John Donofrio
Johnson Controls InternationalAbout John Donofrio
Executive Vice President and General Counsel of Johnson Controls International plc since November 2017, with responsibility for legal, compliance, governance, and political engagement oversight (chairs the company’s PAC steering committee) . During his tenure, JCI delivered FY2024 revenue growth of 2% overall (4% organic) to $27.4B, service revenue growth of 7% (8% organic), record backlog of $13.1B (+7% YoY), and adjusted EPS of $3.71; cumulative TSR rose to 208 (vs 178 for S&P 500 Industrials) and EBIT Growth was 8.8% . His compensation is tied to multi‑year metrics including pre‑tax earnings growth, recurring revenue, and relative TSR vs S&P 500 Industrials .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Mars, Incorporated | Vice President, General Counsel & Secretary | 2013–2017 | Led global legal and governance at a major CPG company . |
| The Shaw Group Inc. | EVP, General Counsel & Secretary | 2009–2013 | Supported global engineering and construction operations and transactions . |
| Visteon Corporation | SVP, General Counsel & Chief Compliance Officer | 2005–2009 | Oversight of compliance and IP in global auto supplier . |
| Honeywell/AlliedSignal | VP Intellectual Property; VP & General Counsel, Honeywell Aerospace | 1996–2005 | Led IP strategy and aerospace legal operations . |
| Kirkland & Ellis LLP | Partner | 1989–1996 | Complex litigation and IP; prior clerkship at U.S. Court of Appeals for the Federal Circuit and USPTO Patent Examiner . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| FARO Technologies, Inc. | Director; Lead Director (2018–2019); Chairman (2019–2022) | 2008–present | Long‑standing board service; governance leadership . |
| Medical College of Wisconsin | Board of Trustees | N/A | Trustee service . |
Fixed Compensation
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Base salary and annual incentive
- FY2024 base salary: $700,000 (unchanged vs FY2023) .
- FY2024 target bonus: 90% of salary ($630,000) .
- FY2024 actual AIPP paid: $665,280 (106% of target) .
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Perquisites (FY2024)
- Aircraft personal use: $14,256; retirement plan contributions: $93,246; company vehicle: $15,000; total “All Other Compensation”: $122,502 .
Multi‑year summary compensation (USD)
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $700,000 | $700,000 | $700,000 |
| Stock/Unit Awards | $1,801,465 | $1,860,272 | $1,662,506 |
| Option Awards | $549,985 | $549,997 | $549,998 |
| Non‑Equity Incentive (AIPP) | $505,260 | $465,570 | $665,280 |
| All Other Compensation | $141,022 | $145,071 | $122,502 |
| Total | $3,697,732 | $3,720,909 | $3,700,286 |
Performance Compensation
Annual Incentive Performance Program (FY2024 design and outcome)
| Metric | Weighting | Target Goal | Actual | Payout Factor |
|---|---|---|---|---|
| EBIT Growth | 1/3 | Company‑set, disclosed in CD&A | FY2024 EBIT Growth 8.8% | 96% enterprise factor (part of financial/strategic) . |
| Revenue Growth | 1/3 | Company‑set | FY2024 revenue +2% overall; +4% organic | Included in the 96% factor . |
| Free Cash Flow Conversion | 1/3 | Company‑set | Company targeted strong cash generation | Included in the 96% factor . |
| Strategic Initiative Modifier (Organic Service Revenue Growth) | +/-15% | >12% adds +15%; <7.5% subtracts −15% | 8.2% → 0% modifier . | |
| Business Unit Modifier | N/A | 100% baseline | Assessed at 100% for all NEOs . | |
| Individual Modifier | N/A | ±10%/−25% | Donofrio: 110% . |
Net AIPP payout factor for Donofrio: 106% (Financial/Strategic 96% × BU 100% × Individual 110%) → Award $665,280 .
Long‑Term Incentive (FY2024 grants and PSU metrics)
| Instrument | Grant Date | Shares/Units | Key Terms | Grant Date Fair Value |
|---|---|---|---|---|
| Options | 12/18/2023 | 40,029 | Strike $53.52; vest 50% at 2 yrs, 50% at 3 yrs | $549,998 |
| RSUs | 12/18/2023 | 10,276 | Equal annual tranches over 3 yrs | $549,972 |
| PSUs (threshold/target/max) | 12/18/2023 | 3,426 / 20,553 / 41,106 | 3‑yr metrics: Pre‑tax Earnings Growth (1/3), Recurring Revenue (1/3), Relative TSR vs S&P 500 Industrials (1/3); payout 50%–200% | $1,112,534 |
PSU performance (fiscal 2022–2024 cycle)
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout |
|---|---|---|---|---|---|---|
| Pre‑tax Earnings Growth | 1/3 | $818 | $1,000 | $1,435 | $888 | 69% |
| Recurring Revenue | 1/3 | $208 | $535 | $881 | $634 | 129% |
| Relative TSR vs S&P 500 Industrials | 1/3 | ≥25th pct | 50th pct | ≥75th pct | 28th pct | 55% |
| Final PSU Payout (weighted) | — | — | — | — | — | 84.3% |
Equity Ownership & Alignment
- Beneficial ownership: 260,503 JCI shares (<1% of outstanding) . Includes options exercisable within 60 days: 228,820; RSUs vesting within 60 days: none for Donofrio (group total shown) .
