Matthew Pine
XylemAbout Matthew Pine
Matthew F. Pine, age 53, is President & Chief Executive Officer of Xylem Inc. (since January 1, 2024) and has served on Xylem’s Board since 2024; he is not independent as the sitting CEO . Under his leadership in 2024, Xylem set records: revenue grew 16% (6% organic), net income margin expanded 210 bps, EBITDA margin expanded 170 bps, and EPS increased 31% (13% adjusted) . Xylem’s cumulative TSR since 12/31/2019 equated to a $156 value for a $100 investment (vs $176 for S&P 500 Industrials), while 2024 revenue was $8,562M and net income $890M . Pine’s pay mix is heavily performance-based (88% of CEO total direct compensation at target) and the company’s say‑on‑pay support was 82.7% in 2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Xylem Inc. | President & CEO | 2024–present | Led transition to high-impact culture; delivered record 2024 performance and accelerated Evoqua integration synergies . |
| Xylem Inc. | Chief Operating Officer | 2023 | Drove simplification to segment-led structure; 80/20 execution and modernization initiatives . |
| Xylem Inc. | Segment leader (Applied Water; MCS; Americas Commercial) | 2020–2023 | Advanced customer centricity and profitable growth in core franchises . |
| United Technologies (Carrier Residential) | President | 2018–2020 | Led residential HVAC portfolio with commercial and operating discipline . |
| Vestas Wind Systems; Lennox International; Trane Residential & Light Commercial Systems | Sales/Marketing leadership | Prior to 2018 | Built global product and go-to-market expertise across energy and climate tech . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Trane Technologies plc | Director | 2025–present (effective Apr 1, 2025) | Adds adjacent industrial tech insight; potential information flow across climate tech ecosystems . |
| Business Roundtable | Member | Ongoing | Policy engagement and CEO‑level strategy dialogue . |
| WEF Alliance of CEO Climate Leaders | Member | Ongoing | Sustainability leadership and climate transition collaboration . |
Fixed Compensation
| Component | 2024 | Notes |
|---|---|---|
| Base Salary ($) | 1,100,000 | Increased 69% upon promotion to CEO effective Jan 1, 2024 . |
| Target AIP (% of salary) | 135% | Raised from 80% to 135% with CEO role . |
| Actual AIP Payout ($) | 2,085,311 | Based on total performance score of 140% . |
Performance Compensation
Annual Incentive Plan (AIP) – 2024 Team Metrics and Results
| Metric | Weight | Target | Actual | Actual vs Target | Payout % |
|---|---|---|---|---|---|
| Organic Revenue ($M) | 25% | 8,520 | 8,626 | 101% | 131% |
| Adjusted EBITDA ($M) | 25% | 1,670 | 1,762 | 106% | 183% |
| Free Cash Flow Conversion (%) | 25% | 115% | 113% | −2% delta | 96% |
| Team Performance Score (%) | — | — | — | — | 137% |
AIP Design notes: Team metrics 75% and Individual Objectives 25% in 2024; total performance score for Pine was 140% (IO score 110%) . For 2025, AIP will be 100% team-based (EBITDA margin adjusted, organic revenue, FCF margin adjusted); segment executives will have blended global/segment weightings .
