Olivier Leonetti
Eaton CorpAbout Olivier Leonetti
Olivier Leonetti, 59, became Executive Vice President and Chief Financial Officer of Eaton (ETN) on February 5, 2024, after serving on Eaton’s Board since 2019 (he resigned from the Board effective February 2, 2024) . He previously served as CFO at Johnson Controls (2020–2024) and Zebra Technologies (2016–2020), and held senior finance roles at Western Digital, Amgen, and Dell; he is a Certified Accountant with graduate degrees in economics/accountancy and internal audit (France) and an MBA . Company performance metrics that tie to incentives: 2024 Adjusted EPS was $10.80 vs $10.15 target and Adjusted Operating Cash Flow was $4,327m vs $4,200m target (corporate factor: 123%), and 2022–2024 TSR was 133.58% (81.25th percentile vs peers; ESIP paid 163%) . Shareholders approved Say‑on‑Pay at 92.2% in 2024, indicating broad support for pay design .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Johnson Controls International plc | EVP & Chief Financial Officer | 2020–2024 | Led finance for a global building tech leader; prior board experience at Eaton supported transition . |
| Zebra Technologies Corporation | Chief Financial Officer | 2016–2020 | Drove public‑company finance transformation and investor communications . |
| Western Digital Corporation | Chief Financial Officer | Not disclosed | Senior public‑company CFO experience at a large-cap tech hardware firm . |
| Amgen; Dell | Senior finance leadership roles | Not disclosed | Built operational finance and capital allocation expertise at blue‑chip companies . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Eaton Corporation plc | Director; Audit Committee member | 2019–Feb 2, 2024 | Served on Audit Committee and was determined independent as a director; resigned before becoming CFO . |
| All‑In Milwaukee (non‑profit) | Board member | Not disclosed | Community/education non‑profit service . |
Fixed Compensation
| Component | 2024 Detail | Notes |
|---|---|---|
| Base Salary | $890,000 | Initial CFO base salary set at $890k ; 2024 paid salary was $805,076 (partial year from Feb 5) . |
| Target Annual Bonus (EIC) | 92% of salary | 2024 EIC target shown as 92% (prorated service); appointment 8‑K initially referenced 100% target . |
| Sign‑on/Replacement Cash | $271,667 | Cash replacing prorated 2024 Johnson Controls STI; subject to 2‑year repayment if voluntary/for‑cause separation . |
| Perquisites/Benefits | $38,972 | Includes $37,654 employer DC plan contributions and $1,318 company‑paid life insurance . |
Performance Compensation
2024 Short‑Term Incentive (EIC)
| Metric | Target | Actual | Resulting Corporate Factor |
|---|---|---|---|
| Adjusted EPS | $10.15 | $10.80 | Contributed to 136% formula; committee adjusted to 123% corporate factor . |
| Adjusted Operating Cash Flow | $4,200m | $4,327m | Contributed to 136% formula; committee adjusted to 123% corporate factor . |
| Executive | EIC Target (% of Salary) | Corporate Factor | Individual Factor | Payout ($) | Payout as % of Target |
|---|---|---|---|---|---|
| O. Leonetti | 92% | 123% | 100% | $1,003,475 | 123% |
Notes: Adjusted EPS excludes acquisition/divestiture, restructuring, and intangible amortization; Adjusted OCF excludes U.S. qualified pension contributions .
2024 Long‑Term Incentive Grants and Vesting
| Grant Type | Grant Date | Target/Granted | Vesting/Terms | Notes |
|---|---|---|---|---|
| ESIP PSUs (2024–2026) | Feb 28, 2024 | 7,035 target PSUs | 3‑year performance based on relative TSR; payout 0–200% at 2026 year‑end . | |
| RSUs (annual) | Feb 28, 2024 | 3,520 RSUs | Vest in approximately equal annual installments over 3 years (time‑based) . | |
| Stock Options (annual) | Feb 28, 2024 | 11,050 options | 10‑yr term; equal annual vesting over 3 years; strike = $286.96 . | |
| New‑hire RSUs (replacement) | Mar 1, 2024 | 7,474 RSUs | Equal annual vesting over 3 years . | |
| New‑hire Stock Options (replacement) | Mar 1, 2024 | 31,141 options | 10‑yr term; equal annual vesting; strike = $293.70 . |
ESIP design: Relative TSR against a 16‑company TSR peer group; payout capped at 200%; positive TSR at lowest rank pays 25% of target; negative TSR at top rank capped at 100% .
Leonetti did not participate in the 2022–2024 ESIP cycle (he joined in 2024); that cycle paid at 163% based on 133.58% absolute TSR (81.25th percentile vs peers) .
