Tonit Calaway
Executive Vice President, Chief Administrative Officer, General Counsel and Secretary at 
BORGWARNER
BORGWARNERExecutive
About Tonit Calaway
Tonit M. Calaway, age 57, is Executive Vice President, Chief Administrative Officer, General Counsel and Secretary at BorgWarner (BWA). She joined BorgWarner in 2016, became CLO & Secretary in 2018, and has served in her current role since October 2020, overseeing Legal, Government Affairs, Real Estate, Facilities, Security, and Aviation. She holds a BA from the University of Wisconsin–Milwaukee, a JD from the University of Chicago Law School, and an honorary doctorate from UW–Milwaukee; she is admitted to the State Bar of Wisconsin. Company performance context: 2024 Adjusted Operating Margin (AOM) was 10.06% and Free Cash Flow (FCF) was $729 million; management reduced the 2024 MIP payout by 10% of target due to negative absolute TSR in 2024 despite strong margins and FCF, and set tougher 2025 targets (AOM 10.4%, FCF $800M) to reinforce pay-for-performance alignment .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| BorgWarner Inc. | EVP, Chief Administrative Officer, General Counsel & Secretary | Oct 2020–present | Oversees Legal, Government Affairs, Real Estate, Facilities, Security, Aviation; instrumental in executing strategy, including Delphi Technologies acquisition (2020) and PHINIA spin-off (2023) . |
| BorgWarner Inc. | EVP, Chief Legal Officer & Secretary | Aug 2018–Oct 2020 | Led legal function . |
| BorgWarner Inc. | EVP, Chief Human Resources Officer | 2016–2018 | Led global HR, compensation/benefits, talent, labor and employment . |
| Harley-Davidson, Inc. | VP Human Resources; President, The Harley-Davidson Foundation; Associate/Assistant General Counsel, Chief Compliance Counsel, Assistant Secretary | 18-year tenure (dates not disclosed) | Guided leadership development, compensation/benefits, labor relations, diversity; senior legal and compliance roles . |
External Roles
| Organization | Role | Years |
|---|---|---|
| Air Products and Chemicals, Inc. (APD) | Director | Not disclosed (current) . |
| W. P. Carey Inc. (WPC) | Director | Not disclosed (current) . |
Fixed Compensation
| Metric ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary | 668,750 | 693,750 | 730,000 |
| Stock Awards (Grant-date FMV) | 2,958,025 | 3,284,522 | 7,525,792 |
| Non-Equity Incentive Plan Compensation (Annual MIP) | 1,279,800 | 1,369,200 | 1,687,200 |
| All Other Compensation | 190,234 | 241,182 | 254,668 |
| Total Compensation | 5,096,809 | 5,588,654 | 10,197,660 |
2024 “All Other Compensation” detail for Calaway: perquisite allowance $30,000 and company contributions to defined plans $224,668 .
Performance Compensation
2024 Annual MIP (cash incentive)
- Plan metrics and structure: AOM and FCF (each 50% weighting), with a Committee performance modifier of ±10% of target (applied −10% of target for 2024 due to negative TSR) .
- Calaway’s 2024 MIP: Base Salary (for MIP calc) $740,000; Target Bonus 120% of base; Payout 190% of target; Bonus Paid $1,687,200 .
| Item | 2024 |
|---|---|
| Base Salary used for MIP | $740,000 |
| Target Bonus % of Salary | 120% |
| Payout as % of Target | 190% (after −10% target adjustment applied to all NEOs) |
| Bonus Paid | $1,687,200 |
| Notes | MIP metrics: 50% AOM, 50% FCF; 10% negative modifier applied due to negative absolute TSR in 2024 . |
Looking ahead: 2025 AOM target set at 10.4% (vs 2024 actual 10.06%) and FCF target at $800M (vs 2024 actual $729M), raising hurdle rates; business unit presidents’ MIP incorporates business unit AOM .
Long-Term Incentives: Design and 2024 Grants (equity)
- 2024–2026 LTI metrics: 25% eProducts Revenue; 25% eProducts AOM (2026 margin from eProducts); 25% Foundational AOM (2026 margin from foundational products); 25% Relative TSR; three-year performance period for PSUs; RSUs vest 50% after 2 years and 50% after 3 years .
