Donald Allan, Jr.
STANLEY BLACK & DECKERAbout Donald Allan, Jr.
Donald Allan, Jr. is President & Chief Executive Officer of Stanley Black & Decker and a director since 2022; he became CEO in July 2022 after over 20 years in finance and operating roles at the company. He is 60 years old and serves on the Executive Committee of the Board; all other directors are independent and the Board has an independent Chair, mitigating dual-role concerns and preserving governance independence . Company performance under the ongoing transformation shows FY2024 revenue of $15.4B, adjusted gross margin 30.0% (+400 bps YoY), adjusted EBITDA ~$1.6B (10.1% of sales), free cash flow $753M, and $1.1B debt reduction; GAAP EPS from continuing ops was $1.89 (adjusted $4.36) . Over five years, the Company’s cumulative TSR translated a fixed $100 investment to $56, underscoring recent underperformance versus the peer index, while pay-versus-performance alignment was emphasized by zero payout for the 2022–2024 PSUs .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Stanley Black & Decker | President & CEO | 2022–present | Articulated business transformation; oversight of cost reductions and margin restoration |
| Stanley Black & Decker | President & CFO | 2021–2022 | Led finance through transformation onset; capital allocation |
| Stanley Black & Decker | EVP & CFO | 2016–2021 | Corporate finance leadership; risk, capital markets |
| Stanley Black & Decker | SVP/CFO (and earlier Controller roles) | 2000–2016 | Financial reporting, controls, supply chain finance |
| Loctite Corporation | Finance management roles | n/a | Financial operations experience |
| Ernst & Young | Finance roles | n/a | Accounting and audit grounding |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Logitech International S.A. | Director | 2024–present | Technology/consumer hardware perspective to SWK; network linkage |
Fixed Compensation
| Component | 2024 Detail | Source |
|---|---|---|
| Base Salary | $1,350,000 (effective 1/1/2024) | |
| Target Bonus % (MICP) | 155% of base (increased from 150% effective 1/1/2024) | |
| Actual MICP Payout | $3,362,580 (173.6% of target) | |
| Perquisites (Total) | $642,731 (incl. aircraft $268,131; life insurance $47,945; disability $7,331; product program $20,835; RAP/Supplemental RAP contributions etc.) | |
| Director Compensation | CEO is a director; non-employee director compensation shown elsewhere; only CEO is non-independent |
Performance Compensation
| Metric (Corporate) | Weight | Threshold | Target | Maximum | 2024 Actual | Payout Impact |
|---|---|---|---|---|---|---|
| Adjusted EPS | 30% | $3.50 | $4.00 | $4.50 | $4.36 | Above target contribution |
| Free Cash Flow | 40% | $550M | $650M | $750M | $753M | Above maximum contribution |
| Adjusted Gross Margin Rate | 30% | 29.3% | 29.8% | 30.3% | 30.0% | Above target contribution |
| Adj. Gross Margin Modifier | + up to 10% | 30.3% | 30.55% | 30.8% | 30.0% | No additional payout (below threshold) |
| Total MICP Payout (CEO) | — | — | — | — | 173.6% of target | $3,362,580 |
Long-term incentives:
- 2024 LTI target allocation: 50% PSUs (CFROI 40%, Relative Organic Sales Growth vs Market 35%, Relative TSR 25%), 25% stock options, 25% RSUs; CEO grant-date fair values: PSUs $5,187,495; options $2,593,756; RSUs $2,593,719 .
- 2022–2024 PSU cycle paid 0% due to below-threshold performance across all metrics; CEO and other NEOs received no shares .
- Underwater options: all outstanding options other than recent awards are generally underwater, strengthening at-risk alignment and limiting option-driven selling .
