Joseph R. Leonti
Parker-HannifinAbout Joseph R. Leonti
Executive Vice President, General Counsel and Secretary of Parker‑Hannifin; promoted to EVP effective August 21, 2025 after serving as Vice President, General Counsel and Secretary since July 1, 2014 . Company performance during his recent tenure includes record FY2025 segment operating margin of 23.0%, cash flow from operations of $3.8B (19% of sales), and EPS of $27.12; PH also increased its dividend for the 69th consecutive year . FY2025 year-end stock price was $698.47 (vs. $505.81 FY2024), and a $100 investment in PH on 6/30/2020 grew to $408.78 by FY2025; PH’s pay-versus-performance tables also show strong relative EPS growth against peers .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Parker‑Hannifin | VP, General Counsel & Secretary | 2014–2025 (promoted to EVP 8/21/2025) | Senior legal/governance officer; corporate secretary; signatory on 8‑K filings for director changes |
External Roles
- No public company directorships or external roles disclosed for Mr. Leonti in PH proxy or 8‑K filings .
Fixed Compensation
| Metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Base Salary (Actual) ($) | 749,167 | 801,667 | 843,333 |
| Base Salary Rate (Effective 9/1) ($) | — | 810,000 | 850,000 |
| Target ACIP (% of Salary) | — | 80% | 80% |
| Target ACIP ($) | — | 641,333 | 674,667 |
| Actual ACIP Paid ($) | 1,158,452 | 1,113,098 | 938,394 |
| Stock Incentive Grants (# underlying shares) | 6,850 (FY2024 grant) | 6,850 | 4,870 (10‑yr term; vest 1/3 annually; exercise price $578.39) |
| LTIP Target Shares (cycle) | — | 2,060 (CY2024–2026) | 1,380 (CY2025–2027) |
| Summary Compensation Table Components | FY2023 ($) | FY2024 ($) | FY2025 ($) |
|---|---|---|---|
| Salary | 749,167 | 801,667 | 843,333 |
| Stock Awards (LTIPs; grant-date fair value) | 797,214 | 957,653 | 930,796 |
| Option Awards (Stock Incentives; grant-date fair value) | 781,154 | 1,038,803 | 1,026,547 |
| Non-Equity Incentive (ACIP) | 1,158,452 | 1,113,098 | 938,394 |
| Change in Pension Value & Nonqualified Deferred Earnings | — | — | — |
| All Other Compensation | 312,049 | 407,055 | 470,413 |
| Total | 3,798,036 | 4,318,276 | 4,209,483 |
Performance Compensation
Annual Cash Incentive Plan (ACIP) – Design and Outcomes
- Metrics/weights: Segment Operating Income (40%), Sales Revenue (20%), Cash Flow Margin (40); individual multiplier up to ±20% applied for strategic imperatives (ESG eliminated beginning FY2026); cap 200% .
- FY2024 payout 173.56% (no individual multiplier); FY2025 payout 139.09% (no individual multiplier) .
| Metric | FY2024 Target | FY2024 Actual | Earned % | Weight | Weighted % |
|---|---|---|---|---|---|
| Segment Operating Income ($000s) | 4,586,246 | 4,955,360 | 180.48% | 40% | 72.19% |
| Sales Revenue ($000s) | 19,775,033 | 19,939,768 | 108.33% | 20% | 21.67% |
| Cash Flow Margin (%) | 11% | 14.97% | 199.25% | 40% | 79.70% |
| Total Weighted Payout | — | — | — | — | 173.56% |
| Metric | FY2025 Target | FY2025 Actual | Earned % | Weight | Weighted % |
|---|---|---|---|---|---|
| Segment Operating Income ($000s) | 5,183,552 | 5,198,595 | 102.90% | 40% | 41.16% |
| Sales Revenue ($000s) | 20,311,722 | 19,890,924 | 89.60% | 20% | 17.93% |
| Cash Flow Margin (%) | 11% | 16.80% | 200.00% | 40% | 80.00% |
| Total Weighted Payout | — | — | — | — | 139.09% |
Long-Term Incentive Plan (LTIP)
- Structure: 3‑yr performance, cliff vest; gate requires ≥4% average ROAE or ≥4% average free cash flow margin; payout 0–200% based on relative percentile vs peer group for Revenue Growth (40%), EPS Growth (40%), ROIC (20%) .
- Latest cycles granted: CY2024–2026 target shares 2,060; CY2025–2027 target shares 1,380 .
