Andrew D. Ross
Parker-HannifinAbout Andrew D. Ross
Andrew D. Ross is Parker-Hannifin’s President and Chief Operating Officer (since January 1, 2024), and a Named Executive Officer with 26.7 years of credited service, reflecting deep tenure across Parker’s operations . Under his operational leadership, Parker delivered record FY2025 results: segment operating margin 23.0%, cash from operations $3.8B (19% of sales), EPS $27.12, and FY2025 year-end stock price $698.47 vs. $505.81 in FY2024; five-year cumulative TSR value per $100 invested reached $408.78 and net income was $3,532M . Executive incentives for FY2025 paid out strongly (ACIP 139.09%, LTIP 162.22% for the prior 3-year cycle), evidencing pay-for-performance alignment to segment OI, revenue, cash flow margin, and long-term growth versus peers .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Parker-Hannifin Corporation | President & Chief Operating Officer | Since Jan 1, 2024 | Leads global operations under The Win Strategy; oversees segment OI, sales execution, cash flow discipline and strategic imperatives integrated in ACIP/LTIP |
| Parker-Hannifin Corporation | Chief Operating Officer | Not disclosed | Prior COO role supported enterprise execution and peer-relative long-term performance metrics used in LTIP; exact dates not disclosed |
External Roles
- No external directorships or roles disclosed for Andrew D. Ross in the latest proxy statements. Skip.
Fixed Compensation
| Metric | FY2024 | FY2025 |
|---|---|---|
| Base Salary Rate (effective 9/1 of prior year) | $910,000 (effective 9/1/23); transitioned to $950,000 effective 1/1/24 | $1,000,000 (effective 9/1/24) |
| Base Salary (Actual Paid) | $920,000 | $991,667 |
| Target ACIP (Annual Cash Incentive) as % of Base | 115% | 115% |
Performance Compensation
Annual Cash Incentive (Officer ACIP) – Structure and FY2025 Results
| Metric (Weight) | Threshold | Target | Maximum | Actual FY2025 | Earned Payout |
|---|---|---|---|---|---|
| Segment Operating Income (40%) | $4,665,197 | $5,183,552 | $5,701,907 | $5,198,595 | 102.90% of target; 41.16% weighted |
| Sales Revenue (20%) | $18,280,550 | $20,311,722 | $22,342,894 | $19,890,924 | 89.60% of target; 17.93% weighted |
| Cash Flow Margin (40%) | 7% | 11% | 15% | 16.80% | 200.00% of target; 80.00% weighted |
| Total ACIP Payout | — | — | Cap 200% | — | 139.09% of target (no +/-20% multiplier applied) |
ACIP Payouts – Multi-Year
| Metric | FY2024 | FY2025 |
|---|---|---|
| Base Salary Earned | $920,000 | $991,667 |
| Target ACIP Amount | $1,058,000 | $1,140,417 |
| ACIP Award Paid | $1,836,265 | $1,586,206 |
LTIP (Long-Term Incentive Performance) – Structure
- Three-year performance cycles under the Officer LTIP Plan; cliff vest after 3 years; eligibility if Parker’s average ROAE or free cash flow margin ≥4%; payout determined by percentile rank vs peer group for Revenue Growth (40%), EPS Growth (40%), ROIC (20%); 0% below 25th percentile, 100% at 50th percentile, 200% at 75th+ percentile; Committee retains downward discretion .
LTIP Grants – Target Values and Shares
| LTIP Cycle | Target Value ($) | Target Shares (#) |
|---|---|---|
| CY2024–2026 (granted FY2024) | $1,950,000 | 4,350 (value/avg price $448.65) |
| CY2025–2027 (granted FY2025) | $1,950,000 | 2,920 (value/avg price $668.09) |
LTIP Vesting/Payout – Completed Cycle
| LTIP Cycle | Shares Vested | Payout % of Target | Value Realized on Vesting |
|---|---|---|---|
| CY2022–2024 (vested Apr 2025) | 7,910 | 162.22% (Weighted: Rev Growth 80.00%; EPS 57.78%; ROIC 24.44%) | $4,594,207 |
Equity Ownership & Alignment
Beneficial Ownership (as of July 31, 2025)
| Item | Amount |
|---|---|
| Total Beneficial Ownership (includes exercisable SARs within 60 days) | 43,366 shares |
| Shares with voting power via Retirement Savings Plan | 3,764 shares |
| SARs exercisable on or before Sept 30, 2025 (estimated gross shares) | 21,717 shares |
| Ownership Guidelines | President & COO must hold ≥4x annual base salary |
| Compliance Statement | All executive officers and Directors in their positions ≥5 years compliant as of June 30, 2025 |
| Hedging/Pledging | Hedging and pledging prohibited; 10b5-1 plans allowed with pre-clearance |
Outstanding Stock Incentives (SARs) – June 30, 2025
| Exercise Price | Exercisable (#) | Unexercisable (#) | Expiration |
|---|---|---|---|
| $209.56 | 10,220 | — | 8/11/2030 |
| $296.00 | 6,740 | — | 8/10/2031 |
| $299.19 | 6,099 | 3,051 | 8/16/2032 |
| $406.32 | 4,816 | 9,634 | 8/15/2033 |
| $578.39 | — | 10,270 | 8/13/2034 |
- Terms: 10-year term; vest 1/3 annually over 3 years; exercise price equals grant-date close; no repricing permitted .
