Mark Sheahan
GRACOAbout Mark Sheahan
Mark W. Sheahan, 60, is Graco’s President and Chief Executive Officer (CEO) and a director, roles he has held since June 2021 after joining the company in 1995; his prior roles include CFO & Treasurer (2018–2021), VP/GM Applied Fluid Technologies (2008–2018), Chief Administrative Officer (2005–2008), and Vice President & Treasurer (1998–2005) . He also serves as a director of Tennant Company and on the board of managers of Fernweh Group, LLC . Under the SEC “Pay vs. Performance” disclosure, Graco reported net sales of $2,143.5m (2022), $2,195.6m (2023), and $2,133.3m (2024), net income of $460.6m (2022), $506.5m (2023), and $486.1m (2024), and a $100 TSR value of $134 (2022), $175 (2023), and $171 (2024) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Graco Inc. | President & CEO; Director | Jun 2021–present | Leadership continuity; capital allocation and strategy oversight as CEO/director . |
| Graco Inc. | CFO & Treasurer | 2018–2021 | Financial leadership through multi-year growth cycle . |
| Graco Inc. | VP & GM, Applied Fluid Technologies | 2008–2018 | P&L leadership for key growth platform . |
| Graco Inc. | Chief Administrative Officer | 2005–2008 | Enterprise administration and operations support . |
| Graco Inc. | VP & Treasurer | 1998–2005 | Balance sheet and capital structure stewardship . |
| Graco Inc. | Manager, Treasury Services | pre-1996–1996 | Treasury operations and liquidity management . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Tennant Company | Director | Current | Cross-industry insights; governance and strategy . |
| Fernweh Group, LLC | Board of Managers | Current | Industrial/industrial-tech investment perspectives . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 918,800 | 985,000 | 1,025,000 |
| Target Bonus (% of base) | 100% (CEO plan design) | 100% (CEO plan design) | 100% (CEO plan design) |
| Actual Annual Bonus ($) | 788,695 | 1,299,436 | 122,740 |
| Actual Payout vs Target (%) | — | 132% | 12% |
- 2024 base increased 4% to $1,025,000 (from December 2023 review) .
- Perquisites and benefits: executive financial planning reimbursement (CEO up to $10,000 in 2024), executive physical program, supplemental long-term disability (up to $21,800/month), and limited spousal travel reimbursements with potential tax gross-ups .
Performance Compensation
Annual Cash Incentive Plan (metrics, weightings, and outcomes)
- Design: corporate Net Sales and corporate Incentive EPS for CEO (and corporate/division/region metrics for others) .
- 2023 outcomes (CEO): payout 132% of target (132% of base salary) .
| Year | Metric | Weight | Target Definition | Threshold (% of Target) | Maximum (% of Target) | Actual vs Target | CEO Payout |
|---|---|---|---|---|---|---|---|
| 2023 | Corporate Net Sales | 40% | 102% of 2022 actual | 90% | 105% | 100% | 132% of target (132% of base) |
| 2023 | Corporate Incentive EPS | 60% | 102% of 2022 actual | 90% | 105% | 113% | 132% of target (132% of base) |
| 2024 | Corporate Net Sales, Incentive EPS | — | Design unchanged | — | — | CEO payout 12% of target (12% of base) | 12% (12% of base) |
Long-Term Incentives (stock options only)
- Philosophy: stock options are the sole executive LTI, granted near the 75th percentile of market data, 10-year term, 4-year ratable vesting; repricing prohibited .
- Recent CEO grants and key terms:
| Grant | Options (#) | Exercise Price ($/sh) | Term | Vesting | Grant Date Fair Value ($) |
|---|---|---|---|---|---|
| Feb 16, 2024 | 189,910 | 88.64 | 10 years | 25% annually over 4 years | 5,499,794 |
| Feb 17, 2023 | 245,530 (unexercisable at 12/29/2023) | 71.47 | 10 years | 25% annually over 4 years | Option Awards $5,499,872 (SCT value) |
| Feb 2025 | 204,910 (2025 grant) | FMV on grant (policy) | 10 years | 25% annually over 4 years | — |
- Option exercises (liquidity/pressure indicators): 0 shares exercised in 2023; 43,080 shares exercised in 2024 for $2,517,449 value realized .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (Feb 24, 2025) | 861,857 shares; includes 762,066 shares acquirable via vested stock options; includes 2,892 shares held by spouse; less than 1% of outstanding shares . |
| Stock ownership guidelines | CEO must hold ≥5x base salary; retain 50% of net shares from equity awards until guideline met . |
| Equity vehicle mix | Options only for executives (rare use of restricted stock historically) . |
Outstanding equity awards at FY-end (retention overhang and vesting runway):
| Grant Date | Exercisable (#) | Unexercisable (#) | Exercise Price ($) | Expiration |
|---|---|---|---|---|
| 2/16/2024 | 0 | 189,910 | 88.64 | 2/16/2034 |
| 2/17/2023 | 61,382 | 184,148 | 71.47 | 2/17/2033 |
| 2/18/2022 | 118,045 | 118,045 | 71.73 | 2/18/2032 |
| 6/10/2021 | 103,117 | 34,373 | 73.70 | 6/10/2031 |
Employment Terms
- Key Employee Agreement (pre-Change-in-Control): if terminated involuntarily without cause, CEO receives pro-rata bonus (based on actual performance), severance equal to 2× (base salary + target bonus), continued medical/dental/life up to 18 months, outplacement, and legal fee reimbursement if prevailing .
