Mitchell Rales
DANAHER CORP /DE/About Mitchell Rales
Co‑founder of Danaher, Director since 1983, and Chairman of the Executive Committee since 1984; previously served as President (1984–1990). Age 68 . Danaher’s 2024 results: Sales $23.9B (5.9% CAGR vs. 2019), Operating Profit $4.9B (8.3% CAGR), and Operating Cash Flow $6.7B (12.8% CAGR), reflecting disciplined capital allocation and DBS execution . Company long-term equity incentive outcomes were constrained for the 2022–2024 PSU cycle (0% vesting) due to absolute TSR of -4.28% (29th percentile vs S&P 500), underscoring the program’s pay-for-performance design; while Rales does not participate in PSUs, this frames the broader performance environment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Danaher Corporation | Chairman, Executive Committee | 1984–Present | Co‑created Danaher Business System; guides portfolio strategy, capital allocation, and M&A oversight . |
| Danaher Corporation | President | 1984–1990 | Early operating leadership during foundational growth phase . |
| Danaher Corporation | Director | 1983–Present | Long-tenured board member shaping strategy and oversight . |
External Roles
| Organization | Role | Years | Notes / Strategic Relevance |
|---|---|---|---|
| ESAB Corporation | Director | Current | Additional public board experience . |
| Fortive Corporation | Director | Within past 5 years | Former Danaher spin peer governance exposure . |
| Enovis Corporation | Director | Within past 5 years | Portfolio adjacencies; governance experience . |
Fixed Compensation (Mitchell P. Rales – 2024)
| Component | Amount | Notes |
|---|---|---|
| Base Salary | $419,000 | Fixed for more than a decade . |
| Cash/Equity Incentives | — | No cash incentive or equity compensation in 2024 . |
| 401(k) Contribution | $24,096 | Company contribution . |
| Excess Contribution Program (ECP) | $17,806 | Company contribution . |
| Change in Pension Value | $6,765 | Cash Balance Plan actuarial change . |
| Tax & Accounting Services | $357,815 | Incremental cost to company for services provided . |
| Personal Use of Designated Danaher Office Space | $316,131 | Incremental cost . |
| Personal Car & Parking | — | Not applicable to M. Rales (amount not shown) . |
| Personal Administrative Services | No incremental cost | Company-provided EA support; minority non‑Danaher use . |
Note: As a director and executive officer, Rales receives no additional compensation for board service .
Performance Compensation
- Not applicable: Rales received no annual bonus, no RSUs/PSUs, and no stock options in 2024 .
Context – Company PSU Design and Outcome (for reference on program alignment, not paid to Rales):
| Metric | Weighting/Mechanics | Target/Thresholds | Vesting/Holding | 2022–2024 Outcome |
|---|---|---|---|---|
| Relative TSR vs. S&P 500 | Primary driver (0–200% payout) | 55th percentile = 100%; 35th = 50%; 75th = 200%; linear interpolation | 3-year performance + 2-year post-vest hold | 0% (absolute TSR -4.28%, 29th percentile) . |
| ROIC Modifier | ±10% modifier | +200 bps vs. baseline = 110%; ≤0 bps = 90% | Applies to earned PSUs; 200% cap | Not applicable given 0% base payout . |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 34,932,704 shares (4.9% of outstanding) . |
| Ownership Breakdown | 25,671,000 via LLCs controlled by a revocable trust; 647 in 401(k); 6,425 in company deferred comp; 6,745,238 held by a charitable foundation (disclaimed); 2,509,394 other indirect . |
| Shares Pledged (Collateral) | 26,521,000 of LLC/indirect shares and 5,904,000 foundation shares are pledged to secure lines of credit; all lines in compliance . |
| Anti‑Pledging/Hedging Policy | Pledging generally prohibited since 2013; Rales brothers’ long‑standing pledges grandfathered and excluded from ownership guideline calculations; hedging prohibited . |
| Pledging Oversight | Audit Committee quarterly review; secured indebtedness capped so as not to exceed 25% of market value of pledged shares; >15% reduction in aggregate pledged shares since 2013; estimated unwind time one day or less at 12/31/24 . |
| Executive Ownership Guidelines | Executives subject to stock ownership requirements; what counts: directly/indirectly owned shares, notional shares in deferred plans, 401(k), unvested RSUs, vested PSUs; what doesn’t: unexercised options, unvested PSUs; pledged shares excluded from counting . |
Employment Terms
| Provision | Terms |
|---|---|
| Severance (Senior Leader Severance Pay Plan) | If terminated without cause: severance equal to 3 months base salary plus 1 month per year of service (capped at 12 months), paid over the severance period; welfare benefit continuation at active-employee rates during severance period; no change‑in‑control provision . |
| “Cause” Definition (Plan) | Includes dishonesty/fraud/misconduct/gross negligence; certain criminal convictions/pleas; willful failure to perform; policy violations; restrictive covenant breaches; conflicts of interest; material misrepresentations . |
