David Graziosi
Allison Transmission HoldingsAbout David Graziosi
David S. Graziosi, age 59, is Chair of the Board (since 2021) and President & CEO of Allison Transmission (CEO since June 2018; director since May 2018). He holds a B.S. in business economics from SUNY and an MBA from Rutgers, and is a non‑practicing CPA and Certified Information Systems Auditor . Under his leadership, Allison delivered record 2024 revenue of $3,225 million, Adjusted EBITDA of $1,165 million with 36.13% margin, and Adjusted free cash flow of $658 million . Allison’s three‑year absolute TSR for 2022–2024 was 235.4% (100th percentile of its peer set), driving maximum 200% payout on 2022–2024 PSUs; the company also repurchased ~$254 million of shares and paid ~$87 million in dividends in 2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Allison Transmission | Chair of the Board; President & CEO | Chair since 2021; CEO since Jun 2018 | Led execution of growth, capital returns, and record 2024 results . |
| Allison Transmission | President, CFO & Assistant Secretary | Jan 2016–Jun 2018 | Finance, operations, and leadership transition to CEO . |
| Allison Transmission | EVP, CFO, Treasurer & Assistant Secretary | Nov 2007–Jan 2016 | Built finance function post‑divestiture from GM . |
| Covalence Specialty Materials | EVP & CFO | 2006–2007 | Corporate finance leadership in specialty materials . |
| Hexion Specialty Chemicals | VP Finance — Precursors & Epoxy Resins | 2005–2006 | Segment finance oversight in chemicals . |
| Resolution Performance Products | EVP & CFO | 2004–2005 | Corporate finance and controls . |
| General Chemical Industrial Products | VP & CFO | Prior to 2004 | Corporate finance leadership . |
| GenTek Inc. | Finance Director | Prior to 2004 | Corporate finance roles . |
| Sun Chemical Group B.V. | Internal Audit Director & Assistant Corporate Controller | Prior to 2004 | Audit and controls management . |
External Roles
No other public company directorships or external board roles for Mr. Graziosi were disclosed in the proxy .
Board Governance
- Dual role implications: Mr. Graziosi serves as combined Chair and CEO and is not independent; Allison mitigates this with a Lead Independent Director (Philip J. Christman) who chairs executive sessions, approves agendas with the Chair, and engages with major stockholders .
- Independence and committees: Nine of ten current directors are independent; all standing Board committees are fully independent (Audit, Compensation, Nominating & Corporate Governance, Finance). Mr. Graziosi is not a member of these committees .
- Board activity: In 2024, the Board met four times; committees met 26 times in aggregate. All directors attended at least 75% of meetings, and independent executive sessions occur at each regularly scheduled meeting .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 995,000 | 1,041,667 | 1,071,667 |
| Stock Awards ($) | 4,468,541 | 4,447,041 | 5,868,500 |
| Option Awards ($) | 1,250,598 | 1,753,054 | 2,267,266 |
| Non‑Equity Incentive Plan ($) | 2,384,757 | 2,978,981 | 3,010,947 |
| All Other Compensation ($) | 102,802 | 107,882 | 114,442 |
| Total Compensation ($) | 9,201,698 | 10,328,625 | 12,332,822 |
2024 CEO base salary set at $1,076,000 effective March 1, 2024 (+2%) . 2024 perquisites and other items include 401(k) and deferred plan contributions, insurance, and vacation payout, totaling $114,442 .
Performance Compensation
Annual Incentive (IComp) Design and Outcomes
| Performance Metric | Weighting (%) | Threshold | Target | Maximum | Achieved |
|---|---|---|---|---|---|
| Revenue ($mm) | 35 | 3,007 | 3,100 | 3,193 | 3,225 |
| Adjusted EBITDA as % of net sales | 30 | 34.00% | 35.50% | 37.00% | 36.13% |
| Adjusted Free Cash Flow ($mm) | 35 | 572 | 600 | 637 | 658 |
| Item | Value |
|---|---|
| CEO Target as % of Salary | 125% |
| % of Target Earned (Company) | 223.86% |
| CEO % of Salary Earned (Formulaic) | 279.83% |
| CEO IComp Paid ($) | 3,010,947 |
Notes: Metrics were unchanged from 2023; clawback applies to cash and equity incentives; hedging/pledging prohibited; no tax gross‑ups; double trigger required for CIC benefits .
Long‑Term Incentive Grants (2024)
| Grant Date | Stock Options (#) | RSUs (#) | PSUs at Target (#) | Option Exercise Price ($/sh) | Vesting |
|---|---|---|---|---|---|
| 02/22/2024 | 94,273 | 31,421 | 31,421 | 73.39 | Options/RSUs vest ratably over 3 years; PSUs vest post‑performance period . |
Performance Units (2024–2026) metric: relative TSR vs a defined industrial peer set; payouts: 0% below 25th percentile, 50% at 25th, 100% at 50th, 200% at ≥75th percentile; vesting no later than Feb 28, 2027 . 2022–2024 PSU result certified at 200% of target based on 100th percentile TSR .
