Kevin Murphy
About Kevin Murphy
Kevin Murphy, 55, is President & Chief Executive Officer (since Nov 2019) and a Director of Ferguson Enterprises Inc.; he joined Ferguson in 1999 after the acquisition of his family’s business, rose to COO of the U.S. business (2007–2017), CEO of Ferguson Enterprises, LLC (2017–2019), and became CEO and a Director of the parent in 2019; he serves on no board committees at Ferguson and is also an independent director of Pool Corporation . He holds a B.S. in Business and Marketing from Miami University . Under his leadership, Ferguson delivered FY2025 net sales of $30.8B (+3.8% YoY), adjusted operating profit of $2,842M (+$18M YoY), adjusted diluted EPS of $9.94 (+2.6% YoY), and a 5% dividend increase; $100 invested on 7/31/2020 grew to $278 by FY2025 versus $230 for the S&P 500 Industrials index .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Ferguson Enterprises, LLC (U.S. subsidiary) | Chief Executive Officer | 2017–2019 | Led U.S. business prior to group CEO role; continued profitable growth and market share gains . |
| Ferguson Enterprises, LLC (U.S. subsidiary) | Chief Operating Officer | 2007–2017 | Drove operational performance improvements and strategic development . |
| Ferguson | Operations Manager and leadership roles | 1999–2007 | Joined via acquisition of Midwest Pipe and Supply; progressed through leadership positions . |
| Ferguson Enterprises Inc. | President & Chief Executive Officer | 2019–present | Delivered growth via share gains, nine acquisitions, increased cash returns (dividends, buybacks) in FY2025 . |
External Roles
| Organization | Role | Years | Committee / Governance |
|---|---|---|---|
| Pool Corporation (Nasdaq: POOL) | Independent Director | Appointed Jun 3, 2024 | Compensation Committee; board determined he is independent per Nasdaq rules . |
Fixed Compensation
| Metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Base salary earned ($) | 1,194,278 | 1,237,059 | 1,457,346 |
| Annual base salary rate change (effective Oct 1, 2024) | — | — | Increased to $1.5M to align with U.S. CEO market |
| Target annual bonus (% of salary) | — | 150% (prior level) | 160% (raised for FY2025) |
| Non-equity incentive (bonus) actually paid ($) | 1,457,800 | 2,442,802 | 2,632,818 (113% of target) |
Performance Compensation
Short‑Term Incentive (STI) – FY2025 design and outcome
| Metric | Weight | Target | Actual | Payout factor |
|---|---|---|---|---|
| Adjusted Operating Profit (Company) | 70% | $2,780M | $2,842M | Above target (contributes to 113% overall) |
| Cash‑to‑Cash Days | 20% | 63.9 | 66.5 | Below target |
| ESG Scorecard | 10% | Qualitative | Above target (125%) | Above target |
| Result | — | — | — | CEO earned 113% of target; $2,632,818 |
Design notes (changes in FY2025): CEO target bonus raised to 160% of salary; payout curve standardized to 50% threshold / 200% max; AOP threshold eased to 90% (from 92%) and max raised to 110% (from 108%); ESG component to be removed after FY2025 .
Long‑Term Incentive (LTI) – FY2025 structure
| Element | Weight | Vesting | FY2025 CEO grant details |
|---|---|---|---|
| PSUs (TSR vs S&P 500 Industrials, Adjusted EPS growth, ROCE – equally weighted) | 50% | Cliff vest 3 years (Oct 15, 2027) | 24,207 target PSUs; grant-date FV $4,902,079 |
| RSUs (time-based) | 30% | 1/3 annually starting 1-year from grant | 14,524 RSUs; grant-date FV $2,906,107 |
| Stock Options | 20% | 1/3 annually starting 1-year from grant; 10-year term | 30,991 options @ $201.38; FV $1,927,640; expire 10/15/2034 |
Target LTI opportunity for CEO in FY2025: 650% of base salary ($9,750,000) to better align with U.S. market . 2025 SCT equity values: Stock Awards $7,808,186; Option Awards $1,927,640 .