Equity Ownership & Alignment
| Item | Amount/Detail |
|---|---|
| Shares Beneficially Owned (Feb 1, 2025) | 16,988 shares . |
| Ownership as % of Outstanding | ~0.0043% (16,988 / 391,769,379 shares outstanding) . |
| Right to Acquire within 60 days | 16,358 shares (options/RSUs vesting within 60 days) . |
| Unvested RSUs at 12/31/2024 | 3,520 (2/28/24 grant) and 7,474 (3/1/24 grant); total market value ~$3.65m at $331.87 . |
| Unearned PSUs (target) at 12/31/2024 | 7,035 (2024–2026 ESIP; value ~$2.33m at $331.87) . |
| Unexercisable Options at 12/31/2024 | 11,050 (2/28/24) and 31,141 (3/1/24) . |
| Insider Selling/Exercises in 2024 | None (no exercises or stock vesting realized by Leonetti in 2024) . |
| Ownership Guidelines | CFO minimum 4× base salary; executives must hold vested shares until compliant; 5‑year window; all NEOs exceeded or are progressing adequately . |
| Hedging/Pledging | Prohibited (no shorting, options, derivatives; no pledging/margin) . |
| Clawback Policy | SEC/NYSE‑compliant recoupment for restatements (3‑year lookback) and “Detrimental Activity” (e.g., felony, fraud, gross misconduct) . |
| Deferred Compensation (2024) | No DIC II deferrals; Supplemental Retirement Plan contributions $17,692; year‑end balance $17,608 . |
Vesting cadence and potential selling pressure: Time‑based RSUs and options from Feb 28, 2024 and Mar 1, 2024 grants vest in approximately equal installments over 2025–2027, creating periodic liquidity windows; hedging/pledging prohibitions and ownership guidelines partially mitigate forced selling .
Employment Terms
- Appointment and start: Named CFO January 17, 2024; effective February 5, 2024; resigned from Eaton’s Board February 2, 2024 .
- Offer economics:
- Base salary $890,000; initial EIC target referenced at 100% of salary; 2024 proxy shows 92% target (proration from start) .
- 2024 LTI targets: ESIP $1,762,500; RSUs $881,250; Options $881,250 (annual program), plus new‑hire replacement RSUs and options as detailed above .
- Cash sign‑on $271,667 (replacement for prior employer STI) with 24‑month repayment if voluntary/for‑cause termination .
- Change‑of‑Control (double‑trigger) agreement: If terminated without Cause or resign for Good Reason within 2 years post‑CoC:
- Lump sum: (i) unpaid earned salary/STI and completed ESIP; (ii) prorated EIC and open ESIP at target; (iii) 2× (base + target EIC) severance; (iv) additional 1× (base + target EIC) for a 1‑year non‑compete; (v) 2 years of benefits; no tax gross‑ups .
- Estimated CoC separation values (as of 12/31/2024): Severance $5,117,500; prorated ESIP $804,688; accelerated equity $5,333,486; benefits $45,157; outplacement $18,000; total $11,318,831 .
- Involuntary termination (not for Cause, non‑CoC): Committee discretion up to 2× (base + target EIC), six months benefits, pro‑rated open ESIP eligibility, may allow continued/accelerated vesting of RSUs vesting within 12 months; estimated total for Leonetti ~$4.64m (severance $3.41m; equity vesting $1.20m; benefits/outplacement) .
- Death/Disability: Pro‑rated ESIP and equity acceleration at committee discretion; estimated total $6,138,174 .
- No employment contracts for U.S. salaried employees, including NEOs .
Investment Implications
- Pay‑for‑performance alignment: High at‑risk pay mix (annual EIC + TSR‑based PSUs) and strong 2024 execution (Adjusted EPS/OCF above target; corporate factor 123%) support incentive credibility; 2022–2024 TSR outperformance (81st percentile) underpins long‑term value creation narrative . Say‑on‑Pay at 92.2% lowers governance overhang risk .
- Retention and risk: CoC double‑trigger protection with additional non‑compete consideration, ownership requirements (4× salary), and clawback/anti‑hedging policies reduce misalignment and retention risk; sign‑on repayment clause further discourages near‑term turnover .
- Selling pressure: Time‑based vesting of 2024 RSUs and options through 2027 plus ESIP settlement in 2027 may create episodic supply; however, holding requirements and prohibition on pledging mitigate forced sales; no 2024 selling/exercises by Leonetti observed .
- Governance: Prior Audit Committee service as a director enhances CFO oversight credibility; no related‑party transactions involving executives disclosed; no tax gross‑ups or option repricing; robust insider policy framework .
Appendices
2024 Total Compensation (Proxy Summary Table)
| Component | 2024 Amount ($) |
|---|---|
| Salary | 805,076 |
| Bonus (Sign‑on cash) | 271,667 |
| Stock Awards (RSUs/PSUs grant‑date fair value) | 5,754,556 |
| Option Awards (grant‑date fair value) | 3,889,522 |
| Non‑Equity Incentive Plan Compensation (EIC) | 1,003,475 |
| All Other Compensation | 38,972 |
| Total | 11,763,268 |