Timothy Knavish
PPG INDUSTRIESAbout Timothy Knavish
Chairman and CEO of PPG Industries; director since 2022; joined PPG in 1987. Age 59. Appointed President & CEO on Jan 1, 2023 and became Chairman & CEO on Oct 1, 2023 . Under his leadership in 2024, PPG executed portfolio actions (sold U.S./Canada architectural coatings and silicas), delivered $15.8B in net sales from continuing operations, adjusted EPS of $7.87 (+6% y/y), adjusted EBITDA margin of 18.1% (+100 bps), and $1.4B operating cash flow; 3‑yr TSR ranked at the 19th percentile (zero payout on TSR awards) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| PPG | Chairman & Chief Executive Officer | Oct 1, 2023 – present | Led strategic portfolio reviews and divestitures; improved margins; returned $1.4B to shareholders via buybacks/dividends in 2024 |
| PPG | President & Chief Executive Officer | Jan 1, 2023 – Oct 1, 2023 | Transition to CEO; executed growth and operational excellence priorities |
| PPG | Chief Operating Officer | Mar 1, 2022 – Dec 31, 2022 | Oversaw global operations |
| PPG | Executive Vice President | 2019 – 2022 | Enterprise leadership across segments |
| PPG | SVP, Architectural Coatings; President, PPG EMEA | Jan 2019 – Sep 2019 | Regional leadership; commercial excellence |
| PPG | SVP, Industrial Coatings | Oct 2017 – Dec 2018 | Segment leadership |
| PPG | SVP, Automotive Coatings | Mar 2016 – Sep 2017 | Segment leadership |
| PPG | VP, Protective & Marine Coatings | Aug 2012 – Feb 2016 | Segment leadership |
| PPG | VP, Automotive Coatings, Americas | Mar 2010 – Jul 2012 | Regional leadership |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Rockwell Automation, Inc. | Director | Not disclosed (current) | Listed in PPG proxy “Other Directorships” |
Board Governance (PPG)
- Board service: Director since 2022; currently Chairman & CEO; not independent .
- Committee roles: None (all 4 standing committees are fully independent) .
- Independent Lead Director: Michael W. Lamach, with defined authorities (approves agendas/schedules, leads executive sessions, shareholder outreach liaison, etc.) .
- Board activity: 8 full board meetings in 2024; average attendance 100%; independent directors meet without management at each board meeting .
- Combined CEO/Chair rationale: Board cites strategic alignment and a strong Lead Director and independent committees as counterbalance .
Fixed Compensation
| Item | 2024 | Notes |
|---|---|---|
| Base salary rate (effective Mar 1, 2024) | $1,300,000 | Approved by HCM & Compensation Committee |
| Salary paid (SCT) | $1,283,333 | 2024 SCT reported salary |
| Target annual bonus (% of salary) | 150% | CEO target for 2024 |
| Actual annual incentive paid | $1,320,000 | Reflects 68% of target for CEO |
| All other compensation | $430,456 | Includes aircraft, savings/deferred plan contributions, etc. |
Perquisites and benefits (selected 2024 items):
- Personal use of company aircraft: $106,745; financial counseling: $14,035 .
- Company contributions: Employee Savings Plan $37,950; Deferred Compensation Plan $263,217; TSR dividend equivalents $8,509 .
Performance Compensation
Annual incentive framework and 2024 payout
| Metric | Weight | Threshold | Target | Maximum | 2024 Actual | Component payout |
|---|---|---|---|---|---|---|
| Adjusted EPS (continuing ops) | 50% | $5.62 | $7.72 | $8.66 | $7.86 | 103% |
| Adjusted CFO (USD mm) | 20% | $1,724 | $2,298 | $2,528 | $1,469 | 0% |
| Organic sales growth | 30% | -0.8% | 1.7% | 3.7% | -1.2% | 0% |
| Weighted company component | 100% | — | — | — | — | 52% |
| CEO total payout vs target | — | — | — | — | — | 68% (incl. personal goals) |
Notes: PPG exceeded adjusted EPS target but missed CFO and organic growth targets; 2024 NEO payouts ranged 56–68% of target; 3‑yr TSR at 19th percentile resulted in zero TSR long‑term payout .
Long‑term incentives (LTI) – 2024 grants and structure
| Instrument | 2024 Grant | Key terms |
|---|---|---|
| Stock options | 66,551 options @ $142.65 | 10‑yr term; vest on 3rd anniversary (2/21/2027); no repricing |
| PBRSUs (EPS growth, CFROC) | 21,663 target shares | 3‑yr period (2024–2026); 0–200% payout; no dividends |
| TSR contingent shares | 20,447 target shares | 3‑yr period (2024–2026); relative to S&P 500; 0–200% payout |
Recent LTI outcomes:
- 2022–2024 TSR cycle: 0% payout (19th percentile) .
- 2022–2024 PBRSU cycle: 120% payout; Knavish received 7,766 shares .
- Options vesting cadence: e.g., prior grants vesting on 2/16/2025; 1/1/2026; 2/21/2027 .
