Justin Patrick
ITRONAbout Justin Patrick
Justin K. Patrick (age 52) is Senior Vice President, Device Solutions at Itron (joined January 2020). He oversees strategy to grow Itron’s global portfolio of measurement, safety, and operational devices, after prior leadership roles at Johnson Controls (residential products GM; VRF/ductless GM; channel strategy/marketing), Auer Steel, Carrier, and service as a U.S. Navy Surface Warfare Officer . Under his tenure in 2024, Itron grew revenue 12% to ~$2.44B, with Adjusted EBITDA up 43% to ~$323.6M and non‑GAAP EPS up ~67% to $5.62; PRSUs for the 2022–2024 cycle paid at 155.33% driven by non‑GAAP EPS outperformance and TSR at ~87th percentile vs Russell 3000 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Itron | SVP, Device Solutions | 2020–present | Leads global device strategy for measurement/safety/operations |
| Johnson Controls | VP & GM, Residential Products | 2018–2020 | Led residential HVAC product portfolio |
| Johnson Controls | VP & GM, VRF Systems & Ductless | 2014–2017 | Expanded VRF/ductless businesses |
| Johnson Controls | Director, Channel Strategy & Marketing | 2010–2014 | Built channel and marketing strategy |
| Auer Steel & Heating Supply | Sales leadership | N/A | Distribution/channel experience |
| Carrier Corporation | Roles of increasing responsibility | N/A | General management progression |
| U.S. Navy | Surface Warfare Officer | N/A | Leadership/operations foundation |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $400,000 | $415,000 (3.8% increase) |
| Target Annual Bonus (% of salary) | 75% | 75% |
| Actual IIP Bonus Payout | $420,000 | $473,505 at 152.1% of target |
Performance Compensation
Annual Incentive Plan (IIP) – 2024 design and outcome
| Component | Weight | Target | Actual | Payout |
|---|---|---|---|---|
| Financial: Adjusted EBITDA | Part of 80% | $250.0M target; threshold $200.0M; max $275.0M | $323.6M | Contributed to 118.3% financial payout |
| Financial: Revenue | Part of 80% | $2,350.0M target; threshold $2,130.0M; max $2,460.0M | $2,440.8M | Contributed to 118.3% financial payout |
| Non‑Financial: GGI bookings | 10% (of total 20%) | >$240M | Pass | 100% for non‑financial |
| Non‑Financial: Reduce GHG intensity | 10% (of total 20%) | >5% reduction vs 2023 | Pass | 100% for non‑financial |
| Individual modifier | — | 0–150% discretion | Applied for NEOs | Justin Patrick final 152.1%; award $473,505 |
Notes: A significant portion of NEO pay is at risk; anti‑hedging/pledging applies to executive officers .
Long‑Term Incentive Plan (LTIP)
| Element | 2024 Target Value | Instrument | Vest/Measure |
|---|---|---|---|
| PRSUs (at target) | $500,000 | Performance RSUs | 3‑yr cycle (2024–2026) based on non‑GAAP diluted EPS averaged over three annual cycles, modified ±25% by relative TSR vs Russell 3000; payout 0–200% before TSR mod |
| RSUs | $500,000 | Time‑vested RSUs | 1/3 on first anniversary, then quarterly over 2 years |
2024 PRSU/RSU grant details (Feb 23, 2024):
- RSUs: 6,672 units to Patrick (fair value $499,933) .
- PRSUs: 6,672 target (max 16,680) for 2024–2026 cycle (fair value portion $185,171 for 2024 tranche) .
2022–2024 PRSU cycle (earned):
- Non‑GAAP diluted EPS results: 2022 $1.13; 2023 $3.36; 2024 $5.62 with payout schedule leading to 138.69% average, TSR ~87th percentile vs Russell 3000 → 1.12x multiplier → 155.33% earned .
