Christopher Calio
About Christopher Calio
Christopher T. Calio is Chairman (effective April 30, 2025), President & CEO of RTX and a director since 2023; age 51 . Under his leadership in 2024, RTX delivered strong shareholder returns (41% TSR, ahead of the S&P 500 and Core A&D peers), exceeded adjusted net sales and EPS goals, grew backlog 11% to $218 billion, generated $7.2 billion GAAP cash from operations and $4.5 billion free cash flow . RTX’s annual Say‑on‑Pay approval was ~86% in 2024, indicating investor support for pay design . The Board determined combining CEO and Chairman enhances decision efficiency with safeguards including a robust independent Lead Director and fully independent key committees .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| RTX Corporation | Chairman (effective Apr 30, 2025) | 2025– | Board elected Calio as Chairman to succeed Executive Chairman Hayes; governance designed with strong Lead Director |
| RTX Corporation | President & CEO; Director | May 2024–present | Drove 41% TSR in 2024; exceeded adjusted net sales/EPS; backlog +11% to $218B; strong FCF |
| RTX Corporation | President & COO; Director | Dec 2023–May 2024 | Led operations across Collins, Pratt & Whitney, Raytheon; risk management emphasis |
| Raytheon Technologies (RTX) | Chief Operating Officer | Mar 2022–Feb 2023 | Enterprise-wide execution, manufacturing/operations and supply chain oversight |
| Pratt & Whitney (RTX/UTC) | President | Jan 2020–Feb 2022 | Led GTF aftermarket expansion; managed powder metal fleet plan execution oversight |
| Pratt & Whitney (UTC) | President, Commercial Engines | Feb 2017–Dec 2019 | Commercial engine growth, customer commitments |
| United Technologies | Chief of Staff to Chairman & CEO | Feb 2015–Jan 2017 | Enterprise strategy, governance exposure |
| UTC Aerospace Systems / Pratt & Whitney | VP & General Counsel; VP & Counsel | 2005– | Legal, risk management foundation |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| US‑India Strategic Partnership Forum | Board of Directors | Current | External policy/market engagement |
Fixed Compensation
| Component | 2024 Detail | Notes |
|---|---|---|
| Base Salary (paid, SCT) | $1,182,500 | Reflects actual salary paid in 2024 |
| Base Salary (year‑end reference) | $1,450,000 | Used for 2024 total direct compensation presentation |
| Target Bonus % | 175% of base salary (effective with 2024 role change) | Corporate executive target revised with promotion |
| Annual Incentive Paid (Bonus) | $2,760,000 | Based on AIP results and individual assessment |
| Long‑Term Incentive (LTI) value included in 2024 TDC | $17,150,000 | February 6, 2025 LTI approved for 2024 performance |
| Total Direct Compensation (2024) | $21,360,000 | Base + AIP + LTI (2025 grant for 2024 performance) |
Performance Compensation
Annual Incentive Plan (AIP) – Corporate Metrics and Outcomes (2024)
| Metric | Weight | Threshold | Target | Maximum | Actual | Performance Factor |
|---|---|---|---|---|---|---|
| Adjusted Net Income ($M) | 40% | 6,135 | 7,220 | 8,445 | 7,722 | 141% |
| Free Cash Flow ($M) | 40% | 4,700 | 5,700 | 7,300 | 5,607 | 95% |
| Employee Retention (%) | 5% | 93.3% | 95.1% | 96.9% | 96.0% | 150% |
| Total Representation (%) | 5% | 42.9% | 43.3% | 44.3% | 43.1% | 75% |
| GHG Emissions vs 2019 (CO2 tons) | 5% | -18% | -21% | -30% | -21.4% | 104% |
| Water Usage vs 2019 (gallons) | 5% | -9% | -11% | -20% | -9.7% | 68% |
| 2024 RTX Performance Factor | — | — | — | — | — | 114% |
Note: For 2025 AIP, Corporate metrics will be solely financial, 50% earnings and 50% FCF .
