Nicholas Pinchuk
Snap-onAbout Nicholas Pinchuk
Nicholas T. Pinchuk, age 78, is Chairman, President, and CEO of Snap-on Incorporated (SNA), roles he has held since 2009 (Chairman) and 2007 (CEO); he joined Snap-on in 2002 after executive operational and financial roles at United Technologies and earlier engineering/finance roles at Ford. He holds BS and MS in engineering from Rensselaer Polytechnic Institute and an MBA from Harvard Business School, and served as a U.S. Army officer in Vietnam . Under his leadership in 2024, net sales were $4.71B (-0.5% YoY), operating margin before financial services improved to 22.7% (+70 bps), and diluted EPS rose 4% to $19.51; five-year cumulative TSR reached 228.34 vs 176.44 for the S&P 500 Industrials and 197.02 for the S&P 500 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Snap-on Incorporated | President and COO; previously SVP & President – Worldwide Commercial & Industrial Group | 2002–2007 (COO/President); SVP role prior to 2007 | Led global operations and C&I group, precursor to CEO role |
| United Technologies Corporation | Executive operational and financial management positions | Pre-2002 | Large-cap operations/finance experience leveraged to Snap-on’s margin and process discipline |
| Ford Motor Company | Financial and engineering positions | Pre-2002 | Automotive engineering/finance grounding, relevant to Snap-on’s core end market |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Columbus McKinnon Corporation | Director (prior service) | Pre-2025 (not currently disclosed) | Industrial motion control exposure; network and governance experience |
| U.S. Army | Officer (Vietnam) | Historical service | Leadership under stress; discipline relevant to execution |
Fixed Compensation
Multi-year CEO compensation (Summary Compensation Table):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $1,142,473 | $1,142,473 | $1,142,473 |
| Stock Awards ($) | $4,673,039 | $5,532,076 | $5,502,126 |
| Option Awards ($) | $1,179,998 | $1,323,023 | $1,443,040 |
| Non-Equity Incentive ($) | $1,738,702 | $1,800,681 | $1,014,859 |
| Change in Pension Value/Deferred Earnings ($) | $486,011 | $455,232 | $499,568 |
| All Other Compensation ($) | $264,437 | $321,272 | $874,796 |
| Total ($) | $9,484,660 | $10,574,757 | $10,476,862 |
Notes:
- 2024 All Other Compensation includes 401(k) and deferred match plus dividend equivalents on vested awards; dividend equivalents totaled $786,501 .
- Annual incentive targets for CEO are 135% of base salary .
Performance Compensation
Annual incentive design and 2024 outcomes:
- Weighting: 50% consolidated financial results (Operating Income and RONAEBIT) + 50% personal strategic business goals .
- CEO personal goals payout: 70% of target .
- Consolidated financial results payout: 61.6% of target .
| Component | Threshold | Target | Maximum | Actual |
|---|---|---|---|---|
| Operating Income ($mm) | $1,044.7 | $1,138.7 | $1,305.9 | $1,074.0 |
| RONAEBIT (%) | 33.0% | 38.0% | 43.0% | 37.2% |
| Consolidated payout (% of target) | 25% if threshold criteria met | 100% | 200% | 61.6% |
| CEO personal goals payout (% of target) | — | — | — | 70% |
Long-term incentives (design since 2021):
- CEO equity mix: PSUs 60%, Stock Options 20%, RSUs 20% .
- Vesting: PSUs over 3 years based on revenue CAGR and RONAEBIT; Options vest 1/3 annually over 3 years; RSUs 3-year cliff .
