Heidi Petz

About Heidi Petz

Heidi G. Petz is Chair, President and CEO of The Sherwin-Williams Company (CEO since January 1, 2024; Chair since January 1, 2025; director since 2023) and previously held senior leadership roles across Sherwin’s consumer and architectural businesses after joining in 2017 via the Valspar acquisition; she is 50 years old . Company performance under the current program includes record 2024 net sales of $23.10 billion, net income of $2.68 billion, and diluted EPS of $10.55; 10-year average annual shareholder return was 15.59% vs. 13.10% for the S&P 500; five-year cumulative TSR was 149%, at the 78th percentile of the peer group .

Past Roles

Organization	Role	Years	Strategic Impact
The Sherwin-Williams Company	Chair	2025–present	Combined Chair/CEO role to provide unified leadership and oversight .
The Sherwin-Williams Company	President & CEO	2024–present	Led enterprise strategy and operating plans during choppy demand; record sales and EPS in 2024 .
The Sherwin-Williams Company	President & COO	2022–2024	Operated global businesses; progressed alignment of Global Architectural and Global Industrial .
The Sherwin-Williams Company	President, The Americas Group	2021–2022	Led Paint Stores Group (PSG) operations .
The Sherwin-Williams Company	SVP, Marketing, The Americas Group	2020–2021	Drove marketing for PSG .
The Sherwin-Williams Company	President, Consumer Brands Group	2020	Led consumer brands operations .
The Sherwin-Williams Company	President & GM, Retail North America, Consumer Brands Group	2019–2020	Retail leadership across North America .
The Sherwin-Williams Company	SVP, Marketing, Consumer Brands Group	2017–2019	Joined via Valspar acquisition and led marketing .

External Roles

Organization	Role	Years	Strategic Impact
Ulta Beauty, Inc.	Director	Current	Public company board experience in consumer/retail .
University Hospitals Health System, Inc.	Director	Current	Regional health system governance .
Harvard Joint Center for Housing Studies	Policy Advisory Board	Current	Advisory perspective on housing market dynamics .

Fixed Compensation

Multi-year compensation summary (NEO totals from proxy):

Metric (USD)	FY 2022	FY 2023	FY 2024
Salary	$760,802	$873,088	$1,284,615
Stock Awards (PRSUs grant-date fair value)	$1,226,925	$3,885,665	$5,400,447
Option Awards (grant-date fair value)	$963,637	$3,399,387	$4,519,209
Non-Equity Incentive (annual cash incentive paid)	$402,000	$1,746,000	$1,448,000
All Other Compensation	$167,762	$181,372	$340,026
Total	$3,521,126	$10,085,512	$12,992,297

Base salary was increased to $1,300,000 at December 31, 2024 (from $900,000 at December 31, 2023) following promotion to CEO .
Perquisites include personal use of Company aircraft subject to an annual allowance; allowance was $75,000 in 2024 and increased to $125,000 effective January 1, 2025; costs above the allowance are reimbursed to the Company .

Performance Compensation

2024 Annual Cash Incentive — CEO Metrics, Targets, Actuals, and Payout

Metric	Weighting	Threshold	Target	Maximum	Actual (2024)
SHW Net Sales ($)	25%	$21,245M	$23,605M	$23,882M	$23,098M
Adjusted EPS ($)	40%	$8.24	$10.30	$10.67	$10.55
Adjusted Free Cash Flow ($)	35%	$1,724M	$2,155M	$2,213M	$1,892M

Payout summary:

Target annual incentive opportunity: 160% of salary (increased from 100% upon promotion to CEO) .
2024 payout: $1,448,000, equal to 112.72% of salary based on weighted achievement; no strategic modifier applies to CEO .

2024 Long-Term Equity Incentive Awards (Granted)

Award Type	Grant Date	Target/Count	Metrics/Terms	Vesting
PRSUs – Adjusted EPS	Feb 13, 2024	11,800 target (max 23,600; threshold 5,900)	Adjusted EPS goal; straight-line vesting between thresholds	Vests after 3-year performance period; paid Feb 2027 upon Committee approval
PRSUs – Adjusted RONAE	Feb 13, 2024	5,900 target (max 11,800; threshold 2,950)	Adjusted RONAE goal; straight-line vesting between thresholds	Vests after 3-year performance period; paid Feb 2027 upon Committee approval
Stock Options	Oct 15, 2024	40,500 options	Exercise price $388.57; 10-year term	Vests in equal installments on the first, second, and third anniversaries of grant

2024–2026 PRSU performance scales:

Adjusted EPS: Threshold $29.79; Target $33.10; Maximum $35.25 (payout 50%–200% of target) .
Adjusted RONAE: Threshold 14.00%; Target 15.00%; Maximum 15.50% (payout 50%–200% of target) .

Historical vesting (2012–2024 PRSU cycle outcome):

Performance Goal	Threshold	Target	Maximum	Actual	% of Target PRSUs Vesting
Adjusted EPS	$25.52	$27.15	$28.65	$28.04	159.21%
Adjusted RONAE	14.00%	14.50%	15.00%	14.87%	173.08%
Overall PRSU Vesting	—	—	—	—	163.83%

2024 realized equity events:

Event	Shares	Value
PRSUs vested (Feb 15, 2024)	2,897	$924,770
Options exercised	—	—

Equity Ownership & Alignment

Beneficial ownership (as of Feb 19, 2025):

Category	Shares
Common stock owned	12,477
Shares acquirable within 60 days (options)	42,233
Total	54,710
% of shares outstanding	<1% (based on 251,510,149 shares)

Outstanding equity awards (12/31/2024):

