Definitive proxy statements

Pay vs Performance Disclosure

v3.24.1
Pay vs Performance Disclosure - USD ($)
 12 Months Ended
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Pay vs Performance Disclosure        
Pay vs Performance Disclosure, Table
2023 Pay Vs. Performance Table
Year
​ ​
Summary
Compensation
Table Total for
CEO
(Rumsey)(1)
​ ​
Compensation
Actually Paid
to CEO
(Rumsey)(1)(7)
​ ​
Summary
Compensation
Table Total for
Former CEO
(Linebarger)(2)
​ ​
Compensation
Actually Paid
to Former CEO
(Linebarger)(2)(7)
​ ​
Average
Summary
Compensation
Table Total for
Non-CEO
NEOs(3)
​ ​
Average
Compensation
Actually Paid
to Non-CEO
NEOs(3)(7)
​ ​
Value of Initial
Fixed $100 Investment
Based On:
​ ​
Net
Income
($MM)(5)
​ ​
EBITDA
($MM)(6)
​
​
CMI
TSR
​ ​
Peer
Group
TSR(4)
​
2023
​ ​ ​ ​ $12,846,068 ​ ​ ​ ​ ​ $12,821,542 ​ ​ ​ ​ ​ N/A ​ ​ ​ ​ ​ N/A ​ ​ ​ ​ ​ $4,698,631 ​ ​ ​ ​ ​ $4,035,580 ​ ​ ​ ​ ​ $148.9 ​ ​ ​ ​ ​ $186.7 ​ ​ ​ ​ ​ $735 ​ ​ ​ ​ ​ $3,017 ​ ​
2022
​ ​ ​ ​ $7,133,411 ​ ​ ​ ​ ​ $8,912,042 ​ ​ ​ ​ ​ $11,521,051 ​ ​ ​ ​ ​ $6,424,086 ​ ​ ​ ​ ​ $3,223,819 ​ ​ ​ ​ ​ $4,301,797 ​ ​ ​ ​ ​ $146.4 ​ ​ ​ ​ ​ $154.5 ​ ​ ​ ​ ​ $2,151 ​ ​ ​ ​ ​ $3,799 ​ ​
2021
​ ​ ​ ​ N/A ​ ​ ​ ​ ​ N/A ​ ​ ​ ​ ​ $15,645,919 ​ ​ ​ ​ ​ $17,265,880 ​ ​ ​ ​ ​ $5,560,018 ​ ​ ​ ​ ​ $4,868,941 ​ ​ ​ ​ ​ $128.3 ​ ​ ​ ​ ​ $146.1 ​ ​ ​ ​ ​ $2,131 ​ ​ ​ ​ ​ $3,251 ​ ​
2020
​ ​ ​ ​ N/A ​ ​ ​ ​ ​ N/A ​ ​ ​ ​ ​ $17,291,581 ​ ​ ​ ​ ​ $27,870,614 ​ ​ ​ ​ ​ $4,213,127 ​ ​ ​ ​ ​ $4,975,391 ​ ​ ​ ​ ​ $130.5 ​ ​ ​ ​ ​ $124.2 ​ ​ ​ ​ ​ $1,789 ​ ​ ​ ​ ​ $3,108 ​ ​
​
(1)
Our current CEO is Jennifer W. Rumsey, who became CEO on August 1, 2022.
​
(2)
Our former CEO N. Thomas Linebarger served as CEO until August 1, 2022 and subsequently served as Executive Chairman until July 31, 2023; his compensation for fiscal year 2023 is included in the columns for average non-CEO NEOs.
​
(3)
The non-CEO NEOs for each applicable year are:
​
–
2023: S.R. Barner, M. Boakye, N.T. Linebarger, L.L. Satterthwaite, and M.A. Smith
​
–
2022: S.R. Barner, T.A. Embree, S. Padmanabhan, L.L. Satterthwaite, and M.A. Smith
​
–
2021: J.W. Rumsey, S. Padmanabhan, L.L. Satterthwaite, and M.A. Smith
​
–
2020: M.M. Rose, S. Padmanabhan, L.L. Satterthwaite, and M.A. Smith
​
(4)
