Robert E. Sanchez
RYDER SYSTEMAbout Robert E. Sanchez
Board Chair and CEO of Ryder System, Inc. since January 2013; appointed Chair in May 2013. Director since 2013; age 59. Under his leadership, 2024 results included total revenue of $12.6B (+7% YoY), comparable EPS of $12.00, adjusted ROE of 16%, operating cash flow of $2.3B, net earnings of $489M (+21% YoY), and comparable EBITDA of $2.8B; absolute three-year TSR was 106%, significantly above the S&P 400 MidCap (+15%) and Dow Jones Transportation average (+1%) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Ryder System, Inc. | President & COO | Feb 2012 – Dec 2012 | Led enterprise operations ahead of CEO appointment . |
| Ryder System, Inc. | President, Global Fleet Management Solutions | Sep 2010 – Feb 2012 | Ran largest segment; growth and operational execution . |
| Ryder System, Inc. | EVP & CFO | Oct 2007 – Sep 2010 | Capital allocation, financial discipline, investor alignment . |
| Ryder System, Inc. | EVP, Operations, U.S. FMS | Oct 2005 – Oct 2007 | Operational efficiency in fleet segment . |
| Ryder System, Inc. | SVP & CIO | Jan 2003 – Oct 2005 | Technology modernization and systems leadership . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Texas Instruments, Inc. | Director; has served as compensation committee chair | Not disclosed | Brings external governance and compensation oversight experience . |
| Truck Renting and Leasing Association (TRALA) | Past Director | Until Apr 2024 | Industry advocacy and policy engagement . |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $1,000,000 | $1,030,001 | $1,060,001 |
| Target Annual Incentive (% of salary) | — | — | 170% |
| Actual Annual Incentive Paid ($) | $3,145,000 | $1,667,652 | $1,439,257 |
| All Other Compensation ($) | $290,003 | $247,264 | $152,094 |
| Total Compensation ($) | $9,765,953 | $9,205,982 | $9,283,808 |
Key notes:
- Base salary increased 3% effective Jan 1, 2024 per annual benchmarking .
- 2024 AIP target for CEO set at 170% of base salary; earned payout was 80% of target ($1,439,257 vs $1,802,000) .
Performance Compensation
Annual Incentive Plan (AIP) – FY 2024 design (CEO)
| Metric | Weight | Target framework | 2024 Result | Payout mechanics |
|---|---|---|---|---|
| Comparable EBITDA (Company) | 60% | Threshold–Target–Max; non-GAAP | Company-wide measure | 0–200% payout range; Committee did not adjust results . |
| Operating Revenue (Company) | 20% | Threshold–Target–Max; non-GAAP | Company-wide measure | 0–200% payout range . |
| Strategic Objectives (Company) | 20% | Qualitative achievement; threshold based on EBITDA | Strategic initiatives, ESG, risk, succession | Discretion retained; not used for 2024 . |
| AIP Award | Target ($) | Actual Payout ($) | % of Target |
|---|---|---|---|
| CEO (Robert E. Sanchez) | $1,802,000 | $1,439,257 | 80% |
Long-Term Incentive Plan (LTIP) – 2024 Grants
| Component | Weight | Grant Date | Shares (#) | Grant-Date Fair Value ($) | Vesting |
|---|---|---|---|---|---|
| PBRSRs | 60% | Feb 9, 2024 | 33,299 | $3,899,979 | Earned over 3-year performance period (2024–2026), 0–200% based on ROE, strategic revenue growth (3-year CAGR), free cash flow; TSR modifier ±15% . |
| TVRSRs | 40% | Feb 9, 2024 | 22,199 | $2,599,947 | Time-vested, ratably over 3 years beginning Feb 9, 2025 . |
| Total 2024 LTIP Target | — | — | — | $6,500,000 | — |
Historical LTIP performance (2012–2024 performance cycle):
| Metric | Weight | Target | Result | Payout |
|---|---|---|---|---|
| ROE (3-year avg) | 33.3% | 15% (Target) | 21.5% | 200% |
| Strategic Revenue Growth (3-year CAGR) | 33.3% | 6% (Target) | 13.1% | 200% |
