Heidi Petz
SHERWIN WILLIAMSAbout 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 .