Mary K. Lawler
ILLINOIS TOOL WORKSAbout Mary K. Lawler
Senior Vice President and Chief Human Resources Officer at Illinois Tool Works (ITW) since October 2014; prior roles include EVP, Human Resources at GATX and leadership positions in operations, HR, and law at Tribune Media; began as an attorney. Education: BA in History (College of the Holy Cross) and JD (University of Notre Dame) . ITW’s performance context: 2024 revenue $15.9B, record EPS $11.71, operating margin 26.8%, and after-tax ROIC 31.2% . Over 2012–2024, ITW’s TSR was 449% vs 433% proxy peers and 415% S&P 500, with margin expansion from 15.9% to 26.8% and ROIC from 14.5% to 31.2% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| GATX Corporation | Executive Vice President, Human Resources | — | Led HR strategy at a global industrial lessor; relevant to talent systems and incentive alignment in heavy industry |
| Tribune Media (formerly Tribune Company) | Operations, HR, and Law leadership roles | — | Cross-functional leadership across legal, HR, and operations; governance and human capital depth |
| Private Practice | Attorney | — | Legal foundation supports contract, governance, and compensation policy rigor |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Quanex Building Products (NYSE: NX) | Director (effective Nov 1, 2025) | 2025– | Adds manufacturing HR strategy and governance expertise; potential network benefits and information flow |
Fixed Compensation
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 594,556 | 624,908 | 647,209 |
| Target Bonus (% of Salary) | 80% | 80% | 80% |
| Actual EIP Bonus Paid ($) | 1,124,010 | 1,044,797 | 293,970 |
| Perquisites ($) | 192,185 (All Other Compensation; includes perqs) | 156,690 (All Other Compensation; includes perqs) | 148,021 (All Other Compensation; includes perqs) |
| Deferred Comp (ECRIP) – Executive Contributions ($) | — | — | 112,299 |
| Deferred Comp (ECRIP) – Company Contributions ($) | — | — | 104,984 |
| Deferred Comp (ECRIP) – Aggregate Balance ($) | — | — | 3,044,166 |
Performance Compensation
| Program | Metric | Weight | Target | Actual (2024 Company) | Payout Scale | Mary K. Lawler Target & Result |
|---|---|---|---|---|---|---|
| 2024 Executive Incentive Plan (EIP) | Operating Income Growth | 60% | 106% | 103.6% achievement → 94.2% payout | 0–200% | Target 80% of salary; payout 56.5% = $293,970 |
| 2024 Executive Incentive Plan (EIP) | Organic Revenue Growth | 40% | 2.0% | -0.7% → 0% payout | 0–200% | Included in 56.5% blended payout |
| 2024–2026 PSUs & Performance Cash | Operating Margin | 33.33% | 25% target; 20% threshold; 27% max | Company metrics certified at period end | 50–200% | PSU target 1,612 units; max 3,224; threshold 806 (grant 2/9/2024) |
| 2024–2026 PSUs & Performance Cash | After-tax ROIC | 33.33% | 25% target; 20% threshold; 27% max | Company metrics certified at period end | 50–200% | Performance Cash target $412,500; max $825,000; threshold $206,250 (grant 2/9/2024) |
| 2024–2026 PSUs & Performance Cash | EPS Growth | 33.33% | 9% target; 4% threshold; 12% max | Company metrics certified at period end | 50–200% | Vest cliff at 3 years; dividends accrue as units; paid only if earned |
| 2022–2024 PSUs & Perf. Cash (Company results) | OM / ROIC / EPS | Equal weights | — | 25.0% OM avg → 150%; 29.9% ROIC avg → 200%; 8.0% EPS avg → 90% | Total payout 146.7% | Drives 2024 Performance Cash payout $550,125 |
Notes:
- 2025–2027 PSUs will add Customer-Back Innovation (CBI) Yield as a fourth equally weighted metric; performance awards payable solely as stock units (50% PSUs, 50% stock options) starting Feb 2025 .
- 2024 stock options vest in equal installments over four years (2024–2028), 10-year term, strike price equals grant-date FMV .