The Peer Group TSR shown in the table above is based on our Custom Peer Group as shown in our CD&A for the applicable year. TSR for this Group is weighted as of year-end 2019 by market capitalization and is calculated using a base date of December 31, 2019. In 2023, we re-evaluated our peer group and chose to include companies that participate in similar end-markets and have similar businesses. Dana Incorporated was added to provide exposure to similar products including e-axles, drivetrain components and transmissions and electric and hybrid products, while Donaldson Company Inc. was removed due to the IPO of Atmus (formerly our filtration business) into a separate publicly traded company. Our revised peer group is summarized in the CD&A of this proxy statement. The indexed TSR value for 2023 under our prior 2022 Custom Peer Group would have been $186.3.
​
(5)
Net Income reflects GAAP net income, as disclosed in our financial statements.
​
(6)
EBITDA is a non-GAAP measure defined as cumulative earnings before interest expense, income taxes, noncontrolling interests, depreciation and amortization.
​
(7)
The SEC rules require that certain adjustments be made to the Summary Compensation Table totals to determine CAP, as reported in the Pay versus Performance table above. The following table details the applicable adjustments that were made to determine CAP:
​
2023 Adjustments Made to Calculate CAP
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pension Benefits & NQDC
​ ​
Equity Awards
​ ​ ​ ​
Executives
​ ​
SCT
Total
Pay
​ ​
Deduct
SCT
Change In
Pension
Value
​ ​
Add
Actuarial
Pension
Service
Cost
​ ​
Add
Above-
Market
Earnings
on NQDC
​ ​
Deduct
SCT
Stock &
Option
Awards
​ ​
Add Year-
End
Value of
Unvested
Equity
Granted
in Year
​ ​
Add
Change in
Value of
Unvested
Awards
Granted in
Prior
Years
​ ​
Add
Change in
Value of
Vested
Equity
Granted in
Prior
Years
​ ​
Deduct
Value of
Awards Not
Meeting
Vesting
Conditions
​ ​
Add
Dividends
Paid on
Unvested
Equity
​ ​
CAP Total
​ ​ ​
CEO (Rumsey)
​ ​
$12,846,068
​ ​ ​ ​ ($1,834,671) ​ ​ ​ ​ ​ $29,567 ​ ​ ​ ​ ​ $0 ​ ​ ​ ​ ​ ($6,186,989) ​ ​ ​ ​ ​ $6,285,193 ​ ​ ​ ​ ​ $2,008,729 ​ ​ ​ ​ ​ ($326,355) ​ ​ ​ ​ ​ $0 ​ ​ ​ ​ ​ $0 ​ ​ ​ ​ ​ $12,821,542 ​ ​ ​ ​
Non-CEO
NEOs (avg)
​ ​
$4,698,631
​ ​ ​ ​ ($449,677) ​ ​ ​ ​ ​ $155,169 ​ ​ ​ ​ ​ $37,666 ​ ​ ​ ​ ​ ($1,094,008) ​ ​ ​ ​ ​ $1,111,373 ​ ​ ​ ​ ​ $1,318,935 ​ ​ ​ ​ ​ ($539,165) ​ ​ ​ ​ ​ ($1,203,344) ​ ​ ​ ​ ​ $0 ​ ​ ​ ​ ​ $4,035,580 ​ ​ ​ ​
     
