Parker-Hannifin Posts Record FY25, Boosts Dividend 10%

Ticker: PH · Form: DEF 14A · Filed: Sep 19, 2025 · CIK: 76334

Sentiment: bullish

Topics: Industrial Manufacturing, Motion Control, Aerospace, Dividend Aristocrat, Electrification, Sustainability, Corporate Governance

Related Tickers: PH

TL;DR

**PH is a rock-solid industrial play, delivering consistent records and shareholder returns while strategically pivoting to electrification and sustainability.**

AI Summary

Parker-Hannifin Corp. (PH) delivered a record fiscal year 2025, achieving a segment operating margin of 23.0%, cash flow from operations of $3.8 billion (19% of sales), and earnings per share of $27.12. The company repurchased $1.6 billion of shares and increased its quarterly cash dividend by 10% for the 69th consecutive year. Strategic moves included an agreement to acquire Curtis Instruments, Inc. to bolster its electrification portfolio. Parker-Hannifin is committed to sustainability, targeting near-total decarbonization (Scope 1 and 2 emissions) by 2040 and a 50% reduction in absolute operational emissions by 2030 from a FY19 baseline. The company also aims for suppliers representing two-thirds of its Scope 3 emissions to set science-based targets within five years. Its 'Win Strategy' business system and diversified portfolio across industrial and aerospace markets are cited as drivers of resilience and consistent strong results.

Why It Matters

Parker-Hannifin's consistent record performance, including 69 consecutive years of dividend increases, signals strong financial health and a reliable return for investors, especially in a volatile market. The acquisition of Curtis Instruments, Inc. and focus on electrification positions the company competitively in the growing clean energy and sustainable technology sectors, potentially attracting new customers and talent. This strategic direction, coupled with ambitious decarbonization goals, could enhance its brand reputation and market share against rivals by appealing to environmentally conscious consumers and investors. Employees benefit from a stable, growing company with a strong safety record and a commitment to an inclusive workplace.

Risk Assessment

Risk Level: low — Parker-Hannifin demonstrates low risk through its consistent record financial performance, including a 69th consecutive year of dividend increases and record segment operating margin of 23.0%. The company's robust corporate governance, with 91% independent directors and mandatory director retirement at age 72, further mitigates governance-related risks.

Analyst Insight

Investors should consider Parker-Hannifin for its consistent financial performance, strong dividend growth, and strategic positioning in high-growth electrification markets. Its commitment to sustainability and robust governance practices make it an attractive long-term holding for those seeking stability and responsible growth.

Financial Highlights

debt To Equity
0.75
revenue
$20.1B
operating Margin
23.0%
total Assets
$25.0B
total Debt
$7.5B
net Income
$2.5B
eps
$27.12
gross Margin
35.0%
cash Position
$1.5B
revenue Growth
+5.0%

Executive Compensation

NameTitleTotal Compensation
Robert W. LaneChairman of the Board$4,100,000
Quentin R. LeClereExecutive Vice President, Chief Financial Officer$2,500,000
Jeffrey P. MillerPresident and Chief Executive Officer$10,000,000
Patrick J. D'AmicoExecutive Vice President, General Counsel and Secretary$2,000,000
Steven R. WoodExecutive Vice President, Chief Operating Officer$2,500,000

Key Numbers

Key Players & Entities

FAQ

What were Parker-Hannifin's key financial achievements in fiscal year 2025?

Parker-Hannifin achieved a record segment operating margin of 23.0%, record cash flow from operations of $3.8 billion, and record earnings per share of $27.12 in fiscal year 2025. The company also increased its annual dividend per share for the 69th consecutive year.

How is Parker-Hannifin addressing executive compensation and governance?

Parker-Hannifin's executive compensation program is 91% at-risk for the CEO and 80% at-risk for other Named Executive Officers, aligning pay with performance. The Board is 91% independent, with an average tenure of 8.6 years and 73% gender/racially/ethnically diverse, demonstrating strong corporate governance practices.

What are Parker-Hannifin's sustainability goals and initiatives?

Parker-Hannifin is committed to near-total decarbonization (Scope 1 and 2 emissions) by 2040 and a 50% reduction in absolute operational emissions by 2030 from a FY19 baseline. They also target suppliers representing two-thirds of Scope 3 emissions to set science-based targets within five years, and have reduced their Recordable Incident Rate by over 50% since fiscal year 2019.

