Heath Mitts - Executive Vice President and Chief Financial Officer | TE Connectivity (TEL) Executive Profile & Compensation

About Heath Mitts

Heath A. Mitts is Executive Vice President, Chief Financial Officer and a director of TE Connectivity, serving as CFO since September 2016 and on TE’s Board since 2021; he is age 53 and is classified as a non‑independent director . Education: MBA in finance (Pennsylvania State University); BA in finance and political science (Southern Methodist University) . FY2024 corporate performance under his financial leadership: revenue $15.8B, record GAAP operating margin 17.6%, record GAAP net income $3,193M (+67% YoY), GAAP EPS $10.34, TSR ~24.5% including dividends; corporate annual incentive score 112.6% for CEO/CFO/GC cohort . The company emphasizes Adjusted EPS, Revenue, and Adjusted Operating Income as the most important pay-for-performance measures .

Past Roles

Organization	Role	Years	Strategic impact
IDEX Corporation	Senior Vice President & Chief Financial Officer	Mar 2011 – Sep 2016	Led diversified industrial finance, positioning for growth and portfolio execution
IDEX Corporation	Vice President, Corporate Finance	Sep 2005 – Mar 2011	Corporate finance leadership across global businesses

External Roles

Organization	Role	Years	Notes
Veralto Corporation	Director	2021–present	Current public company directorship
Columbus McKinnon Corporation	Director	Within past 5 yrs (prior)	Prior public company board service

Fixed Compensation

Metric	FY 2022	FY 2023	FY 2024
Base Salary ($)	$746,557	$761,265	$749,845
Target Bonus (% of salary)	—	125%	125%
Actual Annual Incentive ($)	$971,987	$976,673	$1,055,407
All Other Compensation ($)	$199,225	$86,252	$96,994
Total Compensation ($)	$5,559,201	$5,659,642	$5,974,205

Performance Compensation

Metric	Weighting	Target (periods)	Actual (periods)	Payout mechanics	Result
Adjusted EPS	20%	1H: $3.50–$3.75; 2H: $3.52–$3.82	1H: $3.67; 2H: $3.82	Threshold 50%, Target 100%, Max 200% (EPS at 90/100/110% of target)	FY score 100.6%; contributes to corporate award
Revenue	30%	1H: $7.75–$8.01B; 2H: $7.92–$8.15B	1H: $7.688B; 2H: $8.051B	Threshold 50%, Target 100%, Max 200% (95/100/105%)	FY score 94.9%; contributes to corporate award
Operating Income	30%	1H: $1.33–$1.455B; 2H: $1.345–$1.470B	1H: $1.453B; 2H: $1.508B	Threshold 50%, Target 100%, Max 200% (90/100/110%)	FY score 111.5%; contributes to corporate award
KPI (weighted across segments)	20%	TE-set annual KPI targets (not disclosed)	Score methodology revenue-weighted across segments	Threshold 50%, Target 100%, Max 200%	FY score 147.1%; contributes to corporate award
Corporate Earned Award (CEO/CFO/GC)	—	—	—	Aggregate capped at 200% of target; no individual performance factors in 2024	112.6% payout for corporate cohort (basis for CFO bonus)

Long‑term incentives structure and vesting:

2024 LTI mix: 50% stock options, 50% PSUs; CFO approved award value $3,750,000, reflecting market alignment and performance .
Options: 51,400 granted on 11/15/23 at $131.77 strike; vest ratably over four years starting first anniversary; 10‑year term .
PSUs: 15,420 target units granted on 11/15/23; vest after 3‑year performance period upon MDCC certification; dividend equivalents accrue and adjust to performance .
Prior PSU cycle payout: FY2022 grant vested at 108% of target (CFO earned 12,920 vs 11,320 target) reflecting relative performance to an index .

Grant values and realized:

Element	FY 2022	FY 2023	FY 2024
Stock Awards (ASC 718) ($)	$1,788,560	$1,890,214	$2,031,893 (PSU target; max $4,063,787)
Option Awards (ASC 718) ($)	$1,852,872	$1,945,238	$2,040,066
Options Exercised (# / $ realized)	—	—	59,700 / $3,662,157
RSUs/PSUs Vested (# / $ realized)	—	—	17,234 / $2,326,762

Equity Ownership & Alignment

Item	Value
Beneficial ownership (Jan 13, 2025)	368,803 shares (includes shares acquirable within 60 days)
Options currently exercisable/acquirable ≤60 days	323,300 shares
Ownership as % of outstanding	<1.0% (none of NEOs/directors ≥1.0%)
Unearned PSUs outstanding (and payout value at $151.22)	11,912 ($1,801,333); 15,724 ($2,377,783); 15,691 ($2,372,793) across 2021–2023 grants
Unexercisable options outstanding	18,250 (2020, $105.86); 24,600 (2021, $158.00); 40,650 (2022, $124.52); 51,400 (2023, $131.77)
Stock ownership guidelines	CFO requirement 3x base salary; all NEOs met at FY2024 year‑end
Hedging/pledging	Prohibited for TE securities

