Ronita Banerjee
GRACOAbout Ronita Banerjee
Executive Vice President and Chief Human Resources Officer at Graco Inc. (GGG) since May 2023; serves as a key participant with the CEO in developing and presenting executive compensation design and recommendations to the MOCC, and implements committee decisions and succession/talent processes . 2024 company performance: Net Sales $2.113B (-4% YoY), Operating Earnings $570.1M (-12%), Diluted EPS $2.82 (-4%), and 1-year TSR of -2% (5-year 69%, 10-year 235%) . Graco’s short-term incentive framework for function executives (incl. CHRO) weights Corporate Net Sales (40%) and Incentive EPS (60%), with LTI solely in stock options to align pay with shareholder value creation .
Past Roles
Not disclosed in reviewed filings for Ms. Banerjee .
External Roles
Not disclosed in reviewed filings for Ms. Banerjee .
Fixed Compensation
2024 fixed compensation for Ms. Banerjee:
| Component | 2024 |
|---|---|
| Base Salary ($) | $416,000 |
| All Other Compensation ($) | $26,435 |
Notes:
- All Other Compensation includes company 401(k) matching and limited perquisites (financial planning, executive physical, occasional spousal travel), per program description; itemized totals for Ms. Banerjee are aggregated in the proxy .
Performance Compensation
Short-term incentive (STI) design and 2024 outcomes (function executive weighting applies to CHRO):
| Metric | Weighting | 2024 Target (as % of 2023 actual) | Threshold (as % of 2024 Target) | Maximum (as % of 2024 Target) | 2024 Actual (as % of 2024 Target) | 2024 Individual Payout | Vesting |
|---|---|---|---|---|---|---|---|
| Corporate Net Sales | 40% | 104% | 90% | 105% | 93% | 12% of target; 8% of base salary ($34,870) | N/A (cash bonus) |
| Corporate Incentive EPS | 60% | 104% | 90% | 105% | 87% | 12% of target; 8% of base salary ($34,870) | N/A (cash bonus) |
Long-term incentives (stock options only):
| Detail | 2024 | 2025 |
|---|---|---|
| Option Shares Granted (#) | 17,260 | 18,700 |
| Exercise Price ($/sh) | $88.64 (grant 2/16/2024) | Not disclosed (standard FMV on grant date under 2019 Plan) |
| Grant Date Fair Value ($) | $499,850 (Black-Scholes $28.96/sh) | |
| Vesting | 25% annually over 4 years; 10-year term | 25% annually over 4 years; 10-year term |
| Repricing | Prohibited by 2019 Plan |
Additional award history: Ms. Banerjee received an option grant on 5/24/2023 with 6,?410 total shares (1,352 exercisable; 4,058 unexercisable at FY-end), strike $76.99, expiring 5/24/2033 .
Equity Ownership & Alignment
| Ownership Metric | As of 12/27/2024 | As of 2/24/2025 |
|---|---|---|
| Beneficial Ownership (shares) | See option positions below; no specific total disclosed at FY-end | 5,667 shares (includes shares acquirable via vested options as of 4/25/2025) |
| % of Shares Outstanding | — | ~0.0034% (5,667 ÷ 168,136,428) |
| Options Exercisable (#) | 1,352 (2023 grant portion) | 5,667 (aggregate vested option rights as of 4/25/2025) |
| Options Unexercisable (#) | 4,058 (2023 grant) + 17,260 (2024 grant) | Not stated; ongoing vest under 4-year schedule |
| Shares Pledged as Collateral | None in 2024; hedging and pledging prohibited for directors and executive officers | |
| Ownership Guidelines | 3× base salary for executives reporting to CEO; retain 50% of net shares until compliant (options excluded from guideline count) |
Insider activity: Ms. Banerjee reported zero option exercises in 2024 .
Employment Terms
Key Employee Agreement (Legacy form for NEOs) summary:
- Pre-Change of Control (CoC) involuntary termination (not for Cause): severance equals 1× base salary + target bonus; pro-rata bonus based on actual results; up to 12 months medical/dental/life continuation; outplacement; prevailing-party legal fee reimbursement; one-year non-compete (severance may cease once payments end) .
- Post-CoC (within 2 years) involuntary termination or resignation for Good Reason: severance equals 2× base salary + target bonus (CEO is 3×); pro-rata bonus at target; 18 months benefits continuation; 2 years of nonqualified pension service credit (CEO 3 years); legal fee reimbursement; double-trigger structure; no 280G gross-up, “best-of-net” cutback if applicable .
