Eric Gehringer
UNION PACIFICAbout Eric Gehringer
Executive Vice President – Operations at Union Pacific since January 1, 2021; age 46; tenure 19 years at UNP as of 2024 . He oversees operations and productivity, emphasizing safety, workforce efficiency, terminal automation, and asset utilization; under his leadership, UNP set best-ever records in workforce productivity, fuel consumption, terminal dwell, train length and delivered an adjusted operating ratio of 58.5% in Q3 2025, with adjusted EPS of $3.08, +12% year-over-year . In Q1 2025, he highlighted record safety improvements, 6% better freight car velocity, 6% lower terminal dwell, 9% workforce productivity improvement, and efficient resource buffers supporting 7% volume growth with operating expenses down 2% ex-fuel . His 2024 annual incentive design tied pay to operating income/ratio, safety, and strategic service/engagement goals; UNP achieved a 163% payout, reflecting strong execution against operational and safety metrics .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Union Pacific | Executive Vice President – Operations | Jan 1, 2021 – Present | Leads operations productivity, safety, and service; broad portfolio of automation and efficiency programs |
| Union Pacific | Senior Vice President – Transportation | Jul 2020 – Dec 2020 | Oversaw transportation fundamentals and playbook for productivity during demand fluctuations |
| Union Pacific | Vice President – Mechanical & Engineering | Jan 2020 – Jul 2020 | Advanced technology and automation in inspections and maintenance |
| Union Pacific | Vice President – Engineering | Mar 2018 – Jan 2020 | Network engineering and materials distribution automation initiatives |
| Union Pacific | Assistant Vice President – Engineering | Sep 2016 – Mar 2018 | Early leadership in operations engineering and asset utilization |
External Roles
No external public company directorships or roles disclosed in the proxy or 10-K for Eric Gehringer .
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary ($) | $467,500 | $579,167 | $650,000 |
| Stock Awards ($) | $900,185 | $1,350,106 | $1,500,136 |
| Option Awards ($) | $600,116 | $900,112 | $1,000,035 |
| Non-Equity Incentive (AIP) ($) | $323,500 | $300,000 | $1,224,188 |
| Change in Pension Value ($) | — (g) | $342,336 | $28,950 |
| All Other Compensation ($) | $23,900 | $28,185 | $38,105 |
| Total Compensation ($) | $2,315,201 | $3,499,906 | $4,441,414 |
| Base Salary Progression | 2023 | 2024 | 2025 |
|---|---|---|---|
| Base Salary ($) | $600,000 | $660,000 | $700,000 |
| Target/Actual Bonus | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Target Annual Incentive ($) | $750,000 | $750,000 | $750,000 |
| Actual Annual Incentive ($) | $323,500 | $300,000 | $1,224,188 |
Perquisites detail (FY 2024): corporate aircraft ($9,177), tax/financial counseling ($6,623), excess liability premium ($2,805), company-matched thrift contributions ($19,500), total $38,105 .
Performance Compensation
Annual Incentive Plan (AIP) – Design and Results (Company-level)
| Component | Weight | Threshold | Target | Maximum | 2024 Actual | Weighted Payout |
|---|---|---|---|---|---|---|
| Operating Income | 35% | $8,400 | $9,400 | $10,500 | $9,713 | 45% |
| Operating Ratio | 35% | 64.0% | 62.0% | 60.0% | 60.1% (plan-adjusted) | 68% |
| Reportable Personal Injury Rate | 5% | 1.17 | 1.11 | 1.05 | 0.90 | 10% |
| Reportable Derailment Rate | 5% | 2.72 | 2.58 | 2.45 | 2.17 | 10% |
| Strategic Scorecard (service, NPS, volume, engagement, renewables) | 20% | 25% | 100% | 200% | 150% | 30% |
| AIP Overall Payout | — | — | — | — | — | 163% |
Eric Gehringer – AIP Payout Breakdown (FY 2024)
| Metric | 2024 Target Bonus | Operating Income 35% | Operating Ratio 35% | Personal Injury 5% | Derailment 5% | Strategic 20% | Total AIP ($) | Payout % of Target |
|---|---|---|---|---|---|---|---|---|
| EVP – Operations | $750,000 | $337,313 | $511,875 | $75,000 | $75,000 | $225,000 | $1,224,188 | 163% |
Long-Term Incentives (LTI)
- Structure: 60% PSUs; 40% stock options (annual grants) .
- PSU performance metrics: two-thirds ROIC, one-third relative Operating Income Growth percentile vs S&P 100 Industrials + Class I Railroads; 2024–2026 ROIC target 15.5% .
