Joseph Fadool
BORGWARNERAbout Joseph Fadool
Joseph F. Fadool, 58, became BorgWarner’s President and CEO on February 6, 2025, after serving as EVP & COO from July 2024 to February 2025 and leading multiple business units since 2012. He holds a B.S. in electrical engineering (Lawrence Technological University) and an M.S. in computer and electronic controls (Wayne State University) . Under his leadership, the company emphasized growth in eProducts and operational resilience; he noted light-vehicle e-product sales were up 47% in Q1 and strong China OEM exposure, supporting execution of Charging Forward . Fadool joined BorgWarner in 2010 and was appointed to the Board effective February 6, 2025; the Board maintains a separated Chair/CEO structure with an independent Non-Executive Chair .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| BorgWarner Inc. | President & CEO; Director | Feb 2025–present | CEO succession; Board member; focus on portfolio resilience and electrification |
| BorgWarner Inc. | EVP & Chief Operating Officer | Jul 2024–Feb 2025 | Oversaw operations; implemented new business unit structure aligned to Charging Forward |
| BorgWarner Emissions Systems LLC; BorgWarner Thermal Systems Inc.; BorgWarner Turbo Systems LLC | VP; President & GM | Oct 2019–Jun 2024 | Led Emissions, Thermal & Turbo Systems; delivered strong growth and OEM relationships |
| BorgWarner Turbo Systems LLC | VP; President & GM | May 2019–Oct 2019 | Business leadership during transition |
| BorgWarner Emissions Systems LLC; BorgWarner Thermal Systems Inc. | VP; President & GM | Jan 2017–May 2019 | Advanced core combustion portfolio |
| BorgWarner Ithaca LLC (d/b/a Morse Systems) | VP; President & GM | Jul 2015–Dec 2016 | Led Morse Systems operations |
| BorgWarner Morse TEC Inc. | VP; President & GM | May 2012–Jul 2015 | Business leadership in Morse TEC |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Continental Automotive Systems | Vice President, North American Electronic Operations | Not disclosed | Electronics operations leadership experience |
| Ford Motor Company | Various roles | Not disclosed | Automotive operating experience |
Fixed Compensation
| Component | 2024 (EVP & COO) | 2025 (CEO) |
|---|---|---|
| Base Salary ($) | $1,125,000 | $1,250,000 |
| Target Bonus (%) | 120% of base | 150% of base |
| Target Bonus ($) | $1,350,000 (prorated for 2024) | $1,875,000 (prorated for 2025) |
| Long-Term Incentive Target ($) | $4,218,750 (375% of base; 2025 grants) | $8,125,000 (650% of base; 2025 grants) |
| Perquisite Allowance ($) | Not stated for 2024 role; 2024 “All Other” includes $30,000 perquisite allowance | $50,000 perquisite allowance (increase) |
Performance Compensation
| Annual Cash Incentive (MIP) | Weighting | Target | Actual | Payout | Vesting/Notes |
|---|---|---|---|---|---|
| Adjusted Operating Margin (AOM) | 50% | Not disclosed | Not disclosed | Not disclosed | Committee may apply +/-10% modifier for ESG/strategic goals |
| Free Cash Flow (FCF) | 50% | Not disclosed | Not disclosed | Not disclosed | Same modifier structure as above |
| Long-Term Incentives (PSUs) | Weighting | Performance Period | Target/Metrics | Payout Range | Vesting/Notes |
|---|---|---|---|---|---|
| eProducts Revenue Mix | 25% | 3-year (e.g., 2022–2024; 2024–2026 cycles) | Mix % of total 2024 revenue; Target 16.0%; Threshold 12.0%; Max ≥24.0% | 0–200% of target | Three-year performance shares; relative TSR tranche included |
| eProducts Revenue (absolute) | 25% | Same as above | Target $3.0B; Threshold $2.0B; Max ≥$4.0B | 0–200% | — |
| Cumulative FCF | 25% | Same as above | Target $1.7B; Threshold $1.4B; Max ≥$2.0B | 0–200% | — |
| Relative TSR | 25% | Same as above | Target 50th percentile; Threshold 25th; Max ≥75th | 0–200% | TSR measured against defined peer group |
| Additional PSU Grant (CEO recognition) | — | 2024–2026 | 59,760 performance shares added Feb 2025, using same measures as Feb 2024 awards | Not disclosed | Earned based on 3-year performance; subject to program rules |
| Time-Based Restricted Stock | Vesting | Notes |
|---|---|---|
| RS (time-based) | 50% at 2nd anniversary; 50% at 3rd anniversary, subject to service | Double-trigger COC acceleration applies to restricted stock (if awards not assumed/replaced) |
Multi-Year Compensation History (NEO)
| Metric ($) | FY 2020 | FY 2021 | FY 2022 |
|---|---|---|---|
| Salary | $703,750 | $810,000 | $828,750 |
| Stock Awards (Grant-Date Fair Value) | $1,691,034 | $3,945,083 | $3,502,669 |
| Non-Equity Incentive Plan Comp | $694,328 | $1,205,280 | $1,583,160 |
| All Other Compensation | $248,196 | $274,443 | $329,860 |
| Total | $3,337,308 | $6,234,806 | $6,244,439 |
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Total Beneficial Ownership (as of Mar 1, 2024) | 238,727 shares; less than 1% of class |
| Shares Outstanding (as of Mar 1, 2024) | 230,955,835 |
| Ownership as % of Outstanding | ~0.10% (238,727 / 230,955,835) |
| Stock Ownership Guidelines (Executives) | CEO: 6× base salary; CFO: 3×; Business Presidents & EVPs: 2×; 5-year compliance window; 50% holding of net shares until guideline met |
| Hedging/Pledging Policy | Prohibited for directors/executives; short sales and derivatives prohibited; pledging prohibited |
| Compensation Recovery (Clawback) | SEC/NYSE-compliant policy (Nov 7, 2023) to recover erroneously awarded incentive-based compensation upon restatement |
Note: 2024 “All Other Compensation” table shows Mr. Fadool’s perquisite allowance of $30,000 and plan contributions of $345,377 .
