Hansal N. Patel
TIMKENAbout Hansal N. Patel
Executive Vice President, General Counsel & Secretary of The Timken Company (TKR); 13 years at Timken and 20 years of industry experience as of year-end 2024. Company performance drivers linked to his incentives include adjusted EBITDA ($840M), adjusted EBITDA margin (18.4%), and free cash flow ($345M) in 2024, yielding 81% of target under the corporate annual cash plan amid softer demand across sectors and geographies . Pay-versus-performance disclosures show 2024 adjusted EPS of $5.79 and cumulative TSR value of $139 versus a $198 peer index value (PVP Peer Index), framing the operating and shareholder return context for NEO incentive outcomes .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| The Timken Company | Vice President, General Counsel & Secretary | As of 2021, 2024 | Led legal, governance, and SEC matters; signed multiple 8-Ks during CEO succession and board changes |
| The Timken Company | Executive Vice President, General Counsel & Secretary | As of Jan–Aug 2025 | Elevated to EVP; continued to sign 8-Ks on key officer transitions and board actions |
Fixed Compensation
Multi‑year summary (USD):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $457,692 | $502,533 | $560,000 |
| Stock Awards (Grant Date Fair Value) | $777,261 | $977,195 | $1,001,090 |
| Non‑Equity Incentive Plan Compensation (Cash) | $445,068 | $456,468 | $317,360 |
| Change in Pension Value & Nonqualified Deferred Comp Earnings | — | $11,188 | $13,833 |
| All Other Compensation | $61,887 | $107,536 | $126,646 |
| Total | $1,741,908 | $2,054,920 | $2,018,929 |
Base salary progression:
| Executive Officer | 2023 Annualized Base Salary | 2024 Annualized Base Salary | Percent Increase |
|---|---|---|---|
| Hansal N. Patel | $510,002 | $570,000 | 11.8% |
Other benefits and perquisites (2024):
| Item | Amount |
|---|---|
| Annual Company Contribution to SIP/Core DC | $27,600 |
| Annual Company Contribution to Post‑Tax Savings Plan | $53,717 |
| Executive Physicals | $1,699 |
| Cash Dividend Equivalents (on vesting) | $43,077 |
| Life Insurance Premiums | $553 |
Deferred Compensation (2024):
| Executive Contributions | Aggregate Earnings | Aggregate Balance at 12/31/2024 | Above‑Market Interest (SEC) |
|---|---|---|---|
| $72,188 | $33,138 | $410,378 | $13,833 |
Pension programs: Patel does not participate in the (frozen) Pension Plan or the Supplemental Pension Plan .
Performance Compensation
Annual Cash Incentive (Corporate plan structure and 2024 results)
Plan metrics and outcomes (corporate participants, including Patel):
| Metric (Weighting) | Threshold | Target | Maximum | Actual | Payout |
|---|---|---|---|---|---|
| Adjusted EBITDA (60%) | $705M | $940M | $1,175M | $840M | 78.8% |
| Adjusted EBITDA Margin (20%) | 15.0% | 19.7% | 21.0% | 18.4% | 86.5% |
| Free Cash Flow (20%) | $271M | $387M | $541M | $345M | 82.0% |
| Plan Payout | 50% | 100% | 200% | — | 81.0% of target |
Patel’s 2024 cash incentive opportunity (CSTIP):
| Opportunity | Threshold | Target | Maximum |
|---|---|---|---|
| 2024 CSTIP (Cash) | $39,200 | $392,000 | $784,001 |
Actual cash incentive paid to Patel for 2024: $317,360 .
Long‑Term Incentives (RSUs and PRSUs)
2024 grants:
| Award Type | Grant Date | Quantity | Grant Date Fair Value | Key Terms |
|---|---|---|---|---|
| Time‑Based RSUs | 02/08/2024 | 4,750 | $386,128 | Vest 25% per year over 4 years |
| Performance‑Based RSUs (2024–2026 cycle) | 02/08/2024 | 7,125 target (713/7,125/14,250 threshold/target/maximum) | $614,962 | Cliff vest after 3 years, subject to metrics below |
2024–2026 PRSU metrics and weightings:
| Metric | Weighting | Threshold | Target | Maximum |
|---|---|---|---|---|
| Three‑Year Cumulative Adjusted EPS | 50% | $14.86 | $19.81 | $24.76 |
| Adjusted ROIC (avg over 3 years) | 30% | 9.8% | 13.7% | 16.2% |
| Relative TSR (vs S&P 400 Capital Goods) | 20% | 25th pct | 50th pct | 75th pct |
Recent cycle outcome: 2022–2024 PRSUs earned at 136.8% based on strong cumulative adjusted EPS and solid average ROIC performance .