Company Selected Measure Name EBITDA      
Named Executive Officers, Footnote
(1)
Our current CEO is Jennifer W. Rumsey, who became CEO on August 1, 2022.
​
(2)
Our former CEO N. Thomas Linebarger served as CEO until August 1, 2022 and subsequently served as Executive Chairman until July 31, 2023; his compensation for fiscal year 2023 is included in the columns for average non-CEO NEOs.
(3)
The non-CEO NEOs for each applicable year are:
​
–
2023: S.R. Barner, M. Boakye, N.T. Linebarger, L.L. Satterthwaite, and M.A. Smith
–
2022: S.R. Barner, T.A. Embree, S. Padmanabhan, L.L. Satterthwaite, and M.A. Smith
​
–
2021: J.W. Rumsey, S. Padmanabhan, L.L. Satterthwaite, and M.A. Smith
​
–
2020: M.M. Rose, S. Padmanabhan, L.L. Satterthwaite, and M.A. Smith
     
Peer Group Issuers, Footnote
(4)
The Peer Group TSR shown in the table above is based on our Custom Peer Group as shown in our CD&A for the applicable year. TSR for this Group is weighted as of year-end 2019 by market capitalization and is calculated using a base date of December 31, 2019. In 2023, we re-evaluated our peer group and chose to include companies that participate in similar end-markets and have similar businesses. Dana Incorporated was added to provide exposure to similar products including e-axles, drivetrain components and transmissions and electric and hybrid products, while Donaldson Company Inc. was removed due to the IPO of Atmus (formerly our filtration business) into a separate publicly traded company. Our revised peer group is summarized in the CD&A of this proxy statement. The indexed TSR value for 2023 under our prior 2022 Custom Peer Group would have been $186.3.
     
PEO Total Compensation Amount $ 12,846,068      
PEO Actually Paid Compensation Amount $ 12,821,542      
Adjustment To PEO Compensation, Footnote
(7)
The SEC rules require that certain adjustments be made to the Summary Compensation Table totals to determine CAP, as reported in the Pay versus Performance table above. The following table details the applicable adjustments that were made to determine CAP:
​
2023 Adjustments Made to Calculate CAP
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pension Benefits & NQDC
​ ​
Equity Awards
​ ​ ​ ​
Executives
​ ​
SCT
Total
Pay
​ ​
Deduct
SCT
Change In
Pension
Value
​ ​
Add
Actuarial
Pension
Service
Cost
​ ​
Add
Above-
Market
Earnings
on NQDC
​ ​
Deduct
SCT
Stock &
Option
Awards
​ ​
Add Year-
End
Value of
Unvested
Equity
Granted
in Year
​ ​
Add
Change in
Value of
Unvested
Awards
Granted in
Prior
Years
​ ​
Add
Change in
Value of
Vested
Equity
Granted in
Prior
Years
​ ​
Deduct
Value of
Awards Not
Meeting
Vesting
Conditions
​ ​
Add
Dividends
Paid on
Unvested
Equity
​ ​
CAP Total
​ ​ ​
CEO (Rumsey)
​ ​
$12,846,068
​ ​ ​ ​ ($1,834,671) ​ ​ ​ ​ ​ $29,567 ​ ​ ​ ​ ​ $0 ​ ​ ​ ​ ​ ($6,186,989) ​ ​ ​ ​ ​ $6,285,193 ​ ​ ​ ​ ​ $2,008,729 ​ ​ ​ ​ ​ ($326,355) ​ ​ ​ ​ ​ $0 ​ ​ ​ ​ ​ $0 ​ ​ ​ ​ ​ $12,821,542 ​ ​ ​ ​
Non-CEO
NEOs (avg)
​ ​
$4,698,631
​ ​ ​ ​ ($449,677) ​ ​ ​ ​ ​ $155,169 ​ ​ ​ ​ ​ $37,666 ​ ​ ​ ​ ​ ($1,094,008) ​ ​ ​ ​ ​ $1,111,373 ​ ​ ​ ​ ​ $1,318,935 ​ ​ ​ ​ ​ ($539,165) ​ ​ ​ ​ ​ ($1,203,344) ​ ​ ​ ​ ​ $0 ​ ​ ​ ​ ​ $4,035,580 ​ ​ ​ ​
     
