David Lowe
GRACOAbout David M. Lowe
David M. Lowe, 69, is Chief Financial Officer and Treasurer of Graco Inc., a role he has held since June 2021 after joining Graco in 1995; prior roles include President of the Process and Industrial Products divisions and multiple senior finance and regional leadership posts . Under his financial stewardship in 2024, Graco delivered net sales of $2.113B (down 4% YoY) and diluted EPS of $2.82 (down 4% YoY), while 1-year TSR was -2% and 5-year TSR 69%; operating cash flow was $621.7M and year-end cash was $675.3M . Education not disclosed in filings.
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Graco Inc. | Chief Financial Officer & Treasurer | Jun 2021–present | Oversees corporate finance, capital allocation, and reporting; continued option-only LTI discipline and strong cash generation . |
| Graco Inc. | President, Worldwide Process Division | Apr 2020–Jun 2021 | Led Process businesses across end markets like semiconductor, energy, water/wastewater . |
| Graco Inc. | President, Worldwide Industrial Products Division | Jun 2018–Apr 2020 | Drove industrial finishing and dispense businesses globally . |
| Graco Inc. | EVP, Industrial Products Division | 2012–2018 | Product/market expansion in industrial dispense/finishing . |
| Graco Inc. | VP & GM, Industrial Products Division | 2005–2012 | GM leadership of the division . |
| Graco Inc. | VP & GM, European Operations | 1999–2005 | Led regional operations across Europe . |
| Graco Inc. | Treasurer (previously) | Prior to Dec 1996 | Corporate treasury leadership . |
| Graco Inc. | Joined Company | 1995 | Nearly 30 years of tenure . |
External Roles
No external directorships or outside roles disclosed for Mr. Lowe in company filings (executive officer roster does not list external boards for Lowe).
Fixed Compensation
Multi-year summary (from the Summary Compensation Table):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 424,000 | 449,400 | 476,360 |
| Non-Equity Incentive Plan Compensation ($) | 254,772 | 415,002 | 39,930 |
| Option Awards – Grant Date Fair Value ($) | 749,820 | 849,856 | 949,888 |
| Change in Pension Value/Deferred Comp Earnings ($) | 0 | 105,000 | 99,000 |
| All Other Compensation ($) | 24,574 | 22,234 | 25,523 |
| Total ($) | 1,453,166 | 1,841,492 | 1,590,701 |
Notes: Perquisites include disability coverage, financial planning, limited spousal travel, and executive physicals; for CFO, “All Other Compensation” was $25,523 in 2024 .
Performance Compensation
Short-term incentive (STI) design and 2024 outcomes:
- Target bonus as % of base salary (CFO): 70% .
- 2024 metrics and weighting: Corporate Net Sales growth (40%) and Corporate Incentive EPS growth (60%) vs 2023; targets based on GDP outlook; adjustments exclude acquisition-related and other specified items .
- 2024 performance vs target: Corporate Net Sales achieved 93% of target; Corporate Incentive EPS achieved 87% of target (below threshold/target) .
- 2024 payout for Lowe: $39,930, which is 12% of target and 8% of base salary .
Detailed 2024 STI metrics:
| Metric | Weighting | 2024 Target (as % of 2023) | 2024 Results (as % of Target) | Payout impact |
|---|---|---|---|---|
| Corporate Net Sales growth | 40% | 104% | 93% | Below target; contributed to 12% of target payout . |
| Corporate Incentive EPS growth | 60% | 104% | 87% | Below target; contributed to 12% of target payout . |
Long-term incentives (LTI):
- Vehicle: Non-qualified stock options only (sole LTI vehicle for >30 years); 10-year term; 25% annual vesting over 4 years; no repricing permitted .
- LTI value targeted at 75th percentile of market data; shares adjusted for dilution/internal equity .