Equity Ownership & Alignment
| Ownership Detail (as of Dec 31, 2024) | Amount |
|---|---|
| Total Beneficial Ownership (shares) | 124,252; less than 1% of class (294,018,784 SO) |
| Savings & Investment Plan shares | 457 |
| Options exercisable within 60 days | 95,081 |
| PSUs vesting within 60 days | 2,712 |
| Options granted 2/9/2024 (unexercisable) | 11,959; strike $255.75; expire 2/9/2034 |
| PSUs granted 2/9/2024 (unvested) | 1,640 units; market value $415,734 |
| PSUs granted 2/10/2023 (unvested) | 1,766 units; market value $447,817 |
| PSUs granted 2/11/2022 (unvested) | 1,838 units; market value $465,989 |
| Stock ownership guideline | Senior Vice President: 2x salary; 5-year compliance window |
| Guideline compliance status | All execs/directors 5+ years have met/exceeded (Mary qualifies) |
| Hedging/pledging | Prohibited for executives/directors; pledged shares excluded from guidelines |
| 2024 Option Exercises (shares; value) | 23,294; $3,253,560 realized |
| 2024 Stock Vesting (shares; value) | 5,600; $1,435,952 realized |
Employment Terms
| Provision | Key Terms |
|---|---|
| Employment Agreements | None for U.S.-based executive officers; “at will” employment |
| Clawback Policy | 2023 SEC/NYSE-compliant mandatory recovery for restatements (3-year lookback); equity forfeiture for restrictive covenant violations and certain misconduct |
| Change-in-Control (CIC) Severance | Double-trigger; 2x annual cash comp (base + average bonus prior 3 years); pro-rata current-year EIP; pro-rata Performance Cash at greater of target/actual; no tax gross-ups |
| Equity Treatment – CIC | If awards not continued/replaced: options and awards accelerate; if continued/replaced, acceleration upon involuntary termination within 2 years (double-trigger) |
| Equity Treatment – Retirement/Death/Disability | Retirement: options continue vesting (with 75% forfeiture for grants <1 year from retirement); PSUs/Perf. Cash vest pro-rata, subject to performance; Death/Disability: full vest subject to performance |
| EIP payout discretion | Committee may prorate upon certain terminations; 2024 payouts unadjusted |
| Perquisites | Financial planning/tax preparation, executive physicals; tickets to sporting events (no incremental cost) |
| Pension | Not eligible for Company pension plans (joined 2014; plan closed to new entrants) |
Mary K. Lawler – Termination/CIC Economics (as of 12/31/2024)
| Scenario | Severance ($) | Benefits ($) | Current-year EIP ($) | Accelerated Options ($) | Unvested/Prorated PSUs ($) | Perf. Cash ($) | Total ($) |
|---|---|---|---|---|---|---|---|
| Retirement | — | — | 293,970 | — | — | — | 293,970 |
| Involuntary (w/o Cause) | 137,531 | 3,460 | 293,970 | — | — | — | 434,961 |
| Death/Disability | — | — | 293,970 | 691,891 | 1,329,540 | 1,187,500 | 3,502,901 |
| Termination upon CIC | 2,519,333 | — | 293,970 | 691,891 | 903,111 | 1,037,500 | 5,445,805 |
Multi‑Year Compensation Summary (NEO disclosure)
| Year | Salary ($) | Stock Awards ($) | Option Awards ($) | Non‑Equity Incentives ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2022 | 594,556 | 374,914 | 749,987 | 1,124,010 | 192,185 | 3,035,651 |
| 2023 | 624,908 | 399,913 | 799,943 | 1,044,797 | 156,690 | 3,026,251 |
| 2024 | 647,209 | 412,269 | 824,932 | 844,095 | 148,021 | 2,876,526 |
Company Performance Context (2012 vs 2024)
| Metric | 2012 | 2024 |
|---|---|---|
| Revenue ($B) | 17.9 | 15.9 |
| Operating Income ($B) | 2.8 | 4.3 |
| Operating Margin (%) | 15.9% | 26.8% |
| EPS (GAAP) ($) | 3.21 (adjusted) | 11.71 |
| After‑Tax ROIC (%) | 14.5% | 31.2% |
| Dividends Declared per Share ($) | 1.48 | 5.80 |
| Market Cap ($B) | 23 | 75 |
| TSR vs Peers/S&P500 (2012–2024) | 449% / 433% / 415% | — |
Compensation Structure Highlights (Alignment Signals)
- Performance‑weighted pay: NEO average target compensation 80% performance‑based; no time‑vested full‑value awards for NEOs .
- Metrics rigor: EIP based on organic revenue and operating income growth; LTI PSUs/Performance Cash on 3‑yr average OM, ROIC, EPS growth (equal weights) .
- 2025 changes: Eliminate cash portion of performance awards; add CBI Yield as fourth metric (equal weight) .
- Ownership alignment: Senior VP guideline 2x salary; 5‑year holding until met; all 5+ year execs compliant .
- Governance safeguards: Anti‑hedging/anti‑pledging; SEC/NYSE clawback policy; no option repricing; double‑trigger CIC only; no tax gross‑ups .
Investment Implications
- Pay-for-performance linkage is strong: Mary’s 2024 EIP payout at 56.5% of target reflects below‑target organic revenue and near‑target operating income growth—reducing cash bonus sensitivity to short‑term underperformance .
- Equity incentives dominate and are tightly vesting: Significant unvested PSUs and multi‑year option vesting drive retention and alignment; CIC treatment is double‑trigger with 2x cash, limiting windfall risk .
- Selling pressure monitor: 2024 option exercise and stock vesting values were meaningful ($3.25M exercised; $1.44M vested), which can indicate liquidity events; ongoing monitoring of Form 4s advisable for any sustained selling trends .
- Governance risk appears low: Prohibitions on hedging/pledging and robust clawback materially reduce misalignment and reputational risk; say‑on‑pay support remains high (93–94% range in recent years) .
- External directorship adds network value: Appointment to Quanex’s board (effective Nov 1, 2025) broadens manufacturing governance insight and may enhance talent/compensation benchmarking intelligence .