Gerben Bakker
HUBBELLAbout Gerben Bakker
Gerben W. Bakker, age 60, is Chairman, President and CEO of Hubbell Incorporated (HUBB). He became CEO and a Director in October 2020 and was appointed Chairman in May 2021 after serving as President & COO (2019–2020); previously he led Hubbell Power Systems (2014–2019) and joined Hubbell in 1988 as a manufacturing engineer . Under his leadership in 2024, Hubbell delivered $5.6B in net sales, $16.57 adjusted diluted EPS, and $811M in free cash flow . Shareholder support for pay design remains strong (95.1% Say‑on‑Pay approval in 2024) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Hubbell Incorporated | Chairman, President & CEO | May 2021–Present | Unified leadership as combined Chair/CEO; focus on grid modernization, portfolio pruning (e.g., residential lighting divestiture) and bolt‑on M&A to align with electrification trends . |
| Hubbell Incorporated | President & CEO; Director | Oct 2020–Present | Oversaw strong performance and capital deployment discipline; refreshed brand and investor engagement including 2024 Investor Day . |
| Hubbell Incorporated | President & COO | Jun 2019–Oct 2020 | Enterprise operations leadership prior to elevation to CEO . |
| Hubbell Power Systems (Hubbell) | President | 2014–2019 | Built industry‑leading T&D components business through multi‑year operational execution . |
| Hubbell Wiring Systems (Hubbell) | Manufacturing Engineer | 1988– | Early career foundation in manufacturing and operations . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Regal Rexnord Corporation | Director | Feb 2025–Present | Cross‑industry manufacturing governance exposure (power transmission components), expanding network and insights relevant to HUBB . |
| Manufacturers Alliance | Board of Trustees | Not disclosed | Industry policy and best‑practices forum participation . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 1,032,154 | 1,091,231 | 1,125,385 |
| 2024 Cash Incentive Target | Value |
|---|---|
| Target STI (% of salary) | 125% |
| STI Target ($) | 1,412,500 |
| STI Award Paid ($) | 1,582,000 |
| 2024 Perquisites & Retirement | Amount ($) |
|---|---|
| Perquisites (incl. planning services; personal aircraft $2,571) | 14,071 |
| Company retirement contributions (qualified + non‑qualified) | 249,717 |
Performance Compensation
2024 Short‑Term Incentive (STI) – Design and Results
- Weighting: 80% enterprise financial (Adjusted EPS, FCF); 20% strategic objectives .
- 2024 enterprise results vs targets yielded a 112% blended financial payout; strategic objectives paid at 110%; CEO composite payout 112% .
| Metric (Enterprise) | Target | Performance vs Target | Payout % |
|---|---|---|---|
| Adjusted EPS | $16.35 | 102% | 115% |
| Free Cash Flow | $793M | 101% | 107% |
| Blended Financial Payout | — | — | 112% |
| Strategic Objectives (CEO) | — | — | 110% |
2024 Long‑Term Incentive (LTI) – Grants and Structure (75% performance‑oriented)
| Component | Grant Date | Shares/Units | Terms | Grant Date Fair Value ($) |
|---|---|---|---|---|
| Restricted Stock (RS) | Feb 6, 2024 | 4,155 | 3‑yr cliff vesting | 1,464,845 |
| Stock Appreciation Rights (SARs) | Feb 6, 2024 | 16,641 | Vest 1/3 annually; base price $352.55 | 1,464,957 |
| Performance Shares – Relative Sales Growth (RSG) | Feb 6, 2024 | Target 2,826 (Thr 1,413; Max 5,652) | 3‑yr performance period | 964,203 |
| Performance Shares – Adjusted Operating Profit Margin (OPM) | Feb 6, 2024 | Target 2,743 (Thr 1,372; Max 5,486) | 3‑yr performance period | 935,884 |
| Performance Shares – Relative TSR | Feb 6, 2024 | Target 2,742 (Thr 1,371; Max 5,484) | 3‑yr performance period | 1,327,101 |
Performance share metrics and weightings since 2022: RSG (34%), Adjusted OPM (33%), Relative TSR (33%) .
2022–2024 Performance Share Cycle (granted 2022; performance ended 12/31/2024)
| Metric | Target for 100% | Actual | Payout |
|---|---|---|---|
| Relative Sales Growth (Projected) | 50th percentile | 76th percentile | 200% |
| Adjusted OPM | 15.25% | 21.9% | 200% |
| Relative TSR | 50th percentile | 124.5% | 200% |
| Total Payout (Projected) | — | — | 200% |
| Shares Earned – 2022 Grant | Target | Projected Shares |
|---|---|---|
| Gerben W. Bakker | 12,643 | 25,286 |
Note: Relative Sales Growth result was pending final peer data as of Mar 24, 2025; projections to be finalized by the Compensation Committee post‑filing .
