Jennifer Scanlon
About Jennifer Scanlon
Jennifer F. Scanlon is President and Chief Executive Officer of UL Solutions and a director since September 2019 (age 58). She holds a BA in Government and International Relations and Computer Applications from the University of Notre Dame and an MBA from the University of Chicago Booth School of Business . In 2024, UL delivered revenue of $2.9B (+7.2% YoY), operating income of $462M (+26% YoY, margin +240 bps to 16.1%), net income of $345M (+25% YoY, margin +170 bps to 12.0%), diluted EPS of $1.62 (+24.6%), and $524M operating cash flow—reflecting value creation under her leadership . UL’s governance separates Chair and CEO roles (independent Chair James M. Shannon) and operates as a controlled company with UL Standards & Engagement holding ~95.7% of voting power—mitigating dual-role concerns while acknowledging concentrated control .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| USG Corporation | President & CEO | Nov 2016–Apr 2019 | Led international expansion, digital transformation, and sustainable products evolution; served on USG board 2016–2019 . |
| USG Corporation | Various leadership roles | ~2003–2016 | 16-year tenure culminating in CEO; experience in industrial operations and product strategy . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Commercial Club of Chicago | Chair, Board of Directors | Since 2020 | Civic leadership and regional business community engagement . |
| Chicago Council on Global Affairs | Director | Since 2012 | Global policy engagement and stakeholder relations . |
| Federal Reserve Bank of Chicago | Director | Since 2022 | Financial oversight and regional economic insights . |
| University of Notre Dame | Director | Since 2020 | Academic governance and strategic advisory . |
| US-China Business Council | Secretary Treasurer | Current | International trade and policy interface . |
| TIC Council | Global Board Vice President | Current | Industry standards and TIC sector governance . |
| Norfolk Southern Corporation | Director | Jan 2018–May 2024 | Large-cap public board experience; transportation sector oversight . |
Fixed Compensation
| Component | 2024 Amount | Notes |
|---|---|---|
| Base Salary | $1,037,500 | Reflects 5.0% increase from $1,000,000 in 2023 . |
| AEIP Target Bonus % | 130% of salary | CEO target under All Employee Incentive Plan . |
| AEIP Actual Payout | $1,500,000 | 109.9% formula payout adjusted +5% for individual performance . |
| All Other Compensation | $80,604 | Retirement contributions ($57,275), perquisites incl. $18,000 allowance and executive physical ($23,329) . |
Performance Compensation
| Program | Grant/Performance Structure | Weighting | Targets/Measures | Vesting/Payout |
|---|---|---|---|---|
| 2024 LTIP – PSUs | 3-year cumulative performance (2024–2026) | 67% of LTI | 50% cumulative organic revenue; 50% cumulative operating income (0–200% payout) | Cliff vest at end of period; dividend equivalents credited; settlement in shares . |
| 2024 LTIP – RSUs | Time-based vest | 33% of LTI | N/A | Vest in equal thirds annually; dividend equivalents; settlement in shares . |
| IPO Growth NSOs (Special) | One-time options (Apr 12, 2024) | Equal in fair value to annual LTI | Stock-price appreciation | 3-year cliff vest; 10-year term; settlement in shares . |
| AEIP 2024 | Annual cash incentive | N/A | Adjusted Operating Income (AOI) vs target; CEO payout at 109.9% (+5% discretion) | Paid in cash; pro-rata and governance terms per plan . |
| Pre-IPO 2022–2024 Performance Cash | 3-year performance cash | N/A | Cumulative revenue and cumulative net income (weighted 33⅓% and 66⅔%); achieved 69.8% payout | Vested Apr 1, 2025; settled in shares . |