Equity Ownership & Alignment
| Item | Amount | Notes |
|---|---|---|
| Beneficial Ownership (Shares) | 706,552 | Includes direct, deferred RSUs, options/RSUs eligible within specified windows |
| Shares Outstanding (Record Date) | 154,537,524 | For percentage calculation context |
| Ownership % of Shares Outstanding | ~0.46% | 706,552 / 154,537,524 |
| Options exercisable by 4/29/2025 | 280,646 | Near-term exercisable options |
| RSUs vesting by 4/29/2025 | 9,272 | Near-term time-based RSUs |
| Retirement-eligible options (if retire before 4/29/2025) | 234,712 | Accelerate upon retirement per plan terms; CEO meets retirement criteria |
| Retirement-eligible RSUs (if retire before 4/29/2025) | 65,733 | Accelerate upon retirement per plan terms |
| RSUs not yet vested by grant | 1,906 (12/29/2021); 4,001 (7/5/2022); 3,166 (12/6/2022); 16,351 (2/15/2023); 27,813 (3/1/2024) | Vest in equal annual installments per schedule |
| Pledging/Hedging | Prohibited for directors and officers | Policy bans hedging and pledging; no margin accounts permitted |
| Stock Ownership Guidelines (Execs) | CEO: 6x base salary | CFO/COO 5x; others 3x; measured over 5 years |
Insider selling pressure indicators:
- Upcoming RSU vesting across multiple grants (equal installments) and retirement-eligible acceleration could create supply; however, most legacy options are underwater, dampening option-exercise supply .
Employment Terms
| Term/Provision | Key Details |
|---|---|
| Employment Agreement | Allan Letter Agreement; term to June 30, 2026; at-will employment; amendment 1/24/2024 |
| Base/Bonus/LTI Targets | Base $1.35M; MICP target 155%; LTI target no less than $10M for 2024 and 2025; ≥50% PSUs |
| Severance (Non-CIC) | If terminated without cause or resigns for good reason: lump sum = 2x (or 1x if between 6/30/2025 and term end) base + target bonus; health, welfare, life, vision, Rx continuation until age 65 or new employer eligibility; subject to 2-year non-compete/non-solicit and indefinite confidentiality |
| Change-in-Control (CIC) Agreements | Double-trigger equity; if not assumed: options/RSUs/PSUs vest at target upon CIC; CIC cash severance on qualifying termination: 2.5x base salary + 2.5x average annual bonus (last 3 years); continued benefits/perquisites 2.5 years; +2.5 years service credit for defined contribution; up to $50,000 outplacement; 2-year non-compete/non-solicit |
| Clawbacks | Mandatory clawback for restatements (SEC/NYSE Rule 10D-1 compliant); discretionary clawback for misconduct adopted Feb 2025; covers cash and equity (time/performance-based) |
| Tax Gross-ups | No excise tax gross-ups under CIC agreements; no tax gross-ups on perquisites (other than relocation) |
| Insider Trading Policy | Strict insider trading policy; prohibits transactions while in possession of MNPI |
Board Governance (Director Role)
- Board service: Director since 2022; serves on the Executive Committee; not independent; independent Chair structure separates board leadership from CEO .
- Committees and meetings: Executive Committee met 0 times in 2024 (given cadence of board/committee meetings); overall Board met 6 times; all directors attended ≥75% of meetings; non-management directors hold executive sessions at each regular Board meeting .
- Independence and dual-role implications: Only the CEO is non-independent; independent Chair with robust governance practices (no poison pill, proxy access, majority voting, shareholder rights) mitigates CEO-director dual role concerns .
Director Compensation (Context)
- Non-employee director program in 2024: cash retainer $125,000; annual RSU grant ~$185,000 (fully vested); Chair receives additional quarterly RSUs ($50,000 each); committee chair retainers (Audit $25,000; Compensation $20,000; Corporate Governance $20,000; Finance & Pension $15,000). CEO as employee-director does not receive non-employee director compensation .
Compensation Peer Group
| Peer Companies (2024) |
|---|
| Carrier |
| Emerson Electric Company |
| Owens Corning |
| Rockwell Automation, Inc. |
| Cummins, Inc. |
| Illinois Tool Works, Inc. |
| PACCAR, Inc. |
| The Sherwin-Williams Company |
| Dover Corporation |
| Johnson Controls International plc |
| Parker Hannifin Corporation |
| Textron Inc. |
| Eaton Corporation plc |
| Masco Corporation |
| PPG Industries |
| Whirlpool Corporation |
- Target market positioning: Total target compensation generally targeted at the 50th percentile of the peer group; median peer revenue $17.0B; SWK revenue $15.4B; peer median market cap $50.5B vs SWK $12.4B (FY2024) .
