Eric R. Marchetto
TRINITY INDUSTRIESAbout Eric R. Marchetto
Eric R. Marchetto is Executive Vice President and Chief Financial Officer of Trinity Industries, Inc. (TRN), age 55, serving as an officer since 2001 and CFO since 2020 after joining Trinity in 1995 and holding senior roles across TrinityRail’s finance, commercial, and leadership functions . Under the management team’s plan he helps certify and drive performance against targets including revenues of $3.1B in 2024, cash from operations of $588M, profit before tax of $222.3M, ROE of 13.3% (adjusted 14.6%), and a 44.5% TSR over 2022–2024; he has publicly outlined the ROE value-creation path (balance sheet optimization and PBT initiatives) since Investor Day, emphasizing capital returns and share repurchases .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Trinity Industries, Inc. | EVP & CFO | 2020–present | Led capital allocation and balance sheet optimization contributing to ROE improvement (from ~4.3% baseline to 16.2% trailing 12 months); emphasized share repurchases and dividends to boost EPS and returns . |
| TrinityRail (TRN) | SVP & Group President | 2019–2020 | Oversaw rail businesses; prepared for CFO transition . |
| TrinityRail (TRN) | Chief Commercial Officer | 2018–2019 | Led commercial strategy across leasing/manufacturing/services . |
| TrinityRail (TRN) | EVP & Chief Administrative Officer | 2016–2018 | Coordinated admin support for rail businesses . |
| TrinityRail (TRN) | EVP & CFO (rail businesses) | 2012–2016 | Led finance for rail businesses during portfolio optimization . |
| Trinity Industries, Inc. | Joined company | 1995 | Long-tenured executive across capital markets, finance, commercial leadership . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 578,860 | 596,225 | 611,131 |
| Perquisites ($) | 0 | 0 | 23,605 |
| Company Contributions to Defined Contribution Plans ($) | 22,636 | 21,019 | 52,625 |
| Total Compensation ($) | 1,985,453 | 1,936,684 | 2,631,312 |
Performance Compensation
Annual Incentive (AIP) – 2024 Design and Outcome
| Component | Weight | Threshold | Target | Maximum | 2024 Actual | Payout as % of Target |
|---|---|---|---|---|---|---|
| Profit Before Tax ($M) | 65% | 121 | 187 | 224 | 222 | 196% |
| Cash From Operations ($M) | 15% | 247 | 380 | 494 | 588 | 200% |
| Operating Plan Priorities Scorecard | 20% | N/A | 100% | 200% | 125% | 125% |
| Overall AIP Payout (%) | — | — | — | — | — | 182.4% |
| Marchetto Actual AIP ($) | — | — | — | — | — | 857,280 |
Long-Term Incentive (LTI) – 2024 Grants and Metrics
| LTI Element | Target Value ($) | Grant/Target (#) | Vesting | Performance Metrics |
|---|---|---|---|---|
| Total Target LTI | 1,050,000 | — | — | 60% PSUs; 40% time-based RSUs |
| Time-based RSUs (May 2024 grant) | — | 13,659 | Ratable May 2025/26/27; dividends accrued, paid at vest | Time-based retention |
| PSUs – rTSR (Jan 2024 grant) | — | Target 11,847; Thresh 3,554; Max 23,694 | Earn/vest after 3-year period (settlement around May 15, 2027); rTSR portion capped at 100% if negative TSR | rTSR vs S&P SmallCap 600; threshold 25th, target 50th, max 75th percentile |
| PSUs – ROE (May 2024 grant) | — | Target 10,244; Thresh 3,073; Max 20,488 | Earn/vest after 3-year period (settlement around May 15, 2027) | 3-year average ROE thresholds: 10.0%, 12.5%, 15.0% |
Equity Ownership & Alignment
| Ownership Detail | Value |
|---|---|
| Beneficial Ownership (Common Shares) | 266,101 shares; less than 1% of class |
| Shares acquirable within 60 days (RSUs/Earned Units) | 62,767 shares |
| 401(k) Plan (Indirect) | 2,913 shares |
| Options | None (only CEO held options as of 12/31/24) |
| Unvested Time-based RSUs (12/31/24) | 69,311 shares |
| Earned Performance Shares to be issued in 2025 (2022–2024 cycle) | 40,116 shares |
| PSUs outstanding (potential maximum) – 2023–2025 | 48,204 shares (max) |
| PSUs outstanding (potential maximum) – 2024–2026 | 44,182 shares (max) |
| Upcoming Trinity vesting schedule (selected) | 01/30/25: 15,813; 05/15/25: 62,767; 05/15/26: 12,794; 05/15/27: 6,553; 05/15/28: 1,000; Retirement tranche: 10,500 |
| Arcosa legacy awards vesting (selected) | 05/15/26: 666; 05/15/27: 666; 05/15/28: 333; Retirement tranche: 3,500 |
| Ownership Guidelines | NEOs must hold 3x base salary; 5-year compliance window; before compliance, may sell up to 50% of shares from each vest |
| Hedging/Pledging | Prohibited for officers/directors; no pledged shares by officers/directors as of 3/17/25 |
Alignment notes: No dividends on unvested PSUs; RSUs accrue dividend equivalents, paid upon vesting . Policy bans hedging/pledging; stock ownership rules enforce sustained skin-in-the-game .
