Rajesh Kalathur
DEERE &About Rajesh Kalathur
Rajesh Kalathur (age 56) is President, John Deere Financial, and Chief Information Officer; he is one of DE’s named executive officers with 27.4 credited years of service, indicating long tenure and deep institutional knowledge . Company performance in FY2024: net sales and revenues $51.72B, net income $7.10B, diluted EPS $25.62, and Deere’s five- and ten-year cumulative TSR outperformed the S&P 500 and peer medians, aligning with pay-for-performance constructs used in executive compensation .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Deere & Company | President, John Deere Financial and CIO | 2019–present | Led financial services and enterprise IT; supports Smart Industrial model and recurring revenue ambitions |
| Deere & Company | President, John Deere Financial; SVP Global IT and Chief Financial Officer | 2022 | Dual remit across finance and IT; signals broad operational and capital allocation expertise |
External Roles
- Not disclosed in available filings; no public board or external committee roles identified in DE’s FY2024 10-K or 2025 Proxy.
Fixed Compensation
Multi-year compensation (as reported):
| Metric (USD) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary | $861,045 | $924,379 | $961,731 |
| Stock Awards (RSUs/PSUs grant-date fair value) | $1,367,541 | $2,885,627 | $3,042,558 |
| Option Awards (grant-date fair value) | $753,423 | $1,092,089 | $1,034,714 |
| Non-Equity Incentive Plan Compensation (STI; LTIC treatment changed in 2023) | $2,707,385 | $1,716,479 | $1,731,116 |
| Change in Pension Value & Deferred Comp Earnings | $0 | $162,670 | $786,092 |
| All Other Compensation | $231,500 | $184,028 | $288,269 |
| Total | $5,920,894 | $6,965,272 | $7,844,480 |
Additional fixed elements:
- Base salary increased 4% to $964,824 effective Dec 1, 2023 .
- Target STI rate: 100% of salary for other NEOs (unchanged in FY2024) .
Performance Compensation
Short-term incentive (STI) metrics, results, and payout:
- STI metrics and weightings: OROA 50%, OROS 40%, ROE 10% .
- FY2024 actuals: OROA 35.9%, OROS 18.2%, ROE 9.6%; payout 180% of target (Rajesh received $1,731,116) .
- Targets were set formulaically at 91% of mid-cycle volumes; specific numeric targets not disclosed .
Long-term incentives (LTI) structure and outcomes:
- Equity mix: 50% PSUs, 25% RSUs, 25% stock options; PSUs metrics: 50% relative TSR, 50% relative revenue growth (metric shift implemented in 2024) .
- PSU payout for 2022–2024 cycle: 76% (relative revenue growth at 42nd percentile); settled Dec 15, 2024 .
- LTIC (cash) for 2022–2024: payout 200% based on accumulated SVA; Rajesh received $2,019,635; LTIC discontinued for new cycles starting 2024 .
FY2024 grant detail (Dec 13, 2023 grants):
| Instrument | Grant date | Quantity | Exercise/Base | Vesting | Grant-date fair value |
|---|---|---|---|---|---|
| RSUs | 12/13/2023 | 2,745 | n/a | 34%/33%/33% over 3 years | $1,034,892 |
| PSUs (target) | 12/13/2023 | 5,490 (Tgt); 1,372 Thr; 10,980 Max | n/a | 3-year performance; rTSR and relative revenue growth | $2,007,666 |
| Options | 12/13/2023 | 10,554 | $377.01 | 34%/33%/33% over 3 years; 10-year term | $1,034,714 |
Equity Ownership & Alignment
Beneficial ownership and guideline compliance:
- Shares beneficially owned: 70,271; exercisable options: 101,393; RSUs available within 60 days: 18,120; total 189,784 (<1% of outstanding) .
- Ownership guidelines: 3.5x base salary for NEOs; anti-hedging and anti-pledging; NEOs have met or are within compliance period .
Outstanding equity awards and vesting profile (as of FY2024 year-end):
| Category | Detail |
|---|---|
| Options outstanding (select grants) | 24,580 @ $100.55 exp. 12/14/2026; 15,379 @ $151.95 exp. 12/13/2027; 13,370 @ $148.14 exp. 12/12/2028; 20,156 @ $169.70 exp. 12/11/2029; 10,508 @ $254.83 exp. 12/9/2030; 5,632 (+2,816 unexercisable) @ $343.94 exp. 12/15/2031; 2,722 (+5,281 unexercisable) @ $438.44 exp. 12/14/2032; 10,554 unexercisable @ $377.01 exp. 12/13/2033 |
| RSUs not vested | 5,483 units; market value $2,236,681 at $407.93 (FY2024 close) |
| PSUs not vested | 1,902 units; market value $775,883 at $407.93 (estimation basis per table) |
| Vesting schedules | RSUs and options vest 34%/33%/33% annually over 3 years (RSUs changed from cliff vest to ratable from 2023); options expire 10 years |
Observations on potential selling pressure:
- At FY2024 close ($407.93), 2022 option tranche at $438.44 is out-of-the-money, while earlier option strikes (100.55–343.94) and 2023 strike ($377.01) are in-the-money, creating mixed exercise incentives over the next 24–36 months .