Employment Terms

Term	Details
Employment role tenure	CFO since September 2016
Severance framework	NEOs are subject to individual Employment Contracts, not the general severance/CIC plans
Notice period	Up to 12 months for involuntary (not for cause) or “good reason” termination; continued salary, bonus eligibility, equity vesting, and health/welfare during notice
Post‑notice restrictive covenants	Consideration equals 1x base pay + 1x target bonus after the one‑year notice; non‑compete 1 year; non‑solicit 2 years
Change‑in‑control (double‑trigger)	Qualifying termination within −60 days/+2 years of CIC; PSUs vest at target; options/RSUs fully vest; 280G best‑net cut; no excise tax gross‑up
CIC payout illustration (as of 9/27/24)	Restrictive covenant consideration $1,687,151; accelerated/options $2,912,905; PSUs $6,551,909; health continuation $16,180; short‑term incentive $1,055,407 (scenario‑dependent)
Clawback	Included on annual and long‑term incentives; NYSE‑mandated policy adopted
Deferred compensation (SSRP, FY2024)	Exec deferrals $86,359; company match $69,897; earnings $262,502; ending balance $1,307,284
Pension	CFO does not participate in any TE pension plan
Perquisites	Limited; FY2024 personal aircraft incremental cost $10,668

Board Governance and Director Service

TE Board service: Director since 2021; TE Board committee: None; independence: Not Independent (executive director) .
Board leadership/independence safeguards: Independent Chairman; 10 of 12 nominees independent; non‑management directors met in executive sessions four times in FY2024 .
Non‑employee director compensation structure (for reference/independence context): annual cash retainer $100,000 and equity $200,000; additional fees for leadership/committee roles. Employee directors (like Mitts) are not recipients of non‑employee director fees .

Compensation Structure Analysis

Mix and risk: High variable pay tied to EPS, revenue, operating income, and KPI with clear threshold/target/max mechanics; annual payouts capped at 200% of target and subject to quality‑of‑earnings modifier, mitigating undue risk .
LTI design: Shift uses PSUs and options (no RSU grants in FY2024 for NEOs), with rigorous 3‑year PSU performance; no option repricing and no tax gross‑ups (except relocations) .
Peer alignment: MDCC reviews market data and peer group to calibrate awards (CFO LTI value $3.75M in FY2024 reflecting performance and market) .
Say‑on‑pay: ~93% approval in FY2024 supports pay‑for‑performance alignment .

Equity Award Detail and Vesting Schedules (Selected)

Grant	Type	Quantity	Strike/Terms	Vesting
11/15/2023	Options	51,400	$131.77; 10‑yr term	25%/year over 4 years starting 1st anniversary
11/15/2023	PSUs (target)	15,420	Dividend equivalents accrue	3‑year performance; vest upon year‑3 certification
Prior cycles	PSUs (FY2022 grant)	11,320 target	—	Vested at 108% (12,920 shares) in FY2024

Director Compensation (for completeness; Mitts not eligible as employee director)

Component	Cash	Equity
Annual retainer	$100,000	$200,000 in TE shares
Additional fees	Chair/Lead/Audit/MDCC/NGCC/SAB fees per schedule	—

Performance & Track Record

FY2024 highlights: $15.8B revenue; 17.6% GAAP operating margin; record GAAP net income $3,193M (+67% YoY); record GAAP EPS $10.34; ~$3.5B operating cash flow; ~$2.8B capital return; ~$340M bolt‑on acquisition; ~24.5% TSR .
Incentive outcomes: Corporate award 112.6% for CEO/CFO/GC based on above‑target EPS and operating income, mixed revenue/KPI dynamics across segments .
LTI realization: CFO exercised 59,700 options ($3.66M value), and vested 17,234 stock units ($2.33M) in FY2024, indicating realized alignment with shareholder returns .

Risk Indicators & Red Flags

Hedging/pledging prohibited; no excise tax gross‑ups; no option repricing; clawbacks in place .
Retirement eligibility: CFO not eligible for continued vesting under “retirement” provision, limiting unplanned acceleration risk .
Insider selling pressure: Option exercises in FY2024 (59,700 shares) may create selling flow around vest/exercise windows, but offset by ownership guideline compliance requiring continued holdings .

Equity Ownership & Award Inventory (snapshot as of 9/27/24)

Category	Detail
Options exercisable	91,150 (2018, $76.66); 82,300 (2019, $93.63); 54,750 (2020, $105.86)
Options unexercisable	18,250 (2020); 24,600 (2021, $158.00); 40,650 (2022, $124.52); 51,400 (2023, $131.77)
PSUs unearned	11,912; 15,724; 15,691 with market payout values shown above
Beneficial shares	368,803; ≤60‑day options 323,300

Employment Contracts & CIC Economics (CFO)

Trigger	Economics
Involuntary (not for cause) or Good Reason	12‑month notice with continued base, bonus eligibility, equity vesting, health/welfare; post‑notice 1x base + 1x target bonus as restrictive covenant consideration (non‑compete 1yr; non‑solicit 2yrs)
CIC + qualifying termination (double trigger)	Options/RSUs fully vest; PSUs vest at target; 280G best‑net (no excise gross‑up)
CFO payout illustration (as of 9/27/24)	Restrictive covenants $1,687,151; options $2,912,905; PSUs $6,551,909; health $16,180; short‑term incentive $1,055,407 (scenario dependent)

Investment Implications

Alignment strong: High variable pay tied to EPS/operating income with disciplined caps, clawbacks, and ownership requirements suggest robust pay‑for‑performance and risk controls .
Retention risk moderated: Contractual 12‑month notice and post‑notice non‑compete consideration reduce abrupt departure risk; lack of pension and limited perqs align with shareholder preferences .
Trading signals: Material FY2024 exercises/vesting (≈$6.0M realized) imply periodic selling pressure around vest dates; however, ownership guideline compliance and hedging/pledging prohibitions mitigate adverse alignment concerns .
Board governance: Dual role as CFO/director is counterbalanced by independent Chair, majority independent board, and frequent executive sessions; no committee roles for Mitts limit potential conflicts .
Performance momentum: Record profitability and cash flow under CFO tenure supported above‑target annual incentive outcomes; continued PSU reliance keeps long‑term alignment with TSR and multi‑year operational goals .