| Clawbacks – Restatement‑Based | NYSE‑compliant “no‑fault” recovery of incentive‑based pay for 3 preceding fiscal years if restatement; extends to broader senior management beyond executive officers with enhanced recovery terms . |
| Clawbacks – Misconduct‑Based (2025) | Additional policy allows recovery up to 100% of annual incentives, gains from option exercises, and time/performance‑based awards vesting in the recovery period when misconduct causes serious financial/reputational harm; applies to execs and broader senior leaders for compensation received/realized on or after Feb 20, 2025 . |
Board Governance
| Attribute | Detail |
|---|---|
| Board Tenure | Director since 1983 . |
| Committee Roles | Chairman of the Executive Committee (E) and Chairman of the Finance Committee (F) . |
| Independence | Not independent under NYSE standards (is an executive officer) . |
| Board Structure | Chairman and CEO roles separated (Chairman: Steven M. Rales); Lead Independent Director: Linda Filler with defined authorities; independent directors chair key committees . |
| Meetings/Attendance (2024) | Board met 5 times; overall Board/Committee attendance 97%; 11 directors at 100% . |
| Committee Activity (2024) | Executive Committee: 0 meetings; Finance Committee: 2 meetings . |
| Executive Sessions | Non‑management directors meet in executive session after regularly scheduled meetings; chaired by Lead Independent Director . |
| Director Fees | Rales receives no additional compensation for Board service (as an executive officer) . |
Dual‑Role Implications
- As an executive officer and long‑tenured director with 4.9% ownership, and as chair of the Executive and Finance Committees, Rales exerts significant strategic and capital allocation influence; independence safeguards include separation of Chair/CEO, Lead Independent Director authority, and fully independent Audit/Comp/Nominating committees .
Related Party Transactions and Other Signals
| Item | 2024 Amount/Terms | Notes |
|---|---|---|
| Aircraft Management Cost‑Sharing (FJ900 with Joust II, Joust III, Stonehavens) | ~$4.9M paid by Joust entities | Joust II/Stonehavens controlled by M. Rales; cost‑sharing for fixed aviation expenses; FJ900 receives no management fee; believed to lower Danaher’s costs via scale . |
| Aircraft Interchange (Danaher ↔ Joust entities) | ~$135k net incremental value to Joust | Non‑monetary reciprocal access intended to balance over contract life . |
| Washington Commanders Suite | ~$530k | Licensed at fair market value; Rales is >10% owner of Commanders . |
| Reimbursements for Shared Personnel | ~$219k paid by Rales (aggregate with S. Rales) | For benefits and partial salaries of personnel providing services to the Rales’ . |
| Venture Capital “New Fund” | Contract amendments to protect Danaher | Rales and others intended to invest; Danaher negotiated fee step‑down offsets, reinvestment limits, and restrictions on research financings . |
Governance Controls on Pledging and Hedging
- Pledging grandfathered only for Rales brothers; Audit Committee quarterly oversight; secured debt limited relative to collateral; unwind analysis indicates one day or less at 12/31/24; hedging prohibited .
Say‑On‑Pay & Shareholder Feedback
- 2024 Say‑on‑Pay support: 93% approval, indicating broad investor support for the NEO pay program (context for governance, not specific to Rales) .
- Shareholder engagement: management and some directors engaged with holders representing ~25% of outstanding shares on strategy, governance, compensation, and sustainability; feedback shared with Board committees .
Compensation Committee and Peer Practices (Context)
- Compensation Committee (independent directors) members: Teri List (Chair), Jessica L. Mega, MD, MPH, and Alan G. Spoon; FW Cook serves as independent consultant (no other services; no conflicts) .
- Program governance features: long vesting/holding for equity, no single‑trigger CoC, robust clawbacks, stock ownership requirements, no hedging/pledging (except grandfathered), limited perqs .
Investment Implications
- Alignment: Rales’ compensation is largely fixed (no annual or long‑term incentives), but his 4.9% stake provides substantial long‑term alignment; pledged shares are a monitoring point but Audit Committee oversight, collateral limits, and rapid unwind capacity mitigate forced‑sale risk near term .
- Governance/Influence: Dual role and committee chairmanships centralize strategic and capital allocation influence, balanced by separated Chair/CEO structure, a strong Lead Independent Director, and fully independent key committees—supportive for disciplined M&A and capital deployment under DBS .
- Trading/Signal Watch‑List: Monitor Form 4 filings for any collateral‑driven transactions; maintain scrutiny of related‑party aviation and sponsorship arrangements (currently structured for cost efficiency and fair value) and any future venture fund interactions for conflicts; PSU non‑payouts for 2022–2024 underscore market-relative performance rigor for other executives .
- Retention/Transition: Severance terms are modest and there is no CoC acceleration, reducing parachute risk; broad clawbacks heighten accountability, which investors typically view favorably .