Christopher A. Coughlin
TIMKENAbout Christopher A. Coughlin
Executive Vice President and President of Industrial Motion at The Timken Company; 41 years at Timken. Education and age are not disclosed in the latest proxy. 2024 corporate results that drive executive incentive metrics: revenue $4.6B; EPS $4.99 (adjusted EPS $5.79); net cash from operations $476M; free cash flow $306M; annualized TSR of 2.8%/6.7%/7.6% over 3/5/10 years . 2024 say‑on‑pay support was ~96% .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| The Timken Company | Executive Vice President; President, Industrial Motion | 41 years | Leads Industrial Motion; detailed prior role history not disclosed in proxy |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Not disclosed | — | — | — |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $621,135 | $646,726 | $670,834 |
| Target Bonus % of Salary | n/a | n/a | ~79.5% (CSTIP target $536,667 ÷ $675,000 annualized base) |
| Actual Annual Cash Incentive ($) | $697,917 | $671,363 | $434,481 (81.0% of target; no individual modifier) |
Performance Compensation
| Plan | Metric | Weighting | Threshold | Target | Maximum | Actual/Payout | Vesting |
|---|---|---|---|---|---|---|---|
| 2024 Corporate Annual Cash Incentive | Adjusted EBITDA | 60% | $705M | $940M | $1,175M | $840M; 78.8% payout | Cash (1-year) |
| Adjusted EBITDA Margin | 20% | 15.0% | 19.7% | 21.0% | 18.4%; 86.5% payout | Cash (1-year) | |
| Free Cash Flow | 20% | $271M | $387M | $541M | $345M; 82.0% payout | Cash (1-year) | |
| Plan Payout | — | 50% | 100% | 200% | 81.0% of target (applied to Coughlin) | — |
| Long-Term PSUs | Metric | Weighting | Threshold | Target | Maximum | Actual/Payout | Vesting |
|---|---|---|---|---|---|---|---|
| 2022–2024 PSUs | 3‑Year Cumulative Adjusted EPS | 60% | $10.33 | $14.76 | $19.19 | $17.37; overall plan earned at 136.8% | Cliff at 3 years |
| Average ROIC | 40% | 8.5% | 11.0% | 14.0% | 11.1%; overall plan earned at 136.8% | Cliff at 3 years | |
| 2024–2026 PSUs (in flight) | Cumulative Adjusted EPS | 50% | $14.86 | $19.81 | $24.76 | In progress | Cliff at 3 years |
| Adjusted ROIC | 30% | 9.8% | 13.7% | 16.2% | In progress | Cliff at 3 years | |
| Relative TSR (vs S&P 400 Capital Goods) | 20% | 25th pct | 50th pct | 75th pct | In progress | Cliff at 3 years |
| 2024 Equity Grants (Coughlin) | Type | Grant Date | Shares/Units | Grant-Date Fair Value ($) | Vesting |
|---|---|---|---|---|---|
| Time-Based RSUs | 02/08/2024 | 02/08/2024 | 8,275 | $672,675 | 25% annually over 4 years |
| Performance-Based RSUs (PSUs) | 02/08/2024 | 02/08/2024 | 12,400 target | $1,070,250 (probable outcome) | Cliff vest after 3 years subject to performance |
| Total Stock Awards (2024) | — | — | — | $1,742,925 | — |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 172,711 shares; <1% of outstanding |
| Outstanding Options (Exercisable) | 37,925 (grant 02/12/2018, $44.65 strike, exp. 02/12/2028) and 40,750 (grant 02/12/2019, $42.60 strike, exp. 02/12/2029) |
| Unvested Time-Based RSUs at 12/31/2024 | 1,788 (2021 grant) $127,610 MV; 4,425 (2022) $315,812; 5,907 (2023) $421,583; 7,941 (2024) $566,749 |
| Unearned PSUs at 12/31/2024 | 11,800 (2023 grant) $842,166 MV; 12,400 (2024 grant) $884,988 MV |
| Deferred Shares | 8,000 (grant 02/10/2023) vest 100% on 03/31/2025 |
| Ownership Multiple vs Guideline | Required 3x base salary; actual ~13.0x (as of 12/31/2024) |
| Hedging/Pledging | Prohibited for executives; no pledging allowed |
| Insider Transactions (2024) | Option exercises: 36,825 shares; value realized $1,640,554; stock awards vested: 26,376 shares; value realized $2,169,687 |
Employment Terms
| Provision | Key Terms |
|---|---|
| Severance (No CIC) | Lump sum: 1.5x (salary + bonus construct) for Coughlin; continuation of certain benefits; non‑compete/confidentiality covenants; equity per grant terms |