PSU Design and Recent Vesting
| PSU Metric (2022 grant measured 2022–2024) | Weight | Threshold | Target | Maximum | Actual | Vesting Factor |
|---|---|---|---|---|---|---|
| Adjusted EPS | 35% | 8.1% | 14.1% | 17.9% | 13.6% | 94% |
| ROIC | 35% | 6.1% | 7.1% | 7.8% | 6.9% | 82% |
| TSR vs S&P 500 | 15% | 25th pct | 50th pct | 75th pct | 74.6th pct | 198% |
| TSR vs Core A&D Peers | 15% | 25th pct | 50th pct | 75th pct | 55.5th pct | 122% |
| Final PSU Vesting Factor | — | — | — | — | — | 110% |
2024 LTI Grants (February 8, 2024)
| Award Type | Grant Date | Target/Units | Exercise Price | Vesting | Grant Date Fair Value |
|---|---|---|---|---|---|
| PSUs | 2/8/2024 | Target: 88,975; Threshold: 3,337; Max: 177,950 | n/a | 3‑year performance period; 3.75%–200% payout based on metrics | $8,315,559 |
| SARs | 2/8/2024 | 247,200 | $91.04/sh | Vest 3 years from grant; 10‑year term | $5,379,072 |
Vesting/Supply Indicators:
- 2024 exercises and vesting: Calio exercised 16,003 SARs for $516,555; 51,384 shares vested from stock awards worth $4,677,999 in 2024 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (as of Feb 18, 2025) | 226,494 total shares; includes 113,353 SARs exercisable within 60 days; no RSUs/DSUs convertible within 60 days listed for Calio |
| Ownership % of Outstanding | Each individual under 1% of outstanding shares |
| CEO Ownership Guideline | 6x base salary; rigorous policy applies across executives and directors |
| Compliance | All directors and ELG members comply or are on track; selling restrictions until compliance achieved within 5 years |
| Hedging/Pledging | Prohibited for directors/officers; short sales and derivatives also prohibited; LTIP prohibits option/SAR buyout/repricing without shareholder approval |
Employment Terms
| Element | Calio Terms |
|---|---|
| ELG Program (current) | RSU award upon ELG appointment (grant value ≥$1.5M) acts as retention and severance replacement; vests only upon “qualifying separation” with restrictive covenants; dividends reinvested as RSUs |
| Qualifying Separation definition | Mutually agreeable separation after 3 years in ELG; retirement at/after age 62 after 3 years; involuntary (not for cause) or voluntary (for good reason) within 2 years post change‑in‑control |
| Restrictive Covenants | Duty to protect information; 2‑year non‑solicit; 1‑year non‑compete (additional 1‑year if benefits provided); 2‑year non‑disparagement; IP agreement; release and cooperation for severance |
| Change‑in‑Control (CIC) | Double trigger under RTX LTIP; accelerated vesting; PSUs vest at greater of actual or target performance |
| Potential Payments (as of Dec 31, 2024) | Involuntary w/o cause: Cash $2,417,150; H&W $37,027; Options $5,861,005; Stock $22,039,973; Total $30,355,155 . CIC qualifying termination: Cash $2,417,150; H&W $37,027; Options $11,961,901; Stock $42,632,347; Total $57,048,425 . Retirement eligibility status provides beneficial LTI treatment . |
Board Governance
- Director since 2023; Board committees: Finance and Special Activities (as active employee); Audit, Governance, HCC are fully independent .
- Becomes Chairman April 30, 2025; independent Lead Director (Fredric G. Reynolds) maintains robust oversight with defined authority (executive sessions, agenda setting, CEO evaluation) .
- Independence: All nominees except Calio are independent under NYSE/RTX policy .
- Board engagement: 2024 attendance 96% overall Board meetings; 98% Board/Committee meetings; enhanced oversight of product safety/quality, AI, ERM .
Compensation Structure Analysis
- Mix emphasizes “at‑risk” pay via AIP and LTI; substantial portion tied to financial metrics (earnings, FCF) and long‑term metrics (EPS, ROIC, TSR) .
- Structural shift: Replaced RSUs with SARs in LTI mix in recent years; capped payouts (AIP/PSUs max 200%); discretion to adjust AIP payouts; rigorous ownership and clawback policies .
- 2024 AIP funding factor 114%; PSU vesting factor for 2022–2024 cohort 110%, showing alignment with multi‑year performance .
- Say‑on‑Pay support ~86% in 2024 reinforces investor acceptance of design .
Compensation Peer Group and Shareholder Feedback
- Peer group includes 20 companies across A&D, Industrials, Tech/Comms, Energy (e.g., Boeing, Lockheed Martin, Honeywell, Intel, Chevron, UPS); targeting market median for elements; no changes in 2024 .
- Ongoing engagement; disclosure enhancements reflect investor feedback; Board recommends FOR Say‑on‑Pay .
Risk Indicators & Red Flags
- Combined CEO/Chair role: mitigated by independent Lead Director and independent committees .
- Product quality/safety oversight heightened; Board ran multiple special meetings on settlements and powder metal matter; robust ERM and governance practices .
- Hedging/pledging prohibited; LTIP prohibits option/SAR repricing without shareholder approval; comprehensive clawback policy including SEC/NYSE-compliant executive clawback .
Performance & Track Record Highlights (2024 under Calio’s executive leadership)
- 41% TSR; exceeded adjusted net sales and adjusted EPS guidance; $218B backlog (+11% YoY); $7.2B GAAP CFO; $4.5B FCF; $3.7B capital returned (dividends + buybacks); dividend raised to $0.63/quarter .
- Strategic execution: GTF powder metal plan progress; capacity expansions (P&W aftermarket network to 18 facilities; Collins carbon brake expansion; Raytheon missile integration facility investment) .
Investment Implications
- Strong pay‑for‑performance linkage: AIP and PSU metrics emphasize earnings, FCF, ROIC, and relative TSR, supporting capital discipline and shareholder returns; 2025 AIP shifts entirely to financials, increasing line‑of‑sight to cash/earnings delivery .
- Retention risk appears contained: ELG RSUs vest only upon qualifying separation with strict covenants; retirement eligibility provides beneficial LTI treatment, reducing incentive to depart; ownership guidelines and sale restrictions enhance alignment .
- Insider selling pressure: 2024 SAR exercises/stock vesting indicate ongoing supply, but prohibitions on hedging/pledging and ownership requirements mitigate misalignment; watch three‑year vesting cliffs from 2024 LTI grants (2027) and PSU payouts for potential sell events .
- Governance: Combined CEO/Chair raises typical independence questions, but RTX’s structure features an empowered Lead Director and fully independent audit/compensation/governance committees; continued oversight of product safety/quality and AI risk remain critical execution variables .
- Shareholder sentiment: ~86% Say‑on‑Pay support and 2024 performance momentum underpin confidence; monitoring PSU outcome mix (ROIC/EPS vs TSR) and backlog-to-cash conversion is key for comp payout sustainability and equity performance .