Patrick Tomlinson
President and Chief Executive Officer, Mercer at MMC
Executive
About Patrick Tomlinson
Patrick “Pat” Tomlinson is President and Chief Executive Officer of Mercer and Vice Chair of Marsh McLennan, effective April 1, 2024, following an October 12, 2023 appointment announcement and transition from Martine Ferland . He is a West Point graduate and former U.S. Army officer; prior to joining Mercer in 2014, he spent 17 years at Aon leading client-focused growth initiatives . Under his leadership, Mercer delivered $5.7B revenue in 2024 (+5% underlying), broadened AUM to $617B (+47% YoY via organic growth and acquisitions), and maintained high colleague engagement . Company-level performance context: MMC’s 2024 TSR was 13.7% (5-year annualized TSR 15.5%), and adjusted EPS growth used in incentive frameworks was 10.6%, with 2022 PSU awards paying 200% of target on 14.6% annualized adjusted EPS growth (TSR at 65th percentile; modifier capped) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Mercer | President (appointed during transition) | Oct 12, 2023–Mar 31, 2024 | Managed global Health, Wealth, Career; prepared CEO transition |
| Mercer | President & CEO; Vice Chair, Marsh McLennan | Apr 1, 2024–present | Drove $5.7B revenue (+5% underlying); AUM to $617B (+47% YoY); executed acquisitions (Cardano, Vanguard US OCIO; hkp//, The Talent Enterprise; Kincentric Integration) |
| Mercer | US & Canada President; Marsh McLennan US & Canada CEO | Near term overlapping responsibilities retained during transition | Led multi-line growth and transformation in region |
| Mercer | US & Canada Career business leader | 2014 onward | Scaled Career solutions in compensation, talent & analytics |
| Mercer | US East Market leader | 2018–2020 | Integrated Health, Wealth & Career offerings to meet changing client needs |
| Aon | Senior leadership roles | 17 years | Commercial growth and client execution across HR and risk adjacencies |
| U.S. Army | Officer | — | Leadership and operations discipline; West Point graduate |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| U.S. Army | Officer | — | Leadership foundation; operational rigor |
Fixed Compensation
| Year | Base Salary ($) | All Other Compensation ($) | Total ($) |
|---|---|---|---|
| 2024 | 875,000 | 72,644 | 7,356,059 |
Notes: 2024 SCT detail for Tomlinson also includes Stock Awards $2,207,679, Option Awards $1,100,049, and Non-Equity Incentive Plan Compensation $3,100,000 . 2025 compensation decisions set Base Salary at $900,000, Annual Bonus Award at $3,100,000, and Annual LTI Award at $2,300,000 (50% stock options, 50% PSUs) .
Performance Compensation
Annual Bonus Framework and Payout
| Metric | Weighting | Target | Actual | Payout/Factor |
|---|---|---|---|---|
| Mercer Net Operating Income (Financial) | 80% (Business CEOs) | 108% of prior-year NOI | 110.8% of prior-year NOI; 102.6% of target | Financial Performance Factor: 113.1% |
| Strategic Objectives | 20% (Business CEOs) | 0–150% scale | Above target (Committee assessment) | Determined via holistic assessment |
| Company Adjusted EPS Growth Multiplier | Applied to sum | 8% target | 10.6% → 1.30x multiplier | Payout capped at 200% |
| 2024 Bonus Actual (Tomlinson) | — | $1,900,000 target | $3,100,000 actual | 163% of target |
PSU Design and Results
| PSU Grant | Measure | Target | Maximum | Relative TSR Modifier | Outcome/Payout |
|---|---|---|---|---|---|
| 2022 PSU | Annualized Adjusted EPS Growth (3-yr) | 8% | Target +4pp → 200% | 50th→1.00x; 75th→1.25x; 25th→0.75x | 14.6% EPS growth → 200% payout; TSR at 65th percentile (1.15x) but cap at 200% |
| 2024 PSU (award) | Same as 2024 bonus EPS defn | 8% | Target +4pp→200% | Modifier per TSR table | Tracking above target as of 12/31/24 (directional) |
