Stefan Demmerle
Vice President and President and General Manager, BorgWarner PowerDrive Systems at 
BORGWARNER
BORGWARNERExecutive
About Stefan Demmerle
Stefan Demmerle, age 60, is Vice President, BorgWarner Inc., and President & General Manager of BorgWarner PowerDrive Systems; he joined BorgWarner in 2012. He holds an M.S. in Mechanical Engineering from the Technical University of Munich and a Ph.D. in Mechanical Engineering from Institut Polytechnique de Grenoble . Company performance context during his recent tenure includes 2024 sales of ~$14.1B, Adjusted Operating Margin (AOM) of 10.06%, Operating Margin of 3.88%, and Free Cash Flow (FCF) of $729M, with the 2022–2024 PSU cycle paying out at 131% (Relative TSR 156%, eProducts Revenue Mix 108%, eProducts Revenue 67%, Cumulative FCF 192%); however, 2024 absolute TSR was negative, prompting a -10% MIP modifier .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| BorgWarner Inc. | Vice President; President & GM, BorgWarner PDS (USA) Inc. | 2012–present | Leads PowerDrive Systems (electrified/propulsion) since 2012; also President & GM of BorgWarner PDS (Indiana) Inc. since Dec 2015 (formerly Remy) . |
| Continental | VP, Powertrain Electronics | 2010–2012 | Led powertrain electronics business . |
| Continental Diesel Systems (Siemens Diesel Systems Technology) | President & CEO | 2006–2010 | Business leadership for diesel systems . |
| Siemens VDO Automotive | Roles in transmission and engine electronics (France and global) | Prior to 2006 | Increasing responsibility in engine/transmission electronics . |
External Roles
- No public company directorships or external board roles disclosed for Dr. Demmerle in the proxy .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $775,000 | $810,000 | $838,750 |
| 2024 Year-End Base Salary ($) | — | — | $845,000 |
| Year-over-Year Base Salary Change (%) | — | — | 3.0% |
| Perquisite Allowance ($/yr) | $30,000 | $30,000 | $30,000 |
| Company DC/Excess Plan Contributions ($) | $234,267 | $320,044 | $309,617 |
Notes: U.S.-based NEO perquisite policy is $30,000 per annum for NEOs other than CEO and CFO .
Performance Compensation
Annual Incentive (MIP) – Structure and 2024 Payout
| Metric | Weight | Threshold | Target | Maximum | 2024 Actual | Payout vs Target |
|---|---|---|---|---|---|---|
| Adjusted Operating Margin (AOM) | 50% | 8.95% | 9.45% | 9.95% | 10.06% | 200% |
| Free Cash Flow (FCF) | 50% | $425M | $525M | $625M | $729M | 200% |
| Performance Modifier | — | — | — | Cap 200% | -10% of target due to negative 2024 TSR | Applied |
| Resulting MIP Payout (Demmerle) | — | — | 100% = Target | 200% Cap | — | 190% of target; Paid $1,926,600 |
Additional details: Demmerle’s 2024 MIP target was 120% of base salary .
Long-Term Incentives – Award Design and Grants
- 2024–2026 PSU metrics (each 25% weight): eProducts Revenue (2026), eProducts AOM (2026), Foundational AOM (2026), Relative TSR (3-year) .
- Restricted Stock vests 50% after 2 years and the remainder after 3 years; for 2024 grants: 50% on Feb 28, 2026 and 50% on Feb 28, 2027 .
| 2024 LTI Grants (Demmerle) | Units/Shares | Grant value/notes |
|---|---|---|
| Restricted Stock (RS) | 31,180 shares | Grant-date FMV total $1,062,303 (shares x $34.07) |
| PSUs – eProducts Revenue (target) | 15,600 | Three-year performance; Monte Carlo for TSR used in valuation |
| PSUs – eProducts AOM (target) | 15,600 | — |
| PSUs – Foundational AOM (target) | 15,600 | — |
| PSUs – Relative TSR (target) | 15,600 | — |
| Total 2024 LTI Award Value | — | $3,168,750 |
2022–2024 PSU Outcomes (Vested in early 2025)
| Component (25% each) | Target Shares | Earned Shares (Demmerle) | Payout vs Target |
|---|---|---|---|
| Relative TSR | 12,995 | 20,272 | 156% |
| eProducts Revenue Mix | 12,995 | 14,035 | 108% |
| eProducts Revenue | 12,995 | 8,707 | 67% |
| Cumulative Free Cash Flow | 12,995 | 24,950 | 192% |
| Combined Payout | — | — | 131% of target |
Equity Ownership & Alignment
| Item | Amount |
|---|---|
| Beneficial Ownership (3/3/2025) | 260,094 shares; includes 75,326 unvested RS with voting rights |
| Shares Outstanding (3/3/2025) | 219,686,258 shares |
| Ownership as % of Outstanding | ~0.12% (260,094 ÷ 219,686,258; calculated) |
| Unvested RS at 12/31/2024 | 71,378 shares ($2,269,107 at $31.79) |
| Outstanding Unearned PSUs (max) at 12/31/2024 | 234,612 units ($7,458,315 at $31.79) |
| 2024 Vested Stock Awards | 93,770 shares; value $2,954,884 |
| Stock Ownership Guideline | 2x base salary for Business Presidents/EVPs; 5-year compliance window |
| Compliance Status | As of 3/3/2025, NEOs subject had met guidelines or had time remaining |
| Hedging/Pledging Policy | Hedging prohibited; pledging prohibited for directors and Section 16 officers |
Additional alignment levers:
- Clawback policy updated in 2023 consistent with SEC/NYSE, covering three completed fiscal years before a restatement .
