UNION PACIFIC CORP
For the period ended May 14, 2026. Filed Mar 25, 2026.
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May 14, 2026 · Filed Mar 25, 2026
Contents
Elements of Our Executive Compensation Program
Base Salary
The CEO reviews base salaries and prior year performance and accomplishments for the other NEOs and recommends to the Committee a base salary for the coming year for each. The Committee considers and evaluates these base salary recommendations. Among many considerations, the Committee reviews: (i) the executive’s position and responsibility in the organization, (ii) the executive’s experience and expertise, (iii) Company performance, (iv) individual accomplishments and job performance during the year, (v) Peer Group pay data, (vi) internal benchmarking relative to the Company’s pay structure, and (vii) current salary. In making salary recommendations to the Board of Directors, the Committee exercises subjective judgment in evaluating many factors but applies no specific weights to any factor. The Committee, with input from its compensation consultant, and the Board’s review of CEO performance, assesses and determines the base salary of the CEO for subsequent Board approval based on the same considerations described above.
In February 2025, the Committee reviewed each of our NEO’s base salary. Upon review of competitive market data, including our Peer Group, the Committee reviewed and recommended the salary increases shown below. The Board approved the Committee’s recommended salary increases.
| NAME · 2024 SALARY · INCREASE FOR 2025 · 2025 SALARY | |||||
|---|---|---|---|---|---|
| V. James Vena | $1,350,000 | 11.1% | (1) | $1,500,000 | |
| Jennifer L. Hamann | 690,000 | 3.0% | 711,000 | ||
| Eric J. Gehringer | 660,000 | 6.1% | (1) | 700,000 | |
| Kenny G. Rocker | 555,000 | 9.9% | (1) | 610,000 | |
| Rahul Jalali | 545,000 | 4.0% | 567,000 | ||
| Elizabeth F. Whited | 850,000 | - | % | (2) | 850,000 |
(1)The 2025 salaries for Messrs. Vena, Gehringer, and Rocker were increased to reflect alignment with the Peer Group.
(2)Pursuant to Ms. Whited’s Transition Agreement, she was Special Advisor until February 28, 2026. During this transition period, her salary of $850,000 was reduced to $300,000 effective on July 1, 2025.
2025 Annual Incentive Plan
For 2025, seventy percent (70%) of the target annual incentive cash bonuses for the NEOs was based on the attainment of pre-established objective Company financial performance goals, ten percent (10%) on the attainment of pre-established safety goals consisting of the reportable personal injury rate (5%) and the reportable derailment rate (5%), and twenty percent (20%) was based on a shared set of non-formulaic Company goals in key areas such as service performance index for intermodal and manifest, net promoter score, volume growth, employee engagement, and renewable fuel blend. If the minimum performance thresholds for neither operating income nor operating ratio were achieved, then no annual incentive cash bonus would be paid to executives regardless of performance on the other measures. For performance that exceeded target levels, the annual incentive plan payout was capped at 200% of target.
| Formulaic 80% · Non-Formulaic 20% · TotalAnnualIncentiveBonus | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| OperatingIncome x 35% · OperatingRatio x 35% · ReportablePersonalInjury Rate x 5% · ReportableDerailmentRate x 5% · StrategicScorecard x 20% | |||||||||
| Threshold | 25% | Threshold | 25% | Threshold | 25% | Threshold | 25% | Threshold | 25% |
| Target | 100% | Target | 100% | Target | 100% | Target | 100% | Target | 100% |
| Max | 200% | Max | 200% | Max | 200% | Max | 200% | Max | 200% |
The Committee determined individual annual incentive bonus targets for each of the NEOs such that when added to their base salaries, the resulting Target Total Cash Compensation was generally in the median range of competitive market data. These individual annual incentive bonus targets for each of the NEOs were approved by the Committee and then recommended to the Board and approved in February of 2025.
2025 Target Total Cash Compensation
| NAME · 2025 SALARY · 2025 TARGET BONUS · 2025 TARGET TOTAL CASH COMP | ||||
|---|---|---|---|---|
| V. James Vena | $1,500,000 | $2,500,000 | $4,000,000 | |
| Jennifer L. Hamann | 711,000 | 800,000 | 1,511,000 | |
| Eric J. Gehringer | 700,000 | 750,000 | 1,450,000 | |
| Kenny G. Rocker | 610,000 | 750,000 | 1,360,000 | |
| Rahul Jalali | 567,000 | 600,000 | 1,167,000 | |
| Elizabeth F. Whited | 850,000 | 1,000,000 | '(1) | 1,850,000 |
(1)Pursuant to Ms. Whited’s Transition Agreement, she served as Special Advisor until February 28, 2026. During this transition period, her salary of $850,000 was reduced to $300,000 on July 1, 2025, and her 2025 AIP bonus target of $1,000,000 was prorated to $500,000.
