Scott Santi will leave his post as CEO of Illinois Tool Works Inc., effective Jan. 1, capping an 11-year run at the helm of the industrial products holding company where he has worked since he was a summer intern in 1982.
Santi was picked to lead ITW, which makes everything from dishwashers and auto parts to fence staplers and lubricants, in November 2012 after the death of David Speer. During his tenure, the company’s market value more than tripled and its operating margins climbed from about 16% to nearly 24% last year as he slimmed down the business to focus on higher-growth end markets.
Preparing to take his place at the turn of the year is Chris O’Herlihy, who joined ITW in 1989 and has been vice chairman since 2015 after leading its food equipment segment for five years. He will become just the eighth CEO in ITW’s 112-year history.
“This is the right time to transition to a leader who can see the company through [its] next phase,” Santi said in a statement. “Chris O’Herlihy is the absolute right person to lead ITW forward as our next CEO […] The opportunity to lead this great company has been a distinct honor and an incredible privilege.”
Santi will remain ITW’s chairman through March 1 of next year before retiring as an employee and moving into the role of non-executive board chair.
Before his time in charge of ITW’s food equipment business, O’Herlihy, 59, was group president of the company’s polymers and fluids group. ITW will pay him a $1.3 million salary to be CEO—Santi’s base pay last year was $1.4 million—and he will be eligible for an annual bonus of 1.5 times that figure.
“Our company has never performed better or been better positioned for the future,” O’Herlihy said. “The central focus of the next phase of our enterprise strategy is to elevate high-quality organic growth and […] innovation as key ITW differentiators.”
Shares of ITW (Ticker: ITW) were down more than 2% to about $238 Sept. 7 on the news of Santi’s planned retirement. They are essentially flat over the past six months, leaving the company’s market capitalization at about $72 billion.