- Change-in-Control (double-trigger within 2 years): pro-rata bonus at target and severance equal to 3× (base salary + target bonus); unvested stock options and restricted stock accelerate upon Change in Control (and for death/disability as specified) .
- Retirement, disability, death: pro-rata bonus and equity vesting provisions as disclosed; participation in the Employee Retirement Plan and the Restoration Plan; pension benefits per plan .
- Clawbacks/recoupment: NYSE-compliant Incentive Compensation Recovery Policy (restatements) and separate Executive Officer Misconduct Recoupment Policy (3-year look-back); awards subject to forfeiture/recovery under plan terms .
Potential payments (aggregated) as of the stated dates:
| Scenario | Dec 29, 2023 | Dec 27, 2024 |
|---|---|---|
| Involuntary (Not for Cause) or Good Reason Following Change of Control | $13,024,937 | $9,544,229 |
| Involuntary (Not for Cause) | $4,366,634 | $4,649,263 |
| Retirement | $389,100 | $509,100 |
| Death | $1,374,100 | $1,009,100 |
| Disability | $642,276 | $762,276 |
Board Governance and Director Role
- Board service: director since June 2021 .
- Board leadership and independence context: the Board Chair is J. Kevin Gilligan (non-CEO), indicating CEO and Chair roles are separated; Sheahan is a management director (inside director) while MOCC oversight is led by independent director Martha A. Morfitt (MOCC Chair) .
- Proxies provide full committee composition; CEO biographies do not list committee memberships, consistent with typical practice that executives do not serve on audit/compensation/governance committees .
Performance & Track Record
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Sales ($ thousands) | 2,143,521 | 2,195,606 | 2,133,316 |
| Net Income ($ thousands) | 460,645 | 506,511 | 486,084 |
| $100 TSR Value (Company) | 134 | 175 | 171 |
| $100 TSR Value (Peer Group) | 126 | 160 | 177 |
Say-on-Pay & Shareholder Feedback
- Say-on-pay support: 88.6% (April 2022) and 89.7% (April 2023); Board continues to target competitive, performance-oriented pay structures .
- Annual advisory vote on NEO compensation continues (2025 proxy) .
Investment Implications
- Alignment and incentive quality: Options-only LTI with four-year ratable vesting and no repricing tightly aligns realized pay with long-term TSR and share price compounding; MOCC targets ~75th percentile LTI value, underscoring retention and outperformance ambitions .
- Cyclicality discipline: 2024 annual bonus paid at just 12% of target (vs. 132% in 2023), reflecting under-target results on Net Sales/Incentive EPS and signaling meaningful downside variability in cash pay when growth moderates .
- Ownership and selling pressure: Sheahan beneficially owns 861,857 shares (including vested options) with <1% ownership of shares outstanding; exercises in 2024 (43,080 shares; ~$2.52m realized) vs. zero in 2023 suggest manageable liquidity rather than persistent selling pressure; additional unvested option overhang supports retention through 2028–2034 expiries .
- Downside protections and change-in-control: Double-trigger 3× (base+target bonus) and equity acceleration are standard but sizable; investors should monitor potential M&A scenarios for payout dynamics .
- Governance mitigants: CEO is not Board Chair (independent Chair structure) and MOCC leadership is independent; clawback and misconduct recoupment policies add guardrails against windfalls or misstatement-related awards .
- Forward indicators: February 2025 option grant increased to 204,910 shares (from 189,910 in 2024), expanding future alignment and potential realizable pay tied to stock performance through 2035; watch for Form 4s around vesting anniversaries for incremental exercise activity .