CEO Pay Watch Graco Inc.

Patrick McHale, president and CEO

Total compensation: $4,781,120 for the year ended Dec. 31

Salary: $728,500

Non-equity incentive pay: $1,030,297

Other compensation: $14,760

Exercised stock options: $1,561,343

Value realized on vesting shares: $1,446,220

New stock options: 123,050

Total 2014 shareholder return: 4.2 percent

Note: McHale’s compensation for 2014 was a 58.6 percent increase from the previous year. Increases to his base salary and bonus helped, but most of the gain was from a previously issued restricted stock award that vested during the year.

Graco doesn’t generally grant restricted stock, but in February 2011 the company’s compensation committee awarded McHale a grant of 20,000 shares of performance-based restricted stock for his leadership through the recession and in recognition of McHale’s agreement to forgo a performance bonus in 2009 and a base salary increase in 2010. Graco exceeded targets associated with that award allowing McHale to realize $1.4 million from the grant last year.

McHale’s base salary rate increased 3.9 percent in 2014 and his bonus was up 3.3 percent after the company had record sales and earnings in 2014. Annual performance bonuses for McHale and other Graco executives are based on annual sales and adjusted earnings per share. In 2014, sales were $1.2 billion, an 11 percent increase over 2013 and above the targeted level for the year. Adjusted EPS of $3.65 per share increased 9 percent over 2013 and were also above targeted levels.

Patrick Kennedy