Lamar Duhon
FLOWSERVEAbout Lamar Duhon
Lamar L. Duhon, age 54, is President of Flowserve’s Pumps Division (FPD) and has served in this role since February 2023 after leading Flowserve’s Aftermarket Services & Solutions business; prior to Flowserve, he held senior operating roles at Halliburton and Baker Hughes and served in the U.S. Marine Corps . In 2024, Flowserve delivered 5.5% revenue growth to $4.6B, 31% growth in adjusted operating income to $538M, 15.2% ROIC, and 41.9% 1‑year TSR, underpinning above‑target annual incentive payouts; within FPD, 2024 annual incentive metrics paid strongly above target (see below) . Company PSUs for the 2022–2024 cycle paid at 76.7% of target, reflecting strong ROIC but below‑threshold free cash flow; 3‑year rTSR ranked at the 81st percentile provided a +15% modifier .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Flowserve Corporation | President, Aftermarket Services & Solutions | 2022–2023 | Not disclosed |
| Halliburton Company | VP, Sperry Drilling | 2016–2021 | Not disclosed |
| Halliburton Company | VP, Cementing | 2015–2016 | Not disclosed |
| Halliburton Company | VP, Shell Global Account | 2013–2015 | Not disclosed |
| Halliburton Company | VP, Business Development – Asia Pacific | 2012–2013 | Not disclosed |
| Halliburton Company | Regional Sales Manager, Gulf of Mexico | 2010–2012 | Not disclosed |
| Baker Hughes, Inc. | Various leadership roles of increasing responsibility | 1995–2010 | Not disclosed |
| United States Marine Corps | Sergeant (E-5) | 1988–1994 | Not disclosed |
External Roles
- None disclosed in the proxy for Mr. Duhon .
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Annual Base Salary (as of year-end) | $? (not disclosed in table) | $598,000 |
| Actual Salary Paid ($) | $527,885 | $591,808 |
| AIP Target (% of Salary) | Not disclosed | 70% |
| Actual Annual Incentive Paid ($) | $603,750 | $686,504 |
| Change in Pension Value ($) | $82,771 | $179,735 |
| All Other Compensation ($) | $31,589 | $32,394 |
Notes: 2024 “All Other” includes defined contribution plan contributions $14,850, insurance premiums $814, and financial counseling $16,730 .
Performance Compensation
2024 Annual Incentive Plan (AIP) – Duhon (FPD)
| Metric | Weighting | Target | Actual Attainment | Payout |
|---|---|---|---|---|
| Adjusted Operating Income (FPD) | 25% | Not disclosed | Above target | 169% |
| Customer Bookings (FPD) | 30% | Not disclosed | Above target | 159% |
| Adjusted PWC as % of Sales (FPD) | 20% | Not disclosed | Above target | 129% |
| Corporate Adjusted Operating Income | 25% | Not disclosed | Above target | 111% |
| Quantitative Subtotal | 100% | — | — | 143% |
| Strategic Goals Modifier | +/-15% | — | Met objectives | 1.15x |
| Final AIP Payout | — | — | — | 164% of target; $686,504 |
AIP corporate design and payout math for corporate participants: quantitative payout 118% and 1.15x strategic modifier → 136%; Duhon’s FPD plan uses division metrics plus corporate AOI, yielding 164% final payout as shown above .
Long-Term Incentives (granted Feb 9, 2024)
| Award Type | Units Granted | Grant Date Fair Value ($) | Vest/Performance | Metrics/Notes |
|---|---|---|---|---|
| RSUs | 12,373 | $513,480 | Ratable over 3 years; March 1 each year | Settled in stock; retention and TSR alignment |
| PSUs (Target) | 12,373 | $527,585 | 3-year (2024–2026) performance | 50% ROIC; 50% FCF as % of Adj. Net Income; rTSR +/-15% modifier; 0–230% payout range, no positive modifier if absolute TSR negative |
2024 PSU Targets (single-year goals contributing to 3-year average for ROIC and FCF components):
- ROIC payout schedule: Threshold 11% (50%), Target 12.6% (100%), Max 13.9% (200%) .
- FCF as % of Adjusted Net Income payout schedule: Threshold 75% (50%), Target 85% (100%), Max 100% (200%) .
Historical PSU Outcome
- 2022–2024 PSU payout: 76.7% of target, driven by strong ROIC (3‑yr average payout 133.3%) and 0% FCF component, plus +15% rTSR modifier at 81st percentile .
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Beneficial Ownership (3/18/2025) | 16,725 shares; <1% of class |
| Unvested RSUs (12/31/2024) | 23,344 units; $1,342,746 market value at $57.52 |
| Unearned PSUs outstanding (12/31/2024) | 6,574 units (2022 plan, certified at 76.7%); 27,570 units (2023 plan, shown at max per SEC rules); 28,936 units (2024 plan) |
| 2024 Shares Vested | 6,739 shares vested; $289,328 value realized |
| Stock Options | None outstanding for Duhon; company not currently granting options |
| Ownership Guidelines | Presidents must hold 3x base salary; unvested RSUs count; PSUs/options don’t |
| Compliance Status | All NEOs met ownership requirements as of 12/31/2024 |
| Hedging/Pledging | Prohibited for all officers and directors under Insider Trading Policy |
Upcoming RSU Vesting Schedule (from proxy footnotes)
| Date | Shares |
|---|---|
| Feb 17, 2026 | 3,995 RSUs |
| Mar 1, 2026 | 4,193 RSUs |
| Mar 1, 2027 | 4,193 RSUs |
Note: In 2025, 2,858 RSUs vested on Feb 15, 3,996 on Feb 17, and 4,194 on Mar 1 (including dividend equivalents) .