| Change in Control (Double Trigger) | Cash multiple: 3.0x (salary + target bonus); supplemental retirement lump sums (for eligible U.S. NEOs); SIP and Post‑Tax Savings Plan contributions provided for Coughlin under CIC |
| Equity Treatment (Retirement/Death/Disability) | Retirement eligibility at/after age 62; time‑based RSUs continue to vest; PSUs prorated through last day of employment and paid at end of performance period; immediate vesting for death/disability with PSUs prorated; option exercise windows up to 5 years |
| Clawback | Standalone policy complying with SEC/NYSE: mandatory recovery on accounting restatement; permissive recovery for misconduct causing restatement; forfeiture on detrimental activity and restrictive covenant breaches |
| Stock Ownership Guidelines | Retain net shares until requirement met; all NEOs other than CEO exceeded as of 12/31/2024 (Coughlin at 13.0x) |
Compensation Structure Analysis
- Mix and trend: 2024 total compensation $3.07M vs $3.99M in 2023; lower cash incentive ($434k vs $671k) and lower stock awards ($1.74M vs $2.44M) reflecting below‑target operating performance and grant sizing .
- Annual incentive rigor: 2024 targets set at or above 2023 actuals; payout at 81.0% evidences pay-for-performance alignment (no individual modifiers applied) .
- Long-term alignment: 2022–2024 PSUs paid 136.8% on record three‑year adjusted EPS and strong ROIC; 2024–2026 adds relative TSR to strengthen external benchmarking .
- Peer benchmarking: 2024 compensation peer group includes diversified industrials (e.g., Ingersoll Rand, ITT, Regal Rexnord, Wabtec); Timken targets competitive market levels with WTW support .
Equity Vesting and Potential Selling Pressure
- Near-term vesting calendar: 8,000 deferred shares vest 03/31/2025; RSUs vest 25% annually on outstanding grants from 2021–2024; PSUs for 2022–2024 paid in 2025, with PSUs for 2023–2025 and 2024–2026 in flight .
- 2024 exercises/vestings indicate realized liquidity (36,825 options exercised; 26,376 shares vested), but hedging/pledging bans reduce misalignment risk .
Pension, Deferred Compensation, and Perquisites
- Pension/SERP: Participates in frozen qualified Pension Plan and nonqualified Supplemental Pension (Excess Benefit Agreement), with present value of accumulated benefits $1.06M (qualified) and $4.88M (supplemental) at 12/31/2024 .
- Deferred Compensation: Eligible for 1996 plan; Coughlin had no 2024 deferrals; above‑market interest noted for other NEOs but not Coughlin .
- Perquisites: Executive physicals ($2,644), country club dues allocation ($10,731), cash dividend equivalents ($84,713), life insurance ($4,760) included in “All Other Compensation” .
Compensation Peer Group (Benchmarking)
Agco, Carlisle, Crane, Dana, Dover, Flowserve, Fortive, Gates Industrial, Ingersoll Rand, ITT, Kennametal, Oshkosh, Pentair, Regal Rexnord, Snap-on, Terex, Wabtec, Woodward .
Say‑on‑Pay & Shareholder Feedback
Annual advisory vote passed with ~96% support in 2024; committee noted strong alignment and retained program design; ongoing shareholder engagement highlighted .
Investment Implications
- Alignment: High personal ownership (13x salary vs 3x requirement) and bans on hedging/pledging indicate strong alignment with shareholders .
- Incentive quality: Metrics tied to cash generation (EBITDA, FCF) and long‑term value (EPS, ROIC, relative TSR), with disciplined targets; 2024 below‑target payout reflects cyclicality and demand softness .
- Retention risk: Severance at 1.5x (no CIC) and 3.0x (CIC) plus continued vesting protections in retirement lower abrupt exit risk; near‑term vestings (deferred shares, RSUs, PSUs) could create periodic supply but policy preclearance windows and insider trading constraints apply .
- Performance track: PSUs paying above target for 2022–2024 on record EPS/solid ROIC support value creation credentials; ongoing PSU cycles embed relative TSR to mitigate sector cyclicality impact .