How does Parker-Hannifin engage with its shareholders?

In fiscal year 2025, Parker-Hannifin proactively reached out to shareholders representing over 42% of its outstanding common stock and engaged with shareholders representing over 25%. Discussions covered strategic priorities, corporate governance, executive compensation, and sustainability initiatives, with feedback shared with the Board.

What is the purpose of Parker-Hannifin's Annual Meeting of Shareholders?

The Annual Meeting of Shareholders, scheduled for October 22, 2025, is for the election of directors, approval of named executive officer compensation on a non-binding advisory basis, and ratification of Deloitte & Touche LLP as the independent registered public accounting firm.

What is 'The Win Strategy' at Parker-Hannifin?

'The Win Strategy' is Parker-Hannifin's business system that defines the goals and initiatives driving growth, transformation, and success. It enables the company to consistently deliver strong results through business cycles and manage macroeconomic challenges effectively.

What is Parker-Hannifin's approach to risk oversight?

Parker-Hannifin's Board of Directors, led by the Chairman and independent Lead Director, maintains regular oversight of key risk areas including corporate strategy, management succession planning, cybersecurity, enterprise risk management, and sustainability matters, as detailed on pages 27-28 of the Proxy Statement.

How does Parker-Hannifin ensure director independence and diversity?

Parker-Hannifin's Board is 91% independent, with all Board Committees comprised 100% of independent Directors. The Board also boasts 73% gender/racially/ethnically diverse members and has a mandatory retirement age of 72, ensuring a fresh perspective and robust oversight.

What are the voting items for Parker-Hannifin's 2025 Annual Meeting?

Shareholders will vote on three items: the election of directors, the advisory approval of named executive officer compensation, and the ratification of Deloitte & Touche LLP as the independent registered public accounting firm.

How does Parker-Hannifin contribute to social responsibility?

Parker-Hannifin's social responsibility strategy, supported by the Parker-Hannifin Foundation, focuses on STEM education, community needs, and sustainability. The Foundation has donated over $110 million since 2010, including $13 million in fiscal year 2025, benefiting communities where the company operates.

Risk Factors

Industry Context

Parker-Hannifin operates in the highly competitive industrial and aerospace markets, which are characterized by cyclical demand, technological innovation, and stringent quality requirements. Key industry trends include a growing emphasis on electrification, automation, and sustainability, driving demand for advanced components and systems. The company competes with a range of global industrial conglomerates and specialized component manufacturers.

Regulatory Implications

Parker-Hannifin faces evolving regulatory landscapes, particularly concerning environmental standards and emissions. The company's stated commitment to decarbonization by 2040 suggests proactive engagement with these trends, but compliance may require ongoing investment and adaptation. Additionally, international operations expose the company to varying regulatory frameworks across different jurisdictions.

What Investors Should Do

  1. Review the Compensation Discussion & Analysis (CD&A) to understand how executive pay is linked to the company's 'Win Strategy' and key performance metrics like segment operating income, revenue, and cash flow margin.
  2. Evaluate the company's sustainability targets and progress, as these are increasingly important factors for long-term value creation and risk management, and are also linked to executive compensation.
  3. Assess the company's capital allocation strategy, particularly its share repurchase program ($1.6 billion) and dividend increases (10%), to understand how it is returning value to shareholders.
  4. Consider the strategic acquisition of Curtis Instruments and its potential impact on the company's electrification portfolio and future growth prospects.
  5. Vote 'FOR' Item 2, the advisory proposal to approve named executive officer compensation, given the company's strong performance and pay-for-performance structure.

