Chancey Hagerty
Senior Vice President, Automotive Refinish Coatings at PPG
Executive
About Chancey Hagerty
Senior Vice President, Automotive Refinish Coatings (also led Aerospace Coatings) at PPG. In 2024, automotive refinish organic sales were flat with price offsetting lower U.S. collision claim volumes (PPG gained share in U.S.), Europe modestly up on price; aerospace coatings delivered double‑digit organic sales growth with strong demand and efficiency/profitability improvements under his leadership . Company context: 2024 net sales from continuing ops $15.8B, adjusted EPS $7.87 (+6% YoY), organic sales −1%, and 3‑yr TSR at 19th percentile vs S&P 500 (zero payout on TSR awards), which drove annual bonus payouts at 56%–68% of target for executives .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| PPG Industries | SVP, Automotive Refinish Coatings; led Aerospace Coatings | 2024–present | Share gains in U.S. refinish despite lower collision claims; Europe modest growth on price; aerospace coatings double‑digit organic growth; drove manufacturing efficiency and digital adoption in refinish |
Fixed Compensation
| Item | 2024 Detail | Notes |
|---|---|---|
| Base salary (annual rate) | $580,000 effective Mar 1, 2024 ($525,000 on Jan 1, 2024) | Committee approved $55,000 increase in Feb 2024 |
| Salary paid (SCT) | $570,833 | Prorated cash paid in 2024 (differs from annual rate) |
| “All Other Compensation” | $73,976 total; includes Employee Savings Plan $32,650, Deferred Compensation Plan contributions $39,792, dividends $1,534 | Components per All Other Compensation table |
| Deferred Compensation Plan (DCP) | Company contributions $41,326; aggregate balance $132,212; 2024 earnings $3,061 | U.S. employees eligible; amounts tie to SCT |
| Pension | Non‑Qualified Retirement Plan PV $24,045; not yet eligible to commence; benefit will be monthly annuity | No qualified plan benefit |
Performance Compensation
Annual Incentive (Cash)
| Metric | Weighting | Target | 2024 Actual/Payout | Commentary |
|---|---|---|---|---|
| Company financial | 30% (for “other executive officers”) | Target bonus 70% of base salary | Executives with business unit responsibilities averaged 48% of target for business component; Hagerty overall annual incentive paid at 67% of target; business component 63% of target | Annual bonus paid $273,000 (SCT) |
| Business unit (EBIT, working capital, organic sales) | 50% | See above | 63% of target | Based on Aerospace and Automotive Refinish performance |
| Personal | 20% | – | Included in 67% overall payout | – |
Notes:
- 2024 target bonus opportunity = 70% of base salary for Hagerty (other execs) .
- Company’s pay outcomes: exec payouts 56%–68% of target reflecting EPS beat but cash from ops and organic sales below target .
Long‑Term Incentives (Equity)
Program design (equal thirds): stock options, Performance‑based RSUs (PBRSUs), and TSR shares; options 3‑year vest, 10‑year term; repricing prohibited; grant price at close; PBRSUs/TSR are 3‑year performance cycles with 0–200% payout; PBRSUs measured on annual adjusted EPS growth (5%→50% scale to 10%→100%) and 11% CFROC; settled in shares in February after period .
| 2024 Grant (Feb 21, 2024) | Shares/Options | Grant date fair value |
|---|---|---|
| Stock options (exercise $142.65) | 6,846 | $300,060 |
| PBRSUs (2024–2026) target | 2,229 (threshold 372; max 4,458) | $300,113 |
| TSR shares (2024–2026) target | 2,104 (threshold 1,052; max 4,208) | $300,136 |
Additional performance context:
- PBRSUs metrics and payout scale; 2022 grants paid at 120% of target upon completion in 2024 .
- TSR awards across the prior 3 years paid 0% given PPG 3‑yr TSR at 19th percentile vs S&P 500 .
- As of 12/31/24, estimated payout assumptions for ongoing 2023–2025 and 2024–2026 cycles shown at 100% for PBRSUs and TSR in CIC vesting calculations (estimates only) .