Formulaic Component
Annual incentive compensation supports the Committee’s pay-for-performance philosophy and aligns individual performance with Company goals set forth in the annual operating plan. For 2025, the Committee did not change the financial (Operating Income and Operating Ratio) and safety (Reportable Personal Injury and Derailment Rate) measures and weighting as each are key performance indicators in the rail industry and focus our NEOs' performance on operating results.
| Operating Ratio | Reportable Personal Injury Rate | |
|---|---|---|
| A key indicator of the Company's efficiency. | The number of reportable injuries for every 200,000 employee-hours worked. | |
| ê Good | ê Good |
| Operating Income | Reportable Derailment Rate | |
|---|---|---|
| Links revenue growth with Operating Ratio performance and quantifies our profitability. | The number of reportable derailment incidents per million train miles. | |
| é Good | ê Good |
*The 2025 Annual Incentive Plan design provides for an adjustment to Operating Ratio for the reported fuel expense and fuel revenue from the actual price to the price assumed in the Board-approved financial plan. This adjustment neutralizes the impact of fuel price fluctuations during the year. Reported operating income of $9,846 and operating ratio of 59.8% are adjusted to exclude $72 million of merger related costs.
The table below shows the weighted average annual incentive payout for the NEOs given the Company’s 2025 year-end results relative to the Operating Income, Operating Ratio, Reportable Personal Injury Rate, and Reportable Derailment Rate targets approved in February 2025.
Full Year 2025 Annual Incentive Plan Results
| Threshold 25% Payout · Target 100% Payout · Maximum 200% Payout · 2025 Plan Results · Performance Achieved Weighted Average Payout | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Company Performance(Formulaic 80%) | Operating Income – 35% | $8,500 | $9,800 | $10,700 | $9,918 | (1) | 40% | ||||||||||
| Operating Ratio – 35% | 62.5% | 59.7% | 58.5% | 59.6% | (1) | 38% | |||||||||||
| Reportable Personal InjuryRate – 5% | 0.92 | 0.87 | 0.81 | 0.68 | 10% | ||||||||||||
| Reportable Derailment Rate – 5% | 2.25 | 2.12 | 2.00 | 1.75 | 10% | ||||||||||||
| Strategic Scorecard(Non-Formulaic 20%) | Strategic Scorecard – 20% | 25% | 100% | 200% | 200% | 40% | |||||||||||
| Total Payout % | 138% | ||||||||||||||||
(1)The 2025 Annual Incentive Plan design provides for an adjustment to Operating Ratio for the reported fuel expense and fuel revenue from the actual price to the price assumed in the Board-approved financial plan. This adjustment neutralizes the impact of fuel price fluctuations during the year. Reported operating income of $9,846 and operating ratio of 59.8% are adjusted to exclude $72 million of merger related costs.
Non-Formulaic Component
The non-formulaic component of the 2025 Annual Incentive Plan provides that twenty percent (20%) of the target annual incentive cash bonuses for the NEOs is based on a shared set of quantitative Company goals in key areas such as service performance index (SPI) for intermodal and manifest, net promoter score, volume growth, employee engagement, and renewable fuel blend. The Committee assessed the individual strategic scorecard items shown below without assigning a particular weighting to any one item.
| 2025 Strategic Scorecard | |
| Manifest Service Performance IndexA ratio of the service customers are currently receiving relative to the best monthlyperformance over the last three years for manifest service | Exceeded Goal |
| Intermodal Service Performance IndexA ratio of the service customers are currently receiving relative to the best monthlyperformance over the last three years for intermodal service | Exceeded Goal |
| Net Promoter ScoreMeasures customer loyalty and satisfaction by asking how likely customers are to recommend the Company to others | Exceeded Goal |
| Volume GrowthAnnual carload volume growth to exceed Industrial Production as published by Global Insights | Exceeded Goal |
| Employee EngagementMeasures participation in the Company's annual employee engagement survey as well as the Company's employee engagement index based on survey results | Met Goal |
| Renewable Fuel Blend PercentageMeasures the utilization of renewable diesel and biofuels in our locomotives | Exceeded Goal |
The Committee considered the following in its evaluation of the above strategic scorecard items:
SPI for both manifest and intermodal improved compared to 2024. Intermodal SPI improved 9 points in 2025, and Manifest SPI improved 11 points.
