Kim Nero
GATXAbout Kim Nero
Executive Vice President and Chief Human Resources Officer at GATX; Named Executive Officer (NEO) in the company’s proxy disclosures . Company performance context for 2024: net income $284.2M, diluted EPS $7.78, ROE 12.1%, and total shareholder return (TSR) over 30% . Annual incentives are tied to non-GAAP net income; long-term PSUs are tied to three-year average LTI-adjusted ROE and three-year cumulative investment volume .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| GATX | Executive Vice President & Chief Human Resources Officer | 2022–present | Serves as signatory for executive employment agreements, reflecting oversight of senior talent and compensation governance |
External Roles
Not disclosed in reviewed SEC filings.
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 397,500 | 415,000 | 430,250 |
| Target Bonus % of Salary | — | — | 55% |
| Annual Bonus Paid ($) | 231,458 | 244,387 | 247,333 |
Notes:
- 2024 annual incentive plan payout for NEOs was 104.5% of target based on non-GAAP net income achievement .
Performance Compensation
| Award Type | Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|---|
| Annual Incentive (2024) | Net income (non-GAAP) | 100% | $271.7M | $288.1M | 104.5% of target | Paid after year-end (Feb 2025) |
| PSUs (2022–2024) | 3-yr avg LTI-adjusted ROE (non-GAAP) | 50% | 10.0% | 9.8% | 86.8% component (part of total) | |
| PSUs (2022–2024) | 3-yr cumulative investment volume | 50% | $2.73B | $4.60B | 186.8% component (part of total) | |
| PSUs (2022–2024) | Combined payout | — | — | — | 136.8% of target | Earned at 12/31/2024; determined 2/18/2025 |
| NQSOs (1/25/2024 grant) | Stock price appreciation | — | 5,800 options @ $126.47 | — | — | Vest ratably 1/25/2025–2027; 7-year term to 1/25/2031 |
Additional features:
- NQSOs include dividend equivalents that accrue until vesting and are paid thereafter until exercise/expiry .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (2/28/2025) | 20,614 shares |
| Ownership as % of Shares Outstanding | ~0.058% (20,614 / 35,675,897) |
| Options – Exercisable | 4,533 @ $103.15 exp. 1/28/2029; 5,300 @ $98.105 exp. 5/28/2028 |
| Options – Unexercisable | 5,800 @ $126.468 exp. 1/25/2031; 1,966 @ $113.28 exp. 1/26/2030 |
| PSUs – Unearned/Not Vested | 4,220 (2024 grant target) MV $653,931; 4,100 (2023 grant target) MV $635,336 (based on $154.96 stock price at 12/31/2024) |
| 2024 Stock/PSUs Vested | 3,078 shares; value $514,811 |
| Anti-Hedging / Anti-Pledging | Hedging and pledging of GATX stock prohibited; no margin accounts |
| Ownership Guidelines | 2.5x base salary for NEOs; must retain 50% of after-tax equity gains until guidelines met; NEOs are in compliance |
Employment Terms
| Provision | Terms (Executive Vice President) |
|---|---|
| Executive Severance Plan (adopted Feb 2023) | Termination without cause (not COC): 18 months base salary + 1.5x target bonus; prorated current-year bonus (actual); COBRA; outplacement; EAP; tuition reimbursement |
| Change-of-Control (COC) Agreements (legacy; double-trigger) | Upon COC + qualifying termination: 3x base salary + target bonus; 3 years of additional age/service credit for pension; 3 years continued benefits; prorated target bonus; outplacement up to 10% of salary; no excise tax gross-up; benefits reduced if necessary to maximize after-tax payout |
| Double-Trigger Equity Vesting | Acceleration only if both COC and termination occur, per plan terms |
| Clawback Policy | Mandatory recovery of incentive-based comp for restatements per Rule 10D-1 (effective Oct 2, 2023) |
Illustrative potential payouts (as of 12/31/2024 assumptions):
- Termination without cause apart from COC: Total ~$1.54M; includes cash severance $1,006,030, bonus $237,985, performance shares acceleration $221,128, benefits $51,114, outplacement $25,000 .
- Termination for good reason in connection with a COC: Total ~$3.62M; includes cash severance $2,012,055, bonus $237,985, SRP pension increment $117,785, option acceleration $446,627, performance shares $658,580, benefits $102,228, outplacement $43,270 .
Compensation Structure Analysis
- Mix and rigor: NEO pay is majority performance-based; about 70% of target 2024 compensation in annual and long-term incentives for NEOs; rigorous non-GAAP net income target and three-year ROE/investment volume drive payouts .
- Target setting: Annual target tied to budgeted non-GAAP net income ($271.7M) with actual at 106% of target, paying at 104.5% .
- LTI payout quality: PSUs for 2022–2024 paid at 136.8% driven by outsized investment volume ($4.60B vs $2.73B target) with slightly below-target ROE (9.8% vs 10.0%) .
- Governance safeguards: No single-trigger COC vesting, no excise tax gross-ups for NEOs, anti-hedging/pledging, and clawback in place .
Equity Ownership & Alignment Table (Detail)
| Metric | Value |
|---|---|
| Shares Beneficially Owned (2/28/2025) | 20,614 |
| Shares Outstanding | 35,675,897 |
| Ownership % | ~0.058% (calc.) |
| Options Exercisable within 60 days (group footnote) | 17,966 (Ms. Nero) |
| Unvested PSUs (Target) – 2023 tranche | 4,100; MV $635,336 |
| Unvested PSUs (Target) – 2024 tranche | 4,220; MV $653,931 |
Say-On-Pay & Shareholder Feedback
- Say-on-pay approval ~97% at the 2024 Annual Meeting; 5-year average ~97%, indicating strong shareholder support for the program .
Compensation Peer Group & Target Percentile
- No direct peer group; committee uses market surveys for companies with $1–3B revenues and targets LTI opportunities generally between the 50th–75th percentile to attract and retain talent .
Investment Implications
- Pay-for-performance alignment appears robust: annual and PSU metrics tied to core economic drivers (profitability and disciplined asset growth) produced above-target LTI payouts, signaling management execution against cycle-sensitive goals .
- Limited selling pressure red flags: anti-hedging/anti-pledging policies reduce misalignment risks; upcoming option vest dates (2025–2027) and PSU vest dates (2025, 2026) are known, but actual selling requires Form 4 monitoring around those dates .
- Retention: Double-trigger COC protections and severance terms for EVPs reduce transition risk; no single-trigger vesting and presence of clawbacks reflects shareholder-friendly governance .
- Ownership: While personal stake is modest (~0.058%), Nero is in compliance with stock ownership/retention requirements, supporting alignment .