Employment Terms
| Term | Provision |
|---|---|
| Employment Agreement | None; Company does not use executive employment agreements |
| Change-in-Control (CIC) | Double-trigger cash severance; 2x base salary + target bonus for NEOs; benefits continuation for 24 months; no excise tax gross-ups |
| CIC Equity Vesting | Pre-2019 awards single-trigger on change-in-control; post-2019 awards double-trigger (Qualifying Termination required) |
| CIC Scenario (12/31/24, Marchetto) | Equity $5,295,515; AIP at target $470,000; Cash severance $2,162,262; Benefits $27,242; Total $7,955,019 |
| Clawbacks | NYSE-compliant recoupment for incentive-based pay upon restatement; broader discretionary recoupment policy applies to annual/LTI payouts |
| Deferred Comp – 2024 Marchetto | Exec contributions $105,250; Company match $31,925; Aggregate earnings $245,017; Ending balance $1,682,077 |
| Transition Compensation Plan | Legacy long-term plan (frozen to new participants); above-market earnings reported ($6,672 in 2024); requires notice, 1-year consult availability, and 1-year non-compete to receive payouts; exceptions for death, disability, CIC |
Performance & Track Record (Company outcomes relevant to CFO oversight)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenues ($B) | 2.0 | — | 3.1 |
| EPS (Reported) ($) | 1.02 | — | 1.81 |
| EPS (Adjusted) ($) | 0.94 | — | 1.82 |
| Cash From Operations ($M) | 9 (and adj FCF $138M) | — | 588 |
| Profit Before Tax ($M) | 120.0 | 173.5 | 222.3 |
| ROE (%) | — | — | 13.3; adj 14.6 |
| Orders (new railcars) (#) | 31,905 | — | 7,685 |
| Deliveries (new railcars) (#) | 13,315 | — | 17,570 |
| Lease fleet utilization (%) | 97.9 | — | 97.0 |
| TSR (period) (%) | 50.5 (2020–2022) | — | 44.5 (2022–2024) |
CFO commentary emphasized ROE uplift via capital returns (repurchases/dividends) and operational PBT initiatives, with a stated shift to adjusted net income-based ROE for KPI alignment going forward .
Compensation Peer Group & Governance
- Peer group used for 2024 benchmarking includes Air Lease, Allison Transmission, Astec, FreightCar America, GATX, Herc, Manitowoc, Oshkosh, REV Group, Ryder, Terex, Greenbrier, United Rentals, Wabash, and Wabtec .
- Targeting ~50th percentile with total target comp generally within ±15% of the peer median; external consultant Meridian Compensation Partners advised HR Committee; independence confirmed; no conflicts .
- Say-on-pay approvals: ~97.8% in 2024; board recommends annual say-on-pay cadence and continues pay-for-performance design .
Performance Compensation Details (Mechanics)
| Feature | TRN Policy |
|---|---|
| AIP governance | HR Committee sets annual metrics/levels; excludes unusual/non-recurring items; permits department/individual differentiation within capped Scorecard pool |
| LTI mix | 60% PSUs, 40% RSUs; PSUs measured on rTSR vs S&P SmallCap 600 and 3-yr avg ROE; RSUs vest ratably; no dividends on unvested PSUs; RSU dividends accrue till vest |
| Option practices | No repricing or cash buyouts; last option grants in 2020; none outstanding for Marchetto |
Investment Implications
- Pay-for-performance alignment is strong: AIP tied to PBT and cash generation (both above max in 2024), PSUs focused on rTSR and ROE, and clawbacks/ownership requirements reinforce long-term alignment .
- Insider selling pressure: Significant RSU/earned unit vestings occur around May annually; while policy restricts hedging/pledging and requires ownership multiples (allowing sale of up to 50% of vested shares prior to compliance), monitor Form 4s around May 15 for supply effects .
- Retention risk appears contained: No employment agreements, but CIC agreements offer competitive double-trigger protection; Transition Compensation Plan adds post-separation obligations and benefits for eligible executives, supporting orderly transitions .
- Governance quality signals: High say-on-pay support, independent compensation consultant, no tax gross-ups, no option repricing, and anti-hedging/anti-pledging policies reduce red-flag risk .