- 2025–2027 LTI metrics (refresh): 50% Relative TSR; 25% Cumulative Adjusted EPS; 25% Relative Revenue Growth; 100% payout targeted at 55th percentile TSR; TSR payout capped at 100% if absolute TSR is negative .
| 2024–2026 LTI Metric | Weighting | Notes |
|---|---|---|
| eProducts Revenue | 25% | Revenue from eProducts; three-year PSU . |
| eProducts AOM | 25% | 2026 AOM from eProducts; three-year PSU . |
| Foundational AOM | 25% | 2026 AOM from foundational products; three-year PSU . |
| Relative TSR | 25% | Peer-relative TSR over 3 years . |
| 2025–2027 LTI Metric | Weighting | Payout Policy Enhancements |
|---|---|---|
| Relative TSR | 50% | 100% payout at 55th percentile; capped at 100% if absolute TSR is negative . |
| Cumulative Adjusted EPS | 25% | Three-year cumulative EPS . |
| Relative Revenue Growth | 25% | Relative to industry vehicle production; S&P Global data . |
| 2024 Grants (Calaway) | Grant date | Units/Shares | Vesting | Grant-date FMV ($) |
|---|---|---|---|---|
| Performance Shares (2024–2026) | 2/6/2024 | Target 56,080 (threshold 24,535; max 112,160) | Cliff vest after 3-year period (2024–2026) | 2,069,773 |
| Restricted Stock | 2/6/2024 | 28,060 | 50% on 2/28/2026; 50% on 2/28/2027 | 956,004 |
| Retention Restricted Stock (special) | 7/1/2024 | 142,903 | Cliff vest 7/1/2026; accelerates on death, disability, involuntary termination without cause, or resignation for good reason | 4,500,015 |
Vesting/supply signals:
- Scheduled RS vesting dates across legacy awards: February 28, 2025, 2026, 2027; large cliff vest on July 1, 2026 from the $4.5M retention grant (142,903 shares) may create selling pressure depending on net-share settlement and personal liquidity needs .
2024 realized equity vesting:
- Shares vested in 2024: 81,915; value realized on vesting: $2,583,363; no option exercises .
Equity Ownership & Alignment
| Ownership item | Detail |
|---|---|
| Beneficial ownership (3/3/2025) | 247,926 shares; <1% of outstanding; includes 211,890 unvested RS with voting rights . |
| Unvested RS at 12/31/2024 | 207,559 shares; market value $6,598,301 at $31.79/share . |
| Unearned PSUs outstanding (at max) 12/31/2024 | 208,392 shares; indicative value $6,624,782 at $31.79/share (payout subject to performance) . |
| Ownership guidelines | EVPs must hold ≥2x base salary; includes RS; PSUs do not count; must hold ≥50% of vested shares until compliant; as of 3/3/2025, each NEO met the guideline or had time remaining to meet it . |
| Pledging/hedging | Prohibited for directors and Section 16 officers; no pledging, short sales, or hedging/monetization transactions . |
Employment Terms
| Provision | Key terms |
|---|---|
| Executive Severance Plan (non-CEO NEOs) | Upon qualifying termination without cause or for good reason: cash equal to 1.5×(base salary + recent average bonus) plus pro-rated bonus; pro-rata vesting of RS/RSUs; forfeiture of performance shares; medical/dental up to 18 months; outplacement up to $40,000 . |
| Potential payments (Calaway) – example at 12/31/2024 | Cash Severance $2,837,501; Pro-rated Bonus $1,151,667; RS Vesting $5,798,351; PS Vesting $0; Retirement Contributions $0; Medical/Outplacement $81,310; Total $9,868,829 . |
| Death/Disability/Retirement | Pro-rated bonus eligibility; RS vesting based on FMV $31.79; no PS payout unless waived by Committee; Calaway totals: Death/Disability $7,486,301; Retirement $888,000 (pro-rated bonus only) . |
| Change-in-Control (COC) | Double-trigger for RS and performance shares; no excise tax gross-up (cutback to avoid 4999 excise if beneficial); standard definitions of Change in Control, Cause, Good Reason . |
| Clawback | NYSE/SEC-compliant recovery policy adopted Nov 7, 2023; 3-year lookback on incentive-based comp after accounting restatement . |
Compensation Structure Analysis
- At-risk pay: For 2024, 81%–90% of NEO target direct compensation was at-risk; Calaway’s 2024 stock awards increased to $7.53M driven by a one-time $4.5M retention RS grant to ensure leadership stability during CFO and CEO transitions; the grant is time-based (no performance metrics) and cliffs in 2026, a potential pay-for-performance concern mitigated by its retention rationale and rarity over last 10 years .
