Peter O'Shea
GRACOAbout Peter O’Shea
Peter J. O’Shea is 60 and became President, Global Industrial Division in January 2025 after nearly three decades at Graco (joined 1995), with prior leadership across Lubrication, Industrial Products, Asia Pacific, and South & Central America . In 2024, Graco’s net sales were $2,113 million (-4% YoY), diluted EPS was $2.82 (-4%), TSR was -2%, and Incentive EPS used for bonuses was $2.75 . For 2024, O’Shea’s base salary was $395,500, his MOCC-certified bonus payout was 49% of target (35% of salary, $136,431), and he received a stock option grant of 17,260 shares in February 2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Graco | President, Global Industrial Division | Jan 2025–present | Leads global industrial portfolio execution and growth |
| Graco | President, Worldwide Lubrication Equipment Division; President, South & Central America | Jan 2022–Dec 2024 | Drove divisional and regional performance; metrics tied to divisional and regional Net Sales and Incentive EPS |
| Graco | President, Worldwide Industrial Products Division; President, South & Central America | Jul 2021–Jan 2022 | Managed global industrial products; concurrent regional leadership |
| Graco | President, Worldwide Industrial Products Division | Apr 2020–Jan 2022 | Led core division operations and growth |
| Graco | President, Worldwide Lubrication Equipment Division | 2018–Apr 2020 | Ran global lubrication division |
| Graco | VP & GM, Lubrication Equipment Division | 2016–2018 | Led division operations |
| Graco | VP & GM, Asia Pacific | 2012–2015 | Regional leadership across APAC |
| Graco | Director of Sales & Marketing, Industrial Products Division (and Applied Fluid Technology Division) | 2008–2012 | Commercial leadership across divisions |
| Graco | Country Manager, Australia–New Zealand | 2005–2008 | Built regional presence and sales |
| Graco | Business Development Manager, Australia–New Zealand | 2002–2005 | Growth initiatives in ANZ |
| Graco | Various sales management roles | Pre-2002 | Progressive leadership trajectory |
External Roles
- No external public company directorships or outside board roles are disclosed in Graco’s officer biographies or proxy materials reviewed .
Fixed Compensation
| Year | Base Salary ($) | Target Bonus (% of Salary) | Actual Bonus (% of Target) | Actual Bonus ($) | All Other Compensation ($) | Notes |
|---|---|---|---|---|---|---|
| 2024 | 395,500 | 70% (other NEOs) | 49% | 136,431 | 36,359 | 2024 increase of 10% approved Dec 2023 |
Breakdown of “All Other Compensation” (2024):
- Employee Investment Plan Matching Contribution: $9,998
- Employee Investment Plan Basic Contribution: $6,900
- Other Perquisites (LTD coverage, financial planning, spousal/misc travel, executive physical): $9,537
Performance Compensation
Short-Term Incentive Plan (STI) – 2024 Structure and Results
| Metric | Weighting | Target Definition | 2024 Actual vs Target | Payout Impact |
|---|---|---|---|---|
| Corporate Net Sales | 20% (division/region execs) | 104% of 2023 actual | 93% of target | Contributed to reduced corporate component |
| Corporate Incentive EPS | 30% (division/region execs) | 104% of 2023 actual | 87% of target | Contributed to reduced corporate component |
| Worldwide Division or Region Net Sales | 20% (division/region execs) | 103–104% of 2023 actual | 94–110% of target | Supported divisional/regional payout |
| Worldwide Division or Region Incentive EPS | 30% (division/region execs) | 105% of 2023 actual | 91–108% of target | Supported divisional/regional payout |
| Individual Result | — | — | — | O’Shea payout: 49% of target (35% of salary) |
STI metric construction: For division/regional executives like O’Shea, bonuses are weighted 20% corporate Net Sales, 30% corporate Incentive EPS, 20% worldwide divisional Net Sales, and 30% worldwide divisional Incentive EPS (or regional metrics where applicable). Incentive EPS excludes certain acquisition-related items and tax effects per MOCC policy; 2024 Incentive EPS was $2.75 .