Upcoming Vesting and Potential Overhang (Selling Pressure)
| Vesting Date | RSUs (#) | 2022–2024 PSUs (#) | Dividend Equivalents (#) |
|---|---|---|---|
| 02/24/2025 | 14,767 | — | 767 |
| 02/22/2025 | 13,417 | — | 405 |
| 02/22/2026 | 13,418 | — | 405 |
| 02/22/2025 | 10,473 | — | 119 |
| 02/22/2026 | 10,474 | — | 119 |
| 02/22/2027 | 10,474 | — | 120 |
| 02/28/2025 | — | 88,600 | — |
PSUs granted in 2023 and 2024 are tracking above target and were presented at maximum as of 12/31/2024 (projected vestings by 02/28/2026 and 02/28/2027) .
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Total beneficial ownership (shares) | 376,186 (includes 133,981 vested, unexercised options) |
| Shares outstanding (03/10/2025) | 85,226,273 |
| Ownership as % of outstanding | Less than 1% per proxy notation |
| Unvested RSUs (12/31/2024) | 163,558; market value $17,674,077 (@ $108.06/sh) |
| Unearned PSUs presented at max (12/31/2024) | 143,346; payout value $15,489,969 (@ $108.06/sh) |
| Options exercisable/unexercisable (selected grants) | 18,004 exercisable; 80,505 and 94,273 unexercisable (2023 and 2024 grants) |
| 2024 exercises and vesting | 225,326 options exercised ($8,172,801); 104,714 shares vested ($7,683,147) |
| Pledging/hedging | Prohibited by policy; none of executives’ shares pledged |
| Ownership guidelines | CEO 5.0x salary; 50% holding requirement until met |
Section 16(a) late filing: one Form 4 for Mr. Graziosi was filed late (option exercise and sale on Feb 20, 2024) due to administrative error .
Employment Terms
| Provision | Key Terms |
|---|---|
| Severance (Qualifying Termination) | 2x (base salary + greater of 3‑yr avg bonus or target bonus); 24 months healthcare; option exercise period extended to second anniversary; subject to release . |
| Change‑in‑Control (QT within 2 years) | Additional 1x (base salary + greater of 3‑yr avg bonus or target bonus) and +12 months healthcare; total cash 3x salary+bonus; double trigger . |
| Death/Disability | Greater of 3‑yr avg bonus or target bonus, prorated . |
| Retirement | Prorated annual bonus based on actual performance; currently retirement‑eligible . |
| Equity treatment | As per award documents under QT/CIC/death/disability/retirement . |
| Non‑compete | 24 months post‑termination; confidentiality and IP covenants . |
| Clawbacks | SEC/NYSE‑compliant clawback on cash/equity incentive‑based pay . |
| Tax gross‑ups | None on benefits or CIC payments . |
Deferred Compensation and Pension
| Plan | 2024 Executive Contributions ($) | 2024 Company Contributions ($) | 2024 Earnings ($) | Year‑End Balance ($) |
|---|---|---|---|---|
| Nonqualified Deferred Compensation | 53,583 | 42,867 | 114,124 | 1,714,021 |
Mr. Graziosi does not participate in the defined benefit pension plan (only Mr. Bohley is eligible) .
Compensation Program Design, Peer Group, and Say‑on‑Pay
- Pay‑for‑performance mix: ~80% of NEO total direct compensation performance‑based; ~58% equity‑based; double‑trigger CIC; option re‑pricing prohibited; independent Compensation Committee; independent consultant; hedging/pledging prohibited; robust stock ownership and holding requirements .
- Peer group used for 2024 pay decisions includes Crane, Curtiss‑Wright, Donaldson, Flowserve, Gates Industrial, Gentex, Graco, HEICO, IDEX, ITT, Lincoln Electric, Middleby, Nordson, Sensata, Timken, Woodward, Zurn Elkay; larger comparators added for rTSR only (BorgWarner, Cummins, Eaton, Parker‑Hannifin, Roper, TransDigm) .
- Say‑on‑pay support: ~95% approval at 2024 meeting; 2025 proxy recommends annual say‑on‑pay frequency .
Risk Indicators and Red Flags
- Positive: No tax gross‑ups; double‑trigger CIC; clawbacks on incentive pay; prohibition on hedging/pledging; independent committees; no poison pill .
- Watch items: Significant upcoming RSU/PSU vesting and historically large option exercises ($8.17M value realized in 2024) may create periodic selling pressure; one late Section 16 Form 4 filing in 2024 due to admin error .
Investment Implications
- Alignment: Strong pay‑for‑performance architecture with multi‑metric annual bonus (revenue, EBITDA margin, FCF) and rTSR‑based PSUs; robust ownership and holding policies reduce agency risk .
- Execution and value creation: Record 2024 fundamentals and top‑decile 3‑yr TSR underpin maximum PSU payouts, indicating high management execution; continued capital return program supports equity value .
- Overhang and liquidity: Substantial scheduled vesting and demonstrated use of option exercises/stock sales can create episodic supply; monitor Form 4 activity around vest dates (Feb each year) .
- Governance: Combined Chair/CEO structure offset by Lead Independent Director and fully independent committees; compensation consultant independence affirmed .