| Free Cash Flow (3-year avg) | 33.3% | ($250M) (Target) | $333.4M | 197% |
| TSR Modifier | ±15% | +15% if ≥75th percentile | 1st quartile | +15% |
| Overall PBRSR payout | — | — | — | 200% |
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Total beneficial ownership (as of Feb 21, 2025) | 997,608 shares |
| Ownership as % of shares outstanding | 2.3% (based on 42,019,486 shares) |
| Shares acquirable within 60 days | 516,040 |
| Shares held via trust/joint/family | 382,433 |
| Shares held via 401(k)/deferred comp | 31,614 |
| Stock ownership guideline (CEO) | 6x annual base salary; all NEOs meet requirements |
| Hedging/pledging | Prohibited for directors and executive officers; no margin accounts allowed |
| Clawback policies | SEC 954-compliant recoupment plus additional policy; severance repayment rights under certain scenarios |
Insider selling pressure considerations:
- TVRSRs vest in equal tranches over three years starting Feb 9, 2025, which may create periodic settlement windows; PBRSRs cliff-vest at end of 3-year performance period subject to metrics and TSR modifier (0–200% ±15%) .
Employment Terms
Severance agreement terms (CEO):
- Involuntary termination without Cause: salary continuation for 30 months; pro-rata AIP based on actual performance; 2.5x multiple of average AIP payouts over prior 3 years; options exercisable until 90 days after end of Severance Period; unvested RSRs forfeited .
- Change of Control (double-trigger within 24 months after CoC or certain pre-CoC cases): lump sum 3x base salary; lump sum equal to pro-rata target AIP plus 3x target AIP; accelerated vesting of equity awards under Equity Plan; immediate vesting/payment of deferred comp and certain retirement benefits; “best payments” 280G cutback applies .
- Restrictive covenants: confidentiality and non-disparagement indefinite; non-compete and non-solicit for the longer of 12 months or the severance period (up to 30 months without Cause; up to 36 months post-CoC for CEO) .
- Continuation of welfare benefits and outplacement: welfare benefits continued through Severance Period; CEO outplacement up to 36 months .
Estimated payments (based on a Dec 31, 2024 event and $156.86 stock price):
| Scenario | Cash Severance ($) | Intrinsic Value of Equity ($) | Welfare Benefits ($) | Outplacement ($) | Total Benefit ($) |
|---|---|---|---|---|---|
| Involuntary Termination without Cause | 10,536,867 | — | 105,217 | 105,000 | 10,747,084 |
| Change of Control with Qualifying Termination | 10,025,257 | 27,015,213 | 126,260 | 105,000 | 37,271,730 |
Retirement and welfare/pension:
- Executive life insurance equals 3x base salary up to $3.0M; supplemental long-term disability coverage; perquisites include $9,600 car allowance and $11,800 club/community allowance for CEO; no tax gross-ups .
- Pension plans frozen; present value of accumulated benefits: Retirement Plan $431,571; Benefit Restoration Plan $401,852; eligible for unreduced retirement at age 62 based on tenure .
Board Governance
- Dual role: Ryder combines Chair and CEO; independent oversight provided by a strong Lead Independent Director (currently Robert J. Eck since May 2020) with defined authorities (calling meetings, approving agendas, shareholder consultation, overseeing CEO evaluation) .
- Independence: 10 of 11 directors are independent; all Board committees (Audit, Compensation, Governance, Finance) comprised of independent directors; Sanchez is not independent by virtue of executive status .
- Committee memberships and chairs:
- Audit: David G. Nord (Chair), Robert A. Hagemann, Tamara L. Lundgren, Abbie J. Smith .
