Denise C. Johnson
CATERPILLARAbout Denise C. Johnson
Denise C. Johnson is a Group President at Caterpillar Inc., serving in the Executive Office since 2016 (previously Vice President 2012–2016). She is 58 years old and is one of the senior leaders accountable for segment-level performance under Caterpillar’s operating model that links resource allocation and performance management to Group Presidents and the CFO/COO structure . During her tenure, Caterpillar delivered record adjusted profit per share of $21.90 in 2024, a 20.7% adjusted operating margin, ME&T free cash flow of $9.4B, and services revenue of $24B (+4% YoY), and CAT’s five‑year cumulative TSR through 12/31/24 outperformed peers (value of $100 grew to $274.14 vs $176.44 for S&P 500 Industrials) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Caterpillar Inc. | Group President | 2016–present | Executive Office leader accountable for end‑to‑end businesses; performance managed at the Group President level under the CODM structure . |
| Caterpillar Inc. | Vice President | 2012–2016 | Senior executive role prior to elevation to Group President . |
External Roles
- Not disclosed in the 2025 DEF 14A or 2024 Form 10‑K for Ms. Johnson .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 877,425 | 911,450 | 947,900 |
| All Other Compensation ($) | 464,372 | 312,957 | 311,808 |
| AIP Target (% of salary) | — | — | 115% |
Details of 2024 perquisites/benefits (subset of “All Other Compensation”):
- Company contributions: 401(k) $36,807; SDCP $254,939 .
- Corporate aircraft/transportation: $268 .
- Personal security: $1,882 .
- Other (executive physical/financial planning): $17,912 .
Performance Compensation
2024 Annual Incentive (AIP) – Design and Payout
- Metrics: Enterprise Operating Profit; OPACC (Enterprise/Segment); Services Revenues; plus Services Growth and ESG strategic modifiers (±10% each, ±20% combined) .
- Weighting: Heavy weighting to financial measures (50–66% to Enterprise Operating Profit and OPACC; remainder to Services Revenues); targets set to be reasonably achievable; maximum designed to be difficult .
| Component | Johnson Parameter |
|---|---|
| 2024 AIP Target | 115% of salary |
| Performance Factor | 1.12 |
| Services Growth Modifier | +6% |
| ESG Strategy Modifier | +7% |
| 2024 AIP Payment ($) | 1,374,500 |
Notes:
- Services Revenues reached $24B in 2024 (+4% YoY); CHRC evaluated quantitative/qualitative progress to apply the Services modifier .
- ESG assessment considered quantified progress toward 2030 goals (5 of 6 on target) and qualitative milestones across segments; CHRC applied the ESG modifier accordingly .
Long‑Term Incentives (LTI)
- 2024 LTI mix: 50% PRSUs (performance‑based), 25% time‑based RSUs, 25% stock options; PRSUs use two equally weighted metrics: three‑year average ROIC (absolute) and three‑year relative TSR vs S&P Capital Goods; PRSU vesting is leveraged 50–200% of target .
- 2022–2024 PRSU cycle earned at 100% (three‑year average adjusted ROE 53.9% vs 18% goal) .
2024 grants to Denise C. Johnson (grant date March 4, 2024, except where noted):
- PRSUs: Threshold 2,732; Target 5,463; Maximum 10,926 (3‑year performance, vests after 12/31/2026) .
- RSUs: 2,731 units (vest one‑third on 3/4/2025, 3/4/2026, 3/4/2027) .
- Stock options: 8,871 options @ $338.65, 10‑year life, vest one‑third on 3/4/2025, 3/4/2026, 3/4/2027; expire 3/4/2034 .
- Special retention award (service‑based RSUs): 6,887 units granted 1/12/2024; vest 25% on 1/12/2025, 25% on 1/12/2026, 50% on 1/12/2027; forfeitable on termination (other than death or qualifying CIC) .
2024 grant date fair values (accounting):
- Stock awards (RSUs/PRSUs): $5,157,307 .
- Option awards: $924,982 .
Equity Ownership & Alignment
Beneficial Ownership (as of Jan 1, 2025)
| Holding | Amount |
|---|---|
| Common Stock owned | 25,879 |
| Shares underlying options/RSUs exercisable within 60 days | 80,575 |
| Total reported (aggregate line) | 106,454 |
| Ownership as % of outstanding | <1% (each person listed <1%) |
| Shares pledged | None for directors/executive officers as a group |
Outstanding Awards at 12/31/2024 (select items)
| Award | Quantity/Terms | Valuation/Price |
|---|---|---|
| Unvested RSUs (retention grant) | 6,994 | $2,537,143 market value at $362.76 per share |
| Unvested RSUs (Mar 2024) | 2,762 | $1,001,943 market value at $362.76 per share |
| Unearned PRSUs (2024–2026 cycle, assumes max in table) | 11,050 | $4,008,498 market value at $362.76 per share |
| Stock options (3/4/2024) | 8,871; $338.65 strike; exp. 3/4/2034 | $338.65 strike price |
Ownership Policies and Compliance
- Stock ownership guideline: 3× base salary for NEOs; five‑year accumulation period; all NEOs met target or are within the accumulation period .
