Illinois Tool Works (ITW) | Directors Who Fail To Obtain A Majority Vote at Illinois Tool Works (ITW)

Status
Filed
Previous AGM date
Resolution details
Company ticker
ITW
Lead filer
John Chevedden
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • Shareholder rights
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Industrials
Company HQ country
United States
Resolved clause
RESOLVED : Shareholders request that the Board of Directors take the necessary steps to ensure that directors who fail to obtain a majority vote in a future uncontested shall leave the board as soon as possible but in no case shall such directors serve more than 9-months on the Board after such failed election.
Supporting statement
A vote of rejection by Illinois Tool Works shareholders needs to be respected. ITW shareholders often only vote on 3 Company items a year. The least that ITW can do is to respect all shareholder votes. If ITW accepts shareholder approval of executive pay then ITW should be prepared to accept shareholder rejection of a director. 9-months is adequate time for ITW to find a highly qualified replacement director. This proposal will give ITW directors more of an incentive to perform. Now is a good time to improve shareholder oversight of ITW. ITW stock was at $248 in 2021 and was only at $245 in late 2025 despite a robust stock market. ITW faces challenges and ITW shareholders may believe that board refreshment is a way to address challenges. ITW shareholder efforts at board refreshment could be thwarted if ITW can ignore ITW shareholders if they give a majority vote against a director. These are some of the challenges facing ITW: For both Q1 and Q3 2025, ITW?s revenue came in below analyst expectations. Following the Q3 earnings announcement, the ITW stock price dropped significantly (around 4% in pre-market and regular trading), reflecting shareholder concerns over the modest top-line growth. ITW stock has experienced a year-to-date decrease as of November 2025. Specific business segments experienced weakness, including: Polymers/Fluids and Construction Products both saw organic revenue declines in Q3. Test/Measurement and Electronics experienced flat revenue with a 1% organic decline due to "choppy demand for capital equipment." Several Wall Street analysts issued "sell" or "underweight" ratings on ITW stock during 2025, including Barclays and Wells Fargo, citing concerns like limited potential upside. ITW?s net debt increased to $8 billion by September 2025, a rise from the prior year, partly attributed to share repurchases and dividends. ITW tightened its full-year 2025 EPS outlook range due to an uncertain demand environment and ongoing "tariff headwinds," which points to continued external pressures on profitability.

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