Paulo Ruiz

About Paulo Ruiz

Paulo Ruiz is Eaton’s Chief Executive Officer (effective June 1, 2025), after serving as President and Chief Operating Officer and joining the Board on September 2, 2024; he joined Eaton in April 2019 and is age 50 per the 2025 proxy . He holds a master’s in business management (Fundação Dom Cabral, Brazil) and a bachelor’s in electrical engineering (FEI, São Paulo), with additional programs at Kellogg (via FDC) and Isvor Fiat; prior roles include CEO of Dresser–Rand – A Siemens Business and other Siemens leadership positions . Eaton’s 2024 short‑term incentive metrics were Adjusted EPS ($10.80 vs $10.15 target) and Adjusted OCF ($4,327m vs $4,200m target), producing a 123% corporate payout factor; the 2022–2024 PSU program paid 163% of target on relative TSR (81.25th percentile), underscoring strong recent performance alignment . In November 2025, under Ruiz’s early tenure as CEO, Eaton reported record Q3 2025 results and reaffirmed strong guidance, highlighting order momentum and 25.0% segment margins .

Past Roles

External Roles

Fixed Compensation

Target short‑term incentive opportunity increased to 125% of base salary upon promotion to President & COO (pro‑rated for 2024) .

Performance Compensation

• Short‑term (EIC) structure and 2024 outcomes:
  • Metrics: Adjusted EPS and Adjusted OCF; corporate payout factor 123% after removing one‑time items .
  • Ruiz 2024: Target 108% of salary; individual performance factor 102%; award $1,358,125 (125% of target) .

• Long‑term incentive (portfolio approach): Generally 50% PSUs (3‑yr relative TSR), 25% RSUs, 25% stock options; time‑based awards vest over 3 years; options 10‑year term at grant‑date fair market value .
• 2024 target grants (Ruiz): ESIP (PSUs) $1,050,000; RSUs $525,000; Options $525,000; Total $2,100,000 .
• 2024 granted units/prices (Ruiz): PSUs target 4,190; RSUs 2,095; options 6,600 at $286.96 (2/28/2024 grant) .
• 2022–2024 ESIP payout (Ruiz): 5,314 earned units (163% of 3,260 target), vested 2/26/2025; value at vest $1,568,108 plus $55,476 dividends (total $1,623,584) .

Stock vested/option exercises in 2024:

• Ruiz: 10,997 shares vested; value realized on vesting $3,230,167; no option exercises in 2024 .

Equity Ownership & Alignment

• Beneficial ownership (as of Feb 1, 2025):
  • Shares owned: 64,228; Deferred share units: 1,469; Total: 65,697; <1% of class .
  • Right to acquire within 60 days via options/RSUs: 46,103 .

• Outstanding/vesting cadence (key 2024/2023/2022 awards):
  • 2024: Options 6,600 @ $286.96; RSUs 2,095; PSUs target 4,190; vest roughly 1/3 on 2/28 in 2025, 2026, 2027; PSUs cliff‑settle after 3 years .
  • 2023: Options 3,102 ex/6,298 unex @ $171.31; RSUs 1,756; PSUs target 5,235; remaining tranches vest in 2025 and 2026 .
  • 2022: Options 4,422 ex/2,278 unex @ $151.76; RSUs 555 + 890 (Aug 4, 2022); PSUs 3,260 (paid out 2/26/2025 at 163%) .
• Ownership policy: President & COO must hold stock equal to 4x base salary; count includes outright, unvested RSUs, ESP, and deferred share units; minimum 20% must be held outright; options and PSUs do not count. Executives are expected to meet within 5 years; as of filing, NEOs had exceeded or are on track .
• Hedging/pledging: Prohibited for employees and directors (no margin or pledging; no short, puts/calls, or other hedges) .
• Insider supply/pressure watch: Approximately annual vesting events around late February for time‑based 2024 and 2023 grants; 2022–2024 PSUs settled on 2/26/2025 for 5,314 shares to Ruiz; in 2024, 10,997 shares vested for Ruiz, indicating periodic liquidity events even absent option exercises .

