Joseph Humke
GRACOAbout Joseph Humke
Joseph J. Humke, 54, is Executive Vice President, General Counsel and Corporate Secretary of Graco Inc. (GGG) since July 2021, with prior experience as an M&A/private equity partner at Ballard Spahr LLP and Lindquist & Vennum LLP, an associate at Mayer Brown LLP, and a federal appellate clerk; he holds a BBA from the University of Wisconsin–Madison and a JD from Marquette University Law School . Company performance under his tenure includes 2024 net sales of $2.113 billion, diluted EPS of $2.82, and total shareholder return of -2% (1-year), 69% (5-year), and 235% (10-year) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Ballard Spahr LLP / Lindquist & Vennum LLP | Equity Partner, M&A and Private Equity | 2004–Jun 2021 | Led corporate/M&A transactions and governance advisory for public/private companies |
| Mayer Brown LLP | Associate, Corporate & Securities | Prior to clerkship | Transactions and capital markets exposure |
| U.S. Court of Appeals (7th Cir.) | Law Clerk to Hon. John L. Coffey | Early career | Judicial analysis; legal rigor foundational to governance and compliance |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| SkyWater Technology, Inc. (NASDAQ: SKYT) | Director | Apr 2024–present | Board governance; leverages public company legal/corporate governance experience |
Fixed Compensation
Not disclosed for Mr. Humke; Graco’s program design context (applies to executive officers generally):
- Base salary is guided by 50th percentile market data, adjusted for individual performance and budget .
- Executive benefits include a Restoration Plan for pension limits and supplemental long-term disability; limited perquisites with possible tax gross-ups for certain spousal travel/entertainment events .
Performance Compensation
Program design and 2024 corporate performance mechanics (company-wide; MOCC designates participants annually):
- Short-Term Incentive Plan metrics: Net Sales (40%) and Incentive EPS (60%) for CEO/CFO/function executives; MOCC may include divisional/region metrics for other executives .
- Incentive EPS excludes acquisition-related and certain items to better measure operating performance .
| Metric (CEO/CFO/Function Executives) | Weight | 2024 Target (as % of 2023 actual) | Threshold (as % of Target) | Maximum (as % of Target) | 2024 Result (as % of Target) |
|---|---|---|---|---|---|
| Corporate Net Sales | 40% | 104% | 90% | 105% | 93% |
| Corporate Incentive EPS | 60% | 104% | 90% | 105% | 87% |
Long-Term Incentives (executive officers):
- Sole vehicle: non-qualified stock options; 10-year term; vest 25% annually over 4 years; exercise price = fair market value (last sale price day before grant); repricing prohibited .
Equity Ownership & Alignment
- Stock ownership/retention policy: executives must retain 50% of net shares from equity awards until guideline met; guidelines equal to 5× salary for CEO; 3× salary for executive officers reporting to CEO; 2× salary for executive officers reporting to others (stock options excluded from guideline calculations) .
- Hedging/pledging: prohibited; no shares hedged or pledged by directors/executive officers in 2024 .
| Ownership Snapshot | Shares | % of Outstanding |
|---|---|---|
| All current directors & executive officers (22 persons) | 3,738,302 | 2.19% |
Employment Terms
Key Employee Agreement (applies to incoming CEO/CFO and “all persons hired or promoted to be executive officers” after April 22, 2021; Mr. Humke has served as an executive officer since July 2021) :
- Term: one year; auto-renews annually unless either party gives six months’ notice .
- Pre–Change-of-Control involuntary termination (not for Cause): pro-rata bonus (actual), severance of 1× base salary + target bonus (2× for CEO), continued medical/dental/life insurance up to 12 months (18 months for CEO), outplacement, and legal fee reimbursement if prevailing .
- Post–Change-of-Control within two years; involuntary (not for Cause) or resignation for Good Reason: pro-rata bonus at target, severance of 2× base + target bonus (3× for CEO), 18 months of benefits, nonqualified plan service credit of 2 years (3 years CEO), legal fee reimbursement; “best of net” 280G cutback; double-trigger (benefits only upon CoC plus qualifying termination) .
- Non-compete: Legacy agreement includes post-termination non-compete/non-solicit (one year; two years for CEO), with exceptions post-CoC; New agreement omits non-compete but conditions severance payments on not competing within one year (two years for CEO), with clawback of severance except one month’s base salary if competition occurs .
- Conditions: release of claims; confidentiality; “Cause” and “Good Reason” defined; 50-mile relocation trigger included in “Good Reason” .
Company Performance Context (for pay-for-performance alignment)
| Metric | 2024 |
|---|---|
| Net Sales ($ billions) | $2.113 |
| Operating Earnings ($ millions) | $570.1 |
| Diluted EPS | $2.82 |
| Dividends per share | $1.02 (25th consecutive annual increase) |
| Share Repurchases ($ millions) | $31 |
| Total Shareholder Return | 1-year: -2%; 5-year: 69%; 10-year: 235% |
Say-on-Pay outcomes:
- 2023 approval: 89.7%; 2024 approval: 89.6% .
Compensation peer group (used for benchmarking; validated Sept 2024) includes NDSN, ITT, IEX, TTC, TDG, PNR, WWD, FELE, SSD, EPAC, DCI, etc., with Graco at $2.113B revenue, $14.2B market cap, 4,300 employees; peer median revenue $3.304B, market cap $9.063B, employees 9,900 .
Risk Indicators & Red Flags
- Clawbacks: SEC/NYSE-compliant Incentive Compensation Recovery Policy (restatements) plus misconduct recoupment policy with three-year look-back .
- Hedging/pledging: prohibited; no pledging/hedging by directors/executive officers in 2024 .
- Option repricing: prohibited under the 2019 Plan .
- Tax gross-ups: limited circumstances for spousal travel/entertainment perquisites; potential shareholder-unfriendly element though narrowly scoped .
Governance and Process Notes
- Insider trading policy requires trading windows and pre-clearance; allows Rule 10b5-1 plans; direct communications to Board routed via Mr. Humke as Corporate Secretary .
- Mr. Humke has signed numerous 8-Ks and company filings in his capacity (e.g., Jan 29, 2024; Feb 16, 2024; Sep 18, 2024; Oct 25, 2024) .
Investment Implications
- Alignment: Stock options as sole LTI with four-year vesting and 10-year term strongly tie executive wealth to long-term TSR; hedging/pledging prohibitions and ownership retention rules support alignment and reduce misaligned risk-taking .
- Retention/CoC economics: Standardized Key Employee Agreements with double-trigger, 2× salary+bonus severance and benefit continuation for non-CEO executives reduce transition friction but create defined payout profiles in M&A scenarios; New agreement’s severance-conditioned non-compete approach reduces enforceability concerns while retaining economic deterrents to competition .
- Selling pressure: Options vest annually over four years and trading must occur within windows or via 10b5-1 plans, limiting opportunistic sales; company-wide policy banning pledging/hedging further mitigates overhang risk from collateral calls or hedged positions .
- Pay-for-performance consistency: STI metrics failed to meet targets in 2024 (93% Net Sales; 87% Incentive EPS), resulting in below-target payouts for NEOs, indicating discipline in cash incentives when growth moderates; expect similar discipline for function executives designated by MOCC .