10-K/A: Hillenbrand Amends 10-K, Details Executive Pay & Governance

Hillenbrand, Inc. filed an amendment to its annual report, providing comprehensive details on executive compensation, corporate governance, and director independence for the fiscal year ended September 30, 2025.

Summary

• Amendment No. 1 on Form 10-K/A to the Annual Report on Form 10-K for the fiscal year ended September 30, 2025, was filed to include information required by Part III (Items 10, 11, 12, 13, and 14) and amend Item 15 of Part IV.
• The original 10-K omitted this information in reliance on General Instruction G(3), expecting to incorporate it from the 2026 proxy statement, but the proxy statement will not be filed within 120 days.
• Megan A. Walke was appointed Interim Chief Financial Officer, Vice President, Corporate Controller, and Chief Accounting Officer effective June 28, 2025, following Robert M. VanHimbergen's resignation on June 27, 2025.
• The CEO pay ratio for fiscal year 2025 is estimated to be 135 to 1, with the CEO's annual total compensation at $8,116,389 and the median employee's at $60,289. This ratio was recalculated due to the divestiture of the Milacron injection molding business.
• For fiscal 2025, the Company Performance Factor for Short-Term Incentive Compensation (STIC) was 73.9%, based on Adjusted EBITDA (68.5% payout), Net Revenue (61.4% payout), and Cash Conversion Cycle (91.3% payout).
• Long-Term Incentive Compensation (LTIC) awards granted in fiscal 2023, which closed on September 30, 2025, vested at 55% of the targeted number of shares for shareholder value increase and 0% for relative Total Shareholder Return (TSR).
• Director compensation was updated, effective January 1, 2023, with annual cash retainer increasing from $80,000 to $95,000, and Committee Chairperson fees increasing. Annual RSU awards increased from $125,000 to $140,000 effective October 1, 2023.
• The Company has a merger agreement dated October 14, 2025, with LSF12 Helix Parent, LLC and LSF12 Helix Merger Sub, Inc., where outstanding equity awards will vest and be cashed out at $32.00 per share.

Sentiment

Score: 4

Explanation: While the filing is primarily administrative and governance-focused, the disclosed performance metrics for the 2023 LTIC awards (55% of target for shareholder value and 0% for relative TSR) are significantly negative. The STIC performance at 73.9% of target is also below expectations. The merger announcement, while a significant event, is presented factually without explicit positive or negative framing in this context, but the low cash-out price relative to some option exercise prices could be seen negatively.

Positives

• Shareholders have consistently approved the 'Say on Pay Vote' with over 94% support for the past twelve years, reflecting confidence in the executive compensation program.
• The Compensation Committee determined that the Company's compensation policies and practices do not create risks reasonably likely to have a material adverse effect on the Company for fiscal 2025.
• All current non-employee directors (except Mr. Pullin, Ms. Sawhney, and Mr. Lower, who are within their five-year compliance deadline) are in compliance with stock ownership guidelines.
• All Named Executive Officers currently hold shares or stock equivalents at levels greater than or equal to their Required Ownership Level.

Negatives

• Long-Term Incentive Compensation (LTIC) awards granted in fiscal 2023, which vested on September 30, 2025, resulted in a payout of only 55% of the targeted number of shares for shareholder value increase.
• For the same fiscal 2023 LTIC awards, the Company ranked at the 10th percentile of the S&P 400 Mid Cap Industrials index for relative Total Shareholder Return (TSR), resulting in a 0% payout for that component.
• The Company Performance Factor for Short-Term Incentive Compensation (STIC) for fiscal 2025 was 73.9% of target, indicating underperformance against collective goals.
• Net Revenue achievement for STIC was 61.4% of target, and Adjusted EBITDA achievement was 68.5% of target for fiscal 2025.

Risks

• Risks associated with the development and growth of digital services, including cyber security, technology, and compliance risks.
• Managing financial and operational risks across diverse end markets.
• Risks related to labor and human relations globally.
• The Compensation Committee analyzes the actual or anticipated effect that compensation policies and practices have on employees with respect to creating excessive and undesirable risk-taking.
• The departure of senior executives could have a significant adverse impact on the Company's business and financial results, leading to retention awards.

Future Outlook

The Company has entered into an Agreement and Plan of Merger, dated October 14, 2025, with LSF12 Helix Parent, LLC and LSF12 Helix Merger Sub, Inc. Upon the effective time of the merger, all outstanding Company options and restricted stock units (granted on or prior to October 14, 2025, or to non-employee directors) will vest in full and be cashed out at $32.00 per share. RSUs granted after October 14, 2025 (excluding non-employee director awards) will convert into Restricted Cash Awards with a value of $32.00 per share, subject to original terms and conditions.

Management Comments

• "I, Megan A. Walke, certify that: 1. I have reviewed this Amendment No. 1 on Form 10-K/A to the Annual Report on Form 10-K for the fiscal year ended September 30, 2025 of Hillenbrand, Inc.; and 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report."
• "I, Kimberly K. Ryan, certify that: 1. I have reviewed this Amendment No. 1 on Form 10-K/A to the Annual Report on Form 10-K for the fiscal year ended September 30, 2025 of Hillenbrand, Inc.; and 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report."