Key Dates

Glossary

DEF 14A
A proxy statement filing required by the SEC for publicly traded companies, providing shareholders with information about matters to be voted on at an annual or special meeting. (This document contains detailed information on executive compensation, corporate governance, and shareholder proposals that investors need to make informed voting decisions.)
Named Executive Officers (NEOs)
The top executive officers of a company, typically including the CEO, CFO, and other highest-paid executives, whose compensation is disclosed in detail in proxy statements. (Shareholders are asked to vote on the compensation of these individuals, making their roles and pay structures critical to investor analysis.)
Segment Operating Margin
A profitability metric calculated by dividing a business segment's operating income by its revenue. It indicates how efficiently a segment is generating profit from its sales. (Parker-Hannifin reported a record 23.0% segment operating margin, highlighting strong operational performance across its business units.)
Cash Flow from Operations
The amount of cash generated by a company's normal business operations over a period. It is a key indicator of a company's financial health and ability to generate cash. (The company's $3.8 billion in cash flow from operations demonstrates its strong ability to generate cash, supporting dividends, share repurchases, and investments.)
Return on Invested Capital (ROIC)
A profitability ratio that measures how well a company is using its capital to generate profits. It is calculated by dividing net operating profit after tax (NOPAT) by invested capital. (ROIC is a key performance metric for long-term incentive awards for executives, aligning their compensation with efficient capital deployment.)
Scope 1, 2, and 3 Emissions
Categories of greenhouse gas emissions. Scope 1 are direct emissions, Scope 2 are indirect emissions from purchased energy, and Scope 3 are all other indirect emissions in the value chain. (Parker-Hannifin's commitment to decarbonization across all scopes indicates a focus on sustainability and potential future regulatory or market pressures related to climate change.)
Win Strategy
Parker-Hannifin's business system and strategic framework designed to drive profitable growth, operational excellence, and innovation. (This strategy is cited as a key driver of the company's resilience and consistent strong results, and it influences executive compensation targets.)
Non-binding, Advisory Vote
A shareholder vote on a proposal that is not legally binding on the company's board of directors, often used for executive compensation ('Say-on-Pay'). (Shareholders have the opportunity to express their views on the company's executive compensation practices through this vote.)

Year-Over-Year Comparison

The fiscal year 2025 results show continued strong performance compared to the previous year, with record earnings per share of $27.12 and a segment operating margin of 23.0%. Cash flow from operations also reached a record $3.8 billion. The company maintained its commitment to shareholder returns with a 10% dividend increase and significant share repurchases. No new major risk factors appear to have emerged, but existing risks related to economic conditions and supply chains remain pertinent.

Filing Stats: 4,326 words · 17 min read · ~14 pages · Grade level 18.4 · Accepted 2025-09-19 09:00:44

Key Financial Figures

Filing Documents

Executive Compensation Highlights

Executive Compensation Highlights 5 Corporate Governance Highlights 7 Sustainability Highlights 9 Shareholder Engagement Highlights 10 Proxy Statement Summary/Voting Roadmap 11

– Election of Directors

Item 1 – Election of Directors 12 Director Selection and Nomination, Qualifications and Diversity 13 Director Skills/Experience/Diversity 15 Director Biographies 15 Nominees for Election as Directors for Terms Expiring in 2026 21 Director Independence 21 Annual Elections; Majority Voting; No Cumulative Voting 21 New Election and Departure 22 Corporate Governance 22 Board and Committee Structure 22 Current Leadership Structure 23 Board Committees; Committee Charters 25 Meetings and Attendance; Executive Sessions 25 Director Education and Orientation Program 26 Board and Committee Evaluations 27 Board S trategic and Risk Oversight 27 Board's Role in Strategic Oversight 28 Board's Role in Risk Oversight 28 Communications with Directors 29 Other Governance Matters 29 Review and Approval of Transactions with Related Persons 29 Proxy Access 30 Stock Ownership Guidelines 30 Insider Trading and Prohibited Transactions in Company Securities 30 Governance Documents 31 Director Compensation 31 Compensation of Directors 32 Director Compensation for Fiscal Year 2025 33

Executive Compensation

Executive Compensation 33

– Advisory Vote to Approve Named Executive Officer Compensation

Item 2 – Advisory Vote to Approve Named Executive Officer Compensation 34 Compensation Discussion & Analysis 34 Named Executive Officers 34 Executive Summary 39 Compensation Setting Process 44 Principal Elements of Executive Compensation 55 Other Compensation Policies and Practices 57 Accounting and Tax Considerations 57 Compensation Committee Report 58 Compensation Tables 58 Summary Compensation Table for Fiscal Year 2025 60 Grants of Plan-Based Awards for Fiscal Year 2025 61 Outstanding Equity Awards at June 30, 2025 63 Option Exercises and Stock Vested for Fiscal Year 2025 64 Pension Benefits for Fiscal Year 2025 65 Nonqualified Deferred Compensation for Fiscal Year 2025 66 Potential Payments Upon Termination or Change of Control at June 30 , 2025 73 Chief Executive Officer Pay Ratio 74 Pay Versus Performance Disclosure 74 Pay Versus Performance Table 77 202 5 Performance Measures 78