- Short-term pay-for-performance: 2024 MIP aligned to AOM and FCF with a negative 10% performance modifier due to negative TSR; payout for Calaway was 190% of target, with 2025 targets set above 2024 actuals to raise the bar (AOM 10.4% vs 10.06%; FCF $800M vs $729M) .
- Long-term plan evolution: 2024–2026 LTI emphasizes EV transition economics (eProducts and Foundational margins and revenue) plus TSR; 2025–2027 shifts further toward capital market alignment (50% TSR, 25% Cumulative Adjusted EPS, 25% Relative Revenue Growth) with a cap when absolute TSR is negative and a 55th percentile TSR for 100% payout, responding to investor feedback and avoiding metric overlap with MIP .
Performance & Track Record
- Strategic execution: Key leadership in M&A and portfolio transformation (Delphi Technologies acquisition in 2020; PHINIA spin-off in 2023) .
- 2024 operating results context for incentives: AOM 10.06% and FCF $729M; approximately $500M returned to shareholders via repurchases and dividends; negative absolute TSR led to an across-the-board 10% target reduction in MIP payouts .
- Shareholder feedback: 2023 executive compensation program received 72.9% Say-on-Pay support at the 2024 AGM; enhanced 2025 disclosures/changes followed, including LTI metric shifts and TSR payout cap .
Governance, Policies, and Committees
- Compensation Committee: Members in the last completed fiscal year were independent directors Sara A. Greenstein, Shaun E. McAlmont, Sailaja K. Shankar, and Chair Deborah D. McWhinney; no related-party relationships requiring Item 404 disclosure .
- Insider trading policies: Prohibit pledging/hedging/short sales; timing of equity grants not tied to MNPI .
Equity Vesting Calendar Highlights (Potential Selling Pressure)
- February 28, 2025/2026/2027: Scheduled RS tranches vest (company-wide calendar) .
- July 1, 2026: Calaway’s 142,903-share retention RS cliff-vest date; accelerates on death, disability, involuntary termination without cause, or resignation for good reason .
Ownership Snapshot (as of March 3, 2025)
- Beneficially owned 247,926 shares (<1% of outstanding); includes 211,890 unvested RS with voting rights; separate from 208,392 unearned PSUs at maximum potential payout as of 12/31/2024 .
Investment Implications
- Retention and continuity: The $4.5M time-based retention grant that cliffs in mid-2026 reduces near-term retention risk through CEO/CFO transitions; however, its lack of performance conditions warrants ongoing pay alignment scrutiny .
- Alignment and downside protection: Robust ownership guidelines, prohibition on pledging/hedging, double-trigger COC equity treatment, and a compliant clawback policy support shareholder alignment and risk controls; TSR cap in LTI limits windfalls when shareholders experience losses .
- Potential trading signals: Anticipate incremental supply around Feb 28 in 2025–2027 and a larger event on July 1, 2026 from the retention grant vest; in 2024, 81,915 shares vested to Calaway with $2.58M value realized, illustrating ongoing equity monetization cadence typical for senior executives .
- Pay-for-performance trajectory: 2025 tightening of MIP and LTI metrics (higher AOM/FCF targets; TSR/EPS/revenue growth LTI mix; TSR cap; 55th-percentile TSR target for 100% payout) improves performance alignment after a 72.9% Say-on-Pay outcome in 2024, reducing risk of future shareholder pushback if execution meets raised bars .