| 2024 Grants – Fair Value | Amount |
|---|---|
| PSUs at target | $4,400,231 |
| RSUs | $2,199,767 |
| NSOs (IPO Growth Grant) | $6,600,002 |
| AEIP 2024 Metrics | Target | Threshold | Max | Actual | Payout |
|---|---|---|---|---|---|
| Company AOI | $498M | $473M (50%) | ≥$588M (200%) | $502M | 104.6% |
| Segment AOI (TIC/S&A) | TIC $462M; S&A $36M | TIC $433M (50%); S&A $31M (50%) | TIC ≥$565M (200%); S&A ≥$56M (200%) | TIC $489M; S&A $18M | TIC 125.7%; S&A 0% |
2025 AEIP changes: Metrics shift to adjusted EBITDA (75%) and revenue (25%); segment leaders have 50% segment weighting—tightening profitability and top-line alignment .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 121,786 Class A shares; includes 89,285 in a family trust; 21,259 RSUs vesting within 60 days (as of Mar 26, 2025) . |
| Ownership % | Less than 1% of Class A shares outstanding . |
| SARs – Exercisable/Within 60 Days | 276,342 SARs @ $13.15; 133,112 SARs @ $30.06 (stock-settled) . |
| Performance Cash (shares to settle) | $3,300,000 award vested Apr 1, 2025; settled in shares . |
| Stock Ownership Guidelines | CEO must hold stock valued at 6× base salary; counts time-based RSUs and deferred stock units; excludes options/SARs/PSUs; all NEOs meet or comply via 50% retention rule . |
| Hedging/Pledging | Prohibited for directors and Section 16 officers; no margin purchases or pledging allowed . |
Vesting pressure indicators:
- 2024 RSUs vest annually through 2027; PSUs cliff vest in early 2027 based on 2024–2026 performance; NSOs vest Apr 12, 2027. These events may drive periodic tax-related net share settlements and potential Form 4 activity .
Employment Terms
- Employment Agreement: Dated Aug 21, 2019; provides severance for termination without Cause or resignation for Good Reason; defers to Executive Severance Plan if not less favorable .
- Executive Severance Plan Tiers:
- Tier I (Scanlon): Outside protection period—1.75× salary+target AEIP, installments over 21 months (employment agreement provides lump-sum and Good Reason eligibility) . During protection period (24 months post change-in-control)—2.0× salary+target AEIP, lump-sum; pro-rata AEIP; health coverage up to 18–24 months; outplacement; restrictive covenants required .
- Health & Welfare Continuation: 18–24 months at active rates depending on scenario .
- Clawback: Broad recoupment policy covering restatements, inaccurate metrics, risk failures, harm, and fraud; includes equity gains; 3-year lookback per SEC 10D rules .
- Tax Gross-ups: No excise tax gross-ups; plan includes “best net” cutback under IRC §280G .
| Change-in-Control (CIC) Economics (Illustrative at 12/31/2024 prices) | Scanlon |
|---|---|
| Cash Severance (2× salary+target) | $4,830,000 |
| Pro-rata AEIP | $1,500,000 |
| Equity Acceleration (indicative values at $49.88 closing price) | SARs $5,834,730; NSOs $18,419,394; PSUs $6,348,228; RSUs $3,173,565 |
| Other (health/outplacement) | Included per plan |
| Total Indicative Package | $45,969,220 |
PSU CIC treatment: Conversion to RSUs at target if CIC within first 12 months; conversion based on actual-to-date if after 12 months; RSUs continue vesting; double-trigger vesting if terminated without Cause/for Good Reason within 24 months .
Performance & Track Record
- 2024 execution: Oversubscribed IPO (Apr) and follow-on (Sep); strategic acquisitions (BatterieIngenieure, TesTneT), lab openings/expansions (US, Mexico, Korea, Japan), ULTRUS software brand launch, AI Model Transparency Benchmark, FCC Cyber Trust Mark leadership; strong profit and cash generation .