Net promoter score exceeded the Company’s set goal by 16 points.
Volume growth included the Committee’s evaluation of Industrial Production compared to carload volume.
With respect to employee engagement, although the Company missed its participation goal, the Company's employee engagement score improved 2 points compared to 2024.
The Company exceeded its goal for renewable fuel blend percentage with a 6.7% biofuel blend.
Based on the Committee’s evaluation of the Company’s achievement of the strategic scorecard items, the Committee awarded this component at 200% of target for each of the NEOs.
The table below reflects the aggregate actual performance incentive cash bonus reported for each of the NEOs for 2025.
| ACTUAL | ||||||||
|---|---|---|---|---|---|---|---|---|
| NAME | 2025 TARGET BONUS | OPERATING INCOME 35% | OPERATING RATIO 35% | REPORTABLE PERSONAL INJURY RATE 5% | REPORTABLE DERAILMENT RATE 5% | STRATEGIC SCORECARD 20% | 2025 TOTAL ANNUAL INCENTIVE BONUS | 2025 OVERALL PAYOUT (AS A % OF TARGET) |
| V. James Vena | $2,500,000 | $989,625 | $947,625 | $250,000 | $250,000 | $1,000,000 | $3,437,250 | 138% |
| Jennifer L. Hamann | 800,000 | 316,680 | 303,240 | 80,000 | 80,000 | 320,000 | 1,099,920 | 138% |
| Eric J. Gehringer | 750,000 | 296,888 | 284,287 | 75,000 | 75,000 | 300,000 | 1,031,175 | 138% |
| Kenny G. Rocker | 750,000 | 296,888 | 284,287 | 75,000 | 75,000 | 300,000 | 1,031,175 | 138% |
| Rahul Jalali | 600,000 | 237,510 | 227,430 | 60,000 | 60,000 | 240,000 | 824,940 | 138% |
| Elizabeth F. Whited | 500,000(1) | 197,925 | 189,525 | 50,000 | 50,000 | 200,000 | 687,450 | 138% |
(1)Pursuant to Ms. Whited’s Transition Agreement, she served as Special Advisor until February 28, 2026. During this transition period, her 2025 AIP bonus target of $1,000,000 was prorated to $500,000.
Long-Term Equity Incentive Compensation
The components of our long-term incentive (LTI) compensation are:
Performance Stock UnitsPerformance stock units are payable based on the attainment and certification of: •Two-thirds (2/3) average annual Return on Invested Capital (ROIC) for a three-year performance period (Performance Period) •One-third (1/3) Operating Income Growth (OIG) over the Performance Period as compared to the OIG of the companies in the S&P 100 Industrials Index and the Class I Railroads
Stock OptionsStock option awards become fully exercisable if the executive remains an employee through a three-year vesting period. One-third of each stock option grant vests each year over the three-year vesting period.
The Committee generally seeks to make long-term incentives the largest element of each NEO’s Target Total Direct Compensation opportunity. In setting the size of LTI awards, the Committee considers the individual performance of the NEO as well as the Total Target Direct Compensation opportunities of similarly situated executives of the Company’s Peer Group and competitive market information from third party compensation surveys. The CEO recommends to the Committee an aggregate value of LTI awards for each of the NEOs other than himself, which is a determination reserved for the Committee, taking into account advice from its compensation consultant and the Board’s evaluation of the CEO. The Committee considers these recommendations and determines the final amounts awarded to each NEO. The Committee may vary the mix of each component of equity compensation to some degree depending on Company and individual performance and retention risk regarding an executive.
The LTI awards granted by the Committee in February 2025 reflected the Committee’s desire to provide long-term incentive compensation to promote the continued efforts of the NEOs to meet the long-term goals and strategic plans of the Company and to align this element of their compensation with the long-term interests of the Company’s shareholders. The Committee increased each NEO's, except for Ms. Whited's, target LTI award opportunities for 2025 to incentivize the continued growth of each in their respective roles and to better align their compensation with competitive market rates.
The LTI awards for the NEOs and a description of the terms of these awards are set forth on pages 61 and 62 in the Grants of Plan-Based Awards in Fiscal Year 2025 Table and accompanying narrative discussion.
