Alok Maskara
LENNOX INTERNATIONALAbout Alok Maskara
Alok Maskara is Chief Executive Officer and a Class III Director of Lennox International Inc. (LII), age 54, serving as CEO since May 9, 2022 and director since 2022 . He holds a B.Tech in Chemical Engineering (IIT), M.S. in Chemical Engineering (University of New Mexico), and MBA (Northwestern Kellogg) . Under his leadership, LII delivered record 2024 results with revenue up 7% (~$5.3B), net income up 37% to $807M, operating profit margin up 350 bps to 19.4%, operating cash flow up 28% to $946M, and one-year TSR of 37% (three-year 95%, five-year 166%) . Pay-versus-performance disclosures show 2024 “compensation actually paid” (CAP) to Maskara of $26.2M, alongside strong TSR and net income trends .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Luxfer Holdings PLC | Chief Executive Officer and Director | 2017–2022 | Spearheaded transformation; value-enhancing acquisitions/partnerships; drove profitability growth |
| Pentair PLC | President, Global Business Units (incl. former Technical Solutions segment >$2B revenue) | 2008–2017 | Led global business units in water treatment and sustainable applications |
| General Electric | General Manager, Residential & Commercial Water | 2004–2008 | Significant Lean Manufacturing experience |
| McKinsey & Company | Engagement Manager | 2000–2004 | Industrial turnarounds; growth via customer insights/segmentation |
External Roles
| Organization | Role | Years |
|---|---|---|
| Franklin Electric Co., Inc. | Director | 2021–present |
Fixed Compensation
| Year | Base Salary ($) | All Other Compensation ($) | Notes |
|---|---|---|---|
| 2022 | 667,792 | 277,560 | Sign-on cash $1,000,000 with two-year clawback; initial annual base $1,034,000; perquisite allowance $30,000 |
| 2023 | 1,064,750 | 1,188,979 | |
| 2024 | 1,131,250 | 272,814 | Base set at $1,075,000 Jan 1 2024, raised 7% to $1,150,000 effective Apr 1 2024 |
| Item | Detail |
|---|---|
| STI Target % | CEO participates in STI program; target 120% of base salary per appointment terms |
| CEO Life Insurance | $3 million coverage |
| Director cash/equity (non-employee) | Non-employee directors receive $105,000 cash retainer and ~$150,000 stock grant annually; applies to non-employee directors (CEO is employee director) |
Performance Compensation
Short-Term Incentive (STI) – 2024 Program and Outcome
| Metric | Weight | Threshold ($000s) | Target ($000s) | Max ($000s) | Actual ($000s) | Payout Factor |
|---|---|---|---|---|---|---|
| Company Core Net Income | 50% | 545,600 | 682,000 | 795,700 | 808,396 | 217% (overall company factor) |
| Company Free Cash Flow | 30% | 367,500 | 525,000 | 700,000 | 784,190 | 217% (overall company factor) |
| Company Core Revenue | 20% | 4,500,000 | 5,000,000 | 5,500,000 | 5,344,437 | 217% (overall company factor) |
| STI Paid – 2024 | Amount ($) |
|---|---|
| Non-Equity Incentive Plan Compensation (Maskara) | 2,948,762 |
Program features: 75% formulaic, 25% individual modifier (0–225%); for 2024, payouts calculated on pre-established goals with no discretionary or individual modifier adjustments; company factor ~217% .
Long-Term Incentive (LTI) Grants – February 5, 2024
| Instrument | Target Award Value ($) | Shares/Units Granted | Vesting / Terms |
|---|---|---|---|
| PSUs | 2,850,000 | 6,482 | 3-year performance period ending 12/31/2026; dividends not paid; metrics set annually |
| RSUs | 1,710,000 | 3,889 | Time-based; vest/distribute in shares on 3rd anniversary; no dividends |
| SARs | 1,140,000 | 8,360 | Vest 1/3 annually over 3 years; expire 7 years; exercise price $418.69; grant-date fair value per SAR $134.62 |
Equity grant practices: LTI grant date set three trading days after Q4 earnings release; SAR exercise price equals average of high/low NYSE price on grant date; no timing to MNPI; minimum one-year vesting for ≥95% of awards .
PSU Results – December 2021 Grant (Performance Period 2022–2024)
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout |
|---|---|---|---|---|---|---|
| ROIC (3-year weighted avg) | 50% | 20% | 30% | 40% | 48.4% | 200% |
| Company Core Net Income CAGR | 50% | 6% | 12% | 20% | 20.1% | 200% |
2024 vesting/realization: Maskara received 18,676 PSUs and 2,335 RSUs vested in 2024, realizing $10,640,464 and $1,129,440 respectively; no SARs exercised in 2024 .