- 2022–2024 PSU payout: settled at 90% of target based on 16.2% three-year average ROIC (85% payout on 2/3) and 65th percentile relative OIG capped at 100% due to absolute OIG <2% (weighted 90%) .
| Performance Period | Average ROIC | Relative OIG (Percentile) | Percent of Target Achieved to Date | PSU Payout |
|---|---|---|---|---|
| 2022–2024 | 16.2% | 65th | 90% | 90% of target |
| 2023–2025 | 15.7% (to date) | 52nd (to date) | N/A | Earned at end of period |
| 2024–2026 | 16.0% (to date) | 59th (to date) | N/A | Earned at end of period |
2024 Grants (Eric Gehringer)
| Grant Date | Award Type | Target/Units | Options (#) | Exercise Price | Grant-Date Fair Value |
|---|---|---|---|---|---|
| Feb 8, 2024 | PSUs | 6,029 target units | — | — | $1,500,136 |
| Feb 8, 2024 | Stock Options | — | 16,194 | $248.82 | $1,000,035 |
Equity Ownership & Alignment
| Ownership Detail (as of 3/14/2025 unless noted) | Amount |
|---|---|
| Beneficially owned shares | 62,905 |
| Stock units (unvested, not counted as beneficially owned) | 38,924 |
| Stock options exercisable within 60 days | 50,250 |
| Unvested earned stock units (2022 PSUs/retention) | 3,316 units |
| Unearned PSUs outstanding (targets for 2023 & 2024 grants) | 12,686 units |
- Stock ownership guidelines: 4x salary for NEOs; all NEOs in compliance as of 12/31/2024 .
- Hedging and pledging prohibited for directors and executive officers .
- Rule 10b5-1 sales policy: executives may sell only “Eligible Shares” above ownership targets; total annual sales capped at 50% of beneficially owned shares; plan preclearance and 90-trading-day seasoning required .
Outstanding Equity and Vesting (Eric Gehringer, 12/31/2024)
| Grant Year | Options Unexercisable (#) | Strike | Expiration | Scheduled Vest Tranches |
|---|---|---|---|---|
| 2024 | 16,194 | $248.82 | 2/8/2034 | 2/8/2025, 2/8/2026, 2/8/2027 (one-third annually) |
| 2023 | 12,422 | $202.81 | 2/9/2033 | 2/9/2025, 2/9/2026 (per tranche schedule) |
| 2022 | 3,853 | $244.35 | 2/3/2032 | 2/3/2025 (remaining unvested tranche) |
Employment Terms
| Scenario (as of 12/31/2024) | Cash Severance | Accelerated Options | Accelerated PSUs | Other (medical premiums) | Pre-tax Total |
|---|---|---|---|---|---|
| Change-in-Control + termination without cause/for good reason | $2,240,850 | $313,407 | $3,649,096 | $57,600 | $6,260,953 |
- CIC design: double-trigger plan; benefits reduced to avoid excise tax; amounts shown use UNP closing price $228.04 and PSU payout assumptions (2022 PSU at 90%, 2023/2024 at target) .
- No individual employment agreements for executive officers; no tax gross-up payments for NEOs (including on CIC); clawback policy exceeds SEC requirements .
- Pension: eligible to receive a “vested benefit” under defined benefit plans (Basic and Supplemental) with normal optional annuity forms; no lump-sum option; plans closed to new entrants post-1/1/2018 .
- Nonqualified deferred compensation: 2024 Supplemental Thrift contributions $18,300 (exec) + $9,150 (company), balance $91,729; deferred stock unit awards contribution $920,136, balance $862,348 (represents 3,781 shares) .
Performance & Track Record
- Q3 2025: Adjusted EPS $3.08 (+12% YoY), adjusted OR 58.5% (improved 180 bps), records in workforce productivity, fuel consumption, terminal dwell, and train length .
- Q1 2025: Personal injury rate tied quarterly record since 2016; freight car velocity +6% to 215 miles/day; terminal dwell -6% YoY; workforce productivity +9%; active TEY workforce -1% vs +7% volume; train length +2% .
- Operational playbook: protect buffers; adjust transportation plan, train and crew starts; right-size locomotives and car fleets; monthly hiring plan reviews; dozens of technology initiatives (Energy Management, Mobile NX, automation) .
Compensation Committee Analysis
- Peer group selected with FW Cook; pay targeted around median; heavy emphasis on performance-based variable comp; stringent ownership guidelines; double-trigger CIC; no employment agreements; no options repricing; no hedging/pledging; no tax gross-ups .
- 2024 say-on-pay support ~96% .
Investment Implications
- Alignment: Strong due to 4x salary ownership guideline and prohibition of hedging/pledging; 10b5-1 policy constrains opportunistic selling and caps annual sales, reducing near-term insider selling pressure .
- Pay-for-performance: AIP tied to operating income/ratio and safety, with strategic service goals; LTI PSUs focus on ROIC and relative operating income growth, directly linking compensation to value creation drivers in rail operations .
- Retention: Significant unearned PSUs (12,686 target units) and unvested options across 2025–2027 vesting tranches create retention hooks; CIC economics (~$6.26M pre-tax) provide downside protection without gross-ups .
- Execution signal: Documented productivity, safety, and service records under his oversight, coupled with disciplined buffer management and automation initiatives, support operational leverage and margin improvement, aligning with PSU metrics and AIP outcomes .