Jerome Pedretti
PENTAIRAbout Jerome Pedretti
Jerome O. Pedretti, age 54, is Executive Vice President and Chief Executive Officer of Pentair’s Pool segment (since 2023), after leading the Flow segment (2020–2022), Aquatic Systems (2016–2019), and earlier strategy and Valves & Controls roles; prior to Pentair, he was a consultant at Bain & Co (2002–2005) . Company performance metrics tied to his incentives include Adjusted Operating Income, Revenue, Free Cash Flow (annual), and Adjusted EPS and ROIC (three-year PSUs); in 2024 Pentair delivered Adjusted EPS +15.5% to $4.33, Adjusted Operating Income +12.2% to $959.2M, and record free cash flow of $693.1M . As Pool CEO, his 2024 annual incentive paid at 135.81% of target on Pool/Company metrics, while 2023 paid at 55.69% amid pool volume headwinds, underscoring pay-for-performance alignment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Pentair | EVP & CEO, Pool segment | 2023–present | Segment leadership; incentive metrics weighted to Pool Income/Revenue plus Company FCF/Adjusted OI . |
| Pentair | EVP & President, Flow segment | 2020–2022 | Delivered record segment margins post nVent separation; role tied to segment financial accountability . |
| Pentair | SVP, Aquatic Systems | 2016–2019 | Led pool equipment portfolio; foundation for current Pool leadership . |
| Pentair | VP, Valves & Controls | 2014–2016 | Operated within former business; global operations exposure . |
| Pentair | VP, Growth Strategy | 2010–2014 | Corporate strategy and growth initiatives . |
| Pentair | Business leadership positions | 2005–2010 | Various leadership posts across Pentair . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Bain & Company | Consultant | 2002–2005 | Strategy consulting experience; supports execution discipline . |
Fixed Compensation
Multi-year compensation (Summary Compensation Table):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $590,023 | $640,025 | $660,025 |
| Stock Awards ($) | $750,010 | $1,049,996 | $1,087,487 |
| Option Awards ($) | $250,001 | $349,987 | $362,497 |
| Non-Equity Incentive ($) | $411,206 | $285,133 | $717,077 |
| All Other Compensation ($) | $38,150 | $36,250 | $38,350 |
| Total Compensation ($) | $2,039,390 | $2,361,391 | $2,865,436 |
Base salary and bonus target:
| Item | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $640,000 | $660,000 |
| Target Bonus (% of Salary) | 80% | 80% |
| Target Bonus ($) | $512,000 | $528,000 |
Perquisites and benefits (2024): Executive physical $2,600; Company contributions to RSIP/Sidekick $35,750; total other comp $38,350 .
Performance Compensation
2024 Management Incentive Plan (MIP) – Pool CEO:
| Metric | Weight | Threshold (50%) | Target (100%) | Max (200%) | Payout % | Weighted Payout % | Vesting/Timing |
|---|---|---|---|---|---|---|---|
| Pool Income | 40% | Not disclosed | Not disclosed | Not disclosed | 131.34% | 52.54% | Paid after FY; certified Feb 2025 |
| Pool Revenue | 20% | Not disclosed | Not disclosed | Not disclosed | 95.91% | 19.18% | Annual cash |
| Pentair Free Cash Flow | 20% | Not disclosed | Not disclosed | Not disclosed | 200.00% | 40.00% | Annual cash |
| Pentair Adjusted Operating Income | 20% | Not disclosed | Not disclosed | Not disclosed | 120.43% | 24.09% | Annual cash |
| ESG Modifier | +/-10% | — | — | — | No modifier applied | 100% | Governance overlay |
| Total | 100% | — | — | — | — | 135.81% | Paid following certification |
2023 MIP – Pool CEO:
| Metric | Weight | Threshold (50%) | Target (100%) | Max (200%) | Payout % | Weighted Payout % |
|---|---|---|---|---|---|---|
| Pool Income | 40% | Not disclosed | Not disclosed | Not disclosed | 0.00% | 0.00% |
| Pool Revenue | 20% | Not disclosed | Not disclosed | Not disclosed | 0.00% | 0.00% |
| Pentair Free Cash Flow | 20% | Not disclosed | Not disclosed | Not disclosed | 166.67% | 33.33% |
| Pentair Income | 20% | Not disclosed | Not disclosed | Not disclosed | 111.76% | 22.35% |
| ESG Modifier | +/-10% | — | — | — | 100% | 100% |
| Total | 100% | — | — | — | — | 55.69% |
Long-term incentives and PSU metrics:
| Component | 2024 Mix/Features | 2023 Mix/Features |
|---|---|---|
| Performance Share Units (PSUs) | 50% of LTI; 3-year; metrics: Adjusted EPS (75%), ROIC (25%) | 50% of LTI; 3-year; metrics: Adjusted EPS (75%), ROIC (25%) |
| Stock Options | 25% of LTI; 10-year term; vest ratably years 1–3 | 25% of LTI; 10-year term; vest ratably years 1–3 |
| Restricted Stock Units (RSUs) | 25% of LTI; vest ratably years 1–3 | 25% of LTI; vest ratably years 1–3 |
PSU results (company-wide):