Recent option grants (CFO):
| Grant | Grant Date | Shares | Exercise Price | Closing Price (Grant Date) | Grant Date Fair Value | Vesting | Expiration |
|---|---|---|---|---|---|---|---|
| Annual grant | 2/16/2024 | 32,800 | $88.64 | $88.15 | $949,888 | 25%/yr over 4 yrs | 2/16/2034 |
| Annual grant | 2/2025 | 33,850 | — | — | — | 25%/yr over 4 yrs (plan standard) | 10-year term (plan standard) |
Option exercises (liquidity indicator):
- 2024 options exercised: 43,080 shares; value realized $2,686,753 (spread at exercise) .
Equity Ownership & Alignment
Ownership and options:
| Item | Amount | Notes |
|---|---|---|
| Beneficial ownership (common shares) | 947,595 | As of Feb 24, 2025. |
| % of shares outstanding | ~0.56% (947,595 ÷ 168,136,428) | Based on 168,136,428 outstanding as of record date. |
| Exercisable options (right to acquire within 60 days) | 308,075 | Included in beneficial ownership footnote. |
| ESOP indirect holdings | 1,455 shares | Included within total; ESOP detail in footnote . |
| Pledged or hedged shares | None in 2024 | Prohibited by policy (no hedging/pledging) . |
| Ownership guidelines | 3x base salary for direct reports to CEO; retain 50% net shares until met | Individual compliance not separately disclosed. |
Outstanding stock options by grant (CFO, at 12/27/2024):
| Grant Date | Exercisable (#) | Unexercisable (#) | Exercise Price | Expiration |
|---|---|---|---|---|
| 2/16/2024 | 0 | 32,800 | $88.6400 | 2/16/2034 |
| 2/17/2023 | 9,485 | 28,455 | $71.4700 | 2/17/2033 |
| 2/18/2022 | 19,670 | 19,670 | $71.7300 | 2/18/2032 |
| 2/12/2021 | 21,232 | 7,078 | $71.9200 | 2/12/2031 |
| 2/14/2020 | 38,120 | 0 | $56.3500 | 2/14/2030 |
| 2/15/2019 | 36,880 | 0 | $45.5600 | 2/15/2029 |
| 2/16/2018 | 33,220 | 0 | $43.9000 | 2/16/2028 |
| 2/17/2017 | 51,360 | 0 | $30.3467 | 2/17/2027 |
| 2/12/2016 | 63,510 | 0 | $23.8467 | 2/12/2026 |
| 2/13/2015 | 47,130 | 0 | $24.7934 | 2/13/2025 |
Policies:
- Hedging/pledging: Prohibited for directors and executive officers; none occurred in 2024 .
- Clawbacks: SEC/NYSE-compliant Incentive Compensation Recovery Policy (restatements) and misconduct-related recoupment policy .
Pension/retirement alignment:
- Present value of accumulated benefit (12/27/2024): $1,221,000 (Retirement Plan) and $1,630,000 (Restoration Plan); 29.9 years credited service .
Employment Terms
Key Employee Agreement (CFO; “Legacy” form unless otherwise required by local law):
| Term | Provision |
|---|---|
| Severance (pre-Change of Control, involuntary not for cause) | 1× base salary + 1× target bonus; pro-rata actual bonus; medical/dental/life for 12 months; outplacement; legal fees if prevailing . |
| Change of Control (double-trigger within 2 years) | 2× (base salary + target bonus) lump sum or over severance period; pro-rata target bonus; 18 months benefits; +2 yrs service credit in nonqualified pension; “best net” 280G (no gross-up) . |
| Non-compete | Legacy agreement includes 1-year post-termination non-compete (2 years for CEO); New form removes non-compete but allows severance forfeiture/recoupment if competitive employment; NEOs (other than CEO) are on Legacy form . |
| Equity acceleration | Unvested options accelerate upon Change of Control; also accelerates upon death/disability; retirement accelerates options; RSUs (if any) accelerate on CoC and death/disability . |
| Clawbacks | Restatement recovery and misconduct recoupment policies in place . |
| Hedging/pledging | Prohibited; none in 2024 . |
| Potential payments (Lowe; if event on 12/27/2024) | CoC+qualifying termination: $2,693,605; Involuntary (no cause): $1,102,551; Retirement: $276,500; Death: $753,500; Disability: $538,100 . |
Term and renewal: One-year term with automatic annual renewals unless either party gives six months’ notice .