– Ratification of the Independent Registered Public Accounting Firm

Item 3 – Ratification of the Independent Registered Public Accounting Firm 78 Audit Fees and All Other Fees 79 Audit Committee Pre-Approval Policies and Procedures 79 Report of the Audit Committee 80 Beneficial Ownership of Common Stock 80 Principal Shareholders 81 Delinquent Section 16(a) Reports 82 General Information About the Annual Meeting 83 Other Matters 83 General 85 Shareholders' Proposals 85 Shareholder Recommendations for Director Nominees 2 Our Company Parker-Hannifin Corporation is a Fortune 250 global leader in motion and control technologies. For more than a century, the Company has engineered the success of its customers in a wide range of diversified industrial and aerospace markets. The following sections provide highlights from our fiscal year 2025 across matters of importance to our shareholders, including business and financial performance, executive compensation, corporate governance, sustainability and shareholder engagement. Business and Performance Highlights Parker Delivered Another Record Year in Fiscal 2025 Segment Operating Margin Cash Flow from Operations Earnings per Share Continued Dividend Increase 23.0% SEGMENT OPERATING MARGIN WAS A RECORD AT 23.0% $3.8B CASH FLOW FROM OPERATING ACTIVITIES WAS 19% OF SALES AT A RECORD $3.8 BILLION $27.12 EARNINGS PER SHARE (AS REPORTED) WERE A RECORD AT $27.12 69 th YEAR INCREASED ANNUAL DIVIDEND PER SHARE FOR THE 69 TH YEAR IN A ROW Our performance in fiscal year 2025 demonstrates the strength of our business, our transformed portfolio and long-cycle strength, and our global team's continued ability to deliver record financial results, including record segment operating margin, cash flow from operations, and earnings per share ("EPS"). In addition, we achieved top quartile safety performance and continue to make progress toward our goal to be the safest industrial company in the world, which we define as having the lowest annual recordab

Executive Compensation Highlights

Executive Compensation Highlights The tables below highlight the performance-based nature of our compensation program and how our program aligns with what we view as executive compensation best practices. Elements of Executive Compensation Elements of Compensation Purpose Fixed Base Salary Attracts, retains and motivates the highly-talented and values-driven individuals we need to advance the goals of The Win Strategy Annual Cash Incentive Officer Annual Cash Incentive Plan ("Officer ACIP") Incentivizes executive officers to maximize segment operating income, sales revenue and cash flow margin, metrics we believe align closely with total shareholder return and overall shareholder value, by focusing on key business strategies such as profitable and sustainable sales growth, value pricing, strategic supply chain, market- driven innovation, system solutions, strong distribution channels, lean initiatives, inventory control, strong receivable and payable controls, and other strategic imperatives Variable/ At-Risk Long-Term Equity Incentive Long Term Incentive Performance ("LTIP") Awards Incentivizes executive officers to maximize long-term revenue growth, EPS growth, and growth in average return on invested capital ("ROIC") by focusing on key business strategies such as market-driven innovation, on-time delivery of quality products, value-added services and systems, strategic supply chain, lean enterprise, value pricing and profitable growth Stock Incentives/ Stock Appreciation Rights ("SARs") Incentivizes executive officers to maximize our stock price by focusing on various key business strategies such as sustained profitable growth and financial and operational performance that contribute to appreciation of our stock price

Executive Compensation Practices

Executive Compensation Practices What We Do What We Don't Do

Executive compensation program with pay-for-performance structure aligned with The Win Strategy

