Perry Zheng

About Perry Zheng

Peiming (Perry) Zheng serves as Executive Vice President & Chief Product, Delivery and Customer Officer and was one of Otis’s named executive officers (NEOs) for 2024 . He is retirement-eligible (noted in equity vesting disclosures) and previously operated on an international assignment based in China through March 2023, underscoring deep operating experience in Otis’s key market . Company performance under the current leadership delivered 2024 results of Service organic sales +6.8%, maintenance portfolio +4.2%, adjusted operating profit margin +50 bps, adjusted diluted EPS +8.2%, operating cash flow ~$1.6B and adjusted free cash flow ~$1.6B; modernization orders +12.1% and modernization backlog up 13% at constant currency .

Fixed Compensation

Multi‑Year Summary Compensation (Otis reported, USD)

Metric	2022	2023	2024
Salary ($)	$635,000	$671,667	$694,250
Bonus ($)	–	–	–
Stock Awards ($)	$1,024,830	$1,447,259	$4,839,430
Option/SAR Awards ($)	$330,255	$461,380	$589,840
Non‑Equity Incentive (STI) ($)	$493,000	$574,000	$701,000
Change in Pension/Deferred Comp ($)	–	–	–
All Other Compensation ($)	$1,423,362	$2,020,908	$985,782
Total ($)	$3,906,447	$5,175,214	$7,810,302

STI Target and Payment (2024)

Salary ($)	Target STI %	Financial Performance Payout Factor %	ESG Multiplier	Individual Performance Payout Factor %	STI Payment ($)
$700,000	90%	99%	1.075	105%	$701,000

All Other Compensation Detail (2024)

Vehicle ($)	Company Deferred Contributions ($)	Financial Planning ($)	Health ($)	International Assignment ($)	Misc. ($)	Total ($)
$26,065	$115,411	$16,000	$21,190	$805,550 (net tax settlement China→U.S.)	$1,566	$985,782

Performance Compensation

2024 STI Design and Outcomes

Metric	Weighting (%)	Target	Actual	Payout Factor (%)
Adjusted Net Income ($M)	40	1,552	1,564	46
Adjusted Free Cash Flow ($M)	30	1,579	1,571	29
Organic Sales Growth (%)	15	2.8	1.4	13
New Equipment Orders Growth (%)	15	-2.5	-7.6	11
Total (before ESG/individual)	—	—	—	99
ESG Multiplier	—	—	—	+7.5% (1.075)
Individual Performance Factor	—	—	—	+5% (105%)

PSU Design (Annual LTI; 2024–2026 cycle)

Metric	Weighting (%)	Performance Period	Vesting Terms	Relative TSR Multiplier
Cumulative Adjusted EPS	60	2024–2026	Vests after 3‑yr period, subject to performance and continued employment; exceptions for death, disability, retirement, CIC double‑trigger and certain qualifying involuntary terminations	Applied as multiplier to link payouts to shareholder value
Average Organic Sales Growth	40	2024–2026	Same as above	Applied

One‑Time RSU Award (Retention)

Grant	Target Value	Vesting Schedule	Terms
RSUs granted 12/3/2024	$3,000,000	One‑third at first anniversary; remaining two‑thirds at third anniversary	Same as standard annual LTI RSUs except removal of accelerated vesting retirement provisions

Equity Ownership & Alignment

Beneficial Ownership (as of March 17, 2025)

Metric	Value
Total Shares Beneficially Owned	32,322
SARs Exercisable within 60 Days	25,521 (net shares if exercised)
Ownership as % of Class	<1% (Otis discloses all listed individuals are <1%)

Outstanding Equity Awards at FY‑End (Selected detail for Perry Zheng)

Type	Grant Date	Unvested / Unearned Units (#)	Market/Payout Value ($)	Exercise Price ($)	Expiration
RSUs	12/3/2024	29,926	$2,771,447	—	—
PSUs (2024 grant, target)	2/6/2024	13,031	$1,206,801	—	—
RSUs	2/6/2024	6,515	$603,354	—	—
SARs (unexercisable)	2/6/2024	24,246	—	$91.94	2/5/2034
PSUs (2023 grant, target)	2/7/2023	19,006	$1,760,146	—	—
RSUs	2/7/2023	3,038	$281,349	—	—
SARs	2/7/2023	10,487 (unexercisable)	—	$83.63	2/6/2033
PSUs (2022 grant, target)	2/3/2022	8,396	$777,554	—	—
RSUs	2/3/2022	1,280	$118,541	—	—
SARs	2/3/2022	5,417 (unexercisable)	—	$81.85	2/2/2032
SARs	2/5/2021	22,064 (exercisable)	—	$63.93	2/4/2031
SARs	2/4/2020	43,461 (exercisable)	—	$80.97	2/3/2030
SARs	2/5/2019	51,965 (exercisable)	—	$63.92	2/4/2029