Long-Term Incentive Plan (LTIP) – 2024 Grants (Grant Date: Mar 1, 2024)
| Instrument | Weight | Grant Shares/Units | Key Terms | Grant Date Fair Value ($) |
|---|---|---|---|---|
| PSUs – rTSR | 50% of PSU | 12,701 target | 3-year cliff; 0–200% payout scale; capped at 100% if absolute TSR negative; comparator S&P 500 ex Financials | 2,309,042 |
| PSUs – Adjusted EBITDA | 25% of PSU | 6,351 target | 3-year cliff; 80%/100%/113.3% of target → 50%/100%/200% payout | 812,547 |
| PSUs – Revenue | 25% of PSU | 6,351 target | 3-year cliff; 90%/100%/110% of target → 50%/100%/200% payout | 812,547 |
| RSUs | 25% | 12,701 | Vests 1/3 annually over 3 years | 1,624,966 |
| Stock Options | 25% | 42,967 | 10-year term; strike $127.94; vests 1/3 annually over 3 years | 1,625,012 |
| Total 2024 LTIP Value | — | — | — | 7,184,114 |
PSU rTSR payout scale: 25th percentile = 25%; 50th = 100%; 83rd+ = 200% . For 2025, PSU metrics will be rTSR versus S&P 500 Industrials and Adjusted Cumulative EPS (replacing EBITDA and Revenue) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 247,250 shares (<1% of class) as of Mar 7, 2025 . |
| Unvested RSUs (count; market value) | 17,152; $1,989,975 (at $116.02 on 12/31/2024) . |
| Unearned PSUs (count; market value) | 79,384; $9,210,132 (valuation per proxy methodology) . |
| Options – exercisable | 14,635 @ $63.55 (exp 2/27/2030); 145,856 @ $63.55 (exp 5/7/2030); 11,853 @ $102.23 (exp 3/1/2031); 10,070 @ $86.76 (exp 3/1/2032); 5,735 @ $101.09 (exp 3/1/2033) . |
| Options – unexercisable | 5,036 @ $86.76 (exp 3/1/2032); 11,471 @ $101.09 (exp 3/1/2033); 42,967 @ $127.94 (exp 3/1/2034) . |
| Stock ownership guidelines | CEO must hold 6× base salary; executives must retain at least 50% of net shares from vesting until compliant; all directors/executives met or are on track as of Mar 7, 2025 . |
| Hedging/pledging | Prohibited (hedging, pledging, shorting); robust insider trading policy with quarterly blackout periods and 10b5‑1 plan controls . |
| Director compensation for CEO director | None (employee director receives no director pay) . |
Scheduled Vesting (as of 12/31/2024)
| Grant | 2025 | 2026 | 2027 |
|---|---|---|---|
| Options (3/1/24) – 42,967 unexercisable | 14,322 | 14,322 | 14,323 |
| Options (3/1/23) – 11,471 unexercisable | 5,735 | 5,736 | — |
| Options (3/1/22) – 5,036 unexercisable | 5,036 | — | — |
| RSUs (3/1/24) – 12,701 | 4,233 | 4,234 | 4,234 |
| RSUs (3/1/23) – 3,298 (two tranches) | 1,649 | 1,649 | — |
| RSUs (3/1/22) – 1,153 | 1,153 | — | — |
| PSUs (3/1/24) – combined cycles | — | — | 50,806 |
| PSUs (3/1/23) – combined cycles | — | 17,312 | — |
| PSUs (3/1/22) – combined cycles | 8,576 | — | — |
Note: 2022 PSUs paid at 124% of target upon vesting on 3/1/2025; 2023/2024 PSU estimates at 175% and 200% were used in proxy fair value estimates (subject to actual performance) .
Employment Terms
| Provision | Key Economics |
|---|---|
| Senior Executive Severance Pay Plan (non‑CoC) | 12 months base salary up to 24 months based on service, plus continued health/life benefits during severance period; forfeiture if Code of Conduct or non‑compete violated . |
| Special Senior Executive Severance Pay Plan (CoC) | 2× base salary + most recent annual bonus; 2 years health/life insurance at same cost; retirement contributions multiple; 1 year outplacement; best‑net approach for 280G . |
| Estimated payouts (as of 12/31/2024) | Death/Disability: $5.4M; Termination not for cause: $1.2M; CoC termination not for cause/with good reason: $14.7M . |
| Clawback | SEC Rule 10D‑1 compliant recoupment for incentive‑based compensation; LTIP agreements include additional clawback provisions . |
| Contracts & gross‑ups | No fixed‑term employment contracts; no 280G excise tax gross‑ups; no executive perquisites . |
Board Governance
- Board service: Director since 2024; not independent due to CEO role .