2024 CEO grants:
| Grant type | Grant date | Units | Exercise price | Fair value |
|---|---|---|---|---|
| PSUs (target) | 2/15/2024 | 15,340 | — | $4,126,460 |
| RSUs | 2/15/2024 | 5,114 | — | $1,375,666 |
| Options | 2/15/2024 | 23,710 | $269.00 | $1,443,040 |
PSU payout for 2022–2024 performance cycle:
| Metric | Threshold | Target | Maximum | Actual | Payout (% of target) |
|---|---|---|---|---|---|
| Net Sales ($mm, FY2024) | $4,659 | $4,866 | $5,078 | $4,707 | 107.8% |
| RONAEBIT (3-year avg, %) | 19.0% | 24.0% | 38.0% | 36.9% | 107.8% |
Equity Ownership & Alignment
- Beneficial ownership: 1,434,762 shares (2.7% of outstanding) as of record date Feb 24, 2025; options exercisable within 60 days: 625,480 .
- Stock ownership guidelines: CEO must hold ≥6x base salary; all executives met guidelines as of Aug 2024 .
- Anti-hedging and anti-pledging: Prohibited for directors and executive officers under Insider Trading Policy .
- Clawbacks: SEC-compliant restatement recovery policy effective Oct 2, 2023, plus broader Company policy covering cash and equity incentives for top executives .
Ownership trend:
| Metric | 2021 | 2023 | 2025 |
|---|---|---|---|
| Shares beneficially owned (#) | 1,538,032 | 1,518,605 | 1,434,762 |
| % of outstanding | 2.8% | 2.8% | 2.7% |
| Options exercisable within 60 days (#) | 960,348 | 826,293 | 625,480 |
Vesting and potential selling windows:
- 2024 options vest approx. 2/15/2025, 2/15/2026, 2/15/2027 (three equal tranches) .
- 2024 RSUs cliff vest approx. 2/15/2027 .
- 2022 PSUs paid out in Feb 2025 at 107.8% of target based on three-year performance .
- Company prohibits hedging/pledging, which mitigates forced-selling risk from collateral needs .
Employment Terms
- No general U.S. employment agreement; change-of-control agreements in place for NEOs including CEO, with double trigger; severance multiples at 2x salary and benefits; continuation of health, disability, life insurance, pension credit and 401(k) matching for two years; no excise tax gross-up; payments may be reduced to avoid 280G excise tax; bonus used in calculations is three-year average .
- Severance outside change-of-control determined case-by-case; no U.S. perquisites beyond standard employee benefits .
| Provision | Term |
|---|---|
| Change-of-control trigger | Double trigger (event + qualifying termination) |
| Cash severance multiple | 2x salary and applicable benefits |
| Benefits continuation | Health/disability/life, pension credit, 401(k) match for 2 years |
| Excise tax | No gross-up; cutback provision to avoid 280G/4999 |
| Clawbacks | SEC-required and Company policy covering cash/equity incentives |
| Hedging/pledging | Prohibited |
Board Governance
- Board service: Director since 2007; Chairman since 2009; CEO since 2007 .
- Independence: Not independent (executive director) .
- Committee roles: None; Audit (Jones, Gillis, Stebbins), Governance (Adams, Holden, Knueppel), Compensation (Daniel, Lehman, Sherrill) .
- Lead Independent Director: James P. Holden (since 2009) .
- Board meetings/attendance: Board met 7 times in fiscal 2024; all directors ≥75% attendance (Holden missed one set due to illness) .
- Employee directors receive no additional board compensation .
Director compensation and equity for non-employee directors (context for governance norms):
- Annual cash retainer $110,000; committee chair and member fees disclosed; 2024 grant of 599 restricted shares per non-employee director vesting after ~1 year .
Say-on-Pay & Shareholder Feedback
| Year | Approval (%) |
|---|---|
| 2017 | 96% |
| 2018 | 89% |
| 2020 | 79% |
| 2021 | 92% |
| 2024 | 93% |
Management response: Committee maintains pay-for-performance structure, increased PSU weighting, prohibits repricing, and retains independent consultant Semler Brossy; no conflicts of interest identified .
Compensation Structure Analysis
- Mix shift to performance-based equity: Since 2021, CEO LTI is 60% PSUs, 20% options, 20% RSUs, emphasizing operating performance and RONAEBIT-linked value creation .
