no employment agreements with defined term lengths; compensation governed by plan documents and committee approvals . |
| Clawbacks | NYSE Rule 10D-1 compliant clawback for restatements; enhanced discretionary clawback for fraud/termination-for-cause covering time-based awards . |
| CIC Severance (cash) | Double-trigger: CEO 3.0x salary + target bonus; plus pro-rated current-year target bonus . |
| CIC Equity | RSUs/options vest at CIC unless substantially equivalent replacement award is provided; PSUs vest pro-rata at target based on months worked . |
| Health/outplacement (CIC) | Health benefits continuation (36 months for CEO) and up to $25,000 outplacement . |
| Potential payouts (12/31/2024 scenarios) | In CIC termination: $7,020,000 cash severance; $1,196,780 earned AIP; $3,047,327 PSU payout; $8,654,132 value of unvested equity; $79,993 health; $25,000 outplacement; total $20,023,232 . |
Board Governance
- Board and Committee roles: Stone is a director nominee and CEO; not independent. All committee members are independent; Stone does not serve on committees .
- Leadership structure: Independent Chair (Lauren B. Peters); Board believes separation remains appropriate while Stone builds further public governance experience .
- Attendance: Director nominees attended ≥87% of Board meetings and 100% of their committee meetings in 2024; Board met 8 times, Audit 14, Compensation 5, Governance 5 .
- Executive sessions: Regular executive sessions of independent directors held at Board and committee meetings .
Director Compensation (as board member)
- Employee directors do not receive director compensation; Stone received no additional director pay .
Multi-Year CEO Compensation Progression
| Metric ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | 480,769 | 1,030,000 | 1,040,000 |
| Stock Awards | 5,500,100 | 4,429,896 | 4,662,601 |
| Option Awards | 2,000,016 | 1,375,011 | 1,375,035 |
| Non-Equity Incentive (AIP) | — | 2,025,738 | 1,196,780 |
| All Other Compensation | 94,593 | 136,800 | 183,944 |
| Total | 9,325,478 | 8,997,445 | 8,458,360 |
Company Performance Context (Revenue and EBITDA)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($USD) | $3,271.9M | $3,650.8M | $3,772.2M |
| EBITDA ($USD) | $711.9M* | $834.6M* | $896.8M* |
Values retrieved from S&P Global.*
Compensation Structure Analysis
- High at-risk pay: Significant proportion of CEO compensation is performance-based (AIP and PSUs), consistent with stated pay-for-performance philosophy; executives compliant or on track with robust ownership requirements .
- Metrics changes: AIP metric shifted from adjusted EBITDA to adjusted operating income in 2024 to better align corporate and regional measurement; suggests emphasis on margin discipline .
- PSU design: Balanced adjusted EPS and relative TSR with TSR cap if absolute TSR ≤0; expanded peer group to include S&P 500 Capital Goods from 2024 grants .
- Governance safeguards: No options repricing without shareholder approval; no tax gross-ups under CIC; enhanced clawbacks; anti-hedging/anti-pledging .
Equity Vesting & Potential Selling Pressure
- Scheduled vesting: 2024 RSUs and options vest ratably over three years from grant; Stone holds unvested RSUs (10,554 from 2024 award) and target PSUs (21,107 for 2024–2026), plus earlier cycles; 2022 RSUs have 25/25/50 vesting on years 2–4 .
- 2024 realized vesting: 17,079 shares vested; no option exercises reported, implying limited immediate exercise-related selling; however, tax-withholding on vesting may cause share dispositions mechanically .
Employment & Contracts
- No fixed-term employment agreement; severance plans are committee-administered and primarily double-trigger for cash; equity accelerates at CIC unless alternate award is provided, consistent with the company’s assertion of avoiding automatic single-trigger vesting across the board .
Performance & Track Record
- 2024 highlights: Record financial performance, balanced capital deployment, five acquisitions (Boss Door Controls, Dorcas, Krieger Specialty Products, SOSS Door Hardware, Unicel Architectural) .
- PSU payout: 117% for 2022–2024 period due to strong adjusted EPS (174% component) but below-median TSR (60% component) .
- Say-on-pay: 85% approval at 2024 AGM; shareholder engagement cited as supportive of program design .
Compensation Peer Group & Benchmarking
- Peer group refreshed for 2024 to better align with Allegion’s revenue/market cap median; includes names such as Hubbell, Fortive, Rockwell Automation, Keysight, Zebra, among others .
- Program targets align to peer group median; above/below-target performance drives pay variance .
Equity Ownership & Related Party
- Related party transactions: None exceeding $120,000 since Jan 1, 2024 .
- Beneficial ownership: Directors and officers as a group hold <1% of shares outstanding; Stone individually holds 68,181 ordinary shares and 86,884 options exercisable within 60 days .
Investment Implications
- Alignment and discipline: Strong ownership requirements (6x salary for CEO), robust clawbacks and anti-pledging reduce misalignment risks; AIP shift to operating income underscores margin focus .
- Performance sensitivity: PSU design blends EPS and TSR; historical 117% payout driven by EPS overachievement despite TSR at 30th percentile—watch for TSR improvement to sustain >100% payouts in future cycles .
- Event risk economics: CIC terms (3x CEO, equity treatment) are shareholder-friendly relative to common market practice (no gross-ups, “best of net” excise handling); equity acceleration contingent on no replacement awards mitigates pure single-trigger risk .
- Supply signals: Scheduled RSU vesting and potential Form 4 tax withholdings could create periodic technical supply; no pledging and no 2024 option exercises suggest limited forced selling pressure from leverage .
Notes on Board Service History and Dual-Role Implications
- Stone serves as CEO and director; the Board maintains an independent, separate Chair (Lauren B. Peters) and independent committees, mitigating independence concerns associated with CEO+Chair consolidation .
- Board evaluation, executive sessions, and succession oversight practices are robust, supporting governance quality during Stone’s tenure .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay approval ~85%; feedback generally positive; the company adopted enhanced clawbacks and strengthened time commitment policies after engagement .
Pension/Deferred Compensation/Perquisites
- Pension: Stone does not participate in defined benefit plans .
- Deferred compensation: Supplemental ESP registrant contributions of $163,244 in 2024; aggregate balance $332,944 .
- Perquisites and other: 2024 “All Other Compensation” of $183,944 driven by company matching contributions; program includes financial counseling, officer physical reimbursement, product rebates (not all items applicable to Stone) .