ILLINOIS TOOL INC (ITW)
Sector: Industrials
2026 Annual Meeting Analysis
ILLINOIS TOOL INC · Meeting: May 8, 2026
Directors FOR
3
Directors AGAINST
10
Say on Pay
FOR
Auditor
FOR
Director Elections
Election of Directors
Against Analysis
Mr. Brutto has served since 2012 and his full tenure overlaps the 3-year period in which ITW's stock return of +16.4% trailed the company's own disclosed peer group median of +64.2% by 47.8 percentage points — well above the 35-point trigger threshold for a company with low-positive absolute returns; the 5-year gap of 28.6 points also exceeds the 35-point peer threshold for the low-positive tier, so the 5-year mitigant does not apply.
Ms. Crown has served since 1994 and her full tenure overlaps the 3-year underperformance period; ITW trailed its disclosed peer group median by 47.8 percentage points over three years, exceeding the 35-point trigger, and the 5-year gap of 28.6 points also exceeds the applicable threshold, so no mitigant applies.
Mr. Ford joined in 2021 and has served more than 24 months, covering the majority of the 3-year underperformance window; ITW trailed its peer group median by 47.8 percentage points, exceeding the 35-point trigger, and the 5-year mitigant does not apply because 5-year relative underperformance also exceeds the threshold.
Ms. Grier joined in 2022 and has served more than 24 months, meaning her tenure meaningfully overlaps the 3-year underperformance period; the 47.8-point gap versus the peer group exceeds the 35-point trigger, and while she joined partway into the period this is noted as context, it does not exempt her under policy because her tenure exceeds 24 months.
Mr. Griffith has served since 2012 and his full tenure overlaps the 3-year underperformance period; ITW's stock trailed the disclosed peer group median by 47.8 percentage points, well above the 35-point trigger, and the 5-year gap of 28.6 points also exceeds the applicable threshold so no mitigant applies.
Mr. Henderson has served since 2016 and his full tenure overlaps the 3-year underperformance period; the 47.8-point gap versus the peer group median exceeds the 35-point trigger for a company with low-positive absolute returns, and the 5-year gap of 28.6 points also exceeds the threshold so no mitigant applies.
Mr. Lenny has served since 2014 and his full tenure overlaps the 3-year underperformance period; ITW trailed its peer group median by 47.8 percentage points, exceeding the 35-point trigger, and the 5-year gap of 28.6 points also exceeds the applicable threshold so no mitigant applies.
Mr. Santi has served since 2012 — including as CEO through January 2024 — and his full tenure overlaps the 3-year underperformance period; ITW trailed its peer group median by 47.8 percentage points, well above the 35-point trigger, and the 5-year gap of 28.6 points also exceeds the applicable threshold, so no mitigant applies; this vote is on his role as a director and is independent of the Say on Pay analysis.
Mr. Smith has served since 2009 and his full tenure overlaps the 3-year underperformance period; ITW trailed its peer group median by 47.8 percentage points, exceeding the 35-point trigger, and the 5-year gap of 28.6 points also exceeds the applicable threshold so no mitigant applies.
Ms. Strobel has served since 2008 and her full tenure overlaps the 3-year underperformance period; ITW trailed its peer group median by 47.8 percentage points, exceeding the 35-point trigger, and the 5-year gap of 28.6 points also exceeds the applicable threshold so no mitigant applies.
For Analysis
Mr. Irick joined the board in 2024 and has served less than 24 months, making him exempt from the TSR underperformance trigger under policy; no other negative factors such as overboarding, attendance issues, or independence concerns are identified.
Mr. O'Herlihy joined the board in 2024 and has served less than 24 months as a director, making him exempt from the TSR underperformance trigger; as the sitting CEO he is subject to the same director TSR rules as all other directors, but the exemption applies and no other disqualifying factors are present.