Recent LTI performance vesting
| Award | Performance metrics | Period | Result | Shares vested (CEO) |
|---|---|---|---|---|
| FY2022 LTIP (legacy) | Relative TSR vs FTSE100; Adjusted EPS growth over CPI; 3-yr cumulative CFO | FY2022–FY2024 | ~196% of target overall; TSR at 88th pctile; strong cash flow | 29,921 (incl. 1,786 dividend equivalents) |
| FY2023 LTIP | Relative TSR vs S&P 500 Industrials; Adj. EPS growth; ROCE | FY2023–FY2025 | 91% of target overall; TSR 74.2nd pctile (194%); ROCE 79% | 26,663 (incl. 1,689 dividend equivalents) |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 171,808 shares; <1% of 195,977,590 shares outstanding (as of Oct 8, 2025) |
| Within 60 days – rights to acquire (included in beneficial ownership calculations) | 26,663 (LTIP), 4,906 (RSUs with time-based vesting), 10,331 (SOs) |
| Outstanding unvested CEO awards at 7/31/2025 | RSUs: 14,716 ($3,286,524); PSUs: 24,525 target ($5,477,168); SOs: 30,991 unexercisable @ $201.38 exp. 10/15/2034 |
| Ownership guidelines (CEO) | 6.0x base salary; all current NEOs have met or are on track |
| Hedging/pledging | Prohibited for directors, officers, employees; anti‑hedging/anti‑pledging policy; 10b5‑1 plans must be pre‑cleared |
Vesting schedule and potential selling pressure considerations:
- FY2025 RSUs/SOs vest 1/3 annually beginning Oct 15, 2025; FY2025 PSUs cliff-vest Oct 15, 2027 (subject to performance) .
- FY2024 RSUs and FY2024 LTIP tranches vest Oct 12, 2026 (RSUs time-based; LTIP performance-based) .
Employment Terms
| Term | CEO (Kevin Murphy) |
|---|---|
| Employment agreement | Not fixed term; 12 months’ notice to resign without Good Reason; immediate termination for Cause or resignation for Good Reason |
| Non‑compete / non‑solicit | 12 months post-termination; also non‑interference/non‑hire |
| Severance (without Cause or Good Reason resignation) | 12 months’ base salary + pro‑rated bonus; lump‑sum COBRA cost for 12 months; equity vests pro‑rata per plan terms (performance awards at actual on original vest date; RSUs/SOs pro‑rata at termination) |
| Change‑in‑control (CIC) policy | Double-trigger if awards assumed; 3x (CEO) base salary + target bonus (2x for others) plus pro‑rated target bonus; accelerated vesting rules if not assumed or upon qualifying termination within 24 months |
Potential payments (as of 7/31/2025; estimates):
| Scenario | Cash severance | Current year bonus | Accelerated equity (stock) | Accelerated options | Other | Total |
|---|---|---|---|---|---|---|
| Retirement | — | 2,632,818 | 2,190,923 | 1,248,395 | — | 6,072,136 |
| Death | — | 2,331,754 | 15,344,379 | 4,993,580 | 1,759,048 | 24,428,761 |
| Disability | — | 2,632,818 | 15,344,379 | 4,993,580 | — | 22,970,777 |
| Qualifying termination (no CIC) | 1,500,000 | 2,331,754 | 11,896,768 | 1,248,395 | 9,048 | 16,985,965 |
| CIC, awards not assumed (no termination) | — | — | 22,729,187 | 4,993,580 | — | 27,722,767 |
| CIC with qualifying termination | 4,500,000 | 2,331,754 | 22,729,187 | 4,993,580 | 9,048 | 34,563,569 |
Clawback policy: Effective Aug 1, 2024, executive compensation subject to mandatory recoupment for restatements and discretionary recovery for certain misconduct; filed as 10‑K exhibit .
Perquisites (FY2025 “All Other Compensation” detail):
- Vehicle/allowance and fuel: $43,391; 401(k) match: $12,250; FERP III match: $2,912; SERP discretionary: $100,162; SERP mandatory: $119,205; LTD: $8,198; Long‑term care: $3,368; U.K. tax return: $2,014; Personal aircraft use: $20,003; executive aircraft personal use program authorizes up to 30 hours/year for CEO; no tax gross‑ups .
