Sean Hennessy
TransDigm GroupAbout Sean P. Hennessy
Sean P. Hennessy is an independent director of TransDigm Group Incorporated and currently serves as Chair of the Audit Committee. He is the retired Senior Vice President, Corporate Planning, Development & Administration of The Sherwin-Williams Company (2017–2018), and previously served as Sherwin-Williams’ Chief Financial Officer (2001–2016); he was formerly a certified public accountant. Hennessy is 67 years old and has served on the TDG Board since 2006 . The Board has determined he is independent under NYSE rules; he qualifies as an “audit committee financial expert” .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| The Sherwin-Williams Company | Senior Vice President, Corporate Planning, Development & Administration | Jan 2017 – Mar 2018 | Led integration related to Valspar acquisition; audit and transaction experience |
| The Sherwin-Williams Company | Chief Financial Officer | 2001 – 2016 | Deep financial and audit expertise supporting TDG Audit Chair role |
| Prior profession | Certified Public Accountant | N/A | Financial reporting and controls expertise |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Perimeter Solutions, SA (NYSE: PRM) | Director | Since Nov 2021 | Current public company directorship |
| St. Edward High School | Board/Support Role | Not disclosed | Listed in selected directorships |
| Sisters of Charity Foundation of Cleveland | Board/Support Role | Not disclosed | Listed in selected directorships |
| University Hospitals Miracle Fund | Board/Support Role | Not disclosed | Listed in selected directorships |
Board Governance
- Independence: The Board determined all Audit, Compensation, and Nominating & Corporate Governance Committee members are independent; Hennessy serves as Audit Committee Chair and qualifies as an “audit committee financial expert” .
- Attendance: The Board met four times in FY 2024; each director attended or participated in at least 75% of the aggregate Board and committee meetings on which they served .
- Audit Committee activity: Audit Committee held 8 meetings in FY 2024 .
- Overboarding policy: Adopted in 2024—non-NEO directors may serve on up to three boards (inclusive of TDG) .
| Committee | Position | Meetings FY 2024 | Responsibilities |
|---|---|---|---|
| Audit Committee | Chair | 8 | Oversees financial reporting, auditor oversight, ERM, cybersecurity; Hennessy is designated an “audit committee financial expert” |
| Board of Directors | Member (Independent) | 4 (Board) | Board oversight; executive sessions after each regular meeting |
Fixed Compensation
| Component (FY 2024) | Amount (USD) | Notes |
|---|---|---|
| Annual Board/Chair Retainers (cash/stock) | $12,158 | Hennessy elected to receive semi-annual board retainer in shares; residual cash due to fractional shares |
| Stock Awards | $82,842 | Semi-annual retainer paid in shares at specified NYSE closing prices |
| Option Awards (grant date fair value) | $253,619 | Annual director stock options; performance-vested |
| All Other Compensation | $19,500 | Dividend equivalent payments on pre-2022 dividends for options vested in FY 2024 |
| Total | $368,119 | Sum of components |
- Director Retainer Structure: Annual retainer $75,000; Audit Committee Chair additional $20,000; annual options valued at ~$250,000 (Black-Scholes); non-employee directors must maintain at least $250,000 in TDG equity; all directors in compliance .
Performance Compensation
| Feature | Term | Metric/Thresholds | Notes |
|---|---|---|---|
| Annual Director Options | ~$250,000 fair value | Same vesting criteria as NEOs | Performance-vested, long-term focus |
| Vesting Metric | AOP (Annual Operating Performance per diluted share) | Minimum vesting at 10% cumulative AOP growth; full vesting at 17.5% compound annual AOP growth | No discretion in vesting; linear vesting between thresholds |
| AOP Calculation | (Pro Forma EBITDA As Defined × Acquisition-weighted market multiple − Net Debt) ÷ Diluted shares | Adjusted for special dividends and repurchases; maintains IRR performance requirements | Aligns incentives with EBITDA growth, capital structure, cash generation, acquisition performance |
| Capital Events Treatment | Special dividends | Directors receive strike price reduction on/after 2022 special dividends | DEPs discontinued for directors after FY 2024 |
Other Directorships & Interlocks
| Company | TDG Directors Serving | Potential Interlock Consideration |
|---|---|---|
| Perimeter Solutions, SA | Sean P. Hennessy (current); W. Nicholas Howley (current); Jorge L. Valladares III (current); Kevin M. Stein (former) | Multiple TDG directors on PRM board signals network ties; TDG discloses no related-party transactions involving directors in FY 2024 |
Expertise & Qualifications
- Former large-cap manufacturing CFO; extensive audit and acquisition integration experience (Valspar), CPA background—supports role as Audit Committee Chair and designated “audit committee financial expert” .
- Risk oversight: Audit Committee’s remit includes ERM and cybersecurity; Board conducts annual self-evaluations of the Board and committees .
Equity Ownership
| Item | Amount | Notes |
|---|---|---|
| Shares Owned | 33,678 | As of Jan 10, 2025 |
| Options Exercisable (≤60 days) | 8,655 | Vested, unexercised options as of Sep 30, 2024 |
| Total Beneficial Ownership | 42,333 | Shares plus options exercisable within 60 days |
| % of Class | <1% | Based on 56,040,017 shares outstanding |
| Pledging/Hedging | None pledged; hedging/pledging/short sales prohibited | Company-wide prohibition; beneficial ownership table indicates no pledging |
Governance Assessment
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Strengths
- Audit leadership: Chair of Audit Committee; designated “audit committee financial expert,” with CFO and CPA credentials—strong oversight of financial reporting and audit .
- Independence and attendance: Independent; Board-wide disclosure of ≥75% attendance threshold achieved for all directors in FY 2024 .
- Ownership alignment: Maintains significant TDG equity; director ownership guidelines ($250,000 minimum) in place and all directors compliant; prohibitions on hedging/pledging reinforce alignment .
- Performance-based equity: Director options vest only upon robust AOP targets (10% threshold; 17.5% full vest), aligning incentives with long-term value creation .
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Watch items / potential conflicts
- Interlocks at Perimeter Solutions, SA: Hennessy and other TDG directors (Howley, Valladares; Stein formerly) serve or served on PRM’s board; while TDG discloses no related-party transactions involving directors in FY 2024, concentrated cross-directorships warrant monitoring for information flow and oversight independence .
- Director special dividends treatment: Directors now receive strike price reductions (not DEPs) for special dividends since 2022; ensure transparency and shareholder-friendly treatment is maintained given TDG’s capital return cadence .
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Policy signals
- Overboarding policy adopted (2024) limits non-NEO directors to three boards (inclusive of TDG), mitigating overextension risk; Hennessy’s disclosed board roles appear within policy .
- Robust clawback policy (effective Oct 2, 2023) and enhanced shareholder engagement indicate responsiveness to investor governance concerns .
Overall, Hennessy’s audit expertise and independence are positive for board effectiveness; monitor cross-board interlocks and ongoing alignment of director equity mechanics with shareholder value creation .