2024 Exercises and Vested Shares

Metric	Shares (#)	Value Realized ($)
SARs Exercised	40,687	$1,274,964
Stock Awards Vested (RSUs/PSUs)	25,829	$2,374,138
Note	Shares withheld to satisfy FICA taxes on unvested RSUs due to retirement eligibility	—

Ownership Policies

Stock ownership guideline for “Other NEOs”: 3x annual base salary; failure to meet by deadline restricts discretionary selling until compliant; counts common stock, RSUs and DSUs (excludes options, SARs, unvested PSUs) .
Hedging and pledging of Otis stock prohibited; no single‑trigger vesting on change‑in‑control; no excise tax gross‑ups .

Employment Terms

Severance and Change‑in‑Control

Severance Plan: lump‑sum cash equal to 1x salary + target STI (CEO 1.5x), prorated STI for year of termination based on actual results, continued healthcare and outplacement up to 12 months; clawback/netting reduces any cash severance by value of ELG RSU vesting and other severance benefits—net cash severance for Mr. Zheng would be zero assuming 12/31/2024 termination due to ELG RSU netting .
Equity on death/disability: RSUs/PSUs vest (PSUs at target unless Committee increases), SARs vest and are exercisable for up to three years (subject to award term) .
PSUs/RSUs include double‑trigger protection: vesting exceptions apply for qualifying terminations within two years following a change‑in‑control .
Non‑compete and non‑solicit agreements required for Executive Leadership Group members (where permitted by law) .
Strong clawback provisions maintained .

Event Economics (Otis estimates for Perry Zheng)

Event	Severance Cash ($)	STI Payment ($)	Option/SAR Value ($)	Stock Awards Value ($)	Other Benefits ($)	Less: Vested Pension & Equity ($)	Total ($)
Death/Disability	–	$701,000	$183,185	$8,757,043	–	-$2,383,469	$7,257,759
CIC + Qualifying Termination	$2,660,000	$701,000	$183,185	$8,757,043	$58,148	-$2,383,469	$9,975,907

Compensation Structure Analysis

LTI target value increased from $1.8M to $2.25M in 2024 to maintain competitiveness with Otis’s peer group and in recognition of performance; plus a one‑time $3.0M RSU award for retention, materially shifting pay mix toward equity and at‑risk compensation .
NEO compensation mix is weighted heavily toward at‑risk pay via STI and LTI (policy description) .
STI metrics and weightings emphasize earnings (40%) and cash generation (30%), with growth KPIs (organic sales and new equipment orders, 15% each); 2024 results yielded a 99% financial payout factor, adjusted upward by ESG (+7.5%) and individual performance (+5%) in Perry’s case .

Investment Implications

Alignment and retention: One‑time RSU award with multi‑year vesting (1/3 at year 1, 2/3 at year 3) plus ELG RSU netting that drives zero cash severance on a standard termination indicates strong retention hooks and shareholder‑friendly severance mechanics for Zheng .
Near‑term supply dynamics: 2024 saw meaningful exercises (40,687 SARs; $1.27M value) and vesting (25,829 shares; $2.37M value); upcoming one‑time RSU tranches (12/3/2025, 12/3/2027) may create additional taxable events and potential selling, though Otis prohibits pledging and restricts sales before meeting ownership guidelines .
Pay‑for‑performance: STI tied predominantly to earnings and FCF, with 2024 corporate outcomes near target (99%), aligns cash incentives with core value drivers; PSUs tied to three‑year EPS and organic sales with a relative TSR multiplier further reinforce long‑term performance orientation .
Change‑in‑control economics: Double‑trigger vesting and no excise tax gross‑ups, with total CIC‑related package for Zheng estimated at ~$9.98M, balances protection with governance discipline .
Ownership: Beneficial ownership is modest (<1% of class) and SARs are significant, but hedging/pledging prohibitions and ownership requirements mitigate misalignment risks .