Patrick J. Winterlich
HEXCEL CORP /DE/About Patrick J. Winterlich
Patrick J. Winterlich is Executive Vice President and Chief Financial Officer of Hexcel, serving as CFO since September 2017 and an executive officer since 2017 (age 55). He has been with Hexcel since 1998 in finance, operations, and IT roles, and previously held finance positions at Courtaulds plc; he is a member of the Chartered Institute of Management Accountants . Company performance in 2024: sales $1,903M (+6.4% vs 2023), adjusted diluted EPS $2.03 (+12% YoY), free cash flow $202.9M; MICP financial metrics emphasized Free Cash Flow and Adjusted EBIT (weighted 50/50) . Pay-for-performance design links incentives to ROIC and Relative EPS Growth; PSAs for the 2022–2024 cycle paid out at a weighted 82.0% of target with Relative EPS outperforming 75% of S&P MidCap 400 peers .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Hexcel Corporation | Various roles in Finance, Operations, and IT | 1998–2017 | Built cross-functional expertise across finance and operations supporting scale-up and systems |
| Hexcel Corporation | Executive Vice President & CFO | 2017–present | Financial leadership through recovery/growth; transitioned incentive design to FCF/Adjusted EBIT focus |
| Courtaulds plc | Finance roles | N/A | Chemicals sector finance background; management accounting discipline |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Chartered Institute of Management Accountants | Member | N/A | Professional designation (CIMA) |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $591,608 | $615,272 | $635,269 |
| Target Bonus (MICP) % of Salary | — | 80% (prior) | 85% (increased) |
| Actual MICP Payout ($) | $517,805 | $708,794 | $689,013 |
Performance Compensation
Annual Cash Incentive (MICP) – 2024 Design and Results
| Component | Weight | Threshold | Target | Max | Actual Performance | Payout vs Target |
|---|---|---|---|---|---|---|
| Free Cash Flow ($M) | 50% | $230.8 | $288.5 | $346.2 | $332.9 | 176.9% |
| Adjusted EBIT ($M) | 50% | $208.2 | $260.3 | $312.4 | $237.7 | 78.3% |
| Weighted Achievement | 100% | — | — | — | — | 127.6% |
MICP award (dollars):
| Name | Target Award ($) | Actual Award ($) |
|---|---|---|
| Patrick J. Winterlich | $539,978 | $689,013 |
Performance metric definitions: Free Cash Flow equals operating cash flow less accrued capex over a five-quarter measurement window; Adjusted EBIT excludes M&A, restructuring, severance, and other items as defined .
Long-Term Incentives (Equity)
| Award Type | Grant Date | Shares/Options | Vesting | Notes |
|---|---|---|---|---|
| PSAs (Target) | Jan 29, 2024 | 9,038 | 3-year performance (2024–2026) | Metrics: ROIC (50%) and Relative EPS Growth vs S&P MidCap 400 (50%) |
| RSUs | Jan 29, 2024 | 4,519 | 1/3 on each of 1st–3rd anniversaries | Dividend equivalents in cash upon vest; standard US terms |
| NQ Options | Jan 29, 2024 | 12,433 | 1/3 on each of 1st–3rd anniversaries; 10-year term; exercise price $66.77 | |
| RSUs (Retention) | Jul 22, 2024 | 15,000 | 1/3 on each of 2nd–4th anniversaries | One-time retention grant amid CEO transition |
PSA framework and 2022 grant outcomes:
- 2022 PSAs included ROIC (25%), Relative EPS Growth (25%), and Incremental Adjusted EBIT Leverage (50%) with year-specific leverage goals; the cycle paid 82.0% overall (ROIC 70.7%, EPS Growth 200%, leverage weighted to 14.3%) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 148,948 shares; less than 1% of outstanding |
| Components included in beneficial ownership | 108,591 shares from vested/deferred RSUs and exercisable options counted per SEC rules |
| Unvested/Outstanding Awards at 12/31/2024 | RSUs: 1,700 (2022), 2,757 (2023), 4,519 (2024), 15,000 (retention 2024); PSAs (target): 8,273 (2023), 9,038 (2024); Options: 12,439/6,218 (2022), 3,539/7,075 (2023), 12,433 (2024 unexercisable) |
| Pledging/Hedging | Prohibited; no pledges by Winterlich |
| Stock Ownership Guidelines | Executive Vice Presidents: 3x base salary; as of 12/31/2024, all NEOs met or were complying |
| Insider Trading Controls | 10b5-1 plan guidelines, preclearance, blackout periods, and strict bans on hedging/pledging |
Market values for unvested awards (using $62.70 share price at 12/31/2024) are shown in the company’s outstanding awards table .
Employment Terms
-
Severance Agreement (U.S. EVP):
- Involuntary termination or good reason (no change in control): lump sum = 1.0×(current base salary + 3-year average MICP); Continued Participation Benefits for 12 months; prorated MICP if applicable .
- After change in control (double-trigger): lump sum = 2.0×(same base+bonus sum); Continued Participation Benefits for 24 months; prorated MICP if applicable .
- Non-compete: 12 months; 24 months if termination is in connection with change in control .
- “Good reason” generally defined as a ≥10% reduction in “Total Direct Compensation” among other triggers .
-
Equity Award Treatment:
- Single-trigger vesting upon change in control for RSUs and options; PSAs pay at target immediately upon change in control .
- Retirement/disability/death provisions provide continued vesting or prorated PSA payouts per plan terms .
-
Clawbacks: Mandatory clawback for accounting restatements (3-year lookback) and discretionary clawback for misconduct or material errors .
Compensation Structure Highlights
| Element | % Mix and Design | 2024 Notes |
|---|---|---|
| Short-term cash | MICP 85% of salary target; FCF and Adjusted EBIT equally weighted | Strong FCF over-target; EBIT below target; 127.6% weighted payout |
| Long-term equity | 50% PSAs, 25% RSUs, 25% NQOs (for EVPs) | Added 15,000 RSU retention grant specific to CEO transition |
| Peer benchmarking | Peer group of 14 industry/similar companies used for pay competitiveness | Includes AAR, ITT, Moog, Spirit AeroSystems, Teledyne, Triumph, Woodward, etc. |
Director and Shareholder Signals
- Say-on-Pay: 2024 advisory vote approval ~94% of votes cast (including abstentions) .
- Ownership and Governance: No hedging/pledging allowed; robust stock ownership guidelines; mandatory lead director and strong committee oversight .
Investment Implications
- Alignment: Heavy weighting to FCF and Adjusted EBIT in annual bonus supports cash generation discipline; ROIC and Relative EPS Growth in PSAs link payouts to capital efficiency and peer-relative earnings power .
- Retention Risk: July 2024 one-time retention RSU (15,000) with 2nd–4th anniversary vesting creates medium-term retention hook; forfeiture on voluntary departure underscores its retention intent .
- M&A/Event Risk: Single-trigger equity acceleration on change-in-control could increase supply overhang if a transaction occurs; PSAs paid at target upon CIC .
- Ownership: Winterlich’s beneficial ownership (148,948 shares) and ban on pledging reduce misalignment risk; EVP 3x salary guideline maintained/complied .
- 2024 Performance Calibration: Bonus payout profile (strong on FCF, weaker on EBIT) reflects execution progress and margin sensitivity; PSA track record shows strong peer-relative EPS performance but mixed leverage outcomes through 2022–2024 .