2024 Equity Realization Activity (liquidity signals)
| Type | Shares | Value Realized ($) |
|---|---|---|
| SARs exercised | 82,651 | 19,227,630 |
| Time‑based RS vested | 6,281 | 2,263,861 |
| Performance Shares vested | 24,623 | 8,918,148 |
Equity Ownership & Alignment
Beneficial Ownership and Guideline Compliance
- Beneficial ownership: 62,872 common shares plus 85,578 shares obtainable upon SAR exercise; total 148,450 shares .
- Shares outstanding as of Mar 7, 2025: 53,573,359; Bakker’s beneficial ownership ≈0.28% (148,450 ÷ 53,573,359) .
- CEO stock ownership guideline: 5x base salary; executives, including CEO, currently meet or exceed requirements; hedging and pledging prohibited by policy (with limited exception framework noted) .
| Item | Amount |
|---|---|
| Common Stock Owned | 62,872 shares |
| Shares Obtainable via SARs | 85,578 shares |
| Total Beneficial Ownership | 148,450 shares |
| Shares Outstanding (03/07/2025) | 53,573,359 |
| Ownership % of Outstanding | ≈0.28% (calc. from cited figures) |
| Ownership Guideline (CEO) | 5x base salary; in compliance |
Outstanding Equity Awards at 12/31/2024 (unvested/in‑the‑money alignment)
| Type | Grant Date | Status | Quantity | Reference Value/Price |
|---|---|---|---|---|
| SARs | 02/10/2021 | Exercisable | 34,845 | $163.26 exercise price |
| SARs | 02/08/2022 | Exer./Unexer. | 19,957 / 9,979 | $185.87 exercise price |
| SARs | 02/07/2023 | Exer./Unexer. | 7,625 / 15,250 | $241.17 exercise price |
| SARs | 02/06/2024 | Unexercisable | 16,641 | $352.55 exercise price |
| Restricted Stock (unvested) | 02/08/2022–02/06/2024 | Unvested | 6,322 + 5,784 + 4,155 | $2,648,223 + $2,422,860 + $1,740,488 market values |
| Performance Shares (unearned) | 2022–2024 grants | Unearned | 12,643 + 11,569 + 8,311 | $5,296,026 + $4,846,138 + $3,481,395 market values |
Vesting mechanics: RS generally vest on a 3‑year cliff; SARs vest ratably over 3 years; performance shares cliff‑vest at the end of the 3‑year performance period based on goal attainment .
Pension and Deferred Compensation
| Plan/Item | Details |
|---|---|
| DB Plan (present value) | $864,293 (25.92 yrs credited service; plan frozen) |
| DB Restoration Plan (present value) | $3,077,903 (25.92 yrs; frozen) |
| EDCP 2024 Executive Contributions | $214,043; Aggregate balance $2,234,278 |
| DC Restoration Plan (2024 registrant contrib.) | $198,536 |
Employment Terms
Severance, Change‑in‑Control (CIC) Economics, and Equity Treatment
- No employment agreement; severance governed by Senior Severance Policy; CIC protection via individual agreements (double trigger) .
- CIC cash severance multiple: 2.5x base salary and 2.5x target bonus for CEO; continued welfare benefits up to 2.5 years; pro‑rated target bonus; outplacement up to lesser of 15% of salary or $50,000; no excise tax gross‑up (cut‑back to safe harbor if beneficial) .
- Equity treatment: no automatic vesting on CIC; unassumed awards may vest at Committee’s discretion; if awards continue and a qualifying termination occurs within 12 months post‑CIC, unvested awards fully vest; performance shares subject to award terms/Committee discretion .
| Scenario (as of 12/31/2024) | Severance ($) | Equity Accelerated ($) | Pension ($) | Welfare ($) | Total ($) |
|---|---|---|---|---|---|
| Death | — | 26,574,629 | — | — | 26,574,629 |
| Disability | — | 26,574,629 | — | — | 26,574,629 |
| Involuntary Termination (non‑CIC) | 3,107,518 | 6,811,571 | — | 84,242 | 10,003,331 |
| Retirement | — | 6,811,571 | — | — | 6,811,571 |
| CIC + Involuntary Termination | 4,565,453 | 26,574,629 | 563,050 | 110,875 | 31,814,007 |
Clawback and Trading Policies
- Compensation Recovery Policy compliant with SEC/NYSE; requires recoupment of erroneously awarded incentive comp after restatements within lookback period .