- Patrick target 4,170; earned 6,477 PRSUs for 2022–2024 cycle .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 21,346 shares (<1% of outstanding) as of Mar 4, 2025 . Company had 45,570,047 shares outstanding on record date . |
| Options | 3,274 options exercisable at $87.27 expiring 2/20/2030 . |
| Unvested RSUs | 6,672 unvested (granted 2/23/2024); standard vesting 1/3 on 2/23/2025 then quarterly for two years . |
| Unearned PRSUs | 12,365 (2023–2025 max) and 16,680 (2024–2026 max) outstanding; subject to performance . |
| Upcoming RSU vesting (selected) | 2025 tranches: 2/23/2025 (412 and 2,221 shares), 2/24/2025 (1,391), 5/23/2025 (412 and 556), 8/23/2025 (413 and 556), 11/23/2025 (412 and 556); 2026 and 2027 schedules continue per table . |
| Ownership guidelines | Section 16 SVPs: 2x base salary; all covered executives met guidelines based on 12‑mo avg price at end‑2024 . |
| Hedging/pledging | Prohibited (no hedging, pledging, margin) . |
| Clawback | 2023 Incentive Compensation Recovery Policy adopted under Rule 10D‑1; legacy clawback applies pre‑Dec 1, 2023 awards . |
| Deferred comp | No EDCP balance or contributions for Patrick in 2024 . |
Employment Terms
| Item | Provision |
|---|---|
| Employment agreements | None (Itron uses policy framework) . |
| Severance (involuntary, non‑cause) | One year base salary ($415,000), one year employer benefit premiums/reimbursements, and outplacement; requires release, non‑disparagement, confidentiality, and 1‑year non‑compete (where enforceable) . |
| Change‑in‑Control (CIC) | Double‑trigger; cash severance 2x (base salary + target bonus), 2 years benefits continuation; pro‑rata annual bonus for year of termination at greater of target or actual; equity acceleration on double‑trigger; no excise tax gross‑ups; legal fee reimbursement; 1‑year non‑compete and non‑solicit (where enforceable) . |
| Scenario values (as of 12/31/2024) | Illustrative: death/disability RSU acceleration ~$1.10M and PRSUs ~$2.56M; CIC termination: severance $1.4525M, benefits $58,622, IIP $473,505, and equity acceleration values per performance/vesting assumptions . |
Compensation Structure Analysis
- Mix and at‑risk: Itron emphasizes variable pay; for NEOs (ex‑CEO) average ~78% of TDC variable; CEO 89% variable; no special perquisites; no hedging/pledging; no CIC tax gross‑ups .
- LTIP shift: 50/50 PRSU/RSU split for SVPs (higher PRSU weighting for CEO); 2024 LTIP target for Patrick increased by $450,000 to $1,000,000 to align with market .
- Pay‑for‑performance: 2024 IIP focused on profitability and growth (Adjusted EBITDA and Revenue), plus strategic non‑financial goals (GGI bookings, GHG intensity reduction); strong results yielded 152.1% payout for Patrick .
Company & Segment Performance Context (2024 vs 2023)
| Metric | 2023 | 2024 |
|---|---|---|
| Revenue ($M) | $2,173.6 | $2,440.8 |
| Adjusted EBITDA ($M) | $225.6 | $323.6 |
| Non‑GAAP diluted EPS ($) | $3.36 | $5.62 |
| Bookings ($B) | $2.155 | $2.698 |
| Device Solutions revenue ($M) | $455.7 | $476.6 |
| Device Solutions operating margin | 14.4% | 19.6% |
Governance, Policies, and Shareholder Feedback
- Anti‑hedging/pledging and insider trading policy in place; policy filed as 10‑K exhibit; prohibits hedging, pledging, margin accounts, certain derivatives .
- Stock ownership guidelines met by covered executives; SVP requirement is 2x base salary .
- Related party transactions: none requiring disclosure in 2024 .
- Say‑on‑pay: ~94% support in 2024; ongoing engagement emphasized .
Investment Implications
- Alignment: Strong linkage of Patrick’s incentives to profitability (Adjusted EBITDA), growth (Revenue, GGI bookings), and multi‑year non‑GAAP EPS/relative TSR; 2022–2024 PRSUs paid 155.33% on EPS/TSR, indicating realized pay is performance‑sensitive .
- Retention and supply overhang: Upcoming RSU tranches through 2025–2027 (e.g., multiple dates in 2025 totaling several thousand shares) may create periodic liquidity events; anti‑hedging/pledging and ownership guidelines dampen misalignment risk .
- Segment execution: Device Solutions improved revenue (+5%) and operating margin (19.6%) in 2024, supportive of Patrick’s role; continued outperformance could sustain above‑target incentive outcomes .
- Downside protections: Double‑trigger CIC, no gross‑ups, robust clawback; modest non‑cause severance suggests balanced risk‑sharing with shareholders .
- Shareholder sentiment: High say‑on‑pay support (94%) reduces governance overhang; continued focus on profitability and growth metrics aligns with investor expectations .