Ivan Tornos
ZIMMER BIOMET HOLDINGSAbout Ivan Tornos
President & CEO of Zimmer Biomet since August 2023; Director since 2023 and designated to assume Chairman role effective May 29, 2025, with Michael J. Farrell to serve as Lead Independent Director providing robust independent oversight . Age 49 . Career spans senior operating roles at BD/Bard, Covidien, Baxter and Johnson & Johnson with broad experience in financial management, strategy, M&A and global operations . 2024 performance context: Consolidated constant currency revenue was $7,689 million and net income was $903.8 million; company TSR since 2019 measured value at $75.61 in 2024; CEO’s annual bonus paid 93.7% of target and 2022–2024 PRSUs paid at 150% of target .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Zimmer Biomet | President & CEO; previously COO; Group President, Global Businesses & Americas; Group President, Orthopedics | CEO since Aug 2023; COO Mar 2021–Aug 2023; Group President Dec 2019–Mar 2021; Group President Nov 2018–Dec 2019 | Led transformative growth, operational excellence and disciplined execution in highly regulated global medtech |
| Becton, Dickinson (BD) / C.R. Bard | Worldwide President, Global Urology, Medical & Critical Care; President, EMEA | Jun 2017–Oct 2018; EMEA Sep 2013–Dec 2017 | Drove global divisional performance and regional P&L across EMEA; integration following BD’s acquisition of Bard |
| Covidien International | VP & GM, Americas Pharmaceutical & Medical/Imaging Segments | Apr 2009–Aug 2011 | Managed multi-segment operations and growth in the Americas |
| Baxter International | International VP, Business Development & Strategy | Jul 2008–Apr 2009 | Led BD/strategy initiatives across geographies |
| Johnson & Johnson | Various roles with increasing responsibility | ~11 years prior to 2008 | Built foundational expertise in global healthcare operations |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| PHC Holdings Corporation | Director | Current | Other public boards: 1 listed in proxy |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $823,077 | $968,702 | $1,236,923 paid; 2024 approved base salary set at $1,248,000 (+4%) |
| Target Annual Bonus (% of Salary) | 150% | 150% | 150% |
| Actual Annual Bonus Paid ($) | $1,059,530 | $1,603,022 | $1,738,495 (93.7% of target) |
Performance Compensation
Annual Cash Incentive (2024 structure and outcome)
| Metric | Weight | Target ($mm) | Actual ($mm) | Achievement (%) | Payout Contribution (%) |
|---|---|---|---|---|---|
| Consolidated Constant Currency Revenue | 40% | 7,748 | 7,689 | 99.2 | 36.9 |
| Adjusted Operating Profit | 40% | 2,248 | 2,195 | 97.7 | 35.4 |
| Consolidated Free Cash Flow | 20% | 1,077 | 1,055 | 98.0 | 18.6 |
| ESG Global Quality Modifier | — | — | — | — | +3.0 to subtotal |
| Total Weighted Payout (%) | — | — | — | — | 93.7 (Tornos individual factor at 100%) |
Notes: Annual metrics reweighted in 2024 (revenue 40%, adjusted operating profit 40%, FCF 20%) . ESG quality modifier adds up to +3% based on FDA letters, Form 483s, CAPA score; company achieved max (+3%) in 2024 .
PRSUs – 2022–2024 Performance Period
| Performance Metric | Threshold (50%) | Target (100%) | Max (150%/200%) | Actual | Metric Payout | Award Payout |
|---|---|---|---|---|---|---|
| Constant Currency Revenue CAGR | 1.0% | 3.0% | 6.0% (200%) | 6.3% | 200.0% | Capped at 150% total |
| Adjusted EPS CAGR | 1.0% | 4.0% | 8.0% (200%) | 5.6% | 140.0% | Capped at 150% total |
Tornos PRSUs earned under 2022 grant: 25,878 (150% of target) .