Equity Ownership & Alignment
| Measure | Value | Notes |
|---|---|---|
| Beneficially owned common shares | 132,793 | As of Feb 21, 2025 |
| Common stock equivalents (deferred) | 11,479 | As of Feb 21, 2025 |
| Total (common + equivalents) | 144,272 | As of Feb 21, 2025 |
| Options exercisable within 60 days | 81,575 | As of Feb 21, 2025 |
| Ownership vs shares outstanding | <1% | No NEO/director >1% |
| Shares pledged | None disclosed | “To the Company’s knowledge, none … have been pledged” |
| CEO ownership guideline | 6× base salary | Policy requirement |
| CEO status | ~5.5× base salary (end 2024); within compliance period | Noted in policy status |
| Hedging/pledging | Prohibited | Insider Trading Policy updated 2024 |
| 10b5‑1 plans | Pre‑clear, open window, 90‑day cooling‑off | Governance controls |
Upcoming vesting/supply watch:
- Unexercised options scheduled to vest: 25,554 @ $151.87 on 2/16/2025; 67,115 @ $125.74 on 1/1/2026; 66,551 @ $142.65 on 2/21/2027 .
- Unvested performance awards: PBRSUs 21,173 (2023–2025) and 21,663 (2024–2026); TSR shares 9,942 (2023–2025) and 10,224 (2024–2026) (values determined at target) .
Deferred comp and pensions (alignment and retention):
- Deferred Compensation Plan: CEO 2024 contributions (exec + company) $310,226; aggregate earnings −$186,330; year‑end balance $2,641,204 .
- Pension present value at 12/31/2024: Retirement Plan F $869,209; Non‑Qualified Plan $2,360,465; estimated NQ lump‑sum present value $4,973,892 .
Employment Terms
| Topic | Terms |
|---|---|
| Employment agreements | No employment contracts with U.S.-based NEOs |
| Severance (non‑CIC) | CEO: 2× base salary lump sum; 6 months benefits if contributory portion paid; others typically 1.5× base salary |
| Executive Officer Cash Severance Policy | No new cash severance >2.99× (salary + target bonus) without shareholder ratification; excludes equity vesting, retirement benefits, non‑cash benefits |
| CIC agreements | 3‑yr term auto‑renewing; upon termination without cause or for good reason post‑CIC: 3× base salary; 3× highest/target bonus; pro‑rata bonus; 3‑yr benefits; DC retirement contribution value; no tax gross‑ups; conditional 280G cutback; double‑trigger equity vesting |
| CIC termination economics (as of 12/31/2024) | CEO total estimated value: $19,937,717 (incl. accelerated LTI $10,084,406) |
| Clawback | NYSE‑compliant Compensation Recovery Policy for restatements (prior 3 years) |
| Non‑compete / non‑solicit | Equity grants conditioned on non‑compete/non‑disclosure; CIC agreements include non‑competition/confidentiality provisions |
| Hedging/pledging | Prohibited (short sales, options, collars; margin/pledging banned) |
Performance & Track Record
- 2024 business performance: Net sales (continuing ops) $15.8B; adjusted EPS $7.87 (+6% y/y); adjusted EBITDA margin 18.1% (+100 bps); operating cash flow $1.4B .
- Portfolio actions: Completed sale of U.S./Canada architectural coatings (Dec 2024) and silicas (Nov 2024), sharpening focus and improving return profile .
- TSR alignment: 3‑yr TSR at 19th percentile; TSR share awards paid 0% for 2022–2024 cycle .
- Annual incentive alignment: Company component paid at 52% of target; CEO total AIP payout at 68% (incl. personal goals) .
- Strategic priorities: refocus on organic growth, commercial excellence, modernization (digital tools, capex) .
Compensation Program Architecture and Oversight
- Mix and risk: 68–89% of 2024 target TDC performance‑based; three LTI vehicles (options, PBRSUs, TSR) with 3‑yr cycles; options vest at 3 years; no option repricing .
- Peer benchmarking: Comparator group of 22 industrials (e.g., 3M, Sherwin‑Williams, Honeywell, Trane, Rockwell, etc.) to calibrate market median .
- Independent oversight: Human Capital Management & Compensation Committee (independent) advised by FW Cook; no committee interlocks; annual risk review of comp design .
- Say‑on‑pay: 96% approval at 2024 meeting; shareholder engagement touched 55% of outstanding shares .
Director Service and Compensation (as a Director)
- Status: Employee director (Chairman & CEO); not independent .
- Committee roles: None .
- Board structure: Four independent committees; Lead Independent Director with robust authorities to counterbalance combined CEO/Chair structure .
- Meeting attendance: 100% average attendance in 2024; independent directors meet without management each Board meeting .
Risk Indicators & Red Flags (observed)
- Combined CEO/Chair role; mitigated by strong Lead Independent Director, fully independent committees, and regular executive sessions .
- TSR underperformance vs S&P 500 (19th percentile over 3 years) indicates execution and relative return risk; however, 0% TSR award payout supports pay‑for‑performance alignment .
- No hedging/pledging and robust clawback reduce misalignment risk; no CIC tax gross‑ups; 2.99× cash severance policy adds discipline .
- No related‑party transactions disclosed involving the CEO; 2024 related‑party transactions involved other directors’ companies (all <1% of counterparties’ revenues) .
Investment Implications
- Incentive alignment appears strong: below‑target AIP and 0% TSR payouts in 2024 indicate discipline; CEO equity exposure ~5.5× salary and rising toward the 6× guideline .
- Watch supply from scheduled vesting: material option tranches vest in 2025/2026/2027 and PBRSU/TSR cycles complete in 2025/2026; while policies reduce hedging/pledging risk, vestings can create episodic selling pressure .
- CIC economics are sizable (est. ~$19.9M if terminated post‑CIC at 12/31/2024), but structured with double‑trigger vesting and no gross‑up; shareholder‑approved severance policy caps cash without ratification .
- Execution upside if Knavish continues portfolio optimization and drives organic growth/margins; TSR catch‑up vs peers would improve long‑term payouts and sentiment, but 2024 organic sales decline and TSR rank underscore the need to deliver growth in core segments .