Unearned LTIP Shares (Performance Cycles in Progress)
| Cycle | Unearned Shares (#) | Market/Payout Value ($) |
|---|---|---|
| CY2023–2025 | 5,841 | $4,079,763 |
| CY2024–2026 | 4,421 | $3,087,936 |
| CY2025–2027 | 2,935 | $2,050,009 |
Nonqualified/Deferred Compensation (FY2025)
| Plan | Exec Contributions ($) | Company Contributions ($) | Earnings ($) | Balance ($) |
|---|---|---|---|---|
| Deferred Compensation Plan | 67,946 | 86,608 | 22,790 | 242,282 |
| Savings Restoration Plan | — | — | 269,953 | 1,567,828 |
Perquisites (FY2025)
- Total perquisites: $143,554; includes corporate aircraft personal use ($118,102), long-term disability premiums, leased vehicle, apartments, executive physicals, spousal travel; matching gifts reported for others but not Ross .
Employment Terms
Severance (Non-Change-in-Control)
| Component | Amount (as of 6/30/2025) |
|---|---|
| Severance Pay (one week per full year, max 26 weeks) | $500,000 (assumes release executed) |
| Pension Plan | $834,209 |
| Pension Restoration Plan | $4,746,542 |
| Supplemental Retirement Program | $11,969,832 (vests at 55+ with conditions) |
| LTIP Awards (pro-rated for cycles) | $4,943,771 |
| Medical/Dental COBRA premiums (up to 3 months) | $7,296 |
| Total | $23,001,650 |
Change-in-Control (CIC) – Benefits Without Termination (Single-Trigger Elements)
| Component | Amount |
|---|---|
| Accelerated vesting of Stock Incentives (SARs) | $5,265,998 |
| Pension Plan | $834,209 |
| Pension Restoration Plan | $4,746,542 |
| Supplemental Retirement Program (adds 3 years age/service; lump sum) | $17,399,093 |
| LTIP Awards (greater of target or performance to date) | $9,217,709 |
| Excise & Related Tax Gross-Up | $11,014,089 |
| Total | $48,477,640 |
CIC – Qualifying Termination (Double Trigger)
| Component | Amount |
|---|---|
| Severance Pay (3x base + annual cash incentive) | $7,047,498 |
| Accelerated vesting of Stock Incentives (SARs) | $5,265,998 |
| Defined Contribution Supplemental Retirement Program | — (Ross not a participant) |
| Pension Plan | $834,209 |
| Pension Restoration Plan | $4,746,542 |
| Supplemental Retirement Program | $17,399,093 |
| Executive Deferral Plan (bal./make-whole as applicable) | — (Ross not listed) |
| LTIP Awards (as above) | $9,217,709 |
| Executive LTD Premiums, Medical/Dental, Officer Life Insurance Premiums | $14,511; $87,552; $116,533 |
| Excise & Related Tax Gross-Up | $15,104,782 |
| Total | $59,834,427 |
- CIC definition and mechanics per Section 409A; stock incentives accelerate; LTIP paid at greater of target/performance; certain nonqualified deferrals vest/paid; excise tax gross-ups apply to Ross via legacy agreement .
Clawbacks, Indemnification, Trading
- NYSE/SEC-compliant clawback for incentive-based compensation received on/after Oct 2, 2023; mandatory recovery upon restatements; broad recoupment methods; prior 2009 clawback applies pre-10/2/2023 .
- Individual indemnification agreements for civil/criminal proceedings to max extent under Ohio law .
- Insider trading policy prohibits hedging/pledging; mandates pre-clearance and blackout periods; allows Rule 10b5-1 plans with pre-clearance .
Investment Implications
- Strong alignment to operational and cash generation metrics: FY2025 ACIP payout at 139.09% reflects above-target segment OI and cash flow margin; LTIP emphasizes peer-relative revenue/EPS/ROIC, with prior cycle paying 162.22%—consistent with record FY2025 margin (23.0%), EPS ($27.12), and cFO ($3.8B) .
- Upcoming equity supply/vesting: substantial unexercisable SARs (esp. 9,634 @ $406.32; 10,270 @ $578.39) vest one-third annually; three LTIP cycles hold 13,197 unearned shares—monitor vest dates (Aug each year for SARs; April post-cycle for LTIP) for potential insider selling windows under pre-clearance rules .
- Governance red flags: legacy excise/gross-up provisions and single-trigger accelerations under CIC increase payout sensitivity; while broadly shareholder-unfriendly, Parker’s policies otherwise prohibit pledging/hedging and maintain robust clawbacks and ownership guidelines (4x salary for President & COO), supporting alignment .
- Performance backdrop supportive: Five-year cumulative TSR value $408.78 (vs S&P Industrials peer benchmark $233.00), 2025 net income $3,532M, and consistent say-on-pay support (~89% in 2024) bolster credibility in execution under Ross’s operations remit .