2024 Grants of Plan-Based Awards (Tomlinson)
| Grant Date | Award Type | Quantity | Exercise/Base Price ($/Sh) | Closing Price on Grant ($/Sh) | Grant-Date Fair Value ($) |
|---|---|---|---|---|---|
| 2/22/2024 | PSUs (Target) | 5,488 | — | — | 1,207,634 |
| 2/22/2024 | Stock Options | 22,091 | 200.468 | 204.260 | 1,100,049 |
| 4/1/2024 (approved 1/10/2024) | Special RSU | 4,854 | — | — | 1,000,045 |
2025 Annual LTI Awards (Granted Feb 2025)
| Name | Stock Options ($) | PSUs ($) | Total ($) |
|---|---|---|---|
| Patrick Tomlinson | 1,150,000 | 1,150,000 | 2,300,000 |
Equity Ownership & Alignment
Beneficial Ownership (as of Feb 28, 2025)
| Name | Sole Voting & Investment Power (#) | Other than Sole Voting/Investment Power (#) | Total (#) |
|---|---|---|---|
| Pat Tomlinson | 1,975 | 36,985 | 38,960 |
- Ownership guidelines: 3x base salary for named executive officers; options do not count; PSUs excluded; 5-year period to attain .
- Compliance status: As of Feb 28, 2025, all NEOs except Mr. Tomlinson exceeded required multiple; Tomlinson has until Apr 1, 2029 to reach minimum .
- Hedging/Pledging: Prohibited for senior executives and directors; margin accounts also prohibited .
- 10b5-1 and pre-clearance: Insider trading policies require pre-clearance and describe trading arrangements; policies filed as 10-K exhibits .
Outstanding Equity Awards (Dec 31, 2024)
| Instrument | Grant Date | Status | Quantity | Market/Exercise Details |
|---|---|---|---|---|
| Stock Options | 2/21/2018 | Exercisable | 2,500 | Exercise $83.046; Exp 2/20/2028 |
| Stock Options | 2/19/2019 | Exercisable | 5,609 | Exercise $90.785; Exp 2/18/2029 |
| Stock Options | 2/19/2020 | Exercisable | 5,039 | Exercise $118.865; Exp 2/18/2030 |
| Stock Options | 2/22/2021 | Exercisable/Unexercisable | 4,214 / 1,405 | Exercise $117.530; Exp 2/21/2031 |
| Stock Options | 2/23/2022 | Exercisable/Unexercisable | 1,992 / 1,992 | Exercise $151.368; Exp 2/22/2032 |
| Stock Options | 2/23/2023 | Exercisable/Unexercisable | 894 / 2,685 | Exercise $164.145; Exp 2/22/2033 |
| Stock Options | 2/22/2024 | Unexercisable | 22,091 | Exercise $200.468; Exp 2/21/2034 |
| RSU | 2/23/2022 | Unvested | 551; MV $117,038 | 100% vests 2/28/2025 |
| RSU | 2/23/2023 | Unvested | 1,219; MV $258,928 | 50% vests 2/28/2025 & 2/28/2026 |
| RSU | 3/1/2023 | Unvested | 2,455; MV $521,467 | 50% vests 3/15/2025 & 3/15/2026 |
| RSU (Special) | 4/1/2024 | Unvested | 4,854; MV $1,031,038 | 100% vests 4/15/2027 |
| PSUs (Unearned) | 2/23/2022 | Not vested | 1,652; MV $350,901 | Pays based on 3-yr performance (0–200%) |
| PSUs (Unearned) | 2/23/2023 | Not vested | 1,828; MV $388,285 | Pays based on 3-yr performance (0–200%) |
| PSUs (Unearned) | 2/22/2024 | Not vested | 10,976; MV $2,331,412 | Pays based on 3-yr performance (0–200%) |
2024 Option Exercises & Stock Vested
| Name | Option Shares Exercised (#) | Value Realized ($) | Stock Vested (#) | Value Realized ($) |
|---|---|---|---|---|
| Patrick Tomlinson | 4,126 | 516,773 | 5,225 | 1,066,793 |
Vesting Schedule (as of Dec 31, 2024)
| Grant Date | Award | Vesting Details |
|---|---|---|
| 2/23/2022 | RSU | 100% on Feb 28, 2025 |
| 2/23/2023 | RSU | 50% each on Feb 28, 2025 and Feb 28, 2026 |
| 3/1/2023 | RSU | 50% each on Mar 15, 2025 and Mar 15, 2026 |
| 4/1/2024 | Special RSU | 100% on Apr 15, 2027 |
| 2022/2023/2024 PSU Awards | PSUs | Settle based on 3-year performance; 2022 PSUs vested on Feb 28, 2025; 2023 and 2024 PSUs vest on Feb 28, 2026 and Feb 28, 2027 respectively |
Employment Terms
Core Contract Elements and Policies
- Employment letters: Base salary, target annual bonus, target annual LTI; participation in Senior Executive Severance Pay Plan; confidentiality, noncompetition, and nonsolicitation covenants (template applies to all NEOs) .