- Most recent vested LTIP (CY2022–2024): aggregate payout 162.22%; Leonti received 4,094 shares vesting (value $2,377,836) .
| LTIP Cycle | Target Shares | Weighting (Rev/EPS/ROIC) | Gate | Payout Curve | Last Certified Result |
|---|---|---|---|---|---|
| CY2024–2026 | 2,060 | 40% / 40% / 20% | ≥4% ROAE or ≥4% FCF margin | 25th=50%, 50th=100%, 75th+=200% | — |
| CY2025–2027 | 1,380 | 40% / 40% / 20% | ≥4% ROAE or ≥4% FCF margin | 25th=50%, 50th=100%, 75th+=200% | — |
| CY2022–2024 (paid in FY2025) | — | 40% / 40% / 20% | Gate achieved: ROAE 26.4% & FCF margin 14.6% | 25th/50th/75th as above | Total 162.22%; 4,094 shares vested; $2,377,836 value |
Equity Ownership & Alignment
| Ownership Element | Detail |
|---|---|
| Total beneficial ownership | 20,956 shares, including 426 via Retirement Savings Plan; 2,902 shares subject to stock incentives exercisable by 9/30/2025 |
| Options/SARs (unexercisable at 6/30/2025) | 2,617 @ $299.19 exp. 8/16/2032; 4,567 @ $406.32 exp. 8/15/2033; 4,870 @ $578.39 exp. 8/13/2034 |
| Unvested LTIP awards (target at 100% payout; market value @ $698.47) | 2,652 (2023–25) – $1,852,342; 2,093 (2024–26) – $1,461,898; 1,387 (2025–27) – $968,778 |
| Option exercises (FY2025) | 7,147 shares exercised; value realized $2,162,839 |
| Stock ownership guidelines | Other Executive Officers: 2× annual base salary; 5‑yr compliance window; all execs in role ≥5 years compliant as of 6/30/2025 |
| Hedging/pledging | Prohibited: no hedging or holding PH securities in margin accounts or pledging as collateral |
Nonqualified and Deferred Balances (FY2025)
| Plan | Company/Registrant Contributions ($) | Aggregate Earnings ($) | Aggregate Balance ($) |
|---|---|---|---|
| Savings Restoration Plan | — | 148,893 | 1,039,844 |
| Executive Deferral Plan | — | 72,427 | 678,085 |
| Defined Contribution Supplemental Executive Retirement Program | 232,372 | 615,011 | 5,915,266 |
| Deferred Compensation Plan | 140,815 | 41,713 | 496,323 |
Employment Terms
| Scenario | Key Terms | Estimated Amounts (Leonti) |
|---|---|---|
| No employment agreement | PH does not offer employment agreements to executives; indemnification agreements in place | |
| Termination without cause | Lump sum severance (up to 26 weeks), COBRA premiums up to 3 months; pro‑rated LTIP; vesting rules per plan | Total $2,589,600; severance pay $310,577; LTIP $2,274,568; medical $4,455 |
| Death | Accelerated vesting of Stock Incentives & RSUs; LTIP pro‑rata; life insurance 3× base salary | Total $13,703,788; accelerated options $2,963,954; LTIP $2,274,568; DC SERP $5,915,266; life insurance $2,550,000 |
| Long‑term disability | Accelerated vesting; one year LTD benefit; COBRA premiums; life insurance premiums until retirement | Total $11,614,908; includes LTD $420,000 |
| Retirement | Full/pro‑rata LTIP per age/service thresholds; Stock Incentives vest per schedule; post‑retirement insurance premiums as eligible | Total $5,238,522; Stock Incentives $2,963,954; LTIP $2,274,568 |
| Change in Control (CIC) – no termination | Accelerated vesting of Stock Incentives; LTIP paid at greater of target or performance to date; vest DC SERP and add 3 years of contributions; Executive Deferral Plan “make‑whole” for pre‑2016 participant | Total $14,783,533; accelerated options $2,963,954; DC SERP $6,627,423; Executive Deferral Plan $909,138; LTIP $4,283,018 |
| CIC + qualifying termination (double trigger) | 3× base salary + annual cash incentive; 3 years continuation of welfare benefits; accelerated vesting/payouts above; excise tax gross‑up for certain pre‑2016 agreements (Leonti) | Total $27,246,901; severance pay $5,582,461; accelerated options $2,963,954; DC SERP $6,627,423; Executive Deferral Plan $909,138; LTIP $4,283,018; gross‑up $6,719,608 |
Clawbacks and Plan Safeguards
- NYSE/SEC clawback policy (effective Dec 1, 2023): mandatory recovery of excess incentive-based comp over a 3‑year period upon accounting restatement; broad recoupment methods; no indemnification .
- Prior misconduct-based clawback remains applicable for pre‑Oct 2, 2023 compensation .
- 2023 Equity Plan includes restatement/misconduct-related forfeiture and recoupment provisions .
Investment Implications
- Pay-for-performance linkage is tight: ACIP metrics emphasize cash flow margin (19% of FY2025 sales) and operating income; FY2025 payout moderated to 139% given sales below target, while cash flow margin hit maximum—signals disciplined working capital and FCF focus .
- Material unvested equity (LTIP and Stock Incentives) and sizable DC SERP balances support retention; however, generous CIC economics with excise tax gross‑up and “make‑whole” rights (legacy agreements) elevate change‑of‑control cost to shareholders—monitor governance stance and potential renegotiation risk .
- Insider activity: 7,147 options exercised in FY2025 and substantial outstanding unexercisable tranches (three strike levels) imply potential periodic selling pressure around future vest windows; anti‑hedging/pledging policy mitigates alignment risk .
- Governance/Shareholder support: Say‑on‑pay approval ~89% (2024), robust stock ownership guidelines, and comprehensive clawback framework bolster investor confidence in compensation oversight; peer group breadth (3M, CAT, HON, ROK, etc.) suggests market‑median targeting and alignment .