2024 LTI Grants (mix and vesting)
| Award Type | Units Granted | Grant-Date Fair Value ($) | Vesting |
|---|---|---|---|
| PRSUs (equal mix) | 23,089 | $5,875,100 | Earn over 3-year period; vest 2/20/2027 if earned |
| RSUs (equal mix) | 47,987 | $5,875,048 | Vest 1/3 on 2/20/2025, 2/20/2026, 2/20/2027 |
| Total 2024 Stock Awards | — | $11,750,148 | — |
Stock vested in 2024: 43,661 shares valued at $4,907,017 for Tornos (includes RSUs and earned PRSUs) .
Equity Ownership & Alignment
| Ownership Element | Detail |
|---|---|
| Total Beneficial Ownership | 259,632 shares; includes 232,671 shares acquirable in 60 days; <1% of class; none pledged |
| Options Held (selected grants) | 41,164 exercisable/20,582 unexercisable @ $117.22 exp. 2/18/2032; 27,966/9,322 @ $158.90 exp. 2/25/2031; 43,288 exercisable @ $152.84 exp. 2/21/2030; legacy grants 2019–2018 also outstanding |
| Unearned PRSUs Outstanding | 23,089 (2024 grant, shown at threshold) |
| RSUs Outstanding | 47,987 (2024 grant); 9,660 (9/1/2023); 10,876 (3/6/2023) |
| CEO Stock Ownership Guideline | 6x base salary; 5-year compliance window; retention until minimum met; as of 12/31/2024 NEOs in compliance or within window (Yi later returned to compliance); new policy requires NEOs to retain at least 25% of net shares vesting during a year, until departure (effective 2025) |
| Hedging/Pledging | Prohibited for directors/executives; no margin or pledging allowed |
Employment Terms
| Provision | Key Terms |
|---|---|
| Employment Agreement | No employment contract; executives are “at will” in U.S. |
| Non-Compete | CEO restricted for 2 years post-termination globally; U.S. NEOs have 18 months; regional scopes for APAC/EMEA leaders |
| Executive Severance Plan (no CIC) | CEO: 2x salary + 2x target bonus; 24 months COBRA payment; up to $25,000 outplacement; requires general release and adherence to restrictive covenants |
| Change-in-Control (Double Trigger) | CEO: 3x salary + 3x target bonus; payout of prior year bonus and pro-rata current incentives; equity acceleration (options & RSUs vest; PRSUs greater of target or actual through CIC); health/perks payments; amended 280G “best net” (reduce or pay in full based on after-tax outcome) |
| Potential Payments (as of 12/31/2024) | CIC: Salary severance $3,744,000; Bonus severance $5,616,000; 2024 EPIP at target $1,872,000; Equity acceleration (PRSUs/RSUs) $17,180,825; DCP $718,267; Health & welfare $74,651; Outplacement $25,000 . Company-initiated without cause: Salary $2,496,000; Bonus $3,744,000; Health & welfare $72,779; Outplacement $25,000 |
| Clawback | NYSE-compliant compensation recovery policy for restatements; equity awards subject to forfeiture/recoupment for detrimental conduct and policy violations |
Board Governance (Director service and dual-role implications)
- Director since 2023; not independent .
- Will become Chairman effective May 29, 2025; Board appointed Michael J. Farrell as Lead Independent Director with defined responsibilities (agenda input, presiding in executive sessions, liaison role, shareholder communication, oversight of CEO evaluation) to mitigate CEO/Chairman combination risks .
- Committee memberships: none (CEO is not on standing committees); all committees comprised of independent directors .
- Board/committee meeting attendance: Board held 6 meetings in 2024; all directors attended ≥75% of meetings; annual meeting attendance by all standing directors .
- Director compensation: CEO receives no additional director compensation .
Director Compensation (non-employee directors context)
- Retainers: Director $110,000; Chair retainers vary; non-executive Chair $130,000; Lead Independent Director retainer $40,000 (DSUs), effective May 29, 2025 .