- Insider trading policy restricts derivative transactions and short sales .
Employment Terms
Change-in-Control (COC) protections are double-trigger; no excise tax gross-ups; benefits include 3x (salary + 3-year avg bonus), pro-rated bonus, continued benefits up to 18 months, outplacement, and accelerated equity per plan; executive severance (non-COC) provides 1.5x (salary + 3-year avg bonus), pro-rated bonus, limited RS vesting, forfeiture of performance awards, and benefits continuation .
| Scenario (Assumes termination 12/31/2024) | Cash Severance ($) | Pro-Rated Bonus ($) | RS Vesting ($) | PSU Vesting ($) | Retirement Contributions ($) | Benefits/Outplacement ($) | Total ($) |
|---|---|---|---|---|---|---|---|
| Change of Control Qualifying Termination | 6,748,680 | 1,404,560 | 2,269,107 | 3,729,126 | 852,038 | 82,606 | 15,086,117 |
| Executive Severance Plan (Non-COC) | 3,374,340 | 1,404,560 | 1,374,877 (pro-rata) | — (forfeited) | — | 80,590 | 6,234,367 |
| Death/Disability | — | 1,014,000 | 2,269,107 | — (committee discretion) | — | — | 3,283,107 |
| Retirement (standard) | — | 1,014,000 | — (committee discretion) | — (committee discretion) | — | — | 1,014,000 |
Definitions and terms:
- Double-trigger equity vesting on COC if awards are assumed; single-trigger only if not assumed/replaced .
- “Cause”/“Good Reason” definitions and COC triggers as described in proxy .
Deferred Compensation:
- Company contributions to Excess Plan (non-qualified DC) in 2024: $272,697; aggregate year-end balance: $2,049,651 .
Multi-Year Compensation (Summary Compensation Table)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $775,000 | $810,000 | $838,750 |
| Stock Awards ($) | $3,271,971 | $3,747,834 | $3,365,331 |
| Non-Equity Incentive Plan Comp ($) | $1,478,880 | $1,603,920 | $1,926,600 |
| All Other Compensation ($) | $234,267 | $320,044 | $339,617 |
| Total ($) | $5,760,118 | $6,481,798 | $6,470,298 |
Performance Compensation Details (Plan Mechanics)
| Plan | Metric/Feature | 2024 Design/Pivots |
|---|---|---|
| Annual Incentive (MIP) | 50% AOM; 50% FCF; +/-10% performance modifier with 200% cap; 2024 targets AOM 9.45%, FCF $525M | Actual: AOM 10.06%, FCF $729M; payout 200% before modifier; modifier -10% of target due to negative absolute TSR in 2024 . |
| LTI 2024–2026 | 1/3 RS (time-based); 2/3 PSUs equally weighted: eProducts Revenue (2026), eProducts AOM (2026), Foundational AOM (2026), Relative TSR (3-year) | Emphasis on profitable eProducts growth and foundational margins; removed FCF from LTI to avoid overlap with MIP . |
| Looking ahead to 2025–2027 | 50% Relative TSR (target at 55th percentile, capped at 100% if absolute TSR negative), 25% Cumulative Adjusted EPS, 25% Relative Revenue Growth | Incorporates shareholder feedback; ties more directly to share price performance; caps TSR when absolute TSR is negative . |
Investment Implications
- Pay-for-performance alignment is strong: 2024 MIP maxima on AOM/FCF were tempered by a -10% modifier for negative TSR; 2022–2024 PSUs paid 131% overall with strong Cumulative FCF and TSR, indicating operational strength but market headwinds in 2024 .
- Vesting and potential supply: Demmerle had 71,378 unvested RS outstanding at 12/31/2024 (vesting 2026/2027) and up to 234,612 outstanding unearned PSUs (max), suggesting periodic vest-driven liquidity windows; 93,770 shares vested in 2024 .
- Retention and downside protection: Non-COC severance equates to ~1.5x salary+bonus plus pro-rated bonus and RS pro-rata vesting; COC terms at 3x salary+bonus with double-trigger, no gross-ups; policies prohibit hedging/pledging and include robust clawback and ownership guidelines (2x salary for Business Presidents/EVPs), supporting alignment and mitigating governance risk .
- Shareholder sentiment: 2024 say‑on‑pay support was 72.9%; 2025 program changes raise TSR hurdle to above median (55th percentile) and add EPS/relative revenue growth, a constructive shift for investors focused on value creation .
- Strategic execution exposure: eProducts revenue was $2.335B (16.6% mix) in 2024, with LTI metrics emphasizing profitable EV/hybrid growth and foundational margins, aligning Demmerle’s incentives with the electrification transition and margin discipline .