Long-Term Incentive (LTI) – Stock Options
| Grant Date | Securities Underlying Options (#) | Exercise Price ($) | Grant Date Fair Value ($) | Vesting | Expiration |
|---|---|---|---|---|---|
| Feb 16, 2024 | 17,260 | 88.64 | 499,850 | 25% per year over 4 years beginning first anniversary (i.e., 2/16/2025, 2026, 2027, 2028) | 10 years (i.e., 2/16/2034) |
Graco uses stock options as the sole LTI vehicle, vesting annually over four years; options gain value only if the share price exceeds grant-date fair market value, aligning with long-term shareholder value creation .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 110,135 shares; less than 1% of shares outstanding |
| Exercisable (Vested) Options Included in Beneficial Ownership | 95,619 shares (exercisable within 60 days as of Apr 25, 2025) |
| 2024 Option Exercises | 85,808 shares; value realized $4,872,854 |
| Ownership Guidelines | Execs must retain 50% of net shares until holdings equal: CEO 5× salary; execs reporting to CEO 3×; execs reporting to others 2×; options excluded from calculation |
| Hedging/Pledging Policy | Hedging prohibited; pledging prohibited for directors/executive officers since Sep 2022 |
Employment Terms
- Key Employee Agreement (KEA) – involuntary termination pre-change-of-control: pro-rata bonus (actual performance), severance of 1× base salary + target bonus; continued medical/dental/life insurance for 12 months; outplacement; reimbursement of reasonable legal fees if prevailing party .
- Change of control (double trigger): within two years post-CoC, involuntary termination or resignation for good reason → pro-rata bonus at target and severance of 2× base salary + target bonus (CEO: 3×); paid lump sum or over severance period per 409A rules .
- Equity acceleration: unvested stock options and restricted stock accelerate and fully vest upon change of control; options and restricted stock also accelerate upon death/disability (and options upon retirement) .
- Clawbacks: SEC/NYSE-compliant Incentive Compensation Recovery Policy (accounting restatements); Executive Officer Misconduct Incentive Compensation Recoupment Policy with 3-year look-back .
- Potential payments table (Dec 27, 2024 scenario):
| Scenario | Amount ($) |
|---|---|
| Involuntary (Not for Cause) or Good Reason Termination Following CoC | 1,827,647 |
| Involuntary (Not for Cause) Termination (pre-CoC) | 689,643 |
| Death | 396,000 |
| Disability | 258,000 |
- Pension: Southeast Asian Plan participant; 7 years credited service; present value of accumulated benefit $275,500 at FY2024 .
- Tax gross-ups: reimbursement for miscellaneous and spousal travel perquisites and associated tax gross-ups upon termination events per program description .
Say-on-Pay & Peer Benchmarking
- Say-on-Pay approval: 89.7% (April 2023) and 89.6% (April 2024) .
- Benchmarking references: MOCC uses “Graco Peer Group” market positioning and Willis Towers Watson survey data for salary decisions; O’Shea’s base increased 10% for 2024 based on market position and performance .
Investment Implications
- Alignment: Heavy reliance on stock options (sole LTI) with four-year vesting and 10-year terms aligns O’Shea’s incentives with long-term TSR; ownership guidelines and anti-hedging/pledging policies strengthen alignment .
- Retention risk: KEA provides meaningful double-trigger protection (2× salary + target bonus), reducing flight risk in a CoC scenario; pre-CoC severance (1× salary + target bonus) and benefits further stabilize retention .
- Performance sensitivity: 2024 corporate metrics were below target (93% Net Sales; 87% Incentive EPS), but divisional/regional metrics achieved 94–110% and 91–108% of targets, yielding O’Shea’s 49% of target bonus—suggesting divisional execution offset corporate softness .
- Trading signal: Significant option exercise activity in 2024 (85,808 shares; $4.87M value realized) may indicate monetization of vested options; monitor ongoing Form 4s for continued exercising/selling pressure . Note: a Form 4 administrative error in 2023 related to divorce transfers was disclosed, not indicative of misconduct .
- Payout elasticity: With STI metrics tied to Net Sales and Incentive EPS at corporate/divisional/regional levels, payouts are sensitive to macro/GDP-linked demand and divisional execution, creating transparent pay-for-performance linkage .