Illinois Tool Works (ITW) Proxy Filing summary

Executive summary

• Achieved record 2024 financial results: $15.9B revenue, 26.8% operating margin, $11.71 EPS, and 31.2% after-tax ROIC, with $3.2B returned to shareholders and 61 consecutive years of dividend increases.

• Launched the Next Phase (2024-2030) Enterprise Strategy, targeting 4%+ annual organic growth, 3% Customer-Back Innovation (CBI) yield by 2030, and continued best-in-class margins and returns.

• Sustainability initiatives advanced, including progress toward a 50% reduction in Scope 1 and 2 GHG emissions by 2030 from a 2021 baseline.

Voting matters and shareholder proposals

• Four proposals: election of 12 directors, advisory vote on executive compensation, ratification of Deloitte & Touche LLP as auditor, and a non-binding shareholder proposal on termination pay.

• Board recommends FOR all directors, FOR executive compensation, FOR auditor ratification, and AGAINST the shareholder proposal on termination pay.

• Shareholder proposal seeks a vote on severance exceeding 2.99x salary plus bonus; Board opposes, citing existing limits and strong shareholder support for current practices.

Board of directors and corporate governance

• Board comprises 12 nominees, 83% independent, 42% diverse, with an average tenure of 11 years.

• Annual election of all directors, majority voting standard, and robust director evaluation and succession planning processes.

• Board leadership separated: Non-Executive Chairman and CEO roles; strong independent Lead Director.

• Five standing committees: Audit, Compensation, Corporate Governance and Nominating, Finance, and Executive.