Equity Ownership & Alignment
- Beneficial ownership: 24,975 common shares as of January 1, 2025; percent of class indicated as less than 1% (per table notation) .
- Shares acquirable by March 1, 2025 via options/RSU vesting: 4,368 .
- Stock ownership guidelines: 3x base salary requirement for Patel; actual ownership 4.6x as of December 31, 2024 (exceeds requirement) .
- Anti‑hedging/pledging: Company policy prohibits hedging and pledging for Directors and officers (including Patel) .
Unvested and unearned equity as of December 31, 2024:
| Grant Date | Time‑Based RSUs Unvested (Units) | Market Value | PRSUs Unearned (Units) | Market/Payout Value |
|---|---|---|---|---|
| 02/10/2021 | 944 | $67,373 | — | — |
| 02/10/2022 | 2,313 | $165,079 | — | — |
| 02/09/2023 | 3,244 | $231,524 | 6,475 | $462,121 |
| 02/08/2024 | 4,750 | $339,008 | 7,125 | $508,511 |
Vesting cadence: RSUs vest 25% annually; PRSUs cliff vest after 3 years based on performance; dividend equivalents on RSUs/PRSUs paid in cash at vesting .
Employment Terms
Severance framework and economics:
| Provision | Terms |
|---|---|
| Involuntary termination without cause (non‑CoC) | Cash severance equal to 1.0x of base salary + annual cash incentive (target/actual as defined); continuation of certain benefits; non‑compete/confidentiality covenants; equity vests per grant agreements . |
| Change‑in‑control followed by qualifying termination (double trigger) | Cash severance multiple: 2.0x for Patel; base salary and annual cash incentive determined by “greater of” constructs around termination vs CoC year . |
Illustrative termination scenario values (as of 12/31/2024):
| Scenario | Cash Severance | Equity | Other Benefits | Total |
|---|---|---|---|---|
| Termination Without Cause | $969,000 | $1,367,164 | $26,500 | $2,362,664 |
| Change in Control & Termination | $1,938,000 | $1,526,890 | $53,000 | $3,517,890 |
| Death & Disability | — | $1,280,521 | — | $1,280,521 |
Additional terms:
- Clawback: SEC/NYSE‑compliant clawback policy adopted in 2023 (mandatory restatement provisions; permissive provisions for detrimental conduct) .
- Non‑compete/non‑solicit: The Company receives confidentiality and non‑compete covenants in exchange for severance; officers execute standard restrictive covenant agreements .
- Stock options: nonqualified stock options were removed from the award mix in 2020; legacy options (pre‑2020) fully vested and expire 10 years from grant; Patel has no options listed in 2024 table .
Compensation Structure Analysis
- Mix shift and leverage: For NEOs, annual equity grants are 60% PRSUs and 40% RSUs; CEOs at ~85% incentive‑based, other NEOs ~75% incentive‑based, aligning payout to multi‑year EPS/ROIC/TSR and annual EBITDA/margin/FCF .
- 2024 cash incentive payout at 81% of target reflected below‑target performance versus challenging targets set near prior‑year results; no individual modifiers applied to NEO payouts .
- 2024–2026 PRSU targets raised versus prior cycles (EPS ~6% above 2021–2023 actual; ROIC 100 bps above the 2023–2025 target), indicating a ratcheting performance bar across long‑term metrics .
- Peer group update: Regal Rexnord’s acquisition of Altra led to replacing Altra with Pentair in the 2024 compensation peer group .
Investment Implications
- Alignment and retention: Patel exceeds 3x salary ownership guideline (4.6x), cannot hedge or pledge, and carries meaningful unvested RSU/PRSU exposure, supporting alignment but creating periodic vest‑related liquidity needs; retention risk moderated by severance protections (1.0x non‑CoC, 2.0x CoC) and continued equity vesting rules .
- Pay‑for‑performance linkage: Cash and equity incentives are tied to EBITDA/margin/FCF annually and EPS/ROIC/TSR over three years; 2024 payout (81%) and prior PRSU cycle (136.8%) show sensitivity to both cyclical headwinds and sustained multi‑year execution .
- Trading signals: Upcoming scheduled RSU vesting (25% per year) and PRSU cliff events may drive episodic Form 4 activity; policy requires retention of net shares until guideline compliance, which Patel already exceeds—mitigating forced selling pressure beyond tax obligations .
- Governance risk: Double‑trigger CoC, active clawback policy, and standard restrictive covenants reduce adverse incentive risk; no pension accruals and moderate severance multiples limit golden‑parachute optics for the GC role .