Say-on-Pay & Shareholder Feedback
| Metric | Result |
|---|---|
| 2024 Say-on-Pay approval | 92.7% |
| 3-year average approval | ~90.9% |
| Program changes responsive to feedback | Increased performance-based pay; added Adjusted Gross Margin modifier to MICP; replaced LTIP Adjusted EPS with Relative Organic Sales Growth vs Market; added FCF metric; ongoing investor engagement |
Equity Award Vesting Schedules (CEO)
| Grant Date | Units Not Yet Vested | Vesting Schedule |
|---|---|---|
| 12/29/2021 (RSU) | 1,906 | 4 installments on 1st–4th anniversaries |
| 7/5/2022 (RSU) | 4,001 | 4 installments on 1st–4th anniversaries |
| 12/6/2022 (RSU) | 3,166 | 3 installments on 1st–3rd anniversaries |
| 2/15/2023 (RSU) | 16,351 | 3 installments on 1st–3rd anniversaries |
| 3/1/2024 (RSU) | 27,813 | 3 installments on 1st–3rd anniversaries |
Selected option awards (strike/expiry):
- 12/4/2015: 20,000 @ $109.25; expires 12/4/2025
- 12/2/2016: 25,000 @ $118.66; expires 12/2/2026
- 12/7/2017: 25,000 @ $168.78; expires 12/7/2027
- 3/1/2024: 102,723 unexercisable @ $89.34; expires 3/1/2034
Deferred Compensation & Retirement
- Supplemental Retirement Account Plan (Supplemental RAP): CEO 2024 registrant contributions $266,289; aggregate balance $3,357,815 .
- Deferred RSU Plan: 4,000 RSUs from 2001 deferred until termination; dividend equivalents paid quarterly; 2024 aggregate earnings (including price change) $(58,780) with $13,040 cash distribution of dividend equivalents .
- 401(k)/RAP contributions and vesting schedules as per policy (matching and core allocations) .
Performance & Track Record
- Transformation progress: ~$1.5B cumulative pre-tax run-rate cost savings since mid-2022; FY2024 gross margin rate 29.4% (adjusted 30.0%); free cash flow $753M; debt reduced by ~$1.1B; Infrastructure divestiture proceeds ~$728.5M .
- LTIP outcomes reflect rigor: 2022–2024 cycle paid 0%; 2023–2025 CFROI below threshold in 2024, above target in 2023; TSR negative cap mechanics constrain payouts when TSR is negative .
Compensation Structure Analysis
- Pay mix: 90% of CEO target pay variable; strong emphasis on performance-based incentives (MICP and PSUs); options remain at-risk and generally underwater .
- Metric recalibration: Removal of Adjusted EPS from LTIP PSUs (replaced with Relative Organic Sales Growth vs Market); MICP focused on FCF (40%), Adjusted Gross Margin (30%), Adjusted EPS (30%) with gross margin modifier; 2025 LTIP shifts to emphasize Adjusted EBITDA (45%) and reduces CFROI weighting (30%) .
- Governance protections: Double-trigger CIC vesting; no excise tax gross-ups; comprehensive clawbacks; anti-hedging/pledging; robust ownership guidelines .
Risk Indicators & Red Flags
- Underwater options indicate high at-risk equity and temper near-term sell pressure from exercises .
- Zero payout on 2022–2024 PSUs underscores performance rigor and pay-for-performance alignment .
- Pledging/hedging prohibited for insiders (alignment preserved) .
- Strong Say-on-Pay support (92.7% in 2024; ~90.9% 3-year average) reduces governance risk on compensation .
- No related party transactions since 12/31/2024 requiring disclosure .
Investment Implications
- Compensation alignment is high: significant variable pay with rigorous targets; zero PSU payout and underwater options demonstrate discipline. Near-term RSU vesting and retirement-eligible acceleration could create episodic supply, but underwater options temper exercise-driven selling pressure .
- Retention risk appears mitigated by multi-year term through 6/30/2026, competitive targets (≥$10M LTI in 2024–2025), and robust governance protections; severance/CIC terms are standard industrials practice with double-trigger equity and no gross-ups, limiting shareholder-unfriendly optics .
- Strategic execution remains the key lever: margin restoration, FCF prioritization, and transformation milestones tie directly to incentive metrics (FCF, adjusted gross margin, CFROI/Adjusted EBITDA/TSR). Monitoring PSUs metric realization (CFROI, EBITDA, TSR) and Say-on-Pay results will provide ongoing signals of performance alignment .