- Compensation: Michael F. Hilton (Chair), Robert J. Eck, Luis P. Nieto, Jr., E. Follin Smith, Dmitri L. Stockton .
- Governance: Robert J. Eck (Chair), Michael F. Hilton, Tamara L. Lundgren, E. Follin Smith, Charles M. Swoboda .
- Finance: Dmitri L. Stockton (Chair), Robert A. Hagemann, Luis P. Nieto, Jr., Abbie J. Smith, David G. Nord .
- Meetings/attendance: Board held five regular meetings in 2024; each director attended at least 75% of Board and committee meetings; independent directors meet in outside sessions at each regular meeting; all directors attended the 2024 Annual Meeting .
- Say-on-pay: 2024 executive compensation received over 95% shareholder support .
- Director stock ownership requirement: six times Board retainer; all directors in compliance as of Dec 31, 2024 .
Compensation Structure Analysis
- Mix and risk: 89% of CEO’s total direct compensation considered performance-based/“at risk” in 2024; incentives include three-year performance periods with diversified metrics and capped maximums to deter excessive risk .
- Equity design shift: No stock options granted in 2024 LTIP; equity delivered via PBRSRs (60%) and TVRSRs (40%), indicating emphasis on performance shares and retention over options .
- Ownership alignment: Enhanced stock ownership guidelines (CEO 6x salary) and prohibitions on hedging/pledging strengthen alignment and reduce misalignment risk .
- Clawbacks/recoupment: SEC 954-compliant and additional recoupment policies plus severance repayment provisions provide downside accountability .
Performance & Track Record
- 2024 achievements: EPS $11.06 (GAAP), comparable EPS $12.00, total revenue $12.6B (+7%), operating revenue $10.3B (+8%), adjusted ROE 16%, operating cash flow $2.3B, free cash flow $133M; three-year absolute TSR 106% .
- Strategic execution: Integrated Impact Fulfillment Services and Cardinal Logistics; exceeded customer engagement targets; recognized by FORTUNE, Newsweek, and EPA SmartWay for governance and sustainability .
Equity Ownership & Alignment Details (Supplement)
| Ownership breakdown (as of Feb 21, 2025) | Shares |
|---|---|
| Beneficially owned | 997,608 |
| Acquirable within 60 days (options/RSUs) | 516,040 |
| Trust/joint/family holdings | 382,433 |
| 401(k)/deferred compensation plan | 31,614 |
Employment Terms (Supplemental Definitions)
- “Change of Control”: Acquisition of ≥30% voting power; majority Board change; reorganization/merger/consolidation with >50% ownership change; liquidation/dissolution; sale of substantially all assets .
- “Good Reason”: Material reduction in compensation opportunity; relocation >50 miles; failure of successor to honor severance agreement; failure to fund CoC severance; material adverse change in duties/reporting (not title change alone) .
- Voluntary termination/for Cause: No severance; equity forfeiture/reclaim provisions apply; options canceled upon termination for Cause .
Investment Implications
- Alignment: High at-risk pay tied to ROE, FCF, and strategic revenue growth plus TSR modifier suggests strong linkage between long-term shareholder value creation and executive rewards; ownership guidelines and anti-hedging/pledging policies further align incentives .
- Retention vs. overhang: TVRSR tranches (2025–2027) and PBRSR cliff vesting at end of 2026 performance cycle may create periodic settlement-related trading flows; change-of-control acceleration of $27.0M intrinsic equity value plus 3x cash severance multiples highlight meaningful retention value but potential deal-related overhang .
- Governance mitigants: Dual Chair/CEO structure is balanced by an empowered Lead Independent Director; robust clawbacks and strong say-on-pay (>95%) indicate investor support and governance discipline .
- Execution risk: Continued delivery against non-GAAP ROE/FCF/CAGR targets and TSR relative to peers is critical; historical PBRSR payout at 200% underscores past outperformance, but future cycles will hinge on freight environment and strategic integration success .