Industry Context

The Company's Compensation Committee reviews and updates its peer group annually to reflect changes among peer companies, industry consolidation, and the Company's evolution as a global pure-play industrial company. The peer group was adjusted in fiscal 2025 by adding Graco and removing Dover Corporation, Fortive Corporation, Regal Rexnord Corporation, and Barnes Group Inc. to better align with median revenue and reflect M&A activity. The relative TSR performance is benchmarked against the S&P 400 Mid Cap Industrials index.

Comparison to Industry Standards

• The Company benchmarks target compensation for Named Executive Officers to the 50th percentile of its selected peer group, which includes companies like Acuity Brands, Chart Industries, Crane Co., Donaldson Company, Inc., ESAB Corporation, Graco Inc., IDEX Corporation, Itron, Inc., ITT Inc., John Bean Technology Corp., Kennametal Inc., Nordson Corporation, The Middleby Corporation, The Timken Company, and Woodward, Inc.
• The Company's LTIC award mix places a heavier emphasis on performance-based awards (67%) compared to the peer group average (53%).
• The maximum payout for Shareholder Value RSUs and Relative TSR RSUs was increased from 175% to 200% for awards granted in fiscal 2023 and later, aligning with independent compensation consultant recommendations to incentivize exceeding target performance and remain competitive for executive talent.
• The fiscal 2023 LTIC Relative TSR performance resulted in a 0% payout, ranking at the 10th percentile of the S&P 400 Mid Cap Industrials index, indicating significant underperformance compared to industry peers.

Management Changes

Corporate Governance

Related Party Transactions

• The Company's businesses purchased approximately $519,000 in equipment and services from The Atlas Group (where Joseph T. Lower is a director) in fiscal 2025.
• Cummins, Inc. (where Jennifer W. Rumsey is an executive officer) purchased approximately $754,000 in capital equipment and aftermarket parts and service from the Company in fiscal 2025. The Company also purchased an immaterial amount from Cummins.
• The Company purchased approximately $3,890,000 in business process outsourcing, tech support, and other IT/technical services from Infosys Ltd. (where Inderpreet Sawhney is an executive officer) in fiscal 2025.
• The Company purchased approximately $162,000 in equipment and services from W.W. Grainger, Inc. (where Neil S. Novich is a director) in fiscal 2025. Grainger also purchased an immaterial amount from the Company.
• The Company purchased approximately $232,000 in equipment and services from Wabash National Corporation (where Stuart A. Taylor, II is a director) in fiscal 2025. Wabash also purchased an immaterial amount from the Company.
• The Board determined that these transactions did not create a material interest for the respective directors, thus maintaining their independence.

Stakeholder Impact

• Shareholders are directly impacted by the merger agreement, which will result in a cash-out of equity awards at $32.00 per share. They are also impacted by executive compensation decisions, the CEO pay ratio, and the performance of LTIC awards.
• Executives and employees are impacted by the executive compensation structure, STIC and LTIC payouts, retention awards, and the terms of employment and change in control agreements. The merger will lead to the cash-out of equity awards.
• Customers and suppliers are indirectly impacted by the Company's strategic direction, operational performance, and potential changes resulting from the merger. Related party transactions with certain suppliers/customers are disclosed.

Next Steps

• Closing of the merger with LSF12 Helix Parent, LLC and LSF12 Helix Merger Sub, Inc.
• Vesting and cash-out of outstanding equity awards upon merger closing.
• Conversion of RSUs granted after October 14, 2025, into Restricted Cash Awards upon merger closing.
• Ms. Walke's cash retention award is subject to continued service through the end of fiscal 2026.
• The Executive Matching Shares Program will terminate upon the closing of the merger.

Key Dates

Recommendation

The filing primarily provides administrative and governance updates, including detailed executive compensation and board information. While the performance metrics for the 2023 LTIC awards (55% of target for shareholder value and 0% for relative TSR) indicate underperformance, and the 2025 STIC was below target, the most significant financial event disclosed is the pending merger agreement with LSF12 Helix Parent, LLC at a cash-out price of $32.00 per share. For investors, the immediate focus shifts to the certainty of this acquisition price. Given the fixed acquisition price, there is limited upside potential from current market prices unless the deal falls through or a higher bid emerges, which is not indicated. Therefore, a "hold" recommendation is appropriate for existing shareholders awaiting the merger's completion, while new investors would find little opportunity at or near the acquisition price.

Keywords

Hillenbrand, SEC filing, 10-K/A, Annual Report Amendment, Executive Compensation, Corporate Governance, Board of Directors, Financial Metrics, CEO Pay Ratio, Restricted Stock Units, Performance-Based Compensation, Merger, Sarbanes-Oxley, Audit Committee, Compensation Committee, Nominating/Corporate Governance Committee, Mergers & Acquisitions Committee, Shareholder Value, Total Shareholder Return, Adjusted EBITDA, Net Revenue, Cash Conversion Cycle, Stock Ownership Guidelines, Clawback Policy, Related Party Transactions