Equity Ownership & Alignment
| Ownership / Guideline | Detail |
|---|---|
| Beneficial ownership (Feb 21, 2025) | 36,473 common shares (includes options exercisable within 60 days: 25,600; PPG Employee Savings Plan: 2,395) |
| Pledging/Hedging | Hedging and pledging of PPG stock prohibited for officers; no margin accounts; 10b5‑1 plans governed by policy |
| Ownership guidelines | Executive officers: 3× base salary; expected within 5 years of appointment; Hagerty is within the 5‑year compliance period (not yet fully met) |
| Outstanding equity (CIC value reference) | Aggregate estimated CIC acceleration value for Hagerty’s outstanding equity $1,037,769 at 12/31/24 (see CIC table) |
Employment Terms
| Scenario | Key terms (Hagerty) | Source |
|---|---|---|
| Involuntary termination (non‑CIC) | Salaried Severance Plan: 1.5× base salary lump sum for other executive officers; 6 months benefits eligibility; Hagerty severance amount shown $870,000 | |
| Executive Officer Cash Severance Policy (cap) | No new cash severance >2.99× (salary + target bonus) without shareholder approval; equity/deferred comp/benefits excluded from cap | |
| Change in Control (double‑trigger) | Requires termination or substantial diminution for full acceleration; Hagerty estimated package at 12/31/24: Base Salary $1,740,000; Bonus $1,218,000; Health & Welfare $74,883; Financial counseling $46,247; Accelerated LTI $1,037,769; Total $4,116,899 | |
| CIC equity acceleration mechanics | Options valued at intrinsic value; TSR/PBRSU valued at target (unless otherwise noted); closing price $119.45 on 12/31/24 | |
| Clawback policy | NYSE‑compliant compensation recovery policy for financial restatements | |
| Non‑compete/confidentiality | CIC agreements include non‑competition and confidentiality provisions; terms auto‑extend unless notice to not extend |
Multi‑Year Compensation Snapshot (as NEO)
| Year | Salary | Stock Awards | Option Awards | Non‑Equity Incentive (Annual Bonus) | Change in Pension Value | All Other Comp | Total |
|---|---|---|---|---|---|---|---|
| 2024 | $570,833 | $600,249 | $300,060 | $273,000 | $(1,447) | $73,976 | $1,816,671 |
Note: Hagerty was not a named executive officer in 2023 or 2022 .
Performance & Track Record (operating lens)
- Automotive Refinish: Organic sales flat YoY with price offsetting U.S. volume declines; PPG gained share in U.S.; Europe modest organic growth driven by price .
- Aerospace Coatings: Double‑digit organic sales growth on both price and volume across all regions; strong demand and backlogs similar to 2023; manufacturing efficiency and profitability improved under Hagerty .
- Company metrics that influenced pay: 2024 adjusted EPS up 6% (to $7.87), organic sales −1%, cash from operations below target; 3‑yr TSR 19th percentile → 0% TSR share payout .
Compensation Structure Analysis
- At‑risk pay emphasis with balanced LTI mix (options/PBRSU/TSR at ~1/3 each) aligns with stock appreciation (options), operating/returns (PBRSUs), and relative shareholder returns (TSR). Options are grant‑price, 3‑year cliff vest; repricing prohibited . PBRSUs require annual adjusted EPS growth and 11% CFROC; TSR contingent on relative returns .
- 2024 outcomes show pay‑for‑performance: below‑target annual bonus (67% of target for Hagerty) as cash flow/organic growth underperformed, while EPS target was exceeded; TSR awards paid 0% in prior cycles given weak relative TSR .
- Ownership alignment: 3× salary guideline with mandated retention if not met within 5 years; hedging/pledging prohibited; no pledged shares for listed insiders as of record date .
Vesting Schedules and Insider Selling Pressure
- Options vest on the third anniversary; 10‑year term (no reloads; no repricing) .
- PBRSU/TSR cycles run 3 calendar years, settle in shares in February after the period; 2022 PBRSUs paid at 120% (settled Feb 2025). Current cycles (2023–2025; 2024–2026) are estimated at 100% for modeling in CIC tables, implying potential share deliveries in Feb 2026/Feb 2027 that could create supply if performance is maintained .
- Executives not yet at guideline must receive 20% of annual incentive in stock and hold vested PBRSU/TSR shares for at least 1 year until compliant, partially mitigating selling pressure .
Say‑on‑Pay & Peer Context
- Say‑on‑pay approval: ~96% support at 2024 annual meeting .
- Pay‑versus‑performance peer group (for TSR comparisons): 3M, Akzo Nobel, Axalta, Dow, DuPont, Eastman Chemical, Masco, RPM, Sherwin‑Williams .
Investment Implications
- Alignment and retention: High proportion of at‑risk, multi‑metric LTI with strict ownership/holding rules and no hedging/pledging reduces misalignment risk; Hagerty is still within the 5‑year window to meet 3× salary holdings, which can dampen near‑term selling .
- Payout sensitivity: Annual cash incentive is sensitive to business unit EBIT/working capital/organic sales; 2024 payout at 67% underscores discipline when growth softens, while EPS outperformance alone was not sufficient to drive full payouts .
- TSR lever: TSR awards paid 0% for prior cycles on weak relative TSR; if PPG sustains improvements, estimated 100% payouts for current PBRSU/TSR cycles could add equity supply in 2026–2027; conversely, underperformance would lower realized pay, preserving alignment .
- Change‑in‑control economics: Double‑trigger equity acceleration and cash severance calibrated by policy (explicit 2.99× cap) reduce extreme parachute risk; Hagerty’s modeled CIC package totaled ~$4.12M at year‑end, indicating moderate deal‑related incentives without tax gross‑up practices (gross‑ups generally limited to international assignment costs) .