- Definitions: “Cause” and “Good Reason” outlined (e.g., willful misconduct, material pay reduction, material duty diminishment, relocation >50 miles) .
- Agreement term is one year with automatic annual renewals unless six months’ notice of non-renewal .
Potential payments for Ms. Banerjee (calculated as if event occurred 12/27/2024):
| Scenario | Amount ($) |
|---|---|
| Involuntary (Not for Cause) or Good Reason Termination Following CoC | $1,477,512 |
| Involuntary (Not for Cause) Termination (pre-CoC) | $729,932 |
| Death | $416,000 |
| Disability | $258,000 |
Clawbacks and trading policies:
- Incentive Compensation Recovery Policy (SEC/NYSE-compliant) mandates recovery of erroneously awarded incentive-based comp for accounting restatements; Executive Misconduct Recoupment Policy enables recovery when misconduct contributes to restatement (3-year look-back) .
- Insider trading policy: trading windows and pre-clearance; prohibits short selling, hedging, pledging, margin accounts; no executive hedging/pledging in 2024 .
Performance & Track Record (Context)
- 2024 highlights: Net Sales $2.113B (-4%), Operating Earnings $570.1M (-12%), Diluted EPS $2.82 (-4%), dividends $1.02/share (+9%), 1-year TSR -2% (5-year 69%, 10-year 235%) .
- STI metrics for CHRO linked directly to Corporate Net Sales and Incentive EPS growth; 2024 corporate actuals under target produced below-target bonuses (Ms. Banerjee: 12% of target; 8% of base salary) .
Governance and Say-on-Pay
- MOCC structure emphasizes pay-for-performance, competitiveness, risk mitigation (balanced mix, vesting schedules, capped awards, clawbacks, stock ownership guidelines), and uses Willis Towers Watson for benchmarking .
- Say-on-Pay support: 89.6% approval at 2024 Annual Meeting; 89.7% at 2023 Annual Meeting .
Compensation Structure Analysis
- Equity-heavy LTI via stock options only (no executive RSUs except a legacy RSU for another NEO), vesting over four years with 10-year terms; repricing prohibited—strong linkage to long-term shareholder returns .
- STI tightened toward earnings (60% Incentive EPS / 40% Net Sales) to emphasize profitability; 2024 below-target outcomes reduced bonuses materially (CHRO 8% of salary), evidencing discipline and alignment .
- Ownership guidelines and anti-hedging/pledging policies reinforce alignment and reduce misaligned risk-taking .
Risk Indicators & Red Flags
- No hedging/pledging by executive officers in 2024; options exclusively used for LTI, and repricing prohibited—reduces governance red flags tied to equity manipulation .
- Double-trigger CoC protection with no excise tax gross-up (best-of-net)—market-aligned severance terms .
Equity Ownership & Alignment—Additional Detail
- As of FY-end 2024, options outstanding included 17,260 (2024 grant, unexercisable) and portions of 2023 grant (1,352 exercisable; 4,058 unexercisable) .
- As of 2/24/2025, aggregate vested option rights reflected in 5,667 shares of beneficial ownership for Ms. Banerjee .
Employment Contracts, Non-Compete and Post-Termination Arrangements
- Legacy KEA includes one-year non-compete (two years for CEO) post-termination; in CoC-related terminations, non-compete does not apply; New KEA form (for certain future hires) removes non-compete but requires forfeiture/return of severance if executive competes during the one/two-year period (CEO exception for one month’s base salary) .
Investment Implications
- Pay-for-performance signal: 2024 STI paid at 8% of salary for the CHRO given below-target corporate Net Sales/EPS—comp structure shows discipline and lowers near-term cash comp pressure .
- Potential supply overhang: Options vest 25% annually; as of early 2025, 5,667 vested option shares were beneficially owned, with additional unvested options scheduled to vest over the next three years—monitor Form 4 filings for exercise/sales timing .
- Alignment and retention: Strict stock ownership guidelines (3× salary for executives reporting to CEO) and anti-hedging/pledging policy reduce misalignment risk; severance economics (2× base+target bonus post-CoC) are market-aligned, mitigating retention risk in strategic events .
- Governance quality: Clawback policies (restatement and misconduct) and option-only LTI with no repricing, combined with strong say-on-pay support (~90%), point to robust oversight; continued execution should track Net Sales and Incentive EPS trends that directly drive STI payouts .