Additional Compensation Structure Observations
- Pay mix and outcomes: 2024 STI paid at 8% of base (12% of target) for CFO reflecting below-target sales and Incentive EPS performance ; LTI granted value increased YoY ($949,888 in 2024 vs $849,856 in 2023) consistent with targeting 75th percentile and options-only design .
- LTI vehicle risk profile: Options-only LTI increases alignment with long-term TSR but raises earnings sensitivity to share price and can create exercise-related liquidity events (43,080 options exercised in 2024) .
- Governance and market context: Say-on-pay support of 89.6% in 2024 and 89.7% in 2023; compensation benchmarking uses a defined industrial peer group; LTI values targeted at 75th percentile to drive above-market performance .
- No repricing allowed; equity awards approved by MOCC; timing avoids MNPI concerns; 2024 grant occurred 2/16/2024; exercise price defined as last sale price on day preceding grant .
Performance & Track Record
Company-level performance under Lowe’s CFO tenure (selected):
- 2024: Net sales $2,113.3M, operating earnings $570.1M, net earnings $486.1M, diluted EPS $2.82; operating cash flow $621.7M; year-end cash $675.3M .
- TSR: 1-year -2%; 5-year 69%; 10-year 235% as presented in proxy highlights .
- 5-year cumulative TSR comparison (12/31/2019–12/27/2024): GGG 171 vs DJ U.S. Industrial Machinery 177 and S&P 500 197 (base $100); GGG underperformed both indices over this window .
Say-on-Pay & Shareholder Feedback
- Say-on-Pay approval: 89.7% (2023 AGM); 89.6% (2024 AGM). MOCC made no material structural changes for 2024 based on feedback .
Compensation Peer Group (context)
- Peer group includes diversified industrials (e.g., IDEX, ITT, Nordson, Pentair, Snap-on, A.O. Smith, Franklin Electric, etc.). Used with Willis Towers Watson survey data; LTI targeted at 75th percentile; total direct compensation targeted between the 50th–75th percentiles depending on performance .
Equity Plan Mechanics
- Options: 10-year term; vest 25% annually over 4 years; exercise price = fair market value (last sale price day prior to grant); repricing prohibited .
- Insider trading policy: Trading windows, pre-clearance; 10b5-1 permitted; hedging/pledging prohibited .
Risk Indicators & Red Flags
- No hedging/pledging and no tax gross-ups for golden parachutes (“best net” 280G), reducing misalignment risks .
- Options-only LTI concentrates risk (no RSUs/PSUs), heightening sensitivity to stock price volatility; however, long track record of TSR outperformance over long horizons is cited by MOCC in support of the design .
- 2024 below-target STI underscores pay-for-performance; no discretionary bonuses were awarded .
Investment Implications
- Pay-for-performance appears tight: CFO’s 2024 bonus paid at only 8% of salary (12% of target) amid softer revenue/EPS, signaling discipline and limited downside leakage when targets are missed .
- Alignment is strong via sizable option exposure (308k+ exercisable options) and significant beneficial ownership (~0.56% of shares), with hedging/pledging bans and ownership guidelines (3× salary) supporting long-term alignment .
- Retention risk moderate: Standard double-trigger CoC with 2× severance and 1× severance pre-CoC provide security without gross-ups; Legacy non-compete (1 year) applies, but LTI acceleration on CoC and retirement policies could influence timing considerations .
- Trading signals: 2024 option exercise (43,080 shares; ~$2.69M value realized) is a data point for potential periodic liquidity but not necessarily directional on fundamentals; watch vesting events (annual each February) for incremental supply .