Axel R. J. Beck
ILLINOIS TOOL WORKSAbout Axel R. J. Beck
Axel R. J. Beck is an Executive Vice President at Illinois Tool Works (ITW) based in Germany; his compensation is paid in EUR and he participates in German pension schemes, with 31 years of credited service in the Hobart GmbH Management Pension Scheme and 23 years in the Hobart GmbH Executive Pension Scheme . Company performance during 2024 included $15.9B revenue, record operating income of $4.3B, operating margin of 26.8%, after-tax ROIC of 31.2%, and EPS of $11.71; from 2012–2024 ITW delivered total shareholder return of 449% vs 433% for peers and 415% for the S&P 500 . Executive incentives are tightly linked to rigorous performance metrics (Operating Margin, After-tax ROIC, EPS growth; and, beginning 2025, Customer-Back Innovation “CBI” Yield) with explicit payout scales and no time-vested full-value awards to NEOs .
Past Roles
Not disclosed in the 2025 DEF 14A. ITW indicates Mr. Beck’s German pension accruals are via Hobart GmbH schemes, evidencing long-tenured service in ITW’s German operations .
External Roles
Not disclosed in the 2025 DEF 14A.
Fixed Compensation
| Component | 2024 | Notes |
|---|---|---|
| Base Salary (USD) | $618,918 | Paid in EUR; converted at 1.0819 EUR/USD |
| Target Bonus (% of Salary) | 90% | Executive Incentive Plan (EIP) target |
| Perquisites | $22,181 | Company-leased vehicle in Germany, executive physicals; financial planning/tax not applicable to Beck |
| Pension – Present Value | $1,563,355 total ($33,612 Mgmt; $1,529,743 Exec) | German schemes; PV using 3.20% discount rate |
Performance Compensation
Annual Executive Incentive Plan (EIP) – 2024
| Metric | Weight | Target | Actual | Payout Scale | Payout Result |
|---|---|---|---|---|---|
| Operating Income Growth (Company) | 60% | 106% | 103.6% | 85%→50%; 106%→100%; 116%→200% | 94.2% |
| Organic Revenue Growth (Company) | 40% | 2.0% | -0.7% | 0%→0%; 2%→100%; 5%→200% | 0.0% |
| Company Total | — | — | — | — | 56.5% payout |
| Segment Performance (Beck’s segment) | 50% of Beck’s EIP | — | — | — | 52.3% payout |
| Beck Total EIP Payout | — | — | — | — | 54.4% payout; $303,134 |
Long-Term Incentives (LTI) – Grant details and performance framework
| Award Type | Grant Date | Quantity/Value | Key Terms | Payout Framework |
|---|---|---|---|---|
| Stock Options | 2/9/2024 | 10,510 options; $724,980 fair value; $255.75 strike | 4-year ratable vesting; 10-year expiration (2/9/2034) | Options have value only with stock price appreciation |
| Performance Share Units (PSUs) | 2/9/2024 | Target 1,417 units; grant date fair value $362,398 | 3-year cliff vest (2024–2026) | Equally weighted metrics: OM 33.33%, ROIC 33.33%, EPS growth 33.33%; Threshold 50%, Target 100%, Max 200% |
| Performance Cash | 2/9/2024 | Target $362,500 | 3-year performance (2024–2026); paid in cash | Same metrics/scale as PSUs |
| 2022–2024 PSU/Perf Cash Payout (Company-level) | — | — | — | OM 25.0% avg →150%; ROIC 29.9% avg →200%; EPS growth 8.0% avg →90%; Total 146.7% of target |
Upcoming LTI Mix/Metric changes (for context)
- 2025 awards: eliminate Performance Cash; LTI mix 50% PSUs / 50% stock options; add CBI Yield as fourth PSU metric with equal weighting .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (as of 12/31/2024) | 55,167 shares beneficially owned; includes 50,142 options exercisable within 60 days and 1,989 PSUs vesting within 60 days; <1% of class |
| Outstanding Equity (12/31/2024) | Unexercisable options by grant: 10,510 (2024, $255.75), 7,817 (2023, $235.52), 6,091 (2022, $217.72); unvested PSUs: 1,441 (2024), 1,546 (2023), 1,348 (2022) |
| Stock Ownership Guidelines | EVP guideline: 3× salary; 5-year horizon; retain 100% net after-tax vested/exercised shares until compliant |
| Compliance Status | All executive officers/directors in roles ≥5 years meet/exceed guidelines |
| Hedging/Pledging | Prohibited for executive officers/directors; pledged shares excluded from guidelines |
| 2024 Option Exercises | None by Beck; stock awards vested: 2,610 shares; value realized $669,256 |
Employment Terms
| Provision | ITW Policy / Beck-specific amounts |
|---|---|
| Employment Agreements | No U.S.-based executive employment agreements; executives are at-will |
| Clawback | Mandatory recovery for restatements (SEC/NYSE compliant, 2023 policy); forfeiture for restrictive covenant violations/misconduct |
| Change-in-Control (CIC) Vesting | Double-trigger only (CIC + qualifying termination); no single-trigger vesting |
| CIC Severance Economics | 2× annual cash comp (base + avg bonus prior 3 yrs); pro-rated current-year EIP at target/greater; pro-rated Performance Cash at target/greater; no tax gross-ups |
| Involuntary Termination (no cause) | Severance: 1 week per year of service; benefits based on years of service |
| Equity Treatment on Retirement | Options: awards ≥1 year from retirement continue vesting; awards <1 year from retirement: 25% continue, 75% forfeited; PSUs/Perf Cash pro-rata vest, paid post-period based on performance |
| Beck—Estimated Payments at 12/31/2024 (scenarios) | Retirement: $1,865,498; Involuntary (w/o cause): $731,616; Death/Disability: $2,901,775; Termination upon CIC: $4,837,633 |
Compensation Structure Analysis
- Equity-heavy, performance-oriented mix: 2024 LTI was 50% stock options, 25% PSUs, 25% Performance Cash; no time-vested RSUs for NEOs, directly tying payouts to stock/financial performance .
