David Dillon
UNION PACIFICAbout David B. Dillon
David B. Dillon, age 74, has served as an independent director of Union Pacific Corporation since 2014. He is the former Chairman and Chief Executive Officer of The Kroger Co., and holds a J.D. from Southern Methodist University, bringing CEO experience, audit/finance expertise, and complex logistics knowledge to the board . He is currently Audit Committee Chair and a member of the Corporate Governance, Nominating & Sustainability Committee .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| The Kroger Co. | Chairman of the Board | 2004–2014 | Led large-scale retailer; audit/finance and operations expertise |
| The Kroger Co. | Chief Executive Officer | 2003–2013 | CEO experience; risk management and investor perspective |
| The Kroger Co. | President | 1995–2003 | Operations and customer perspective |
| The Kroger Co. | EVP | 1990–1995 | Finance/audit skills |
| Dillon Companies, Inc. (Kroger subsidiary) | President; prior management roles | 1976–1995 (President 1986–1995) | Complex logistics and operations knowledge |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| 3M Company | Director | Since 2015 | Current public directorship within last 5 years |
Board Governance
| Committee | Role | Meetings in 2024 | Notes |
|---|---|---|---|
| Audit Committee | Chair | 9 | Board determined Dillon is an SEC “audit committee financial expert”; all members financially literate |
| Corporate Governance, Nominating & Sustainability | Member | 4 | Oversees governance policies, related party policy, sustainability oversight |
- Independence: Dillon was affirmatively determined to be independent under NYSE and Board standards; 10 of 11 nominees were independent in 2025 .
- Board structure and engagement: Independent Chairman (McCarthy) with executive sessions at each Board and committee meeting ; Board met 6 times in 2024 and no director attended fewer than 75% of Board/committee meetings . Board meeting attendance was 100% per governance highlights .
- Shareholder engagement: Management and Board engaged widely in 2024 (9 conferences, 80+ investor meetings, 400+ calls) and hosted an investor day .
Fixed Compensation
| Element | Annual Amount | Notes |
|---|---|---|
| Annual Retainer | $300,000 | $175,000 mandatory deferral into Stock Unit Account; remainder $125,000 elective deferral or cash |
| Audit Committee Chair Retainer | $25,000 | Paid to chair |
| Audit Committee Member Retainer | $10,000 | Member fee |
| Non-Executive Board Chair Retainer | $200,000 | Applies only to Board Chair (McCarthy) |
| Lead Director Retainer (if applicable) | $45,000 | If role designated |
| David B. Dillon – 2024 Director Compensation | Amount (USD) |
|---|---|
| Fees Earned or Paid in Cash | $335,000 |
| Stock Awards | $0 |
| Option Awards | $0 |
| All Other Compensation (incl. matching gifts, insurance, NE tax reimbursement) | $29,519 |
| Total | $364,519 |
- All Other Compensation components: Excess liability insurance premiums of $2,805 per director; Company charitable matching gift for Dillon $25,000; Nebraska nonresident tax reimbursements included; no gross-ups; Company does not consider this a perquisite .
Performance Compensation
- Non-management directors did not receive option awards in 2024; annual director equity option grants ceased after 2007, and the initial 4,000 restricted share grant for new directors was eliminated effective August 1, 2018 .
| Company Performance-Linked Metrics and Outcomes Used in Compensation Design (FY 2024) | Value |
|---|---|
| Annual Incentive Plan weight: Operating Income | 35% |
| Annual Incentive Plan weight: Operating Ratio | 35% |
| Annual Incentive Plan weight: Safety metrics (personal injury rate 5%, derailment rate 5%) | 10% total |
| Annual Incentive Plan weight: Strategic objectives (SPI, NPS, volume, engagement, renewable fuel blend) | 20% |
| AIP payout vs target | 163% of target |
| PSU performance period outcome (2022–2024): Avg ROIC | 16.2% |
| PSU performance period outcome (2022–2024): Relative OIG percentile | 65th percentile |
| PSU vesting outcome (2022–2024 grant) | 90% of target |
Other Directorships & Interlocks
| Company | Relationship to UNP | Potential Interlock Notes |
|---|---|---|
| 3M Company | Unrelated industrial; Dillon director | No related-party transactions disclosed involving Dillon; Board reviews related-party transactions via formal policy . 2024 related-party transactions disclosed involved Omaha Track and certain family relationships of other executives, not Dillon . |
Expertise & Qualifications
- CEO experience leading a large, complex retailer (Kroger), with deep operations, logistics, and customer perspective .
- Economics/finance and audit-related expertise; designated audit committee financial expert; legal education (J.D., SMU) .
- Public company board experience (3M; prior extensive public board service) .
Equity Ownership
| Holding | Quantity |
|---|---|
| Deferred Stock Unit Account | 12,308 units |
| Restricted Shares vesting upon termination (legacy initial grant) | 4,000 shares |
| Options (unexercised/exercisable) | 0 |
- Policy alignment: Company has a policy against pledging and hedging Company common stock . Director stock ownership requirements are overseen by the Corporate Governance, Nominating & Sustainability Committee; specific director multiples not disclosed in this proxy .
Governance Assessment
- Strengths: Independent Audit Chair with SEC “financial expert” designation; audit committee met 9 times in 2024, covering financial reporting, internal controls, ERM, cybersecurity, climate and sustainability reporting oversight . Board-level independence is high (10 of 11 nominees), with independent Chairman and executive sessions each meeting, supporting effective oversight .
- Attendance and engagement: Board had 100% meeting attendance in aggregate; no director below 75%; broad investor engagement by management and Board in 2024 .
- Compensation alignment oversight: AIP heavily weighted to financial performance and safety; PSUs tied to ROIC and relative OIG; 2024 AIP paid 163% of target; 2022–2024 PSUs vested at 90% based on disclosed outcomes .
- Director pay structure: Significant mandatory deferral ($175,000) into stock unit accounts enhances alignment; Dillon maintains 12,308 deferred units and a legacy 4,000-share vesting tranche tied to Board retirement .
- Related-party/conflict controls: Formal Related Party Policy administered by the Corporate Governance, Nominating & Sustainability Committee; 2024 related-party transactions disclosed involve other executives/family relationships; no Dillon-related transactions disclosed .
- Watch items: Nebraska nonresident director tax reimbursement is paid by the Company (without gross-up); while explained as business-necessitated travel taxation, investors may monitor consistency and amounts over time . Deloitte is a long-tenured auditor (50+ years) with noted benefits; audit fees and non-audit services are transparently disclosed and pre-approved by the Audit Committee .