Peter Lau
President and CEO, Industrial Automation at HON
Executive
About Peter Lau
Peter Lau, 46, was appointed President and CEO of Honeywell’s Industrial Automation segment effective October 15, 2025; he is based in Charlotte, NC and reports to Chairman and CEO Vimal Kapur . He previously served as President and CEO of FARO Technologies and a member of its Board, and earlier led Honeywell’s Security, Fire and Electrical Products businesses, shifting offerings from hardware to software-based solutions; he holds a B.S. in Business Administration from Northeastern University . Honeywell’s recent performance context includes 2024 net income of $5,740 million, cumulative TSR value of $141.53 on a $100 initial investment, and company-selected measure segment margin of 22.6% used for pay-versus-performance analysis . Honeywell is realigning segments ahead of an Aerospace spin-off; following the separation, Lau will continue leading Industrial Automation among the three remaining businesses (BA, IA, PA&T), reporting to Kapur .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| FARO Technologies | President & CEO; Board Member | 2023–2025 | Guided strategic transformation leading to successful acquisition; delivered customer-driven products, strengthened operational excellence |
| Honeywell (Security, Fire & Electrical Products) | President | 2018–2020 | Shifted offerings from hardware to software, expanded global footprint, strengthened commercial capabilities |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| FARO Technologies | Director (Board Member) | 2023–2025 | Served concurrently while CEO |
Fixed Compensation
- Honeywell determines base salary based on scope, experience, and performance; it does not guarantee annual increases or bonuses .
- Stock ownership guidelines require executive officers to hold shares equal to 5x base salary, with a five-year compliance window; officers must hold 100% of net shares from RSUs/PSUs for one year; hedging and pledging are prohibited .
- Honeywell’s DIC Plan permits deferral of annual cash incentive compensation; 2024 deferrals earned interest at 5.91% and RSUs can be deferred with elected schedules; executives may also elect accelerated change-in-control lump-sum payment timing for deferred RSUs .
Performance Compensation
- Annual ICP structure: 80% formulaic on adjusted EPS, free cash flow, and sales; 15% qualitative individual assessment; 5% Corporate Responsibility KPIs (ESG). Company example for 2024: CEO payout was 107% of target .
- Long-term incentives:
- PSUs: 50% of annual LTI; three-year performance; four equally weighted metrics—relative three-year TSR (25%), cumulative revenue (25%), average ROI (25%), average segment margin rate (25%) .
- Stock Options: 25% of annual LTI; vest ratably over four years; 10-year term; granted at or above fair market value .
- RSUs: 25% of annual LTI; four-year vesting; subject to ownership and post-vesting holding requirements .
| Metric | Weighting | Target Definition | Actual/Payout (Illustrative) | Vesting |
|---|---|---|---|---|
| Adjusted EPS (ICP) | Part of 80% formulaic | Pre-established annual goals | Included in 107% payout for CEO’s 2024 ICP example | Annual cash payout |
| Free Cash Flow (ICP) | Part of 80% formulaic | Pre-established annual goals | Included in 107% payout for CEO’s 2024 ICP example | Annual cash payout |
| Sales (ICP) | Part of 80% formulaic | Pre-established annual goals | Included in 107% payout for CEO’s 2024 ICP example | Annual cash payout |
| Individual Performance (ICP) | 15% | MDCC assessment | Qualitative overlay | Annual cash payout |
| Corporate Responsibility KPIs (ICP) | 5% | ESG KPIs (environmental, social, governance) | Qualitative overlay | Annual cash payout |
| Relative TSR (PSU) | 25% | 3-year TSR vs Compensation Peer Group | Earned at cycle end | 3-year cliff |
| Cumulative Revenue (PSU) | 25% | 3-year cumulative revenue | Earned at cycle end | 3-year cliff |
| Average ROI (PSU) | 25% | 3-year average ROI | Earned at cycle end | 3-year cliff |
| Average Segment Margin (PSU) | 25% | 3-year average segment margin rate | Earned at cycle end | 3-year cliff |
| Stock Options | n/a | Granted at FMV | Value only if stock appreciates | 4-year ratable; 10-year term |
| RSUs | n/a | Time-based | n/a | 4-year ratable |
Equity Ownership & Alignment
- Initial beneficial ownership: Form 3 filed October 15, 2025 reports “No securities are beneficially owned,” reflecting zero shares/derivatives at appointment .
- Ownership guidelines: As an executive officer, Lau must reach 5x base salary within five years and hold 100% of net shares from RSU/PSU vesting for one year; hedging/pledging are prohibited .
- Company-wide context: As of March 26, 2025, directors and executive officers collectively owned ~0.2% of outstanding shares; individual totals listed for then-NEOs were each <1% .
| Item | Status/Detail | Source |
|---|---|---|
| Beneficial ownership (common + derivatives) | 0 shares/none reported | |
| Ownership % of shares outstanding | ~0% (individual) | |
| Pledged shares | Prohibited by policy | |
| Hedging | Prohibited by policy | |
| Ownership guideline | 5x base salary; 5-year window; 1-year net share hold |
Employment Terms
- Appointment and role: Executive officer, President & CEO of Industrial Automation, effective October 15, 2025; reports to Chairman & CEO .
- Employment agreements: Honeywell states it does not maintain employment agreements with NEOs; severance governed by plans .
- Senior Severance Plan: Benefits conditioned on release and restrictive covenants; double-trigger required for CIC severance/vesting (CIC plus involuntary termination without cause or voluntary for good reason) .
- Equity treatment on CIC/termination:
- Double-trigger vesting applies to unvested options and RSUs; PSUs vest pro rata at target for incomplete cycles and based on actual for completed cycles upon qualifying termination within two years post-CIC; awards not rolled-over vest immediately at CIC .
- Option exercise windows post-termination follow plan rules (e.g., up to three years for death/disability/retirement; one year for other involuntary termination without cause) .
- Clawback and restrictive covenants: SEC/Nasdaq-compliant clawback for restatements; additional misconduct clawback; non-compete up to two years tailored to role; violation can result in cancellation/recovery of equity gains .
- ICP timing in CIC year: ICP awards paid based on business performance as usual; no accelerated target payments in CIC context .
Investment Implications
- Alignment and ownership build: Zero initial ownership suggests forthcoming RSU/PSU/option grants will be key to alignment; monitor Form 4 filings for grant sizes, vesting schedules, and any deferral elections that could affect near-term supply overhang; one-year net share holding reduces immediate sell pressure .
- Incentive levers: ICP ties 80% to adjusted EPS/FCF/sales and 5% to ESG KPIs; PSUs weight TSR/revenue/ROI/segment margin equally—watch IA segment targets and post-spin portfolio actions (e.g., evaluation of strategic alternatives for PSS/WWS) as potential drivers of payouts and execution risk .
- Retention risk mitigants: No employment contract but robust Senior Severance Plan with double-trigger CIC and non-compete up to two years lowers flight risk; hedging/pledging bans, ownership requirements, and clawbacks strengthen alignment and governance .
- Corporate transformation backdrop: Segmentation realignment and anticipated Aerospace spin-off elevate execution stakes for IA; performance against multi-year PSU metrics (segment margin, ROI, revenue growth, TSR) will be the critical value-creation scorecard for Lau’s tenure; use Honeywell’s 2024 pay-versus-performance metrics (net income $5,740M; segment margin 22.6%; TSR $141.53) as baseline context .