Rafael Santana
WESTINGHOUSE AIR BRAKE TECHNOLOGIESAbout Rafael Santana
Rafael Santana, age 53, has served as Wabtec’s President and CEO since July 2019 and as a director since 2019; he previously led GE Transportation and held multiple global leadership roles at GE since 2000, giving him more than a decade of direct rail industry experience and 25 years in Fortune 300 operations . Under his tenure, Wabtec reported 2024 sales of $10.39B (+7.3% YoY), GAAP operating margin 15.5% (18.9% adjusted), GAAP EPS $6.04 ($7.56 adjusted), and cash from operations of $1.83B . For the 2022–2024 long-term incentive cycle, Wabtec delivered TSR of 122.9% versus its peer construct, resulting in a +10% RTSR modifier and 183.8% of target PSUs earned, including 97,437 shares paid to Santana in March 2025 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| GE Transportation (GE) | President & CEO | Nov 2017–Feb 2019 | Led GE’s rail unit before combining with Wabtec, bringing deep rail operations and commercial expertise . |
| General Electric (GE) | Various global leadership roles (Transportation, Power, Oil & Gas) | 2000–2017 | Built multi-division international operating experience in product management, human capital and strategy . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Travelers Insurance | Director | Since 2022 | Current public company directorship . |
Board Governance
- Board service: Director since 2019; currently serves on Wabtec’s Board without committee memberships; classified as non-independent due to CEO role .
- Dual-role implications: Wabtec currently separates Chair and CEO roles; Independent Chair (Albert Neupaver) and a Lead Independent Director (Linda Harty) mitigate concentration of power through executive sessions and defined liaison duties, reducing typical CEO/Chair dual-role concerns .
- Board operations: Executive sessions at all regular meetings; all directors attended ≥75% of meetings in 2024 .
Fixed Compensation
Multi-year CEO compensation detail:
| Metric ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | 1,242,308 | 1,325,000 | 1,325,000 |
| Stock Awards (grant-date fair value) | 8,200,042 | 10,655,185 | 14,988,497 |
| Non-Equity Incentive (annual bonus paid) | 2,222,200 | 3,485,178 | 4,637,500 |
| All Other Compensation | 20,922 | 27,877 | 23,322 |
| Total Compensation | 11,685,472 | 15,493,240 | 20,974,319 |
Bonus design and target:
| Component | 2023 | 2024 |
|---|---|---|
| Target bonus (% of base) | 160% | 175% |
Perquisites and other compensation (2024):
| Item | Amount ($) |
|---|---|
| 401(k) company match | 20,700 |
| Imputed group term life insurance | 2,622 |
| Total perquisites reported | 23,322 |
Performance Compensation
Annual cash incentive (2024):
| Metric | Weight | 2024 Actual | Payout Factor | Notes |
|---|---|---|---|---|
| Adjusted EPS | 75% | $7.56 | 185.6% | Non-GAAP; reconciled in proxy appendix . |
| Cash Conversion | 25% | 120% | 200% | Non-GAAP definition provided . |
| Personal Modifier (EBIT Margin %) | 80–120% | 18.9% adj. EBIT margin | 120% | Modifier applied to financial result . |
| Total Payout (capped) | — | — | 200% | Plan max is 200% . |
Actual CEO bonus computation (2024):
| Base Salary | Target % | Financial Payout % | Bonus $ Before Modifier | Individual Modifier | Actual Bonus $ |
|---|---|---|---|---|---|
| 1,325,000 | 175% | 189.2% | 4,387,075 | 120% | 4,637,500 |
Long-term incentives:
- 2024 grants (awarded Mar 6, 2024; 60% PSUs, 40% RS): Santana received 63,468 target PSUs (25% threshold 15,867; 200% max 126,936) and 42,312 restricted shares; RS vest one-third on Mar 1, 2025/2026/2027 . Grant-date fair values: PSUs $8,993,098; RS $5,995,399 .
- PSU plan design (2024–2026): 50% ROIC, 50% cumulative cash conversion, subject to +/-20% RTSR modifier versus XLI; payouts range from 25% at 85% of target to 200% at ≥115% of target; no options granted in 2024 .
- 2022–2024 PSU payout: ROIC 10.2% (182.5% payout), CCC 101.4% (151.6% payout), totaling 167.1% before RTSR; RTSR modifier +10% lifted payout to 183.8%; Santana received 97,437 shares valued at $18,913,125 at settlement in March 2025 .
Equity Ownership & Alignment
Ownership and awards:
| Item | Quantity | Valuation Reference |
|---|---|---|
| Beneficial ownership (as of Jan 31, 2025) | 191,852 shares; includes 81,137 restricted shares; 68,833 options exercisable within 60 days | Less than 1% of class; percentages as of record date . |
| Unvested restricted stock (by grant year) | 11,780 (2022); 27,045 (2023); 42,312 (2024) | Market values at $189.59 close on 12/31/2024 for each line item . |
| Unearned PSUs outstanding | 346,077 (aggregate max for cycles including 2023–2025 and 2024–2026) | Valued at year-end for disclosure purposes . |
| Stock options outstanding | 9,800 @ $70.635 exp 3/6/2029; 27,591 @ $78.33 exp 2/7/2030; 31,442 @ $81.21 exp 2/11/2031 | All fully vested/exercisable; year-end stock price $189.59 . |
Ownership policies and alignment:
- CEO stock ownership guideline: 7x base salary; NEOs 3x; 5-year compliance period. As of Dec 31, 2024, named executive officers met required ownership unless within first five years; directors also have guidelines of 6x cash retainer .