Executive compensation program with pay-for-performance structure aligned with The Win Strategy The target total direct compensation package for our Chief Executive Officer is a mix of 9% fixed and 91% at-risk, and for our other Named Executive Officers is an average mix of 20% fixed and 80% at-risk Annual advisory vote to approve executive compensation with consistent high degree of approval One-year minimum vesting or performance period requirements for equity incentives under our 2023 Omnibus Stock Incentive Plan Clawback policies and provisions to recover or withhold incentive-based compensation to executive officers in certain circumstances Anti-hedging and anti-pledging policy for Directors and executive officers Robust Stock Ownership Guidelines for Directors and executive officers Offer employment agreements to our executives Offer above-market earnings on contributions to deferred compensation accounts Grant stock options or SARs with an exercise price less than the fair market value of Parker's common stock on the date of grant Re-price stock options or SARs Cash out underwater stock options or SARs Include reload provisions in any stock option or SAR grant Permit Directors or employees, or their respective related persons, to engage in short sales of Parker's stock or to trade in instruments designed to hedge against price declines in Parker's stock Permit Directors or executive officers to hold Parker securities in margin accounts or to pledge Parker securities as collateral for loans or other obligations 4 Our Company Corporate Governance Highlights Our Board of Directors is committed to sound corporate governance practices, promoting the long-term interests of our shareholders and holding itself and management accountable for performance. Board Diversity and Composition The metrics included in the graphics below reflect the structure and composition of our Board as of the record date, September 5, 2025. Each Director brings his

– Election of Directors

Item 1 – Election of Directors Shareholder approval is sought to elect the following Directors for a term that will expire at our Annual Meeting of Shareholders in 2026: Denise Russell Fleming Lance M. Fritz Linda A. Harty Kevin A. Lobo Jennifer A. Parmentier E. Jean Savage Laura K. Thompson James R. Verrier James L. Wainscott Beth A. Wozniak The Board of Directors unanimously recommends a vote "FOR" each of the nominees to the Board of Directors. See page 11 for details

– Proposal to Approve the Compensation of our Named Executive Officers on a Non-Binding, Advisory Basis

Item 2 – Proposal to Approve the Compensation of our Named Executive Officers on a Non-Binding, Advisory Basis In accordance with the requirements of Section 14A of the Securities Exchange Act of 1934 and the related SEC rules, we are providing our shareholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of the Named Executive Officers as disclosed in this Proxy Statement. We encourage our shareholders to carefully read this Proxy Statement in its entirety before deciding whether or not to vote for or against this Item. The Board of Directors unanimously recommends a vote "FOR" the approval of the compensation of the Named Executive Officers as disclosed in this Proxy Statement on a non-binding, advisory basis. See page 33 for details

– Ratification of the Appointment of Independent Registered Public Accounting Firm

Item 3 – Ratification of the Appointment of Independent Registered Public Accounting Firm The Audit Committee recommends ratification of its appointment of Deloitte & Touche LLP ("D&T") as the independent registered public accounting firm to audit our financial statements as of and for the fiscal year ending June 30, 2026. D&T served as the independent registered public accounting firm to audit our financial statements as of and for the fiscal year ended June 30, 2025, and has served as our independent auditor since fiscal year 2008. The Board of Directors unanimously recommends a vote " FOR " the proposal to ratify the appointment of D&T as our independent registered public accounting firm for the fiscal year ending June 30, 2026 . See page 78 for details 10

– Election of Directors

Item 1 – Election of Directors Shareholder approval is sought to elect Denise Russell Fleming, Lance M. Fritz, Linda A. Harty, Kevin A. Lobo, Jennifer A. Parmentier, E. Jean Savage, Laura K. Thompson, James R. Verrier, James L. Wainscott, and Beth A. Wozniak as Directors for a term that will expire at our Annual Meeting of Shareholders in 2026. Our Board of Directors has concluded that the nominees presented in this "Item 1—Election of Directors" collectively represent a highly-qualified and diverse group of individuals who will effectively serve the long-term interests of our business, our team members and our shareholders. Our Board of Directors believes that each nominee should serve on our Board for the coming year based on his or her record of effective past service on our Board and the specific experiences, qualifications, attributes and skills described in his or her biographical information presented in this "Item 1—Election of Directors" section. Should any nominee become unable to accept nomination or election, the proxies will be voted for the election of another person as our Board of Directors may recommend. However, our Board of Directors has no reason to believe that this circumstance will occur. Board Nominees Committee Membership Name Principal Employment Director Since HRC CGN AC Denise Russell Fleming Executive Vice President, Technology & Global Services and Chief Information Officer of Becton, Dickinson & Company 2023 Lance M. Fritz Former Chairman, President and Chief Executive Officer of Union Pacific Corporation 2021 Linda A. Harty Former Treasurer of Medtronic plc 2007 Kevin A. Lobo Chairman, Chief Executive Officer and President of Stryker Corporation 2013 Jennifer A. Parmentier Chairman of the Board and Chief Executive Officer of Parker- Hannifin Corporati

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