Board Governance
- Structure: Independent Non‑Employee Board Chair (Geoff Drabble); CEO (Murphy) is a Director; committees entirely independent; if Board ever combines Chair/CEO, guidelines require a Lead Independent Director .
- Independence and attendance: All non‑employee directors deemed independent under NYSE/SEC standards; Board met 8x in FY2025; committees met 6–7x; each incumbent director attended ≥75% of meetings; independent directors hold regular executive sessions .
- Director compensation: Executives receive no director pay; non‑employee director annual base fee $130k; Chair $250k; RSU grant $180k; ownership guideline 4x base fee for directors .
Director Service (Murphy-specific)
- Ferguson Board: Director since Aug 2017; no board committees .
- Other public boards: Pool Corporation director since June 2024; serves on Pool’s Compensation Committee; Nasdaq‑independent .
Compensation Structure Analysis
- Mix shift to more at‑risk, performance‑based pay: FY2025 LTI calibrated to 70% performance (PSUs + Options) / 30% time-based RSUs; CEO target LTI lifted to 650% of salary to align with U.S. peers .
- STI curve recalibration: Threshold AOP eased (90% vs 92%) but maximum increased to 110%; uniform 50% threshold and 200% cap; CEO target bonus raised to 160% of salary—watch for higher guaranteed target vs market but still performance‑based .
- No hedging/pledging; no tax gross‑ups; robust clawback adopted; no option repricing authority without shareholder approval—favorable governance posture .
Performance & Track Record
- Growth and returns: FY2025 net sales +3.8% with above‑market share gains, nine acquisitions ($0.3B), and capital returns ($0.5B dividends; $0.9B buybacks for 5.0M shares); adjusted operating profit +$18M YoY; dividend per share up 5% .
- Pay versus performance alignment: $100 initial investment grew to $278 (FY2021–FY2025) vs $230 peer index; CEO compensation actually paid (CAP) for FY2025 was $15.7M vs SCT total $14.1M, with CAP tied to TSR, adjusted operating profit, and net income .
Say‑on‑Pay & Shareholder Feedback
- FY2024 say‑on‑pay support: 89.1% approval; Board/Committee considered this feedback in FY2025 program decisions .
Compensation Peer Group (FY2025)
- Peers used for benchmarking included: 3M, AutoZone, Carrier, CDW, Cummins, Eaton, Fastenal, Genuine Parts, Honeywell, Illinois Tool Works, Johnson Controls, O’Reilly, PACCAR, Parker‑Hannifin, Stanley Black & Decker, Trane, United Rentals, W.W. Grainger; target positioning around 50th percentile; revisions for a late‑2025 transition period shifted peers toward U.S. distribution/retail comparables (e.g., Builders FirstSource, Home Depot, Lowe’s, Sherwin‑Williams) .
Equity Grant Practices and Trading Controls
- Annual equity grants approved in September; issued several weeks after fiscal results; no spring‑loading; blackout policy honored; insider trading policy prohibits hedging/pledging and restricts margin purchases; 10b5‑1 plans must be pre‑cleared .
Risk Indicators & Red Flags
- Positive: Strong anti‑hedging/pledging; no tax gross‑ups; clawback in place; independent Chair and independent committees; no option repricing without shareholder approval .
- Watch items: Committee applied discretion to harmonize FY2023 POSP vs LTIP outcomes due to legacy U.K. metric differences—transparent rationale disclosed but discretionary adjustments merit monitoring for consistency over time .
Investment Implications
- Alignment: High variable pay (89% of CEO compensation) with balanced PSU metrics (TSR, EPS growth, ROCE) supports long‑term value creation and capital discipline; ownership guideline (6x salary) and anti‑pledging policy strengthen alignment .
- Retention and potential selling pressure: Multi‑year vesting (RSUs/SOs in thirds; PSUs cliff in 2027) creates periodic vest events; change‑in‑control protection (3x salary+bonus) and severance design reduce retention risk; insider trading policy reduces opportunistic selling risk .
- Execution track record: Continued market share gains, steady adjusted profit and cash generation, and favorable TSR relative to peer index under Murphy’s tenure are supportive; monitoring future STI target calibration (lower threshold, higher max) and any use of discretion will be key for pay‑for‑performance integrity .