Shawn O’Connell

About Shawn O’Connell

Shawn M. O’Connell, age 52, is President & Chief Executive Officer of EnerSys (ENS) and has served as a Director since May 23, 2025. He was previously President & COO (Nov 2024–May 2025), President, Energy Systems Global (Nov 2023–Nov 2024), and led Motive Power globally (Jul 2020–Nov 2023). He holds an MBA in International Business (University of Redlands) and a BA in English Literature (California State University, San Bernardino), and is a U.S. Army 82nd Airborne veteran (Signals Intelligence Analyst, Spanish Linguist) . Company performance for FY2025: net sales $3.6B (+1% YoY), operating income $465M (vs $352M), EBITDA $559M (15.4% of sales; vs $434M, 12.1%), diluted EPS $8.99 (vs $6.50); adjusted operating income $528M (vs $450M), adjusted EBITDA $589M (16.3%; vs $507M, 14.1%), adjusted EPS $10.15 (vs $8.35), free cash flow >$139M . FY2025 Management Incentive Plan (MIP) paid at 130.5% of target on metrics (Adjusted Operating Earnings, Primary Operating Capital, NFTQ goals) .

Past Roles

External Roles

Fixed Compensation

• Base salary progression | Year | Base Salary | |---|---| | FY2024 | $575,000 | | FY2025 | $700,000 (initially $590,000 for Energy Systems Global; increased to $700,000 at COO promotion) |

• Annual bonus target | Date/Role | Target Bonus % of Salary | Notes | |---|---|---| | Pre-promotion FY2025 | 70% | Prior target | | From Nov 2024 (promotion) | 85% | Pro-rated for FY2025 payout |

• Multi-year summary compensation (as reported) | Metric ($) | FY2023 | FY2024 | FY2025 | |---|---:|---:|---:| | Salary | 495,123 | 575,026 | 700,000 | | Stock Awards (RSUs) | 500,000 | 500,000 | 700,000 | | Option Awards | 500,000 | 500,000 | 700,000 | | Non-Equity Incentive (MIP) | 436,665 | 472,842 | 630,756 | | All Other Compensation (perqs, 401k) | 23,377 | 19,834 | 40,930 (401k $19,125; auto $21,210; airline dues) | | Total | 1,955,165 | 2,067,702 | 2,771,686 |

Notes: Company disclosed no defined benefit pension and no deferred comp accruals for NEOs in FY2023–FY2025 .

Performance Compensation

• Annual cash incentive (MIP) design and FY2025 results | Metric | Weight | Goal Range | FY2025 Actual | Payout | |---|---:|---|---:|---:| | Adjusted Operating Earnings (M) | 60% | Min $461 / Target $498 / Max $543 | $498.403 | 101% | | Primary Operating Capital | 20% | 27.3% / 26.8% / 26.3% | 25.1% | 200% | | NFTQ goals (strategic milestones) | 20% | 2 / 6 / 8 achieved | 7 achieved | 150% | | Overall payout | — | — | — | 130.5% |

• Long-term incentive (LTI) structure and FY2025 grants (shift from PSUs to options/RSUs) | Grant Type | Weight | Key Terms | FY2025 Grant Detail | |---|---:|---|---| | Premium-priced stock options | 50% | 10-year term; 10% premium to grant-date FMV; vest 1/3 per year over 3 years | 8/9/2024: 20,408 options @ $103.73; 11/8/2024 (promotion): 13,801 options @ $107.18 | | Time-vested RSUs | 50% | Vest 25% annually over 4 years | 8/9/2024: 7,423 RSUs (value $94.30); 11/8/2024: 5,131 RSUs (value $97.44) |

• Aggregate FY2025 LTI award sizing (company table) | Name | Options (count) | RSUs (count) | Total Value | |---|---:|---:|---:| | Shawn M. O’Connell | 34,209 | 12,554 | $2,400,000 (includes $1,000,000 off-cycle at promotion) |

• Grants of Plan-Based Awards (FY2025, O’Connell) | Grant Date | All Other Options (#) | Exercise/Base Price | Grant-Date Option Value | All Other Stock Awards (RSUs) | RSU Grant-Date Value | |---|---:|---:|---:|---:|---:| | 8/9/2024 | 20,408 | $103.73 | $34.30 per option | 7,423 | $94.30 per share | | 11/8/2024 | 13,801 | $107.18 | $36.23 per option | 5,131 | $97.44 per share |

• Legacy PSU/TSR context: Company granted market condition TSR awards prior to FY2020; current design emphasizes premium-priced options and RSUs (no new TSR PSUs) .