- RSUs/PSUs ratable vesting through 2026 increases scheduled delivery of stock; insider trading policy prohibits hedging/pledging and governs trading windows, moderating near-term selling risk .
Employment Terms
- Change-in-control (CIC) severance: double-trigger equity acceleration; senior officers receive 2x base salary and 2x target STI; CEO at 2.99x; unvested RSUs/PSUs cash-out at target on CIC+qualifying termination .
- Rajesh Kalathur—CIC economics (as of FY2024):
- CIC only: $1,485,494 (LTIC) total .
- CIC + qualifying termination: Salary $1,929,648; STI $1,923,462; LTIC $1,485,494; Stock Awards $4,421,553; Benefits $43,794; Plans $267,821; Total $10,071,772 .
- Other termination scenarios (FY2024 year-end estimates): Death $36,671,068; Disability $52,745,813; Retirement $38,590,647; Termination without cause $14,299,943; for-cause $13,335,119 .
- Clawback: SEC/NYSE-compliant incentive compensation recovery policy .
- Deferred compensation and pensions: DCRP balance $5,347,955 (FY2024); pension present value $3,276,558 across salaried, supplementary, and supplemental plans .
- Non-compete and restrictive covenants apply within CIC program to protect continuity and value .
Performance Compensation
| Metric | Weighting | Target (framework) | Actual (FY2024) | Payout Impact | Vesting/Settlement |
|---|---|---|---|---|---|
| OROA (Equipment Operations) | 50% | Formulaic vs mid-cycle (91%) | 35.9% | Contributed to 180% STI payout | Cash paid Dec 15, 2024 unless deferred |
| OROS (Equipment Operations) | 40% | Formulaic vs mid-cycle (91%) | 18.2% | Contributed to 180% STI payout | Cash paid Dec 15, 2024 unless deferred |
| ROE (Financial Services) | 10% | Pre-set annual goal | 9.6% | Contributed to 180% STI payout | Cash paid Dec 15, 2024 unless deferred |
| LTIC—Accumulated SVA | n/a | 3-year SVA with rTSR modifier cap | $20.9B SVA; rTSR 54th percentile | 200% payout; $2,019,635 for Rajesh | Cash; LTIC discontinued for new cycles |
| PSUs—Relative Revenue Growth | 25% of LTI | 3-year to FY2024 | 42nd percentile | 76% payout | Settled Dec 15, 2024 |
| PSUs—Relative TSR | 25% of LTI | Introduced in FY2024 PSUs | Ongoing | Impacts 2024–2026 cycle | Settles at cycle end per plan |
| RSUs | 25% of LTI | Time-based | n/a | n/a | Ratable 3-year vest (34/33/33) |
| Options | 25% of LTI | Time-based | n/a | n/a | Ratable 3-year vest; 10-year term |
Say-on-Pay & Shareholder Feedback
- Say-on-Pay approvals: 92.4% at 2024 Annual Meeting (indicative of strong shareholder support for compensation design) .
- Shareholder engagement influenced 2024 design changes: increased PSU mix to 50%, added rTSR, simplified STI weighting, raised FY2025 OROA/OROS targets to maintain rigor .
Investment Implications
- Alignment: High variable/at-risk pay with robust STI and PSU constructs tied to OROA/OROS/ROE and rTSR/relative revenue growth indicates strong linkage of compensation to operating quality and shareholder returns .
- Retention risk: Retirement eligibility and sizable vested/unvested equity could create optionality for departure; however, double-trigger CIC equity treatment, non-compete covenants, and strong ownership/anti-hedging/anti-pledging policies reduce misalignment risk .
- Trading signals: Mixed moneyness across option tranches (2022 underwater at $438.44 vs FY2024 close $407.93; 2023 and earlier in-the-money) may dampen near-term exercises, while ratable RSU/PSU vesting through 2026 increases stock delivery cadence—monitor Form 4 filings around vest dates for potential selling pressure within policy windows .
- Pay-for-performance momentum: FY2024 STI paid at 180% despite down-cycle volumes, reflecting structural improvements; LTIC at cap underscores enterprise SVA discipline—continued rigor with elevated FY2025 OROA/OROS targets supports sustained execution focus .