Jennifer Rumsey
About Jennifer Rumsey
Jennifer W. Rumsey, age 51, is Chair of the Board (since Aug 1, 2023) and Chief Executive Officer of Cummins Inc. (since Aug 1, 2022). She holds a B.S. in Mechanical Engineering from Purdue University and an M.S. in Mechanical Engineering from MIT . In 2024, Cummins delivered record results: revenue $34.1B and adjusted EPS $21.37; the company ranked first among its peer group in TSR and outpaced the S&P 500 over 1-, 3-, and 5-year periods . Under Rumsey’s leadership, 2024 corporate bonus metrics achieved above target (EBITDA $5,266m vs $4,436m target; operating cash flow $3,419m vs $3,385m target), driving a 170% payout factor .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Cummins Inc. | Chair of the Board | 2023–present | Combined Chair/CEO structure to “streamline accountability” with Lead Independent Director oversight |
| Cummins Inc. | Chief Executive Officer | 2022–present | Oversaw record 2024 performance; advanced Destination Zero strategy |
| Cummins Inc. | President & COO | 2021–2022 | Ran global operations prior to CEO promotion |
| Cummins Inc. | President, Components Segment | 2019–2021 | Led business driving profitable growth |
| Cummins Inc. | Chief Technical Officer (VP) | 2015–2019 | Product life cycle, engineering and product quality leadership |
| Cummins Inc. | VP, Engineering, Engine Business | 2013–2015 | Engineering leadership for Engine segment |
| Cummins Inc. | Various engineering/product roles | 2000–2013 | Built foundation in technology and manufacturing |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Hillenbrand, Inc. | Director | 2020–present | Current public company board seat |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base salary ($) | $1,062,833 | $1,500,000 | $1,500,000 |
| Target annual bonus ($) | $2,625,000 (set with CEO promotion) | $2,625,000 (maintained) | $2,625,000 (maintained) |
| Actual annual bonus paid ($) | $1,532,908 | $2,231,250 (50% discretionary reduction) | $4,462,500 |
Notes:
- 2023 bonus reduction reflected regulatory settlement context (committee halved payout) .
Performance Compensation
- Plan architecture and weights
- Annual bonus: EBITDA (70%), Operating Cash Flow (30%) .
- Long-term incentives (2024–2026 corporate cycle): ROIC (80%), EBITDA (20%) .
- CEO pay mix: 89% performance-linked (at risk) in 2024 .
| 2024 Annual Bonus Mechanics | Target | Actual | Payout |
|---|---|---|---|
| EBITDA ($m, 70%) | $4,436 | $5,266 | 200% |
| Operating Cash Flow ($m, 30%) | $3,385 | $3,419 | 100% |
| Final bonus factor | — | — | 170% |
| 2022–2024 LTI Performance (Corporate) | Target | Actual | Payout |
|---|---|---|---|
| ROIC (%) | 15.00% | 17.66% | 150% |
| 3-yr Cumulative EBITDA ($m) | $12,875 | $14,384 | 170% (component) |
| Plan payout factor | — | — | 150% |
| Rumsey 2024 Realized Incentives | Target | Performance factor | Realized |
|---|---|---|---|
| Performance cash (2022–2024) | $2,250,000 | 150% | $3,375,000 |
| Performance shares (2022–2024) | 23,040 sh | 150% | 34,560 sh; $12,047,616 (@$348.60) |
Equity Ownership & Alignment
| Ownership/awards (as of Mar 14, 2025 unless noted) | Amount |
|---|---|
| Beneficial ownership (includes options exercisable within 60 days) | 102,899 sh |
| Of which: 401(k) | 1,481 sh |
| Of which: Trust | 11,373 sh |
| Options exercisable within 60 days | 47,165 sh |
| Unvested RSUs (Deposit Share Program, 5/31/24 grant) | 10,228 units |
| Unearned performance shares outstanding (2023–2025 and 2024–2026 targets shown at max per table) | 114,420 units |
Policy alignment and selling pressure assessment:
- Stock ownership guideline: CEO must hold 5x base salary; officers restricted from selling below guideline; all NEOs are compliant or within time to comply .
- Anti-pledging/anti-hedging policy: Officers and directors may not pledge or hedge company stock .
- Deposit Share Program: Rumsey acquired 10,228 newly purchased shares and received a 1:1 matching RSU grant that cliff vests on the 4th anniversary of the 5/31/2024 participation deadline (subject to continuous employment and holding the deposited shares), tightening near-term selling capacity and reinforcing alignment .
Vesting schedule highlights:
- Performance shares/performance cash for 2024–2026 cycle earn/settle in March 2027 (subject to performance) .
- Deposit Share matching RSUs cliff vest 4 years after 5/31/2024 (subject to conditions) .