Equity Ownership & Alignment
Beneficial Ownership (as of March 15, 2025)
| Holder | Common Stock Held (#) | Acquirable Within 60 Days (#) | Total Beneficially Held (#) | % of Class |
|---|---|---|---|---|
| Alok Maskara | 14,437 | 12,817 (vested SARs) | 27,254 | <1% |
Stock ownership guidelines and compliance:
- CEO guideline: 6x base salary; as of Dec 31, 2024 Maskara’s counted shares and unvested RSUs totaled 12,861, equating to 6.0x base salary (measured at average daily closing price $536.86 in 2024) .
- Hedging and pledging are prohibited for directors and employees; securities may not be held in margin accounts or pledged as collateral .
- Clawback policy: recovery of excess incentive compensation upon financial restatement (preceding 3 fiscal years) .
Outstanding Equity Awards at 12/31/2024 (Market Price $609.30)
| Instrument | Grant Date | Unexercised Exercisable (#) | Unexercised Unexercisable (#) | Exercise Price ($) | Expiration | Unvested RSUs (#) | RSU Market Value ($) | Unearned PSUs (#) | PSU Market Value ($) |
|---|---|---|---|---|---|---|---|---|---|
| SARs | 12/9/2022 | 10,031 | 5,016 | 259.56 | 12/9/2029 | — | — | — | — |
| SARs | 2/5/2024 | — | 8,360 | 418.69 | 2/5/2031 | — | — | — | — |
| RSUs | — | — | — | — | — | 9,750 | 5,940,675 | — | — |
| PSUs | — | — | — | — | — | — | — | 32,500 | 19,802,250 |
2024 exercises/vests summary (Maskara): SARs exercised: 0; RSUs vested: 2,335 ($1,129,440); PSUs vested: 18,676 ($10,640,464) .
Employment Terms
Employment Agreement (Key Provisions)
- Start date and term: Effective on commencement May 9, 2022; in effect until December 31 of that year and automatically renews annually each January 1, unless either party gives ≥30 days notice not to renew .
- Severance (enhanced): If terminated without cause, for good reason, or disability, enhanced severance includes 12 months base salary (<3 years of service) or 24 months (≥3 years), lump-sum of prior 12 or 24 months STI payments, 10% of base salary in lieu of perquisites, 10% in lieu of outplacement or actual outplacement, and COBRA premiums up to 18 months plus up to 6 months equivalent .
- Non-compete and non-solicit: 24 months post-termination non-compete and non-solicit of employees/customers/vendors; injunctive relief and cessation of payments upon breach .
- Arbitration: Binding arbitration for employment disputes; governed by FAA and Texas law .
Change-in-Control (CIC) Severance Plan (Current)
- Double-trigger: CIC benefits contingent on termination without cause or for good reason within two years post-CIC (or within six months pre-CIC) .
- CEO cash severance: Three times annual base salary and three times target bonus; plus prorated target bonus; COBRA for up to 36 months; immediate vesting of SARs/RSUs/PSUs with PSUs deemed earned at greater of target or actual; SARs exercisable for 90 days .
- Market-aligned changes adopted Dec 2022: Replaced single-trigger equity vesting with double-trigger; eliminated excise tax gross-ups; reduced non-CEO multiples to 2x base+bonus; replaced perquisite and outplacement cash with actual services; reduced non-CEO health coverage from 36 to 24 months .
Potential Payments (as of 12/31/2024)
| Scenario | Base Salary ($) | Bonus ($) | Prorated Target Bonus ($) | Perquisites/Outplacement/Health ($) | LT Equity Accelerated ($) | Total ($) |
|---|---|---|---|---|---|---|
| Enhanced Severance (Good Reason/Not for Cause) | 1,150,000 | 2,729,934 | — | 289,807 (115,000 perqs + 115,000 outplacement + 59,807 health) | — | 4,280,318 |
| Change in Control (Double Trigger) | 3,450,000 | 4,140,000 | 1,380,000 | 98,607 (92,632 health + 5,975 outplacement) | 19,189,595 | 28,368,779 |
| Death | 287,500 | — | — | 17,206,618 (incl. equity and benefits) | 17,096,041 | 17,494,118 |
| Disability | 1,150,000 | 2,729,934 | — | 1,325,577 (incl. health) | 17,096,041 | 21,316,552 |
Definitions of “good reason,” “CIC,” and “change in control” events are specified in plan; failure to re-elect an executive serving on board is included in “good reason” under CIC plan .