Employment Terms

• No employment contracts for salaried U.S. employees including NEOs; severance decisions are at Committee discretion (up to 2x base + target bonus in involuntary not‑for‑cause scenarios), plus limited benefits .
• Change‑of‑control (CoC) agreements: Double‑trigger; upon CoC, an executive terminated not for Cause or resigns for Good Reason within 2 years receives (a) accrued pay; (b) pro‑rated EIC/open ESIP; (c) 2x (base + target EIC) severance; (d) an additional 1x (base + target EIC) in exchange for a 1‑year non‑compete; (e) 2 years of health/welfare benefits; no excise tax gross‑ups .
• Potential payments (modeled as of 12/31/2024):
  • Involuntary termination not for cause (Ruiz): Total $6,421,852 (incl. severance $4,166,667; pro‑rated ESIP $1,196,477; equity vesting $995,942; benefits/tax prep/outplacement) .
  • Change of control (Ruiz): Total $11,518,270 (severance $6,271,666; pro‑rated ESIP $1,675,859; accelerated equity $3,475,487; benefits/tax prep/outplacement) .
  • Death/Disability (Ruiz): Total $5,185,281 (pro‑rated ESIP $1,675,859; accelerated equity $3,475,487; tax prep) .
• Retirement treatment: Mandatory retirement age 65; as of 12/31/2024, Ruiz did not qualify for retiree treatment under equity plans (age/service rule) .
• Clawback: Compensation recovery policy for material restatements and/or misconduct .
• Deferred compensation: Ruiz deferred $562,802 of EIC into DIC Plan II in 2024; registrant credited $63,574 to Supplemental Retirement Plan; aggregate deferred balance $1,277,732 . Ruiz does not accrue benefits under Eaton’s defined benefit pension plans .

Board Governance

• Board service history: Joined Eaton Board on September 2, 2024; management director (not independent); no standing committee assignments listed for Ruiz .
• Leadership structure: With the CEO transition to Ruiz, the Board separated Chair and CEO roles; Gregory R. Page to serve as non‑executive Chair effective June 1, 2025, mitigating CEO/Chair concentration risk .
• Attendance: Board held 5 meetings in 2024; all directors attended ≥75%, average attendance 98.7% .
• Executive sessions: Non‑employee directors meet in executive session at each regular Board meeting; committee executive sessions also held .
• Director compensation context: Non‑employee directors receive $150,000 cash + $170,000 RSUs; additional retainers for leadership/committee roles; directors subject to 5x cash retainer holding requirement; hedging/pledging prohibited . As an employee director, $50,000 of Ruiz’s 2024 salary was attributable to director service per Irish regulations (not the standard non‑employee program) .

Compensation Committee, Peer Group, and Say‑on‑Pay

• Compensation & Organization Committee: Chaired by Lori J. Ryerkerk; members include Silvio Napoli, Gregory R. Page, Robert V. Pragada, Karenann Terrell; fully independent .
• Program design and practices: ~80% of NEO pay at target is performance‑based; no employment contracts; no tax gross‑ups; clawback; anti‑hedging/pledging; double‑trigger CoC equity vesting .
• Compensation peer group (for benchmarking): includes ABB, Caterpillar, Cummins, Dover, Emerson, Honeywell, ITW, Parker‑Hannifin, Rockwell, Trane, etc. .
• Say‑on‑pay (2024): 92.2% approval; no substantive changes made in response .

Director Compensation (for context; Ruiz is an employee director)

Multi‑Year Compensation Summary (Ruiz)

Performance & Track Record

• Execution highlights: Elevated from sector COO to enterprise COO in 2024 and to CEO in 2025, recognized for operational excellence and portfolio transformation leadership .
• Company performance context: 2024 corporate EIC metrics exceeded targets (Adj EPS/OCF), 2022–2024 PSUs paid at 163% on relative TSR; in Q3 2025, Eaton achieved record segment margins and order momentum .

Equity Ownership & Deferred Compensation (additional detail)

• 2024 vesting/realization: 10,997 shares vested; $3,230,167 value realized; no option exercises .
• Deferred comp elections: $562,802 deferred to DIC Plan II in 2024; SRP registrant credits $63,574; aggregate balance $1,277,732 .

Risk Indicators & Red Flags (as disclosed)

• Governance protections: No hedging/pledging; clawback; double‑trigger CoC; no tax gross‑ups; no option repricing; strong say‑on‑pay support .
• Related party/pledging: No pledging permitted; no related transactions disclosed specific to Ruiz in provided documents .

Investment Implications

• Alignment and incentives: High performance‑based mix (Adjusted EPS/OCF ST, relative TSR LT) with robust ownership requirements and hedging/pledging prohibitions suggest strong alignment with shareholders .
• Vesting/supply dynamics: Annual vesting cycles around late February (RSUs/options) and PSU settlements (e.g., 2/26/2025) can create episodic insider selling pressure; monitor Form 4s around these dates .
• Retention/CoC risk: No employment contract but substantial double‑trigger CoC protection ($11.5m modeled) and standard involuntary severance framework ($6.4m) reduce departure risk but represent potential transaction costs .
• Governance: Separation of CEO/Chair roles effective 2025, strong committee independence, and 92.2% say‑on‑pay support reduce governance discount concerns .
• Track record: Promotions tied to operating execution and portfolio work, with enterprise KPIs outperforming targets in 2024 and strong early‑tenure operating results in 2025 supporting confidence in execution .