Employment Terms
| Topic | Key term |
|---|---|
| Employment agreement | No individual employment contract for NEOs (policy-based arrangements) |
| Standard severance (non-CIC) | Up to 12 months’ base salary + pro-rated bonus at normal payout timing (release required) |
| Change-in-control (CIC) protection | Double-trigger; CEO: 3x base salary + 3x annual bonus at 1.0 factor; full vesting of certain benefits; continued benefits for 3 years |
| Non-compete / confidentiality | Confidentiality and 12-month non-compete with certain competitors post-employment |
| Clawback policy | Restatement-based recovery per SEC/NYSE rules; broader misconduct/reputational harm recovery permitted |
| Perquisites | Limited; personal aircraft use (incremental cost basis), financial counseling, executive physicals |
CIC economics (illustrative, if all triggers occurred on 12/31/2024):
- Aggregate estimated payout for Rumsey: $59,398,314, comprising severance $12,375,000; unvested restricted stock $3,565,481; performance cash at target $7,950,000; performance shares at target $27,975,150; incremental retirement and other benefits .
Pension/SERP snapshot:
- Present value at FY2024 year-end: Qualified plan $409,948; Excess plan $708,176; SERP $6,770,951 .
- 2024 change in pension value: $1,818,569 .
Board Governance (including Rumsey’s director role)
| Governance facet | Current state |
|---|---|
| Roles | Combined Chair and CEO since Aug 1, 2023 (annual reassessment); Lead Independent Director (Thomas J. Lynch) with robust duties |
| Independence | 10 of 11 director nominees are independent; Rumsey is non-independent by virtue of CEO role |
| Committees | 5 fully independent committees (Audit; Talent Management & Compensation; Governance & Nominating; Finance; Safety, Environment & Technology); Rumsey sits on the Executive Committee |
| Board attendance | All directors attended ≥75% of board/committee meetings in 2024; independent directors hold executive sessions at each regular meeting |
| Director compensation | Non-employee director annual target: $315k ($140k cash + $175k stock); Lead Director +$35k; committee chair fees vary; Rumsey as employee director receives no director pay |
| Anti-hedging/pledging | Prohibited for directors and officers |
| Say-on-pay (2025 AGM) | Votes For/Against/Abstain: 94,961,361 / 8,824,274 / 474,002 (passed) |
| Independent Chair proposal (2025 AGM) | Votes For/Against/Abstain: 43,023,230 / 60,921,624 / 314,783 (failed) |
Performance & Track Record
- 2024 financials: revenue $34.1B; adjusted EPS $21.37 (excludes Atmus divestiture gain and Accelera reorg charges) .
- TSR context: First among peer group in 2024; 1-, 3-, 5-year returns outpaced the S&P 500 .
- Strategic execution: Destination Zero advancement (e.g., HELM multi-fuel platforms; X15N production; power gen investments; Accelera JV for U.S. battery cell localization) .
Compensation Committee Analysis (structure, benchmarking)
- Design principles: Market median targeting; mix of short- and long-term; heavy pay at risk; simple and transparent; alignment via equity and ownership .
- Consultant: Farient Advisors LLC engaged; independence affirmed .
- Peer group (for 2024 decisions): BWA, TXT, DTG-XE, DE, CAT, ETN, EMR, DAN, HON, ITW, PCAR, PH, VOLV B-SE .
- Stock ownership guidelines: CEO 5x salary; officers restricted from sales below guideline; directors 3x annual retainer .
Say-on-Pay & Shareholder Feedback
- 2025 advisory vote on NEO compensation passed with 94,961,361 votes for vs 8,824,274 against .
- Prior year (2024 AGM) support was 94.0% for say-on-pay; no material program changes were made in response .
Equity Ownership & Alignment Details (granular awards)
| Item | Quantity/Terms |
|---|---|
| Matching RSUs (Deposit Share Program) | 10,228 units; cliff vest 4th anniversary of 5/31/2024; must hold the newly acquired 10,228 shares for 4 years; continuous employment required |
| Outstanding options (legacy) | Various tranches from 2016–2020, fully vested; examples include 13,320 @ $142.12 expiring 4/6/2030; others detailed in proxy table |
Risk Indicators & Red Flags (as disclosed)
- Clawback policy exceeds minimum legal requirements, covering restatements and specified misconduct causing reputational/financial harm .
- No hedging or pledging permitted by officers/directors .
- Related-party transactions are governed by a formal Audit Committee policy; the related-party section outlines approval criteria (no Rumsey-specific related-party transaction disclosed) .
Investment Implications
- Pay-for-performance linkage is strong: 89% of CEO target pay is variable; 2024 short-term and 2022–2024 long-term plans paid above target on quantifiable EBITDA/ROIC metrics . This supports alignment and can be a positive signal when combined with robust clawbacks and ownership rules .
- Selling pressure appears contained near term: Deposit Share Program requires four-year holding of newly acquired shares and the matching RSUs cliff vest in year 4, reducing discretionary liquidity; anti-pledging/hedging further limits misalignment risks .
- Retention risk mitigants are solid: Long-duration performance cycles, ownership guidelines, and CIC protections (double-trigger; 3x multiples for CEO) support stability through cycles and strategic transitions .
- Governance check on combined Chair/CEO: While the dual role concentrates authority, Cummins maintains a strong Lead Independent Director role, high board independence, and shareholders rejected an independent chair proposal in 2025, indicating current investor acceptance; continue to monitor any shifts in shareholder sentiment or performance that could reopen this question .