Retirement and Deferred Compensation
| Plan | Eligibility/Balance |
|---|---|
| Frozen Consolidated Pension Plan | Not eligible |
| Supplemental Retirement Plan (Closed) | Not eligible |
| Defined Contribution Supplemental Restoration Plan (Nonqualified) | Company contributions $210,971; earnings $41,714; aggregate balance $358,123 (2024) |
Board Governance and Director Service
- Board service: Class III Director since 2022; nominated for re-election to term expiring 2028; serves on the Executive Committee .
- Independence: Maskara is not independent (CEO); Board requires majority independent and all key committees (Audit, Compensation & HR, Board Governance) are fully independent .
- Leadership: Independent Chair of the Board (Todd J. Teske); regular executive sessions of non-management directors; majority voting; robust stock ownership guidelines (5x retainer for directors; 6x salary for CEO; 3x for EVPs) .
- Committee overview: Compensation & HR Chair Shane D. Wall; members John W. Norris III, Gregory T. Swienton, Jon Vander Ark; independent compensation consultant Meridian Compensation Partners; five meetings in 2024 .
- Governance highlights: No directors attended less than 75% of meetings; anti-hedging/pledging policies; no material related-party transactions noted .
Director Compensation (Non-Employee Program)
| Component | Amount |
|---|---|
| Annual Cash Retainer | $105,000 |
| Annual Equity Grant (Common Stock) | ~$150,000 |
| Leadership Retainers | Chair $150,000; Audit Chair $25,000; Compensation Chair $20,000; Governance Chair $20,000 |
| Ownership Guideline | 5x annual retainer within five years |
Note: Applies to non-employee directors; CEO is an employee director and is not counted among non-employee participants .
Compensation Peer Group and Say-on-Pay
- Compensation peer group (used in pay-versus-performance): A. O. Smith, Acuity Brands, Dover, Flowserve, Fortune Brands Innovations, Hubbell, IDEX, Masco, Owens Corning, Pentair, Regal Rexnord, Rockwell Automation, Snap-On, Timken, Xylem .
- Say-on-Pay outcomes: 2024 approval ~97% ; 2025 approval ~93% (26,396,570 for; 2,057,457 against; 20,476 abstain) .
Multi-Year CEO Compensation Summary
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 667,792 | 1,064,750 | 1,131,250 |
| Bonus ($) | 1,000,000 | — | — |
| Stock Awards ($) | 6,708,818 | — | 4,429,662 |
| Option/SAR Awards ($) | 971,133 | — | 1,125,423 |
| Non-Equity Incentive ($) | 472,476 | 2,729,934 | 2,948,762 |
| All Other Compensation ($) | 277,560 | 1,188,979 | 272,814 |
| Total ($) | 10,097,779 | 4,983,663 | 9,907,911 |
Additional Company Performance Reference (2024)
| Measure | Result |
|---|---|
| Revenue | ~$5.3B; +7% YoY |
| GAAP Diluted EPS | $22.54 (+36% YoY) |
| Adjusted Diluted EPS | $22.58 (+26% YoY) |
| Operating Profit Margin | 19.4% (+350 bps) |
| Operating Cash Flow | $946M (+28% YoY) |
| Free Cash Flow | $785M (+61% YoY) |
| TSR | 1-year 37%; 3-year 95%; 5-year 166% |
Board-Service Dual Role Implications
- Dual role: CEO and Director; sits on Executive Committee with independent Chair and committee chairs .
- Independence safeguards: Independent Chair; fully independent Audit/Comp/Governance Committees; regular executive sessions; majority independent board (88% of continuing directors) .
- No separate non-employee director pay applicable to CEO; director ownership guidelines apply to non-employee directors, while CEO adheres to 6x salary guideline .
Investment Implications
- Strong pay-for-performance alignment: 2024 STI payout factor 217% and PSU vest at 200% were driven by exceeding net income, FCF, revenue, ROIC, and core net income growth targets; say-on-pay support remained high (93%–97%), signaling investor acceptance of incentive design .
- Retention and overhang: Significant unearned PSUs (32,500) and unvested RSUs (9,750) as of year-end 2024 create ongoing equity-linked retention but also potential supply upon vesting; 2024 realized vesting value was substantial ($11.77M combined RSU/PSU), though no SAR exercises occurred .
- Deal protection: CIC plan’s double-trigger vesting, CEO 3x base+bonus severance, and 36-month health benefits lower management flight risk in M&A while reducing prior shareholder-unfriendly features (no excise tax gross-ups; replaced single-trigger) .
- Governance/independence: Independent Chair and fully independent compensation oversight with an external consultant mitigate dual-role risks and support disciplined incentive setting; CEO meets 6x ownership guideline, with prohibitions on hedging/pledging strengthening alignment .