- Anti‑hedging and anti‑pledging policy in place; no hedging/pledging permitted .
- Insider trading policy requires pre‑clearance and imposes additional restrictions for Section 16 insiders (directors and officers); pre‑notification to CLO and Securities Section is required for trades by Section 16 insiders .
Deferred Compensation and Retirement
| Plan | 2024 Executive Contributions | 2024 Company Contributions | 12/31/2024 Aggregate Balance |
|---|---|---|---|
| Supplemental Deferred Compensation Plan (SDCP) | $148,626 | $254,939 | $10,560,590 |
| Pension/SERP | Not a participant in defined benefit plans (no pension) | — | — |
Employment Terms
- No individual severance or change‑in‑control (CIC) agreements; benefits provided through broad‑based incentive plans .
- CIC requires a double trigger (CIC + qualifying termination) for: immediate vesting of options/RSUs/PRSUs (options remain exercisable for normal life); AIP payout at target prorated through later of CIC or termination .
- Clawback: non‑fault recoupment of erroneously awarded incentive comp for three years preceding a restatement, in addition to misconduct‑based clawback under governance guidelines .
Compensation Structure Details (what drives pay)
- AIP Metrics: Enterprise Operating Profit; OPACC (enterprise/segment level); Services Revenues (enterprise/segment); Services Growth and ESG strategic modifiers (±10% each) .
- LTI Metrics: PRSUs split 50/50 between three‑year average ROIC (absolute) and three‑year relative TSR vs S&P Capital Goods; RSUs time‑vest; options time‑vest, 10‑year term .
- 2024 Special Retention: Service‑based RSUs ($2.0M grant date value) to Ms. Johnson and Mr. De Lange to support leadership continuity after COO role creation and Executive Office realignment; vests 25%/25%/50% across 2025–2027 .
Compensation Peer Group and Governance
- 2024 Compensation Peer Group includes: 3M, ADM, Boeing, Cisco, Cummins, Deere, Emerson, FedEx, Ford, GE, GM, Halliburton, Honeywell, Intel, Johnson Controls, PACCAR, RTX (full list in proxy) .
- Market positioning: CEO LTI sized ~60th percentile; other NEOs around 50th percentile (benchmarked and size‑adjusted) .
- CHRC (Compensation and Human Resources Committee) members: Chair Rayford Wilkins, Jr.; members Daniel M. Dickinson, Gerald Johnson, Nazzic S. Keene, Judith F. Marks; independent consultant Meridian Compensation Partners (no conflicts) .
- Say‑on‑Pay: 93% support in 2024 (also 93% in 2023; 94% in 2022) .
Performance & Track Record Context (Company-level)
| Metric | 2024 Result |
|---|---|
| Adjusted Profit per Share | $21.90 (record) |
| Adjusted Operating Margin | 20.7% |
| ME&T Free Cash Flow | $9.4B |
| Services Revenues | $24B (+4% YoY) |
| Capital Returned | $10.3B (buybacks + dividends) |
| Five‑year cumulative TSR (12/31/19→12/31/24) | $274.14 value of $100 (peers $176.44) |
Risk Indicators & Red Flags
- Special retention equity grants indicate targeted retention priorities for key leaders amid leadership realignment; vesting through 2027 supports continuity (but create scheduled vesting events) .
- No tax gross‑ups on CIC; no backdating/repricing; strict anti‑hedging/pledging; clawbacks adopted per NYSE rules—mitigates governance risk .
- None of the directors/executive officers’ shares are pledged; Section 16 compliance noted (no delinquent filings) .
Investment Implications
- Pay-for-performance alignment is strong: Johnson’s variable pay is driven by profitability (Enterprise Operating Profit), capital efficiency (OPACC/ROIC), and durable services growth, with relative TSR as an explicit LTI metric—key levers for CAT’s multiple and cash return profile .
- Near-term retention risk appears contained: targeted $2.0M service‑based RSUs vesting through 2027 incentivize continuity; combined with ownership guidelines and anti‑hedge/pledge policy, alignment with long‑term shareholders is reinforced .
- Upcoming vesting cadence is transparent (RSUs and options vest annually 2025–2027; PRSUs settle after 2026 performance period), which creates known windows for potential share delivery while pre‑clearance and window policies apply to Section 16 insiders .
- Governance and shareholder support reduce compensation controversy risk (93% Say‑on‑Pay), and the absence of individual CIC agreements/gross‑ups limits payout inflation in adverse scenarios .