Heath Monesmith
Eaton CorpAbout Heath Monesmith
Heath B. Monesmith is President and Chief Operating Officer – Electrical Sector at Eaton, serving in this role since July 5, 2022; he previously led Eaton’s Industrial Sector as President and COO from July 2019 to July 2022 . He is 54 and joined Eaton in 2012 via the Cooper Industries acquisition; his education includes a BBA from Ohio University, a JD from The Ohio State University College of Law, and an MBA from Texas A&M University . 2024 performance against short‑term incentive metrics was strong: Adjusted EPS of $10.80 vs. $10.15 target and Adjusted Operating Cash Flow of $4,327 million vs. $4,200 million target, with the corporate payout factor reduced to 123% to exclude one‑time items . Eaton’s 2022–2024 PSU cycle paid 163% of target on 81.25th percentile TSR, with Eaton’s TSR of 133.58% over the period and PSUs vesting on February 26, 2025 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Eaton Corporation | President & COO – Electrical Sector | Jul 5, 2022 – present | Executive leadership of Electrical Sector; responsibilities per executive officer listing . |
| Eaton Corporation | President & COO – Industrial Sector | Jul 1, 2019 – Jul 4, 2022 | Executive leadership of Industrial Sector; responsibilities per executive officer listing . |
| Eaton Corporation | EVP & General Counsel | Mar 1, 2017 – Jan 6, 2020 | Responsible for all legal matters; counsel to the Board . |
| Eaton Corporation | SVP & Deputy General Counsel | May 15, 2015 – Mar 1, 2017 | Senior legal leadership; responsibilities per executive officer listing . |
| Cooper Industries | VP, Chief Legal Counsel – Litigation; EVP, Human Resources | 2006 – 2012 | Senior legal and HR roles prior to Eaton acquisition . |
| K&L Gates (law firm) | Partner | Pre‑2006 | Private practice partner; prior to joining Cooper . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Not disclosed | — | — | No public company directorships or external roles disclosed in filings reviewed . |
Fixed Compensation
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 697,746 | 749,171 | 813,605 |
| Bonus ($) | 175,392 | — | — |
| Stock Awards ($) | 1,382,723 | 2,090,150 | 2,724,774 |
| Option Awards ($) | 419,405 | 627,367 | 773,486 |
| Non‑Equity Incentive Plan ($) | 406,909 | 1,250,893 | 1,066,307 |
| Changes in Pension Value & Above‑Market Deferred Earnings ($) | 7,171 | 8,352 | 8,725 |
| All Other Compensation ($) | 117,307 | 138,745 | 164,189 |
| Total Compensation ($) | 3,206,653 | 4,864,678 | 5,551,086 |
- Base salary rate: increased 9.5% effective March 1, 2024 to $825,634 .
- 2024 all other compensation breakdown:
- Financial planning $19,926; personal aircraft use $47,736; company‑paid life insurance $4,236; employer contributions to defined contribution plans $92,291; total $164,189 .
Performance Compensation
| Plan | Metric | Weighting | Target | Actual | Payout/Factor | Vesting |
|---|---|---|---|---|---|---|
| 2024 EIC (cash) | Adjusted EPS | Not disclosed | $10.15 | $10.80 | Corporate factor 123% after removing one‑time items | Paid Q1 2025 |
| 2024 EIC (cash) | Adjusted Operating Cash Flow | Not disclosed | $4,200 mm | $4,327 mm | Corporate factor 123% after removing one‑time items | Paid Q1 2025 |
| 2024 EIC award (individual) | Composite (Company + individual) | — | $866,916 target (105% of salary) | — | $1,066,307 (123% of target) | Paid Q1 2025 |
| 2022–2024 ESIP (PSUs) | Relative TSR | 100% | 50th percentile | 81.25th percentile; TSR 133.58% | 163% of target | Vested Feb 26, 2025; earned 9,104 PSUs; value $2,686,499; dividends $95,041 |
2024 long‑term incentive targets (granted Feb 28, 2024):
- ESIP (PSUs): target value $1,350,000; target units 5,385; grant date fair value $1,951,416; payout range 0–200%; three‑year period 2024–2026 .