| PSU Performance Period | Adjusted EPS Weighted Payout | ROIC Weighted Payout | Total Weighted Payout |
|---|---|---|---|
| 2022–2024 | 78.21% | 29.51% | 107.72% |
| 2021–2023 | 150.00% | 21.94% | 171.94% |
Grant detail (Jerome Pedretti):
| Grant Date | Award Type | Target/Units | Exercise Price | Grant-Date FV ($) |
|---|---|---|---|---|
| 1/2/2024 | PSUs | 10,223 target (5,112 threshold; 20,446 max) | — | $725,015 |
| 1/2/2024 | RSUs | 5,111 units | — | $362,472 |
| 1/2/2024 | Options | 14,981 options | $70.92 | $328,379 |
| 1/3/2023 | PSUs | 15,487 target (7,744 thr; 30,974 max) | — | $700,012 |
| 1/3/2023 | RSUs | 7,743 units | — | $349,984 |
| 1/3/2023 | Options | 23,921 options | $45.20 | $320,350 |
Vesting and realizations (2024):
| Item | Quantity/Value |
|---|---|
| Options exercised (shares/value) | 24,747 / $1,034,081 |
| Stock vested (shares/value; includes PSUs) | 13,200 / $1,159,006 |
Equity Ownership & Alignment
Stock ownership and guidelines:
| Executive | Shares Owned | Market Value @ 12/31/2024 | Ownership Guideline | Status |
|---|---|---|---|---|
| Jerome O. Pedretti | 49,916 | $5,023,546 | $1,650,000 (2.5x salary) | Meets guideline |
Outstanding/unvested awards (12/31/2024):
| Category | Units | Market/Payout Value |
|---|---|---|
| Unvested RSUs | 11,688 | $1,176,280 |
| Unearned PSUs (target) | 26,220 | $2,638,781 |
| Unexercisable Options (examples) | 14,981 @ $70.92 (2024 grant); 17,423 @ $45.20 (2023 grant); 4,312 @ $70.99 (2022 grant) |
Policies impacting alignment:
- Hedging/pledging prohibited for executives; margin accounts and pledging of Pentair securities are disallowed under Insider Trading Policy .
- Equity holding policy: retain 100% of net shares from awards until guidelines met .
- Clawback policy (SEC/NYSE-compliant): recoup excess incentive-based comp after accounting restatements (3-year lookback) .
Employment Terms
Severance (Executive Officer Severance Plan):
- Qualifying termination (without cause or for good reason) cash severance equals multiplier × (base salary + target bonus). For Pedretti, cash payment $2,376,000 (2× $660,000 + $528,000), plus equity treatment per plan, outplacement ($15,000), and medical/dental subsidy ($46,907); total illustrative package $7,792,287 (assuming 12/31/2024 valuation) .
- “Cause”/“Good reason” defined; good reason includes material breach, salary/bonus reduction, adverse change in working conditions, >50-mile relocation (with notice/cure) .
Change-in-control (KEESA):
| Component | Amount ($) |
|---|---|
| Cash Termination Payment | $2,376,000 |
| Stock Option Vesting (value) | $1,539,017 |
| RSU Vesting (value) | $1,176,482 |
| PSU Vesting (assumes target) | $2,638,881 |
| Incentive Compensation (target) | $528,000 |
| Outplacement | $50,000 |
| Legal & Accounting Advisors | $15,000 |
| Medical, Dental, Life Insurance | $50,424 |
| Total: CIC only vs CIC+Termination | $5,882,380 vs $8,373,804 |
Key features:
- Double-trigger equity vesting (no single-trigger); PSUs paid based on better of target or trend; annual incentive paid at target post-CIC termination; excise tax cutback/best-net provision applies .
Deferred compensation (Sidekick Plan):
| Item | 2024 Value |
|---|---|
| Executive Contributions | $274,084 |
| Company Contributions | $18,500 |
| Aggregate Earnings/(Loss) | $354,969 |
| Aggregate Withdrawals | $(338,441) |
| Year-end Balance | $2,686,797 |
Other benefits:
- Executive physical benefit; products/services program (up to $50,000 annually beginning 2024; taxes borne by executive) .
Investment Implications
- Strong pay-for-performance linkage: 2024 Pool CEO payout at 135.81% vs 55.69% in 2023 tightly matched segment performance, reducing risk of misaligned incentives; PSU metrics (Adjusted EPS/ROIC) anchor long-term value creation .
- Retention and change-in-control economics: Robust double-trigger KEESA protections and 2× severance (as a pre-2021 executive officer) minimize flight risk through transitions but imply meaningful equity acceleration in a CIC, relevant for M&A scenarios .
- Ownership alignment: Pedretti exceeds 2.5× salary guideline, is subject to holding and anti-hedging/pledging policies, and realized ~$1.03M via option exercises in 2024—ongoing RSU/PSU vesting suggests predictable supply but policies mitigate hedging/pledging-driven sell pressure .
- Execution risk: Pool segment variability (2023 underperformance vs 2024 rebound) and incentive weighting to Pool Income/Revenue expose payouts to end-market cycles; however, inclusion of Company FCF/Adjusted OI diversifies risk and emphasizes cash generation discipline .