ILLINOIS TOOL WORKS INC
For the period ended May 2, 2025. Filed Mar 21, 2025.
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What shareholders are asked to vote on at a company's meeting. It is where to find what directors and top executives are paid, and who owns the most shares.
May 2, 2025 · Filed Mar 21, 2025
Contents
Proxy Summary
This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting. Page references are supplied to help you find further information in this proxy statement.
Director Nominees
| Age | DirectorSince | Other PublicBoards | 2024 CommitteeMembership |
|---|---|---|---|
| Daniel J. BruttoRetired President of UPS International and Senior Vice President of United Parcel Service, Inc. | 68 | 2012 | 1 |
| Susan CrownChairman and CEO of Owl Creek Partners, LLC | 66 | 1994 | 1 |
| Darrell L. FordExecutive Vice President, Chief Human Resources Officer of UPS International | 60 | 2021 | 0 |
| Kelly J. GrierRetired US Chair and Managing Partner (CEO) of Ernst & Young LLP | 55 | 2022 | 2 |
| James W. GriffithRetired President and Chief Executive Officer of The Timken Company | 71 | 2012 | 0 |
| Jay L. HendersonRetired Vice Chairman, Client Service of PricewaterhouseCoopers LLP | 69 | 2016 | 2 |
| Jaime IrickFormer Chief Executive Officer of The Pittsburgh Paints Company | 50 | 2024 | 0 |
| Richard H. LennyIndependent Lead Director; Non-Executive Chairman of Conagra Brands, Inc. | 73 | 2014 | 1 |
| Christopher A. O'Herlihy*President & Chief Executive Officer of Illinois Tool Works Inc. | 61 | 2024 | 1 |
| E. Scott Santi*Non-Executive Chairman of the Board Retired Chief Executive Officer of Illinois Tool Works Inc. | 63 | 2012 | 1 |
| David B. Smith, Jr.Executive Vice President for Policy and Legal Affairs and General Counsel of Mutual Fund Directors Forum | 58 | 2009 | 1 |
| Pamela B. StrobelRetired Executive Vice President and Chief Administrative Officer of Exelon Corporation and President of Exelon Business Services Company | 72 | 2008 | 0 |
| Audit Committee | Executive Committee | Corporate Governance andNominating Committee | Chair | * Non-Independent |
| Compensation Committee | Finance Committee | |||
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Proxy Summary
Board Snapshot
Our director nominees include twelve current Board members. See “Proposal No. 1—Election of Directors” for biographical and other information about our director nominees.
| Director Age | Representation | Independence | Tenure |
|---|
Governance Profile
| Board Composition · Corporate Governance | |||
|---|---|---|---|
| •Annual Election of All Directors | Yes | •Regular Executive Sessions of Independent Directors | Yes |
| •Majority Voting for Directors with Director Resignation Policy | Yes | •Annual Evaluation of the Board and Individual Directors | Yes |
| •Number of Independent Directors Standing for Election | 10 | •Annual Self-Evaluations by Board Committees | Yes |
| •Annual Independent Director Evaluation of the President & CEO · Yes | |||
| •Total Number of Director Nominees | 12 | ||
| •Independent Lead Director | Yes | •Risk Oversight by Full Board and Committees | Yes |
| •Mandatory Retirement Age | Yes | •Strong Board Oversight of Sustainability | Yes |
| •Director Time Commitment Limits | Yes | •Strong Board Oversight of Cybersecurity | Yes |
| Compensation | •Shareholder Engagement Program | Yes | |
| •Annual Advisory Approval of Executive Compensation | Yes | •Code of Conduct for Members of the Board of Directors | Yes |
| •Stock Ownership Requirements for Executives and Directors | Yes | •Stockholder Ability to Call Special Meetings | Yes |
| •Proxy Access · Yes | |||
| •Anti-Hedging, Anti-Short-Sale and Anti-Pledging Policies | Yes | •Simple Majority Vote to Amend Charter and By-Laws | Yes |
| •Compensation/Clawback Policy (mandatory for financial restatement regardless of misconduct) | Yes | •Exclusive Venue Requirement | No |
| •Poison Pill · No | |||
| 2025 PROXY STATEMENT | 5 |
|---|
Overview
The Compensation Committee adopted our executive compensation pay-for-performance philosophy which is designed to deliver competitive total compensation upon the achievement of our strategy objectives, which will attract, motivate and retain leaders who drive the creation of long-term stockholder value.
Our decisions surrounding executive compensation are guided by this pay-for-performance philosophy. The programs are weighted toward variable compensation elements (annual cash incentives and long-term incentives), with reward opportunities tied to stock price appreciation and achievement of rigorous financial performance metrics. We have not granted time-vested full value equity awards to our named executive officers ("NEOs").
Our executive compensation programs are also governed by practices and policies aligned to the interests of our stockholders, as the table below highlights.
| What We Do | What We Don’t Do |
|---|---|
| Pay for Performance: Our current NEOs’ average total target compensation is 80% performance based. Robust Stock Ownership Guidelines: We have stock ownership guidelines of 6 x salary for CEO, 3 x salary for Executive Vice Presidents and CFO and 2 x salary for Senior Vice Presidents. Executives must retain the net after-tax shares of vested or exercised awards if an executive does not meet the guidelines within five years. Annual “Say on Pay” Vote: We hold an annual advisory vote for our stockholders to review and approve our executive compensation programs. Independent Compensation Consultant: The Committee: (1) engages an independent compensation consultant who advises the Committee on regulatory and other current trends and key developments in executive compensation, and (2) reassesses its consultant’s independence annually. Annual CEO and NEO Performance Review: The Committee conducts an annual review of the performance of the CEO, as well as the other executive officers. Annual Review of Compensation Programs: The Committee, with input from its independent compensation consultant, conducts an annual review of our executive compensation programs, considering business strategies, best practices and good governance. Clawback Policy: Our Compensation Recovery Policy, updated in 2023, provides for the mandatory reimbursement of incentives if a material financial restatement is required, whether or not based on misconduct, and equity forfeiture provisions for violations of restrictive covenants and certain misconduct whether or not related to restatement. Annual Compensation Risk Assessment: Each year we perform an assessment of risks that could result from our executive compensation practices. | Employment Agreements: We do not provide U.S.-based executive officers with employment agreements. Tax Gross-ups: We do not provide tax gross-ups as part of our change-in-control agreements. Repricing: We do not allow share repricing within our stock option plan. Hedging/Pledging of Company Equity Securities: We prohibit executive officers and directors from engaging in any transaction that is designed to hedge or offset a decrease in the market value of ITW common stock and from pledging ITW equity securities. Dividends on Unvested Equity Awards: Dividends accrued on unvested equity awards, including restricted stock units and performance share units, are not paid unless the awards vest. Single-Trigger Change-In-Control Vesting/Benefits: We do not allow immediate vesting of equity awards that are continued or replaced upon a change-in-control; all such awards allow only double-trigger vesting (change-in-control and termination). |
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Proxy Summary
The Board recommends that stockholders ratify the appointment of Deloitte & Touche LLP (Deloitte) as the Company’s independent registered public accounting firm for 2025. The Audit Committee and the Board believe that it is in the best interests of the Company and its stockholders to retain Deloitte as the Company’s independent auditor based on its ability to handle the breadth and complexity of ITW’s global operations, its familiarity with our businesses and the appropriateness of Deloitte’s fees.
| 2025 PROXY STATEMENT | 7 |
|---|
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