- Leadership structure: Independent Board Chair (Robert F. Friel) sets agendas, presides over executive sessions; Lead Independent Director would be appointed if Chair were non‑independent .
- Committees: Audit (Ellis, Harker, Morelli, Yadav), Leadership Development & Compensation (Morelli Chair, Beliveau‑Dunn, Friel, Glatch), Nominating & Governance (Peribere Chair, Harker, Tretikov, Yadav); CEO not a committee member .
- Board effectiveness: >97% meeting attendance; six Board meetings and 15 committee meetings in 2024; independent director executive sessions at all meetings .
- Independence: 8 of 9 nominees independent; CEO sole non‑independent; executive sessions regular .
Dual-role implications: Pine is CEO and a director, but Board independence (90%), an independent Chair, majority voting, and regular executive sessions mitigate concentration risk and preserve independent oversight of CEO performance and compensation .
Director Compensation
- Non‑employee director program: $105,000 cash retainer; $165,000 annual RSU grant; additional retainers for Committee Chairs and Independent Chair; deferral elections available; annual cap $750,000 .
- Employee director: Pine receives no compensation for board service .
Compensation Structure Analysis
- Mix and leverage: CEO target pay heavily at-risk; 2024 CEO total compensation in SCT was $10.58M with $7.18M LTIP grant value; strong pay‑for‑performance alignment through PSU rTSR, EBITDA, and Revenue .
- 2025 design tightening: AIP moves to 100% team metrics (adds adjusted FCF margin; segment accountability); LTIP simplifies PSUs to rTSR plus Adjusted Cumulative EPS; rTSR comparator refined to S&P 500 Industrials; reflects shareholder feedback and strategic priorities .
- Governance guardrails: Double‑trigger CoC; clawbacks; prohibition on hedging/pledging; no option repricing; use of independent compensation consultant; regular risk assessment found no material compensation‑related risks .
Related Party Transactions
No related party transactions requiring disclosure since Jan 1, 2024; pre‑approval policy in place; independent review by Nominating & Governance Committee .
Say‑On‑Pay & Shareholder Feedback
- Say‑on‑pay support: 83.1% (2023), 82.7% (2024) .
- Engagement: Targeted outreach to 13 shareholders (>26% of shares) in fall 2024; nine engaged (>21% of shares); feedback incorporated into 2025 AIP/LTIP design changes .
Compensation Peer Group
- 2024 peer group includes Agilent, Ametek, Dover, Flowserve, Fortive, IDEX, ITW, Ingersoll Rand, Lincoln Electric, Parker-Hannifin, Pentair, Rockwell Automation, Roper, Snap‑On, TE Connectivity, Trane Technologies, Veralto .
- 2025 addition: Emerson Electric Co. .
- Targets benchmarked around market median; balanced against role scope and performance .
Expertise & Qualifications
- Global leadership across sales, operations, supply chain, product management, technology, and digital transformation; deep water industry knowledge; execution of complex strategic transactions (acquisitions/JVs) .
- External leadership roles (Business Roundtable; WEF Alliance of CEO Climate Leaders); passion for developing talent and inclusive culture .
Investment Implications
- Alignment: Strong linkage of CEO pay to multi-year value drivers (rTSR, EPS/EBITDA/Revenue), reinforced by ownership guidelines and anti‑hedging/pledging policy—supports long-term shareholder alignment .
- Retention risk: CoC economics (~$14.7M estimate) and sizable unvested equity (e.g., ~79k PSUs and ~17k RSUs) reduce near-term departure risk; 2027 PSU vesting (~50,806 shares) may create transactional liquidity needs, but blackout/10b5‑1 policy governance mitigates disorderly selling .
- Trading signals: Upcoming multi-year vesting schedules and option maturities (2025–2027) could introduce episodic selling pressure; monitor Form 4 activity and any disclosed 10b5‑1 plans around vest dates (March cadence) .
- Governance quality: Independent Chair and strong committee oversight offset CEO-director dual role; sustained say‑on‑pay support and shareholder-engaged compensation redesigns are constructive for sentiment and execution accountability .