Employment Terms
| Executive Severance Plan (non-CEO, adopted May 28, 2024) | Terms |
|---|---|
| Cash Severance | 1.5× (base salary + recent average bonus), plus accrued salary, unpaid prior-year bonus, accrued vacation, and prorated recent average bonus |
| Equity Treatment | Pro rata vesting of restricted stock/RSUs; unearned PSUs/PSUs forfeited; unvested options/SARs forfeited (unless more favorable under other agreements) |
| Benefits | Medical/dental continuation up to 18 months; outplacement services up to $40,000 |
| Definitions | “Cause” and “Good Reason” defined in Plan |
| Estimated Payments Under Executive Severance Plan (Assumed termination on Dec 31, 2024) | Cash Severance ($) | Pro-rated Bonus ($) | Restricted Stock Vesting ($) | Outplacement ($) | Total ($) |
|---|---|---|---|---|---|
| Joseph F. Fadool | $3,937,470 | $1,499,980 | $1,468,325 | $81,310 | $6,987,085 |
| Change-of-Control (COC) Agreement (double trigger; no excise tax gross-up) | Terms |
|---|---|
| Cash Severance Multiple | 3× (base salary + average annual bonus) |
| Pro-rated Bonus | Average annual bonus pro-rated to termination date |
| Equity Vesting | Restricted stock fully vests; performance shares vest proportionately (target performance deemed if awards not assumed/replaced) |
| Tax Treatment | Executives forego portion of COC payments to avoid IRC §4999 excise taxes; no gross-up |
| Definitions | “Change of control,” “Cause,” and “Good Reason” defined |
| Estimated Payments Upon Qualifying Termination in Connection with COC (Assumed termination on Dec 31, 2024; stock price $31.79) | Cash Severance ($) | Pro-rated Bonus ($) | Restricted Stock Vesting ($) | Performance Share Vesting ($) | Medical Continuation ($) | Outplacement ($) | Total ($) |
|---|---|---|---|---|---|---|---|
| Joseph F. Fadool | $7,874,940 | $1,499,980 | $2,421,858 | $3,974,068 | $998,452 | $83,326 | $16,852,624 |
Board Governance
- Structure: Board separates Chair and CEO; Alexis P. Michas is Non-Executive Chair; Fadool is CEO and director, allowing independent oversight; executive sessions of non-employee directors at each regular meeting are chaired by the Non-Executive Chair .
- Independence: Seven of eight directors are independent; Fadool is not independent as CEO .
- Committee Membership: Fadool serves on no Board committees; other committees (Audit, Compensation, Corporate Governance, Executive) chaired by independent directors .
| Board Service Details | Value |
|---|---|
| Director Since | 2025 |
| Committees | None |
| Other Public Company Directorships | None |
| Chair/CEO Structure | Separate; Non-Executive Chair provides oversight and leads executive sessions |
Equity Ownership & Pledging/Hedging Compliance
- Beneficial ownership: 238,727 shares as of March 1, 2024; less than 1% of outstanding shares (230,955,835) .
- Guidelines: CEO must hold 6× base salary; EVPs 2×; officers must retain 50% of net shares until compliant; company prohibits pledging/hedging .
Performance & Track Record
- Execution: Introduced new business unit structure effective July 1, 2024 to enhance Charging Forward execution; led ETTS unit to strong growth and OEM relationships .
- Markets: Commentary indicates robust e-product momentum (light-vehicle e-product sales +47% in Q1), diversified China OEM exposure (~20% of company sales, 75% with domestic OEMs), and resilience across ICE/hybrid/BEV portfolios .
Compensation Committee & Peer Benchmarking
- CEO package set using independent consultant benchmarks; total target direct compensation of $11.25M set at ~80% of peer median for new-to-role executives .
- Committee oversight and program elements include AOM/FCF in annual incentives and balanced three-year PSU metrics (eProducts mix, eProducts revenue, cumulative FCF, relative TSR) .
Employment & Deferred Compensation
- Excess/Deferred Plan: BorgWarner maintains an unfunded Excess Plan mirroring RSP investment choices; Mr. Fadool had $2,122,247 previously reported in an Excess Plan-related column for years prior to FY2024; distributions occur after separation per plan rules .
Investment Implications
- Alignment: High equity mix (PSUs tied to eProducts revenue/mix, cumulative FCF, relative TSR) is well-aligned with value creation in electrification and cash discipline; additional 59,760 PSUs for 2024–2026 strengthen long-term alignment and likely reduce near-term selling pressure due to performance vesting .
- Retention vs. Risk: Robust severance/COC protections (1.5× under Executive Severance Plan; 3× under COC) and lack of tax gross-ups balance retention and governance; double-trigger equity treatment mitigates windfalls, but sizable COC totals indicate potential event-driven payout risk .
- Governance: Separated Chair/CEO roles and independent committee leadership reduce dual-role concerns; strict clawback, anti-hedging/pledging, and stock ownership guidelines enhance investor protection and reduce agency risk .
- Execution Signal: Reported e-product momentum (+47% Q1 sales) and China exposure diversification support medium-term growth, but regional electrification variability implies execution risk in meeting PSU thresholds (eProducts and FCF) .