- Unvested awards at FY2024 year‑end:
- RSUs: 18,649 shares; market value $1,447,411 (at $77.61) .
- PSUs (at stated performance basis): 88,657 shares; market/payout value $6,880,670 .
- Options outstanding by series (selected): 37.36 (12/07/2027) 70,921; 33.39 (12/06/2028) 89,928; 41.75 (12/05/2029) 75,445; 45.69 (12/10/2030) 58,760; 79.54 (12/08/2031) 14,793; 66.77 (12/08/2032) 30,203; 53.52 (12/18/2033) 40,029 .
- Scheduled vesting (near‑term supply):
- RSUs: 12/08/2024 5,326; 12/18/2024 3,486; 12/05/2025 3,486; 12/08/2025 2,864; 12/07/2026 3,487 .
- PSUs: 12/08/2024 12,457; 12/08/2025 34,360; 12/07/2026 41,840 .
- Options vesting tranches (illustrative): 12/08/2024 14,793 (79.54) and 15,101 (66.77); 12/05/2025 20,015 (53.52); 12/08/2025 15,102 (66.77); 12/07/2026 20,015 (53.52) .
- Policies: Robust executive share ownership requirement of 3x base salary for NEOs ; anti‑hedging and anti‑pledging policy (insider trading policy prohibits margin accounts/pledges for Directors and Section 16 Officers except by prior written approval; trading pre‑clearance and blackout rules apply) .
Employment Terms
- Severance & change‑in‑control (CIC) mechanics (double‑trigger; no single‑trigger vesting; no tax gross‑ups) :
- CIC with qualified termination: Cash severance equals 2x (salary + target bonus) for Donofrio; benefits continuation for 24 months; accelerated vesting of unvested equity per plan terms. As of 9/30/2024 illustrated value: severance $3,290,002; benefits $192,800; equity acceleration $6,842,906 .
- Involuntary termination without cause (non‑CIC): Cash severance equals 1.5x (salary + target bonus) for Donofrio; benefits continuation for 18 months; equity acceleration per plan terms. Illustrated value: severance $1,995,001; benefits $63,000; equity acceleration $3,524,649 .
- Retirement eligibility: As of 9/30/2024, Donofrio was retirement eligible; on retirement, options/RSUs accelerate and vest pro‑rata; PSUs earned based on actual performance pro‑rated for service .
- Clawback: Mandatory recoupment for financial restatements; discretionary recoupment for misconduct that may cause reputational harm; broader recoupment for culpable individuals .
- Insider trading, 10b5‑1, blackouts: Pre‑clearance required; quarterly and special blackouts enforced; 10b5‑1 plans permitted under policy .
Performance & Track Record
- Company outcomes under his tenure include portfolio simplification (divestitures announced for Residential & Light Commercial HVAC and Air Distribution Technologies), strong service/order growth, data center cooling leadership, and cumulative TSR outperformance vs S&P 500 Industrials as of FY2024 .
- Donofrio chairs PAC steering committee and co‑leads oversight of political spending governance processes .
Compensation Structure Analysis
- Mix emphasizes at‑risk pay: Equity at 75% of LTI split into PSUs (50%), options (25%), RSUs (25%); options/RSUs vesting over 2–3 years and PSUs on 3‑year cycles aligns incentives to multi‑year performance .
- PSU metrics balanced among earnings, recurring revenue, and relative TSR; 2022–2024 payout at 84.3% demonstrates downside sensitivity when TSR/earnings underperform even as recurring revenue exceeded target .
- AIPP includes quantitative financial measures with capped payouts (200%), strategic modifier, BU and individual modifiers; FY2024 payout for Donofrio modestly above target (106%) reflecting enterprise performance and individual contribution .
Related Party & Risk Indicators
- Anti‑hedging/anti‑pledging and pre‑clearance policies reduce misalignment and trading‑related risks .
- No tax gross‑ups; double‑trigger CIC; no option re‑pricing without shareholder approval .
- Retirement eligibility may influence timing of equity realizations under policy terms .
Investment Implications
- Alignment: Strong pay‑for‑performance architecture (PSUs tied to earnings/recurring revenue/relative TSR; AIPP tied to EBIT/revenue/FCF) with clawback and anti‑hedging/pledging enhances shareholder alignment .
- Near‑term supply considerations: Significant scheduled vesting in 2025–2026 (PSUs/RSUs/options) could lead to programmatic selling via 10b5‑1 plans; policy blackouts suggest sales concentration outside reporting windows .
- Retention risk: Retirement eligibility introduces potential voluntary transition flexibility, but severance terms are standard and equity treatment (pro‑rata) mitigates windfalls; overall retention risk appears manageable .
- Governance quality: No single‑trigger CIC, no tax gross‑ups, rigorous clawback and ownership requirements are positives; PAC oversight centralized under General Counsel offers transparency on political activity governance .