- Severance protections: Uniform cash severance equal to base salary plus three-year average annual bonus (1x multiple); no agreements above 2.99x without stockholder approval .
- Change-in-control: Double-trigger vesting for outstanding unvested equity; no excise tax gross-ups .
- Clawbacks: NYSE/SEC-compliant compensation clawback policy for erroneously awarded incentive compensation; additional clawback for specified detrimental conduct; equity plans permit clawback .
Potential Payments Upon Termination or Change in Control (Patrick Tomlinson)
| Termination Reason | Total Cash Payment ($) | Unvested Stock Awards ($) | Unvested Option Awards ($) | Accumulated Dividend Equivalents ($) | Welfare & Retirement Benefits ($) | Total ($) |
|---|---|---|---|---|---|---|
| Involuntary without cause | 5,070,000 | 2,423,386 | 0 | 45,943 | 20,971 | 7,560,300 |
| Involuntary without cause or good reason post-CIC | 3,870,000 | 3,833,363 | 648,304 | 68,265 | 20,971 | 8,440,904 |
| Death | 1,900,000 | 3,833,363 | 648,304 | 68,265 | 0 | 6,449,933 |
| Disability | 1,900,000 | 4,078,272 | 648,304 | 70,962 | 0 | 6,697,539 |
Cash payment calculation: Base $900,000 + average bonus $1,070,000 = $1,970,000; 1x severance; plus pro-rata bonus per scenario, subject to waiver/release .
Pension Benefits (2024)
| Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) |
|---|---|---|
| Patrick Tomlinson | 2.3 | 79,848 |
Investment Implications
- Pay-for-performance alignment is strong: 80% financial/20% strategic bonus weighting for business CEOs, plus company EPS multiplier; PSU awards pay 0–200% scaled to 3-year adjusted EPS with relative TSR modifier—200% cap mitigates excessive risk-taking .
- Upcoming vesting events are material: Multiple RSU tranches vest Feb/Mar 2025 and Feb/Mar 2026, with a special RSU vesting Apr 2027; PSU settlements in Feb 2026/2027 based on 3-year performance—these dates can create mechanical selling/tax-withholding flows and should be monitored for near-term supply dynamics . The company enforces pre-clearance and prohibits pledging/hedging, reducing adverse alignment risk .
- Ownership guideline shortfall is a watchpoint: Tomlinson is below the 3x salary guideline (has until Apr 1, 2029 to comply), indicating continued accumulation needs; this can support long-term alignment but may limit discretionary sales near-term .
- Severance economics are shareholder-friendly: Cash severance at 1x base+average bonus, double-trigger equity, and no excise tax gross-ups temper parachute risk and reduce change-of-control overhang .
- Execution track record is constructive: Mercer delivered persistent underlying growth (+5% underlying; 15 consecutive quarters ≥5%), scaled AUM to $617B with notable acquisitions and integrations, and maintained high engagement—supports confidence in value creation under Tomlinson’s leadership . Company-level TSR and adjusted EPS growth further support incentive payouts while preserving caps .