ILLINOIS TOOL INC (ITW)
Sector: Industrials
2026 Annual Meeting Analysis
ILLINOIS TOOL INC · Meeting: May 8, 2026
Directors FOR
13
Directors AGAINST
0
Say on Pay
FOR
Auditor
FOR
Director Elections
Election of Directors
Director since 2012 with strong operational and international experience; ITW's 3-year TSR of 20.1% is strong positive and the gap versus XLI of -48.9pp does not meet the 65pp threshold required to trigger a vote against; no overboarding (1 other public board), 100% meeting attendance, independent.
Director since 1994 with broad governance and executive experience; TSR trigger does not fire (gap -48.9pp vs 65pp threshold); holds 1 other public board seat, 100% meeting attendance, independent.
Director since 2021 with deep human capital expertise; joined within the last 5 years and TSR trigger does not fire in any event (gap -48.9pp vs 65pp threshold); 0 other public boards, 100% meeting attendance, independent.
Director since 2022 with strong audit and governance credentials including CPA background; TSR trigger does not fire (gap -48.9pp vs 65pp threshold); holds 3 other public board seats which is within the 4-board limit, 100% meeting attendance, independent.
Director since 2012 with extensive manufacturing CEO experience; TSR trigger does not fire (gap -48.9pp vs 65pp threshold); 0 other public boards, 100% meeting attendance, independent.
Director since 2016, CPA and former PwC Vice Chairman serving as Audit Committee Chair; TSR trigger does not fire (gap -48.9pp vs 65pp threshold); holds 2 other public boards, 100% meeting attendance, independent.
Director since 2024, joining within the past 24 months and therefore exempt from the TSR trigger under policy; brings relevant manufacturing and operations experience; 1 other public board, 100% meeting attendance, independent.
Independent Lead Director since 2020 with extensive Fortune 500 CEO and board experience; TSR trigger does not fire (gap -48.9pp vs 65pp threshold); holds 1 other public board seat, 100% meeting attendance, independent.
CEO and executive director since 2024, joining within the past 24 months and therefore exempt from the TSR trigger; deep ITW operational expertise; 1 other public board, 100% meeting attendance, non-independent as expected for sitting CEO.
Non-Executive Chairman since 2024 and director since 2012; TSR trigger does not fire (gap -48.9pp vs 65pp threshold); holds 1 other public board, 100% meeting attendance; classified non-independent as former CEO and current chairman, which is appropriate given his role.
New nominee with no prior ITW board tenure; exempt from TSR trigger; brings relevant executive leadership and governance experience as CEO of UL Solutions; 1 other public board, independent.
Director since 2009 with legal, regulatory, and finance industry expertise serving as Finance Committee Chair; TSR trigger does not fire (gap -48.9pp vs 65pp threshold); 1 other public board, 100% meeting attendance, independent.
Director since 2008 with deep human capital, legal, and energy sector experience serving as Corporate Governance and Nominating Committee Chair; TSR trigger does not fire (gap -48.9pp vs 65pp threshold); 0 other public boards, 100% meeting attendance, independent.
All 13 director nominees receive a FOR vote. ITW's 3-year price return of 20.1% is solidly positive, and the gap versus the XLI sector ETF benchmark of -48.9 percentage points does not reach the 65pp threshold required to trigger a vote against under the strong-positive TSR tier. No director is overboarded, all attended 100% of meetings in 2025, the board discloses a skills matrix, audit committee members have clear financial expertise, and there are no problematic independence or familial relationship issues. Two directors (O'Herlihy and Irick) joined within the past 24 months and are exempt from the TSR trigger in any event.
Say on Pay
✓ FORCEO
Christopher A. O’Herlihy
Total Comp
$15,211,011
Prior Support
95.2%%
CEO total compensation of $15.2 million is within a reasonable range for a large-cap industrial company of ITW's scale ($74.7B market cap), and prior say-on-pay support has been consistently strong at 93-95% over the past three years, indicating broad shareholder alignment. The pay structure is heavily performance-oriented — the proxy discloses that 81% of average NEO target compensation is variable, with no time-vested restricted stock units, long-term incentives split between performance stock awards (tied to operating margin, after-tax return on invested capital, earnings per share growth, and customer-back innovation yield over a 3-year period) and stock options that only pay out if the stock price rises, all of which are genuine performance conditions. The 2025 annual bonus paid out at only 54% of target due to below-target organic revenue growth and modest operating income growth, demonstrating that the incentive plan responds to actual results, and ITW maintains a strong, SEC-compliant clawback policy covering mandatory repayment upon financial restatement regardless of misconduct.
Auditor Ratification
✓ FORAuditor
Deloitte & Touche LLP
Tenure
N/A
Audit Fees
N/A
Non-Audit Fees
N/A
Deloitte is a Big 4 firm appropriate for ITW's size and global complexity. The proxy filing does not include an auditor fee table with specific audit and non-audit fee amounts in the text provided, so the non-audit fee ratio trigger cannot be evaluated; however, the policy default is FOR when fee data is unavailable and no other triggers (material restatement, confirmed tenure over 25 years) are evidenced in the filing. The Audit Committee explicitly endorses Deloitte's continued engagement based on audit quality and familiarity with ITW's global operations.
Stockholder Proposals
1 proposal submitted by shareholders
Proposal 4
Non-Binding Stockholder Proposal for Directors Who Fail To Obtain a Majority Vote
ITW already requires directors to be elected by a majority of votes cast in uncontested elections, and any director who fails to receive a majority must tender their resignation, which the Corporate Governance and Nominating Committee must evaluate and the Board must act on within 90 days — this is a well-established governance mechanism that directly addresses the concern raised by this proposal. Because the company has already implemented the substantive governance protection the proposal seeks, supporting it would add no incremental shareholder protection. Without a clear filer identity suggesting an independent governance activist with a credible concern beyond what is already in place, and given ITW's existing majority vote standard, a vote against is appropriate.
Overall Assessment
The 2026 ITW annual meeting ballot is straightforward and broadly supportable: all 13 director nominees receive FOR votes as the TSR underperformance trigger does not fire given ITW's positive 3-year return and the gap versus XLI falls well short of the 65pp threshold, the executive compensation program is well-structured with genuine pay-for-performance mechanics and 95% prior shareholder support, and the single stockholder proposal on majority voting is redundant given ITW's existing majority vote standard and director resignation policy. The auditor ratification also receives a FOR vote pending no disqualifying fee data, with Deloitte appropriate for ITW's size and complexity.