- RSUs: 2,695 units; grant date fair value $773,358; vest in approximately equal annual installments over three years .
- Stock options: 8,500 options; exercise price $286.96; grant date fair value $773,486; 10‑year term; vest over three years .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 114,921 shares owned; less than 1% of outstanding shares . |
| Stock ownership guidelines | President & COO (including sector presidents): 4× base salary; at least 20% held outright; executives expected to reach compliance within five years; all named executive officers have exceeded requirements or are making adequate progress . |
| Hedging/pledging | Prohibited for officers and directors; no margin or pledging permitted . |
| Outstanding equity at 12/31/2024 | Unvested RSUs: 2,695 ($894,390 at $331.87); PSU opportunities outstanding: 5,385 (2024–2026), 7,235 (2023–2025), 5,585 (2022–2024) with payout range 0–200%; options unexercisable: 8,500 (2024, $286.96), 8,710 (2023, $171.31), 3,910 (2022, $151.76); various exercisable lots outstanding . |
| Option terms | Strike price set at NYSE closing price on grant date; no repricing or discounted options allowed . |
| Deferred compensation | 2024 Supplemental Retirement Plan company credits $68,141; aggregate balance $669,584; DIC Plan II aggregate balance $292,251 (earnings $20,153); combined aggregate balances $961,835 . |
Employment Terms
- Employment contracts: None; Eaton does not enter employment contracts with salaried U.S. employees, including NEOs .
- Severance (not for cause): Committee discretion; up to 2× base salary + target annual incentive; continuation of benefits for six months; may allow vesting/acceleration of RSUs scheduled within 12 months .
- Change‑of‑control: Double trigger; if terminated without Cause or for Good Reason within two years of a change of control, lump‑sum payments include (i) unpaid salary and earned incentives, (ii) prorated EIC and target ESIP for open periods, (iii) 2× annual base salary + target EIC, and (iv) base salary + target EIC for one‑year non‑compete; plus two years of health and welfare benefits; no tax gross‑ups .
- Clawback policy: Recoupment for three years prior to a material accounting restatement; also for specified “Detrimental Activity” (felony conviction; willful illegal conduct, fraud, or gross misconduct injurious to the Company) .
- Pension/SERP: Monesmith participates via legacy Cooper plan only; present value $7,120; no participation in Eaton defined benefit supplemental plans .
- Potential payments scenarios (as of Dec 31, 2024):
| Scenario | Severance | Pro‑Rated ESIP | Equity Vesting/Acceleration | Benefit Continuation | Tax/Financial Planning | Outplacement | Total |
|---|---|---|---|---|---|---|---|
| Involuntary – Not for Cause | $3,385,101 | $1,653,812 | $1,007,225 | $12,578 | $39,852 | $18,000 | $6,116,568 |
| Change of Control (qualifying termination) | $5,120,998 | $2,269,767 | $4,499,558 | $50,314 | $39,852 | $18,000 | $11,998,489 |
| Death or Disability | — | $2,269,767 | $4,499,558 | — | $39,852 | — | $6,809,177 |
Investment Implications
- Pay‑for‑performance alignment: Large at‑risk mix with 2024 short‑term awards tied to Adjusted EPS and Adjusted OCF and long‑term PSUs tied to relative TSR; recent performance delivered above‑target outcomes (EIC 123%; ESIP 163%), supporting strong realized compensation while aligning with shareholder returns .
- Retention and selling pressure: Significant scheduled vesting of RSUs and PSU cycles plus sizable unexercisable option tranches could lead to periodic sell‑to‑cover activity; mitigants include strict anti‑hedging/pledging policy and robust 4× salary ownership requirement, with NEOs at or progressing toward compliance .
- Change‑of‑control economics: Double‑trigger protection with substantial severance and accelerated equity could be material in corporate events; no tax gross‑ups and clawback provisions temper risk and align governance practices .
- Governance and shareholder support: Say‑on‑pay approval was 92.2% in 2024, indicating broad investor support for program design; related‑party review found no executive officer transactions, reducing governance red flags .