Ms. Scanlon is a new nominee with no prior board tenure at ITW and is therefore exempt from the TSR trigger; she brings relevant executive leadership experience as CEO of UL Solutions and has no identified disqualifying factors.
ITW's stock returned +16.4% over the past three years while the company's own disclosed peer group of 17 industrial companies returned a median of +64.2%, leaving ITW 47.8 percentage points behind — well above the 35-point underperformance threshold that applies when a company's absolute 3-year return is in the low-positive range. The 5-year gap of 28.6 points also exceeds the applicable 35-point threshold, so the 5-year mitigant that would otherwise soften a vote against does not apply. Accordingly, all directors whose tenure meaningfully overlaps the underperformance period receive an AGAINST vote. The two directors who joined within the past 24 months (O'Herlihy and Irick) and the new nominee (Scanlon) are exempt from the trigger and receive FOR votes.
Say on Pay
✓ FORCEO
Christopher A. O’Herlihy
Total Comp
$15,211,011
Prior Support
95.2%%
The CEO's total compensation of approximately $15.2 million is within a reasonable range for a large-cap ($74 billion) industrial company CEO, and the pay structure is heavily performance-oriented — the company states 81% of NEO target compensation is variable, consisting of annual cash bonuses tied to organic revenue and operating income growth, performance stock awards tied to a 3-year average of operating margin, after-tax return on invested capital, earnings per share growth, and customer-back innovation yield, plus stock options that only pay out if the share price rises. The 2025 annual bonus paid out at only 53.9% of target (reflecting below-target organic revenue growth), showing the incentive plan does penalize executives when performance misses goals. Prior Say on Pay support was 95.2% in 2025 and 93.9% in 2024, well above the 70% concern threshold, and the company has a robust clawback policy; while ITW's stock has lagged peers over three years, the pay structure itself is appropriately designed with meaningful performance conditions, no time-vested restricted stock, and caps on payouts, so the compensation program structure passes the policy screens.
Auditor Ratification
✓ FORAuditor
Deloitte & Touche LLP
Tenure
N/A
Audit Fees
N/A
Non-Audit Fees
N/A
Deloitte & Touche LLP is a Big 4 firm appropriate for a $74 billion market cap global industrial company; no fee data was extractable from the provided filing text so the non-audit fee ratio trigger cannot be assessed, but per policy when fee data is unavailable the default is FOR; no material restatements were identified and no other disqualifying factors are present.
Stockholder Proposals
1 proposal submitted by shareholders
Proposal 4
Non-Binding Stockholder Proposal for Directors Who Fail To Obtain A Majority Vote
This is a governance-type proposal asking for a policy requiring directors who fail to receive a majority vote to resign or be replaced — a mainstream governance improvement that aligns with shareholder interests and is widely supported by institutional investors. ITW already has a majority voting standard and a director resignation policy in its Corporate Governance Guidelines, but the proxy indicates those policies give the board discretion to reject a resignation, which is a weaker standard than a binding outcome; a proposal pushing for stronger enforcement of majority vote results is a legitimate governance ask that benefits shareholders by ensuring the board is genuinely accountable to shareholder votes. The board recommends against, but their existing policy does not guarantee that a director who loses a majority vote will actually leave the board, making this proposal a reasonable incremental improvement worth supporting.
Overall Assessment
The 2026 ITW annual meeting presents a mixed ballot: the Say on Pay vote receives a FOR determination given a well-structured performance-oriented pay program with appropriate metrics and meaningful downside (the 2025 bonus paid out at only 54% of target), but the director election results in AGAINST votes for ten of the thirteen nominees because ITW's stock has lagged its own disclosed peer group by nearly 48 percentage points over three years with no 5-year mitigant available. The auditor ratification receives a FOR vote pending full fee data verification, and the stockholder proposal on majority vote enforcement receives a FOR vote as a mainstream governance improvement.
Compensation Peer Group
17 companies disclosed in 2026 proxy filing