Performance Stock Units
In February 2023, February 2024, and February 2025, the Committee granted the NEOs performance stock units (PSUs), two-thirds (2/3) of which are payable based on the attainment and certification of average annual return on invested capital (ROIC) for a three-year performance period (Performance Period) and one-third (1/3) of which are payable based on the attainment and certification of our operating income growth (OIG) over the Performance Period as compared to the OIG of the companies in the S&P 100 Industrials Index and the Class I Railroads. Payout of the 2023, 2024, and 2025 PSUs may be zero if threshold goals are not achieved or may range from 25% to 200% of the target number of stock units. The threshold, target, and maximum number of 2025 PSUs that may be earned by each NEO is set forth on page 61 in the Grants of Plan-Based Awards in Fiscal Year 2025 Table.
We define ROIC as net operating profit after taxes, divided by average invested capital. The Committee may adjust ROIC to reflect the effect of special or strategic transactions or events, such as excluding the impact of significant gains on sales of real estate, tax adjustments, accounting charges, or reclassifications. The Committee selected ROIC because it is one of our key measurements that indicates success in making long-term capital investment decisions that improve financial and operational performance and increase shareholder value. In addition, the Board emphasizes ROIC as a key focus area for the Company.
The ROIC performance criteria are set based on thoughtful analysis of current and projected business levels and changes in the economic environment that may impact the Company’s ability to achieve levels of return reported in previous periods.
For PSUs granted in 2025, the Committee recommended Board approval of our ROIC target at 15.5%. The Committee also considered returns commensurate with other Class I railroads and large-cap industrial companies.
| PERFORMANCE PERIOD | PERFORMANCE CRITERIA | ROIC THRESHOLD | ROIC TARGET | ROIC MAXIMUM |
|---|---|---|---|---|
| 2023 – 2025 | 2/3 ROIC and 1/3 Relative OIG | 13.0% | 17.0% | 19.5% |
| 2024 – 2026 | 2/3 ROIC and 1/3 Relative OIG | 12.0% | 15.5% | 18.0% |
| 2025 – 2027 | 2/3 ROIC and 1/3 Relative OIG | 12.0% | 15.5% | 18.0% |
The Committee selected relative OIG because it aligns with the Company’s objective of profitable growth. The table below summarizes the payout schedule for the relative OIG component of PSUs based on the Company’s operating income growth percentile compared to the OIG of the companies in the S&P 100 Industrials Index and the Class I Railroads. Payout will be linearly interpolated for performance between levels.
| OPERATING INCOMEGROWTH (PERCENTILE) | PAYOUT(% OF EARNED SHARES) |
|---|---|
| 25% | 25% |
| 50% | 100% |
| 75% | 150% |
| 90% | 200% |
For PSUs granted in 2023, 2024, and 2025, if the Company does not meet the threshold ROIC and OIG level for the three-year performance period, executives will not earn any performance stock units on that component. Additionally, if the Company’s absolute annualized OIG for the Performance Period is below 2%, the payout on this component is capped at 100% of target for PSUs granted in 2023 and 2024.
The Committee certified the ROIC results as shown in the graph below for performance years 2023-2025.
ROIC*
é Good
*ROIC is not considered a financial measure under GAAP by SEC Regulation G and Item 10 of SEC Regulation S-K and may not be defined and calculated by other companies in the same manner. For a reconciliation to GAAP, please see Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
In February 2026, the PSUs granted for the 2023-2025 performance period were settled at an overall payout of 86% of target. Three-year average ROIC was 15.9%, resulting in a 79% of target payout for two-thirds (2/3) of the award. Relative OIG was at the 52nd percentile for the Performance Period, which would have resulted in payout of 104% of target for one-third (1/3) of the award, but because our absolute OIG was below 2%, this component was capped at 100% of target. The resulting weighted payout was 86% of target.
PSUs earned under the 2023 grants for each of the NEOs are included as Earned Performance Stock Units in the Stock Awards column of the Outstanding Equity Awards at 2025 Fiscal Year-End Table on page 64.
The table below summarizes how the PSUs granted in 2023 were earned, and how the performance stock units granted in 2024 and 2025 are tracking as of December 31, 2025.
| PERFORMANCE PERIOD | AVERAGEROIC | RELATIVE OPERATING INCOME GROWTH (PERCENTILE RANK) | PERCENT OFTARGET ACHIEVED TO DATE | PERCENT OF TARGET EARNED |
|---|---|---|---|---|
| 2023 – 2025 | 15.9% | 52nd | 86% | 86% of the target number of stock units |
| 2024 – 2026 | 16.1% | 62nd | N/A | No stock units earned until the end of the performance period |
| 2025 – 2027 | 16.3% | 46th | N/A | No stock units earned until the end of the performance period |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.