Equity Ownership & Alignment

• Beneficial ownership and components | Holder | Shares/Derivatives | Notes | |---|---:|---| | Shawn M. O’Connell | 76,353 | Includes 54,885 vested stock options; excludes 21,560.51 unvested RSUs and 50,612 unvested options; shared voting/investment power over 21,468 shares; <1% ownership |

• Outstanding equity awards (as of March 31, 2025) | Instrument | Exercisable | Unexercisable | Exercise Price | Expiration | |---|---:|---:|---:|---| | Stock Options (various grants) | 6,778 | — | $82.93 | 8/17/2030 | | | 15,950 | — | $100.99 | 8/16/2031 | | | 13,866 | 6,933 | $77.97 | 8/12/2032 | | | 4,735 | 9,470 | $104.18 | 8/11/2033 | | | 0 | 20,408 | $103.73 | 8/9/2034 | | | 0 | 13,801 | $107.18 | 11/8/2034 |

• Vesting and selling pressure indicators

  • FY2025 stock vested for O’Connell: 5,945 shares; no options exercised in FY2025 .
  • RSUs vest 25% annually from grant dates (e.g., Aug and Nov); options vest in thirds over three years; options set at 10% premium to spot reduce immediate in-the-money value and near-term exercise incentives .

• Alignment policies

  • CEO stock ownership guideline: 6x base salary; other NEOs 3x; all NEOs (excluding retiring CEO) achieved or are on track as of 3/31/2025; hedging and pledging prohibited .
  • Company prohibits employee hedging/pledging; director program similarly prohibits .

Employment Terms

• Severance/Change-in-Control (CIC) structure

  • O’Connell’s severance letter agreement (initially 4/1/2019) provides CIC protection with non-compete and non-solicit for one year post-termination .
  • Effective upon appointment as CEO (5/23/2025), severance amended to 2x (base salary + target bonus) lump sum and COBRA coverage for two years; double-trigger equity acceleration upon CIC .
  • Definitions of “Cause” and “Good Reason” include pay cut ≥10%, material diminution of duties, relocation >50 miles, and breach; “Cause” covers breach of duty, dishonesty, code violations, etc. .

• Potential payments (as of 3/31/2025 illustration) | Scenario (O’Connell) | Severance | Welfare (PV) | Accelerated Options | Accelerated RSUs | Total | |---|---:|---:|---:|---:|---:| | CIC only | $0 | $0 | $94,358 | $1,965,490 | $2,059,848 | | Termination for Disability | $0 | $0 | $630,132 | $1,965,490 | $2,595,622 | | Death | $0 | $0 | $630,132 | $1,965,490 | $2,595,622 | | Involuntary (no CIC) | $0 | $0 | $0 | $0 | $0 | | Involuntary/Good Reason following CIC | $1,330,756 | $16,653 | $630,132 | $1,965,490 | $3,943,031 |

Note: Post-5/23/2025 CEO amendment increases severance multiple to 2x base + target bonus and COBRA period to two years going forward .

• Clawback and perquisites

  • SEC/NYSE-compliant clawback policy tied to accounting restatements .
  • FY2025 perquisites: 401(k) match $19,125; automobile personal use $21,210; airline membership dues .

• Deferred comp / pensions

  • NEOs did not participate in the Executive Deferred Compensation Plan in FY2025; no defined benefit pension arrangements .

Board Governance (Director Service, Independence, Committees)

• Board service summary | Attribute | Detail | |---|---| | Director since | 2025 (appointed at CEO succession) | | Board class/term | Class III; nominated for election to a term ending at 2028 annual meeting | | Independence | Not independent (all directors except O’Connell are independent under NYSE rules) | | Committee roles | Technology Advisory Committee | | Board leadership | Independent Non-Executive Chair: Paul J. Tufano | | Attendance | Each director attended ≥75% of Board/committee meetings in FY2025 | | Executive sessions | Non-management directors meet in executive session periodically |

• Director compensation context

  • Non-employee directors: $90,000 cash retainer; $1,500 per committee meeting; Chair premiums ($150,000 Chair; $15,000 committee chairs); $155,000 annual deferred stock unit award; no options; hedging/pledging prohibited .
  • Employee directors are not separately compensated for Board service (e.g., CEO)—company disclosed this for the prior CEO .