- 2024 annual incentive paid below prior year, reflecting tougher consolidated metrics; consolidated payout 61.6% and CEO personal goals 70% .
- Governance features: Minimum vesting periods (≥1 year for performance awards; ≥3 years for time-based RSUs), no option repricing, dividends only upon vesting, robust clawbacks, anti-hedging/pledging .
Performance & Track Record
Five-year TSR (cumulative $100 investment):
| Fiscal year ended | Snap-on TSR | S&P 500 Industrials TSR | S&P 500 TSR |
|---|---|---|---|
| Dec 31, 2019 | $100.00 | $100.00 | $100.00 |
| Dec 31, 2020 | $104.01 | $111.06 | $118.40 |
| Dec 31, 2021 | $134.00 | $134.52 | $152.39 |
| Dec 31, 2022 | $145.95 | $127.15 | $124.79 |
| Dec 31, 2023 | $189.28 | $150.20 | $157.59 |
| Dec 31, 2024 | $228.34 | $176.44 | $197.02 |
Recent financial highlights:
| Metric | 2023 | 2024 | Change |
|---|---|---|---|
| Net Sales ($B) | $4.73 | $4.71 | -0.5% |
| Operating Earnings before Financial Services ($mm) | $1,039.9 | $1,068.8 | +2.8% |
| Op. margin before Financial Services (%) | 22.0% | 22.7% | +70 bps |
| Consolidated Operating Earnings ($mm) | $1,310.4 | $1,345.7 | +2.7% |
| Diluted EPS ($) | $18.76 | $19.51 | +4.0% |
Compensation Peer Group
Peer group used for 2024/2025 planning (15 companies):
- AMETEK; Crane; Donaldson; Dover; Flowserve; Fortive; IDEX; Kennametal; Lincoln Electric; Pentair; Rockwell Automation; Roper; Stanley Black & Decker; Timken; Xylem .
Pay positioning:
- Target total direct compensation generally between 50th–75th percentile of market; annual incentive targets at ~50th percentile; pay mix increases at-risk with responsibility .
Equity Ownership Guidelines & Pledging
- Executive stock ownership guidelines based on multiples of salary; CEO at ≥6x; all executives met guidelines in Aug 2024 .
- Anti-hedging/anti-pledging: Strict prohibition for directors and executive officers .
Employment & Contracts Details
- No standard U.S. employment agreements; change-of-control agreements feature double trigger, 2x multiples, benefit continuations, no tax gross-up, and potential cutback to avoid excise taxes; bonus averaged over three years for severance calculation .
- Severance (non-CoC): case-by-case basis; standard global benefits and select overseas allowances only where applicable; no U.S. perquisites beyond normal employee benefits .
Board Governance Implications
- Dual-role CEO + Chairman: Company cites unified leadership benefits; mitigated by a long-tenured independent Lead Director and fully independent committees .
- Director independence: CEO not independent; all other directors except CEO determined independent; executive sessions led by Lead Director .
Investment Implications
- Alignment: High PSU weighting tied to multi-year revenue CAGR and RONAEBIT plus rigorous clawbacks, prohibitions on hedging/pledging, and strong ownership guidelines reduce misalignment risk and pledging-related overhang .
- Near-term supply dynamics: 2022 PSUs vested at 107.8% in Feb 2025; 2024 options vest annually beginning Feb 2025; 2024 RSUs cliff vest Feb 2027; while vesting can create windows for Form 4 activity, hedging/pledging bans and governance design mitigate forced selling; monitor filings for discretionary sales around these dates .
- Pay-for-performance calibration: 2024 annual incentive paid below prior year given tougher consolidated targets (61.6% of target), while multi-year PSU payout remained above target (107.8%), signaling resilient long-term operating returns despite mixed near-term sales trends .
- Governance quality: Double-trigger CoC without tax gross-ups, no repricing, minimum vesting, independent consultant, and strong say-on-pay history (majority support across years) point to shareholder-friendly practices, lowering governance risk premium .