- Hedging/pledging: Prohibited; no directors or executive officers had pledged Wabtec shares as of Jan 31, 2025 .
- Insider trading policy: codified with quiet-period and 10b5-1 constraints .
- Clawback: Mandatory recovery of incentive compensation upon material restatement; applies regardless of fault, with limited impracticability exceptions .
Employment Terms
Severance and change-in-control protections (Continuation Agreement effective Dec 5, 2022):
| Provision | Non-CIC Termination (without cause / good reason) | CIC Termination (within 2 years post-CIC) |
|---|---|---|
| Cash severance | 2x base + 2x target bonus (CEO) | 3x base + 3x target bonus (CEO) |
| Benefits continuation | 24 months of full premiums (CEO) | 36 months of full premiums (CEO) |
| Pro-rated annual bonus | Based on actual performance and days employed | Same |
| Transition payment | $100,000 (CEO) | $100,000 (CEO) |
| Equity vesting minimums | Full vesting of Post-2021 equity grants for CEO; performance awards settle on actual results | Full vesting; performance awards deemed at maximum; subject to 2011 Plan treatment depending on award assumption/replacement |
| Restrictive covenants | Non-compete and non-solicit during employment and for 1 year post-termination; confidentiality/non-disparagement | |
| 280G cutback | Best-net approach to avoid excise tax if beneficial |
Illustrative potential payouts and vesting (as of Dec 31, 2024 at $190.83) show equity values and cash components consistent with above; CEO totals include performance shares and restricted stock values under different scenarios .
Performance & Track Record
| Metric | 2024 Result |
|---|---|
| Sales | $10.39B; +7.3% YoY |
| GAAP Operating Margin | 15.5%; Adjusted 18.9% |
| GAAP EPS / Adjusted EPS | $6.04 / $7.56 |
| Cash from Operations | $1.83B |
| Three-year TSR (2022–2024) | 122.9%; >75th percentile; PSU payout 183.8% |
Compensation Committee Analysis
- Committee composition: Independent directors Klee (Chair), Babcock, Banks, Hehir; 6 meetings in 2024 .
- Independent advisor: Exequity retained; provided peer group benchmarking, plan design, and pay-for-performance assessments; no conflicts identified .
- Risk controls: Significant LTI weighting, capped payouts, multi-year metrics, ownership guidelines; annual risk review concluded design discourages excessive risk-taking .
Compensation Peer Group (Benchmarking)
- Philosophy: Target total comp positioned near median of peer group; benchmarking against large industrials of comparable size and capital intensity .
- 2024 peer group included AGCO, AMETEK, Dover, Eaton, Emerson, ITW, Ingersoll Rand, Jacobs, Norfolk Southern, Parker Hannifin, Rockwell Automation, Snap-on, Stanley Black & Decker, Textron, Timken, TransDigm, Xylem, CSX, Oshkosh, etc.; minor changes year-over-year to better reflect evolving business .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay approval: ~96% support, interpreted as affirmation of program design; cadence remains annual .
- Engagement: Management and Board met with holders representing 77% of shares outstanding in 2024, covering strategy, compensation, governance, ESG, financial performance .
Related Party Transactions and Red Flags
- RPT policy: Governance Committee pre-approves and reviews transactions >$120,000 under Item 404; 2024 purchases from Dana and Salesforce reviewed/approved; no disclosures specific to Santana .
- Red flags mitigated: No hedging/pledging; no CIC gross-ups; no option repricing; clawback in place .
Expertise & Qualifications
- Qualifications: Extensive international operations leadership, product management, corporate governance, human capital, strategy, M&A, with deep transportation/rail sector understanding .
- Education: Not disclosed in the 2025 proxy .
Equity Award Vesting Schedules (Santana)
| Award Type | Grant Year | Units | Vesting |
|---|---|---|---|
| Restricted Stock | 2022 | 11,780 | Final one-third vests Mar 1, 2025 . |
| Restricted Stock | 2023 | 27,045 | Vests one-third Mar 1, 2025; final third Mar 1, 2026 . |
| Restricted Stock | 2024 | 42,312 | Vests one-third on Mar 1 of 2025, 2026, 2027 . |
| Performance Units | 2024–2026 cycle | 63,468 target (max 126,936) | Earned based on 3-year ROIC/CCC with RTSR modifier; settles by Mar 15, 2027 . |
Employment & Contracts — Additional Provisions
- Insider trading program: Quiet periods and prior-approval requirements; permitted transactions include cashless exercises without market sale, regular plan contributions, gifts subject to conditions, and trades under pre-approved 10b5-1 plans .
- Deferred compensation: DC plan available; executives may defer salary, bonus, and PSU payouts; redesigned in 2023 to mirror 401(k) options; in 2024 only select NEOs deferred; Santana not listed among deferrers .
Investment Implications
- Pay-for-performance alignment is strong: 2024 bonus and recent PSU payouts tied to adjusted EPS, cash conversion, ROIC/CCC with RTSR modifier; ownership guidelines and clawback reinforce alignment .
- Upcoming vesting/cash events: Significant RS tranches in March 2025/2026/2027 and PSU cycles through 2027; 2022–2024 PSU payout delivered 97,437 shares in March 2025, a material equity distribution to monitor for potential 10b5-1 activity within policy windows .
- Retention risk appears contained: Competitive severance (2x/3x) and full-vesting protections, one-year non-compete/non-solicit, and independent Chair/Lead Director governance balance continuity with oversight .
- Governance quality: High say-on-pay support, robust shareholder engagement, prohibition of hedging/pledging, and no CIC gross-ups indicate investor-friendly practices that reduce headline risk .