Non-PEO NEO Average Total Compensation Amount $ 4,698,631 $ 3,223,819 $ 5,560,018 $ 4,213,127
Non-PEO NEO Average Compensation Actually Paid Amount $ 4,035,580 4,301,797 4,868,941 4,975,391
Adjustment to Non-PEO NEO Compensation Footnote
(7)
The SEC rules require that certain adjustments be made to the Summary Compensation Table totals to determine CAP, as reported in the Pay versus Performance table above. The following table details the applicable adjustments that were made to determine CAP:
​
2023 Adjustments Made to Calculate CAP
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pension Benefits & NQDC
​ ​
Equity Awards
​ ​ ​ ​
Executives
​ ​
SCT
Total
Pay
​ ​
Deduct
SCT
Change In
Pension
Value
​ ​
Add
Actuarial
Pension
Service
Cost
​ ​
Add
Above-
Market
Earnings
on NQDC
​ ​
Deduct
SCT
Stock &
Option
Awards
​ ​
Add Year-
End
Value of
Unvested
Equity
Granted
in Year
​ ​
Add
Change in
Value of
Unvested
Awards
Granted in
Prior
Years
​ ​
Add
Change in
Value of
Vested
Equity
Granted in
Prior
Years
​ ​
Deduct
Value of
Awards Not
Meeting
Vesting
Conditions
​ ​
Add
Dividends
Paid on
Unvested
Equity
​ ​
CAP Total
​ ​ ​
CEO (Rumsey)
​ ​
$12,846,068
​ ​ ​ ​ ($1,834,671) ​ ​ ​ ​ ​ $29,567 ​ ​ ​ ​ ​ $0 ​ ​ ​ ​ ​ ($6,186,989) ​ ​ ​ ​ ​ $6,285,193 ​ ​ ​ ​ ​ $2,008,729 ​ ​ ​ ​ ​ ($326,355) ​ ​ ​ ​ ​ $0 ​ ​ ​ ​ ​ $0 ​ ​ ​ ​ ​ $12,821,542 ​ ​ ​ ​
Non-CEO
NEOs (avg)
​ ​
$4,698,631
​ ​ ​ ​ ($449,677) ​ ​ ​ ​ ​ $155,169 ​ ​ ​ ​ ​ $37,666 ​ ​ ​ ​ ​ ($1,094,008) ​ ​ ​ ​ ​ $1,111,373 ​ ​ ​ ​ ​ $1,318,935 ​ ​ ​ ​ ​ ($539,165) ​ ​ ​ ​ ​ ($1,203,344) ​ ​ ​ ​ ​ $0 ​ ​ ​ ​ ​ $4,035,580 ​ ​ ​ ​
     
Compensation Actually Paid vs. Total Shareholder Return
[MISSING IMAGE: lc_ceoneo-pn.jpg]
     
Compensation Actually Paid vs. Net Income [MISSING IMAGE: lc_cebitda-pn.jpg]      
Compensation Actually Paid vs. Company Selected Measure [MISSING IMAGE: lc_cebitda-pn.jpg]      
Total Shareholder Return Vs Peer Group
As shown in the graph below, our company’s TSR has historically tracked that for our Custom Peer Group; however, in 2023, the TSR of our peer group exceeded that of Cummins.
[MISSING IMAGE: lc_cummins-pn.jpg]
     
Tabular List, Table
2023 PERFORMANCE MEASURES
For fiscal year 2023, our TMCC identified the performance measures listed below as the most important in its compensation-setting process for our NEOs.
Tabular List of Performance Measures
​
EBITDA
​
​
ROIC
​
​
Operating Cash Flow
​
The Committee identified EBITDA, ROIC, and Cash Flow as our “most important” measures because they are used in our incentive awards to determine payouts. These measures drive the largest portion of our executives’ pay. EBITDA, and ROIC provide an incentive for profitable growth and correlate well with shareholder value. Operating cash flow provides capital for investments that are important to our future and allows us to return significant capital to our shareholders.
     