- Insider trading policy prohibits hedging and pledging; 10b5‑1 plan governance applies; strict black‑out timing around filings for equity grants; no repricing or buyout of options/SARs without shareholder approval .
Board Governance (Director Service, Committees, Independence)
- Bakker serves as Chairman, President & CEO; he chairs the Executive Committee of the Board .
- Board independence: 9 of 10 directors independent; Bakker is non‑independent (management) .
- Lead Independent Director (currently Anthony J. Guzzi) provides counterbalance to combined Chair/CEO structure; independent director executive sessions held regularly .
- Meetings/attendance: Board held 8 meetings in 2024; average director attendance 98% .
- As CEO, Bakker receives no additional director compensation .
Compensation Committee Analysis and Shareholder Feedback
- Compensation Committee (independent) members: Carlos M. Cardoso (Chair), Anthony J. Guzzi, Neal J. Keating, Jennifer M. Pollino .
- Independent consultant: Exequity LLP advises the Committee; annual independence review found no conflicts .
- Peer group targeted at median; updated for 2024 by removing Fastenal, Roper, WESCO and adding Ingersoll Rand, Lennox International, Vertiv .
- Say‑on‑Pay 2024 approval: 95.1%; 10‑year average ~92.5% .
- Ongoing shareholder outreach in early 2025 targeted top 25 holders representing >61% of shares outstanding .
Compensation Structure Observations (alignment and risk)
- High at‑risk mix: majority of CEO total direct comp is variable with 75% of LTI performance‑based; metrics include Relative Sales Growth, Adjusted OPM, and Relative TSR .
- STI paid at 112% on strong EPS/FCF delivery; strategic payout at 110%, evidencing balanced financial/strategic focus .
- 2022–2024 PS cycle projects 200% payout across all metrics, indicating robust multi‑year execution (RSG result preliminary pending peer reporting) .
- Governance safeguards: robust clawback; prohibition on hedging/pledging; no tax gross‑ups; no option/SAR repricing without shareholder approval; annual risk assessment found plans do not encourage excessive risk .
Equity Ownership & Director/Officer Stock Policies (governance quality)
- Executive and director stock ownership/retention policies enforced; all executives including CEO and all directors in compliance as of year‑end 2024 .
- No related person transactions requiring disclosure in 2024 .
Performance & Track Record (selected company outcomes under Bakker)
- 2024 results: Net sales $5.6B; adjusted diluted EPS $16.57; free cash flow $811M .
- Capital deployment: $180M capex; $40M buybacks; 8% dividend increase .
- Portfolio actions: Sale of residential lighting business (Progress Lighting) for $131M (Feb 2024); signed Ventev bolt‑on in Dec 2024 (closed Feb 2025) .
- Investor engagement: Hosted Investor Day (June 2024); targeted outreach to top 25 holders in early 2025 .
Employment Terms (other)
- No CEO employment agreement .
- Perquisites limited (planning/tax services and limited aircraft use) and disclosed; retirement and deferred comp plans aligned with market practices .
Investment Implications
- Alignment: Strong pay‑for‑performance mechanics (multi‑year PS with operational and relative metrics), robust ownership, and prohibitions on hedging/pledging support shareholder alignment; 95% Say‑on‑Pay signals investor acceptance .
- Retention vs liquidity: Significant unvested equity (e.g., $1.74M RS and $3.48M unearned PS at 12/31/24) plus continuing SAR tranches create retention hooks; however, 2024 realized liquidity via SAR exercises ($19.2M) and vestings ($11.2M combined RS/PS) warrants monitoring for potential sale supply post‑vesting windows .
- Downside protection and cost: CIC terms (2.5x salary+bonus; broad equity acceleration upon qualifying termination) are competitive but create sizable liabilities in a change‑in‑control (~$31.8M total exposure at 12/31/24), which is standard but material for scenario planning .
- Execution risk: Elevated PS payouts (projected 200%) reflect strong execution; continued outperformance will be needed to sustain upper‑quartile relative metrics through new PS cycles .
- Governance: Combined Chair/CEO structure is counterbalanced by a strong Lead Independent Director, fully independent key committees, and active shareholder engagement; continued oversight of workload (one outside public board) and independence safeguards is appropriate .