- Pre-IPO long-term performance (2022–2024 performance cycle):
| Metric | Weight | Threshold | Target | Max | Actual | Payout % |
|---|---|---|---|---|---|---|
| 2022–2024 Cumulative Revenue | 33⅓% | $8,373M | $8,544M | $8,715M | $8,416M | 63% |
| 2022–2024 Cumulative Net Income | 66⅔% | $994M | $1,057M | $1,120M | $1,023M | 73% |
| Weighted Payout | — | — | — | — | — | 69.8% |
Board Governance
- Board/Committee Roles: Scanlon is a management director with no committee memberships .
- Independence: Board determined all directors except Scanlon are independent under NYSE rules .
- Board Leadership: Independent Chair; regular executive sessions without management; additional sessions without ULSE designees .
- Meetings/Attendance: Board held 12 meetings in 2024; all directors attended ≥75% of Board/committee meetings .
- Controlled Company: UL Standards & Engagement holds ~95.7% voting power; entitled to designate directors and representation on committees; sunset terms defined .
Dual-role implications:
- Separation of Chair/CEO limits concentration of power and enhances oversight; controlled company status concentrates voting power with UL Standards & Engagement, which can influence director selection and committee composition, partially offset by independence standards and executive sessions .
Compensation Committee Analysis
- HCC Committee composition: Independent directors; chaired by Kevin J. Kennedy .
- Consultant: FW Cook retained; independence assessed—no conflicts; advises on targets, program design, peer benchmarking .
- Peer Group (2024): ADT, Brinks, CBIZ, Clarivate, EPAM, FactSet, Fair Isaac, FTI Consulting, Gartner, ICF, Maximus, Morningstar, Rollins, Stericycle, Tetra Tech, TransUnion, WEX—target total direct compensation calibrated near median (50th percentile) in aggregate with performance leverage .
- Best Practices: No option/SAR repricing without shareholder approval; robust stock ownership; clawback; hedging/pledging prohibited; double-trigger CIC vesting .
Say-on-Pay & Shareholder Feedback
| Item | Votes For | Against | Abstain | Broker Non-Votes |
|---|---|---|---|---|
| Advisory vote on NEO compensation (May 20, 2025) | 1,438,546,235 | 374,149 | 117,415 | 1,690,250 |
| Frequency of say-on-pay | 1 Year: 1,438,773,011; 2 Years: 2,292; 3 Years: 141,501; Abstain: 120,995; Broker Non-Votes: 1,690,250 |
Risk Indicators & Red Flags
- Clawback policy compliant with SEC Rule 10D; broad covered events including risk failures and reputational harm .
- Hedging/pledging prohibited; preclearance and blackout policies applied to insiders .
- No excise tax gross-ups; “best net” cutback under §280G reduces parachute payments if beneficial .
- Controlled company governance may limit minority influence on board composition .
Compensation Structure Analysis
- 2024 pay mix heavily performance-based (AEIP + PSUs/RSUs + NSOs) consistent with pay-for-performance orientation .
- 2025 shift in AEIP metrics to adjusted EBITDA and revenue increases emphasis on profitability and growth vs AOI—potentially tighter link to financial outcomes .
- One-time IPO Growth NSOs introduced market-based upside; time-based RSUs add retention stability; PSU structure preserves multi-year alignment .
Investment Implications
- Alignment: Strong pay-for-performance design with multi-year PSUs, no hedging/pledging, and stringent clawback supports shareholder alignment; CEO holds equity and is subject to 6× salary ownership guideline .
- Retention/Overhang: Multiple future vesting events (RSUs annually; PSUs/NSOs in 2027) may create periodic insider selling pressure; double-trigger CIC and significant equity acceleration could influence behavior in strategic transactions .
- Governance: Independent Chair mitigates dual-role risks; controlled company status concentrates voting power and director designations with UL Standards & Engagement—monitor independence and committee composition over time .
- Performance Trajectory: 2024 improvements in revenue, margins, EPS, and cash flow, plus strategic lab and software investments, indicate execution strength; AEIP metric changes tighten near-term profit discipline .