- Annual bonus discipline: Company underperformed organic revenue target; EIP paid 56.5% on company results; Beck’s segment underperformed (52.3%), leading to 54.4% total payout, demonstrating negative leverage on missed goals .
- Long-term performance delivery: 2022–2024 PSU/Performance Cash paid at 146.7% of target on multi-year OM/ROIC/EPS achievements, reinforcing pay-for-performance .
- Governance safeguards: No repricing; no hedging/pledging; robust clawback; double-trigger CIC; strong ownership rules .
Say-on-Pay & Shareholder Feedback
| Year | Say-on-Pay Approval |
|---|---|
| 2022 | 93.4% |
| 2023 | 93.1% |
| 2024 | 93.9% |
Shareholders expressed strong support for governance practices and compensation alignment in 2024 engagements; discussions included CEO transition and termination pay proposal context .
Compensation Peer Group (Benchmarking context)
| Peer Group (2024) |
|---|
| 3M; Caterpillar; Cummins; Deere; Dover; Eaton; Ecolab; Emerson; Fortive; General Dynamics; Honeywell; Johnson Controls; Parker-Hannifin; PPG; Rockwell Automation; Stanley Black & Decker; Trane Technologies |
- Target total compensation positioned at median of peer group; individual levels reflect role scope and performance .
Equity Ownership & Pledging Details
- Anti-pledging and anti-hedging policies strictly prohibit such activities for executives/directors; pledged shares excluded from guideline calculations .
- All executives/directors ≥5 years in role are compliant with ownership guidelines, aligning incentives with shareholders .
Related Party Transactions & Red Flags
- ITW prohibits conflicts and reviews related-party transactions via governance processes; no Beck-specific related-party transactions disclosed .
- No tax gross-ups; no option repricing; mandatory clawback policy; prohibition on hedging/pledging—favorable alignment signals .
Performance & Track Record (Company context)
| Metric | 2012 | 2024 |
|---|---|---|
| Operating Margin | 15.9% | 26.8% |
| After-tax ROIC | 14.5% | 31.2% |
| EPS (GAAP) | $3.21 (adjusted basis noted) | $11.71 |
| Market Cap | $23B | $75B |
| TSR vs Peers | — | 449% ITW vs 433% peers; 415% S&P 500 (2012–2024) |
Investment Implications
- Alignment: Beck’s pay is predominantly at-risk and linked to multi-year OM/ROIC/EPS, with ownership standards, anti-hedging/pledging, and clawback supporting strong alignment; his 2024 EIP payout was reduced due to company/segment underdelivery on organic revenue, consistent with discipline .
- Retention/pressure: Beck exercised no options in 2024 and had modest stock vesting; sizable unexercisable options and unvested PSUs (with multi-year performance gates) suggest limited near-term selling pressure tied to vesting schedules, though PSUs vest pro-rata on retirement and accelerate on death/disability .
- Change-in-control economics: Double-trigger CIC with 2× cash comp plus pro-rated incentives and accelerated equity under certain conditions; absence of gross-ups and single-trigger vesting reduces shareholder risk while providing competitive protection for retention through strategic events .
- Forward indicators: Addition of CBI Yield as a PSU metric from 2025 increases incentives for organic growth innovation; monitoring segment-level organic growth and operating income trends under Beck’s purview is key for anticipating EIP outcomes and PSU realizations .