Employment Terms
- Executive Officer Severance Plan (non‑CIC): upon qualifying termination without cause/reduction in force, 24 months’ base salary continuation and payment equivalent to target AIP if at least threshold is achieved; pro‑rated PSUs for cycles ending in the termination year; RSUs vesting or equivalent cash/continued vesting per grant date terms within 90 days .
- Change‑in‑Control (double trigger): for Presidents/SVPs, lump sum 2.0x (base salary + target AIP), pro‑rata AIP at target, full vesting at target of stock‑based LTI, and continuation of benefits for duration equal to severance multiplier; supplemental pension adjustments included; 90 days to exercise any vested options (if applicable) .
- Clawbacks: NYSE Rule 10D‑1 aligned restatement clawback for excess incentive‑based comp (3‑year lookback) and a misconduct policy enabling recovery of AIP and equity over 3 years preceding discovery of misconduct .
- Other: No excise or income tax gross‑ups for Executive Officers except relocation; no employment agreements; limited perquisites (executive physical, enhanced vacation, financial counseling) .
Compensation Structure Analysis
- 2024 target pay increased 13% YoY for Duhon, via 4% base salary increase and a 25% increase in target LTI, signaling greater emphasis on at‑risk, long‑term equity over cash .
- AIP uses balanced operating metrics (Adjusted Operating Income, Bookings, Adjusted PWC) and a +/-15% strategic modifier tied to ESG, portfolio actions, and digitization; 2024 strategic goals were met, supporting a 1.15x uplift .
- PSU design mixes internal ROIC and FCF measures with rTSR moderation, with 0–230% payout range and no positive rTSR modifier if absolute TSR is negative; 2022–2024 payouts below target reflect rigor in FCF targets despite strong ROIC and rTSR, aligning pay with sustainable capital efficiency .
Say‑on‑Pay & Shareholder Feedback
- Say‑on‑Pay approval: >93% support in 2024; no program changes were deemed necessary by the Committee following this outcome .
- Shareholder outreach: engaged top 25 holders (~64% of shares) in Fall 2024; feedback positive and considered in compensation and ESG practices .
Performance & Track Record
- Company 2024 performance: $4.6B revenue (+5.5%), $538M adjusted operating income (+31%), 15.2% ROIC, $4.7B bookings, 41.9% 1‑year TSR, with twice‑raised guidance during the year; supports above‑target AIP results .
- Division (FPD) AIP attainment: materially above target across AOI, bookings, and Adjusted PWC, resulting in 143% quantitative payout, lifted to 164% after the 1.15x strategic modifier .
- PSU outcome (2022–2024): 76.7% of target (ROIC strong, FCF below threshold), reinforcing discipline on cash conversion; rTSR 81st percentile added +15% .
Compensation Peer Group (Benchmarking)
- Flowserve benchmarks executive pay vs a defined CPG (e.g., AMETEK, Dover, ITT, IDEX, Pentair, Regal Rexnord, Xylem, etc.) and targets overall market median with adjustments for role/tenure/performance .
Equity & Pension Details (Selected 2024 Items)
| Item | 2024 Amount |
|---|---|
| Stock Awards (grant date fair value) | $1,041,064 |
| RSUs Granted (#) | 12,373 |
| PSUs Granted – Target (#) | 12,373 |
| Option Exercises | None |
| Pension Value Change | $179,735 |
Investment Implications
- Alignment and retention: Significant unvested equity (RSUs ~$1.34M; sizable PSU opportunity across 2023–2024 cycles) and double‑trigger CIC protection reduce near‑term retention risk and align incentives with ROIC, FCF, and TSR over a multi‑year horizon .
- Execution signal: FPD’s above‑target 2024 AIP performance on AOI/bookings/PWC indicates operating momentum in Duhon’s span of control; monitor whether divisional over‑attainment persists into 2025 to support continued above‑target cash bonuses and PSU accruals .
- Selling pressure watch: No options outstanding; however, scheduled RSU vesting in 2026–2027 (approx. 12k shares) represents known supply; hedging/pledging is prohibited, mitigating alignment concerns; track Form 4s for any discretionary sales around vest dates .
- Pay‑for‑performance calibration: Below‑target PSU outcomes in recent cycles (despite strong ROIC) highlight stringent FCF hurdles; this design favors sustainable cash conversion and may constrain realized equity if cash generation underperforms, a conservative feature for shareholders .
- Governance: High say‑on‑pay support (93%+) and robust clawbacks/ownership guidelines (3x salary for Presidents; all NEOs in compliance) are positives for incentive quality and risk mitigation .