Award	Grant Date	Exercisable	Unexercisable	Exercise Price	Expiration
Stock Options	10/18/2017	420	—	$127.98	10/17/2027
Stock Options	10/17/2018	579	—	$136.85	10/16/2028
Stock Options	10/16/2019	3,000	—	$186.85	10/15/2029
Stock Options	10/20/2020	2,700	—	$227.05	10/19/2030
Stock Options	10/18/2021	11,700	—	$295.83	10/17/2031
Stock Options	10/18/2022	9,134	4,566	$215.08	10/17/2032
Stock Options	10/13/2023	14,700	29,400	$248.57	10/12/2033
Stock Options	10/15/2024	—	40,500	$388.57	10/14/2034

Unvested RSUs and unearned PRSUs (12/31/2024):

Award Type	Count	Market/Payout Value
Time-based RSUs (two grants)	7,374; 8,350	$2,506,644; $2,838,416 (at $339.93)
Unearned PRSUs (two cycles)	16,800; 35,400	$5,710,824; $12,033,522 (at $339.93)

Alignment and policies:

Stock ownership guidelines require CEO to hold 6× base salary; as of December 31, 2024, all executives had met or are expected to meet within the timeframe .
Anti-hedging and anti-pledging: directors and executives are prohibited from hedging or pledging SHW securities; short sales and exchange-traded derivatives are prohibited .

Employment Terms

No employment agreements; at-will employment .
Clawback: executive clawback policy allows recovery of erroneously awarded incentive compensation in the event of an accounting restatement .
Key Employee Separation Plan (KESP): upon involuntary termination without cause prior to a change in control, CEO is entitled to 2× base salary plus target annual incentive (salary paid as continuation; target incentive paid after performance period), pro-rated annual incentive subject to actual results, continuation of medical/dental coverage up to 18 months, outplacement assistance, and continued vesting of equity for 2 years; restrictive covenants (IP, confidentiality, non-compete, non-solicit; non-disparagement) apply .
Change in Control Agreements: double-trigger equity acceleration; CEO receives 2.99× the sum of the highest base salary in prior 3 years plus the greater of average prior 3-year annual incentive or current-year target, plus 18 months of health benefits and outplacement up to 10% of salary; annual incentive is paid prorated at least at target; no excise tax gross-up for CEO (only legacy provision for former Executive Chairman) .

Estimated payments (as of 12/31/2024 assumption):

Scenario	Cash Severance	Annual Incentive	Stock Options (Accel/Cont.)	PRSUs/RSUs (Accel/Cont.)	Health Care	Outplacement	Total
Involuntary Termination (KESP)	$6,710,769	$1,448,000	$1,913,057 (continued vesting)	$7,223,513 (continued vesting)	$23,808	$130,000	$17,449,147
Change in Control with Termination	$10,032,600	$1,448,000	$3,256,049 (accelerated)	$13,240,274 (accelerated)	$23,808	$130,000	$28,130,731

Board Governance

Board roles: Petz is Chair, President and CEO; not independent due to her management role .
Combined Chair/CEO structure reinstated effective January 1, 2025 following Executive Chairman retirement, with rationale for unified leadership; robust Lead Independent Director responsibilities mitigate dual-role concerns .
Lead Independent Director: Jeff M. Fettig; chairs executive sessions of non-management directors held after each regular Board meeting .
Committees: Audit, Compensation & Management Development, and Nominating & Corporate Governance are composed entirely of independent directors .
Attendance: Board held six meetings in 2024; each director attended at least 75% of Board/committee meetings; all directors attended the 2024 annual meeting .
Director compensation: executives who serve as directors do not receive additional director compensation .

Compensation Committee Analysis

Independent consultant: Compensation Advisory Partners (CAP) retained directly by the Committee; independence assessed; provided peer group benchmarking, incentive design and risk assessment .
Peer group (21 companies) includes PPG Industries, Ecolab, Linde, Dow, 3M, Caterpillar, Honeywell, Johnson Controls, Kimberly-Clark, and others; SHW ranked at the 55th percentile of TTM revenues at the time of review .
Market positioning approach benchmarks to around the market median with judgment, not a fixed percentile; component mix emphasizes at-risk pay .

Say-on-Pay & Shareholder Feedback

2024 say-on-pay approval: 91.62% of votes cast; viewed as strong endorsement; program maintained with minor adjustments (e.g., CEO target bonus increased upon promotion) .

Equity and Incentive Plan Design Features

Double-trigger change-in-control vesting; awards not assumed by successor are settled at target or projected performance per plan terms .
No repricing or replacement of underwater options without shareholder approval .
Dividend equivalents on RSUs/PRSUs are deferred and paid only upon vesting; no dividend equivalents on options .

Risk Indicators & Red Flags

Related party transactions: none in 2024 .
Hedging/pledging prohibited for directors/executives .
Clawback policy adopted per SEC/NYSE requirements .
Compensation risk assessment conducted; no excessive risk-taking identified .

Investment Implications

High pay-for-performance alignment: CEO’s 2024 pay predominantly at-risk (90% of total direct compensation), with LTI tied to Adjusted EPS and RONAE; recent PRSU cycle vested well above target, indicating strong execution against financial goals .
Selling pressure windows: Option tranches from October 2024 grant vest annually through 2027 and 2024 PRSUs settle in February 2027; monitor Form 4s around vesting dates for potential supply, though insider hedging/pledging is prohibited and CEO had no option exercises in 2024 .
Retention and change-in-control economics: KESP provides 2× salary+target incentive and continued vesting; CIC agreement provides 2.99× salary+bonus multiple with double-trigger vesting—competitive but not excessive, reducing retention risk while limiting gross-up exposure .
Governance mitigants for combined Chair/CEO: robust Lead Director role, fully independent committees, and strong stock ownership guidelines support board independence and alignment amid the dual role .