Compensation Peer Group, Say-on-Pay, and Governance

• Peer group used for FY2025 decisions (representative industrials; $1.3–$6.7B revenues; median $3.4B) | Peer companies (abbrev.) | |---| | Acuity Brands; Advanced Energy; Barnes Group; Belden; Donaldson; Flowserve; Hubbell; ITT; Lincoln Electric; Littelfuse; Regal Rexnord; Sensata; SPX Technologies; Watts Water; Woodward |

• Market positioning: Target total direct compensation for NEOs overall at ~11% above median .

• Say-on-Pay: 95.2% approval at 2024 annual meeting; annual vote maintained .

• Program design highlights: Majority at-risk; double-trigger CIC; no excise tax gross-ups; robust ownership guidelines; hedging/pledging ban; annual risk assessment .

Performance & Track Record Highlights

• FY2025 company performance: net sales $3.6B (+1% YoY), operating income $465M vs $352M, EBITDA $559M (15.4%) vs $434M (12.1%), diluted EPS $8.99 vs $6.50; adjusted OI $528M vs $450M; adjusted EBITDA $589M (16.3%) vs $507M (14.1%); adjusted EPS $10.15 vs $8.35; FCF >$139M; cash $343M; net leverage 1.3x .
• Leadership initiatives: As President, Energy Systems Global, delivered ~$50M cost reduction; as President, Motive Power, drove ~20% operating earnings growth and ~210 bps margin expansion .
• Selected product/innovation milestones: FC&S BESS deployments; DataSafe TPPL enhancements; ABSL Li-ion on NASA Europa Clipper; NexSys 48V launches .

Director Compensation (if applicable in dual roles)

• As CEO/employee-director, O’Connell’s compensation is via executive program (salary, MIP, LTI). Non-employee director program details above; prior CEO not separately compensated for Board service, indicating practice applies to employee-directors .

Equity Ownership Guidelines & Pledging

• CEO guideline 6x salary (others 3x); quarterly monitoring; all NEOs (excluding retiring CEO) achieved or on track by 3/31/2025; hedging/pledging prohibited for employees and directors .

Compensation Structure Analysis

• Mix shift and risk profile: Company replaced performance share units with premium-priced options (more performance-levered) plus time-vested RSUs (retention). Options at a 10% premium align payout with multi-year stock appreciation; RSUs provide steady retention value and may create periodic selling supply at vest .
• FY2025 pay-for-performance: MIP paid above target (130.5%) driven by strong operating capital and strategic execution; O’Connell’s bonus target raised with promotion, increasing variable pay leverage .
• Governance safeguards: Double-trigger only; clawback policy; hedging/pledging ban; no excise tax gross-ups .

Employment & Contracts (Retention/Transition)

• Amended CEO CIC severance (2x base+target bonus; 2 years COBRA); one-year non-compete/non-solicit; equity acceleration on double-trigger .
• Illustrative CIC termination values (as of 3/31/2025) total $3.94M for O’Connell; subject to change with stock price and role terms .

Investment Implications

• Alignment: High at-risk pay with premium-priced options ties upside to multi-year TSR; RSU cadence implies recurring vest-driven supply, but hedging/pledging bans and 6x CEO ownership guideline support alignment and mitigate adverse incentives .
• Retention: Off-cycle promotion grants (Nov 2024) and multi-year vesting increase retention “glue”; amended CEO CIC benefits (2x multiple) provide competitive protection without single-trigger windfalls .
• Execution signal: Above-target MIP (130.5%) on operating earnings, capital efficiency, and strategic milestones suggests strong operational focus; O’Connell’s track record in cost takeout and margin expansion is supportive for execution in CEO role .
• Governance: Independent Chair, majority independent Board, robust clawback, strong say-on-pay (95.2%) reduce governance risk despite dual executive/director role; Board class/tenure structure remains staggered .