Total Shareholder Return Amount $ 148.9 146.4 128.3 130.5
Peer Group Total Shareholder Return Amount 186.7 154.5 146.1 124.2
Net Income (Loss) $ 735,000,000 $ 2,151,000,000 $ 2,131,000,000 $ 1,789,000,000
Company Selected Measure Amount 3,017,000,000 3,799,000,000 3,251,000,000 3,108,000,000
PEO Name Jennifer W. Rumsey      
Measure:: 1        
Pay vs Performance Disclosure        
Name EBITDA      
Measure:: 2        
Pay vs Performance Disclosure        
Name ROIC      
Measure:: 3        
Pay vs Performance Disclosure        
Name Operating Cash Flow      
Jennifer W. Rumsey [Member]        
Pay vs Performance Disclosure        
PEO Total Compensation Amount $ 12,846,068 $ 7,133,411    
PEO Actually Paid Compensation Amount 12,821,542 8,912,042    
Jennifer W. Rumsey [Member] | Pension Adjustments Pension Value In Summary Compensation Table [Member]        
Pay vs Performance Disclosure        
Adjustment to Compensation, Amount (1,834,671)      
Jennifer W. Rumsey [Member] | Pension Adjustments Service Cost [Member]        
Pay vs Performance Disclosure        
Adjustment to Compensation, Amount 29,567      
Jennifer W. Rumsey [Member] | Above-Market Earnings on NQDC [Member]        
Pay vs Performance Disclosure        
Adjustment to Compensation, Amount 0      
Jennifer W. Rumsey [Member] | Equity Awards Value In Summary Compensation Table (Grant Date Value)        
Pay vs Performance Disclosure        
Adjustment to Compensation, Amount (6,186,989)      
Jennifer W. Rumsey [Member] | Year-End Value of Unvested Equity Granted in Year [Member]        
Pay vs Performance Disclosure        
Adjustment to Compensation, Amount 6,285,193      
Jennifer W. Rumsey [Member] | Change In Fair Value Of Outstanding And Unvested Awards Granted In Prior Fiscal Years [Member]        
Pay vs Performance Disclosure        
Adjustment to Compensation, Amount 2,008,729      
Jennifer W. Rumsey [Member] | Change In Fair Value As Of Vesting Date Of Prior Year Awards Vested During Current Year [Member]        
Pay vs Performance Disclosure        
Adjustment to Compensation, Amount (326,355)      
Jennifer W. Rumsey [Member] | Adjustments For Equity Awards Failed To Meet Performance Conditions [Member]        
Pay vs Performance Disclosure        
Adjustment to Compensation, Amount 0      
Jennifer W. Rumsey [Member] | Dividends Or Other Earnings Paid On Equity Awards Not Otherwise Reflected In Fair Value [Member]        
Pay vs Performance Disclosure        
Adjustment to Compensation, Amount 0      
N.Thomas Linebarger [Member]        
Pay vs Performance Disclosure        
PEO Total Compensation Amount   11,521,051 $ 15,645,919 $ 17,291,581
PEO Actually Paid Compensation Amount   $ 6,424,086 $ 17,265,880 $ 27,870,614
Non-PEO NEO | Pension Adjustments Pension Value In Summary Compensation Table [Member]        
Pay vs Performance Disclosure        
Adjustment to Compensation, Amount (449,677)      
Non-PEO NEO | Pension Adjustments Service Cost [Member]        
Pay vs Performance Disclosure        
Adjustment to Compensation, Amount 155,169      
Non-PEO NEO | Above-Market Earnings on NQDC [Member]        
Pay vs Performance Disclosure        
Adjustment to Compensation, Amount 37,666      
Non-PEO NEO | Equity Awards Value In Summary Compensation Table (Grant Date Value)        
Pay vs Performance Disclosure        
Adjustment to Compensation, Amount (1,094,008)      
Non-PEO NEO | Year-End Value of Unvested Equity Granted in Year [Member]        
Pay vs Performance Disclosure        
Adjustment to Compensation, Amount 1,111,373      
Non-PEO NEO | Change In Fair Value Of Outstanding And Unvested Awards Granted In Prior Fiscal Years [Member]        
Pay vs Performance Disclosure        
Adjustment to Compensation, Amount 1,318,935      
Non-PEO NEO | Change In Fair Value As Of Vesting Date Of Prior Year Awards Vested During Current Year [Member]        
Pay vs Performance Disclosure        
Adjustment to Compensation, Amount (539,165)      
Non-PEO NEO | Adjustments For Equity Awards Failed To Meet Performance Conditions [Member]        
Pay vs Performance Disclosure        
Adjustment to Compensation, Amount (1,203,344)      
Non-PEO NEO | Dividends Or Other Earnings Paid On Equity Awards Not Otherwise Reflected In Fair Value [Member]        
Pay vs Performance Disclosure        
Adjustment to Compensation, Amount $ 0