- Equity: Annual RSUs ($130,000) and DSUs ($75,000) with mandatory deferral until cessation or stated date; immediate vesting for directors with settlement deferral .
- CEO not included in director compensation table .
Compensation Structure Analysis
- Mix and at-risk: 91.6% of CEO’s 2024 target total direct compensation was variable at time of grant (annual bonus + PRSUs + RSUs), emphasizing pay for performance and long-term equity .
- Annual incentive measures were rebalanced to increase free cash flow weight to 20% in 2024, aligning to cash discipline; payout at 93.7% indicates near-target performance with quality modifier .
- 2022 PRSUs paid at 150% capped despite metrics indicating 170% (cap enforced), showing discipline in long-term plan design; measures focused on constant currency revenue and adjusted EPS growth .
- Clawback and strict stock trading policy (no hedging/pledging) enhance alignment and risk mitigation .
- Share authorization increase proposal: Amended 2009 Plan seeks +10,000,000 shares and governance enhancements; supports broad-based equity and executive incentives but adds potential dilution; company’s three-year average burn rates cited as reasonable and share repurchases demonstrate stewardship .
Equity Vesting Schedules and Insider Selling Pressure
| Event | Details |
|---|---|
| 2024 RSUs | Vest in thirds on 2/20/2025, 2/20/2026, 2/20/2027 (47,987 units) |
| 2024 PRSUs | Earn over 2024–2026; vest 2/20/2027 if earned (23,089 units) |
| 2023 RSUs | Vest in thirds on 3/6/2024, 3/6/2025, 3/6/2026 (10,876 units) |
| Stock vested in 2024 | 43,661 shares; $4,907,017 value realized |
| Retention guideline | From 2025, NEOs must retain at least 25% of net shares vesting annually until departure, reducing selling pressure |
| Hedging/pledging | Prohibited, reducing leverage and alignment concerns |
Say-on-Pay & Shareholder Feedback
- 2024 Say-on-Pay approval: approximately 91% votes in favor, reflecting broad shareholder support for program design .
- Shareholder outreach: engaged holders representing ~62% of outstanding shares; feedback helped maintain PRSU measures for 2025 and adopt new NEO stock retention guideline; ESG quality modifier emphasized .
Expertise & Qualifications
- Deep medtech leadership with financial management, strategic planning, M&A, business integration, risk management; provides crucial Board insight into strategic, management and operational matters .
Work History & Career Trajectory
- Progressive leadership across J&J, Baxter, Covidien, Bard/BD; ascended through Zimmer Biomet from Group President to COO to CEO, evidencing succession readiness and operational execution track record .
Compensation Peer Group (context for benchmarking)
- Peer group (14 companies) includes Agilent, Align, Baxter, BD, Boston Scientific, DexCom, Edwards, Hologic, Intuitive Surgical, LabCorp, Quest, Stryker, Teleflex, Cooper; ZBH market cap $22,042 million at March 21, 2025 . Program targets competitive total direct compensation levels with emphasis on at-risk equity .
Investment Implications
- Alignment: High variable pay share, three-year PRSU design with cap, clawback, and strict trading policies indicate strong pay-for-performance and risk controls .
- Retention risk: Robust severance and CIC protections (CEO 3x salary+bonus on double trigger, equity acceleration) reduce turnover risk but raise potential transaction costs; two-year non-compete adds post-termination protection .
- Trading signals: Predictable RSU/PRSU vesting cadence and 25% retention requirement likely dampen net selling; 2024 vesting activity was material but hedging/pledging bans reduce forced selling risk .
- Governance: CEO/Chairman combination is offset by defined Lead Independent Director powers and fully independent committees; strong attendance and majority voting standards support governance quality .
- Dilution watch: Proposal to add 10 million shares to 2009 Plan supports talent attraction but increases dilution; ongoing buybacks provide mitigating capital return dynamics .