Tod Carpenter, Donaldson Co. Inc. chairman, president and CEO
Total compensation: $8,964,371 for the year ended July 31, 2019
Nonequity incentive pay: $673,215
Other compensation: $178,392
Exercised stock options: $1,416,184
Value realized on vesting shares: $5,726,388
New stock options: 172,025
Median employee pay: $34,680
CEO pay ratio: 181-1
Total fiscal 2019 shareholder return: 50%
Note: Bloomington-based Donaldson achieved record sales and earnings for fiscal 2019, but the technology-led filtration company did not meet lofty goals for key financial targets tied to executive compensation. As a result, Carpenter and other executives earned smaller annual cash-incentive bonuses for this year than they did the previous year.
Based on revenue, earnings and return on investment (ROI) goals, executives earned from 51% to 69% of the targeted annual cash-incentive award for the year.
But Donaldson’s longer-term financial performance and the outperformance of its share price over the past several years helped to boost the value of previously issued long-term equity awards that Carpenter was able to realize in the past year.
So while Carpenter’s annual cash bonus for the year decreased 58%, the realized value of his combined long-term equity awards increased from $2 million to $5.7 million.
The company’s long-term compensation plan also looks at revenue and ROI goals over the previous three years and pays those awards in stock. In the fiscal 2017 to 2019 time frame, the company exceeded targeted levels, and Carpenter and other executives earned stock awards higher than the targeted goals.