DEF 14A of Graham Corp
Filed Jul 15, 2025 · FY20250000950170-25-095722
Election of Directors
Election of Directors The Board currently consists of seven members. Our By-laws provide for a classified board of directors consisting of three classes of directors, with each class serving a staggered three-year term. As a result, stockholders elect only a portion of our Board each year. The terms of three of our directors, Cari L. Jaroslawsky, Matthew J. Malone and Jonathan W. Painter, will expire at the Annual Meeting. Upon the recommendation of the Nominating and Corporate Governance Committee, the Board has unanimously nominated Cari L. Jaroslawsky, Matthew J. Malone and Jonathan W. Painter for election as directors. If elected, each of Ms. Jaroslawsky and Messrs. Malone and Painter will hold office for a three-year term expiring in 2028 or until his or her successor is duly elected and qualified. Our Board does not contemplate that any of the nominees will be unable to serve as a director, but if that contingency should occur before the proxies are voted, the designated proxies reserve the right to vote for such substitute nominee(s) as they, in their discretion, determine. Our By-laws do not permit re-election after a director reaches the age of 75.
Nominees Proposed for Election as Directors at the Annual Meeting
| Jonathan W. Painter | Lead Independent Director of the Company; Chair of Kadant Inc. AGE DIRECTOR SINCE 66 2014 TERM EXPIRES 2025 COMMITTEES ▶ Audit ▶ Compensation ▶ Nominating and Corporate Governance | | Mr. Painter serves as our Lead Independent Director since June 2025, Chair since March 2022, and a director since 2014. Mr. Painter also serves as the Chair, since 2019, and a director since January 2010 of Kadant Inc. (NYSE: KAI), a leading global supplier of components and engineered systems used in process industries, including the pulp and paper industry. Mr. Painter served as President and Chief Executive Officer of Kadant from January 2010 to July 2019 and as President and Chief Operating Officer from September 2009 to December 2009. | | | Qualifications | | | Mr. Painter brings valuable experience to the Board and management as a former executive officer of a public company that, similar to us, is in the business of designing, manufacturing and marketing specialized, engineered equipment. The Board believes that Mr. Painter’s diverse experience in operations, finance, mergers and acquisitions and corporate strategy enables him to provide critical insight to the Board and management that will help us to achieve our strategic goals. | |
Directors Whose Terms do not Expire at the Annual Meeting
Directors Whose Terms do not Expire at the Annual Meeting
Directors Whose Terms do not Expire at the Annual Meeting
| James J. Barber, Ph.D. | Independent Consultant and Principal of Barber Advisors, LLC AGE DIRECTOR SINCE 71 2011 TERM EXPIRES 2026 COMMITTEES ▶ Audit ▶ Compensation (Chair) ▶ Nominating and Corporate Governance | | Dr. Barber is an independent consultant and the principal of Barber Advisors, LLC, a consulting firm advising businesses and non-profits in the areas of strategy, management, marketing and operations, since September 2007. From January 2000 to May 2007, Dr. Barber was the President and Chief Executive Officer of Metabolix, Inc. (formerly NASDAQ: MBLX). He was responsible for transforming Metabolix, Inc. from a research boutique into a leader in “clean tech” and industrial biotechnology. Dr. Barber has served on the board of directors of Gevo, Inc. (Nasdaq: GEVO) since May 2025, where he serves on the audit committee. Dr. Barber served as the independent non-executive Chair of Itaconix plc (formerly Revolymer plc) (LON: ITX), a specialty chemicals company, from December 2018 to July 2022, and served as a non-executive director of Itaconix plc from September 2016 to November 2018. He has also served as a director of numerous private companies. Dr. Barber holds a National Association of Corporate Directors Directorship Certification. | | | Qualifications | | | Dr. Barber brings to our Board substantial executive level leadership experience and a deep understanding of product and business development in highly technical industries and alternative energy markets. Dr. Barber also has significant experience in structuring both joint venture and acquisition transactions. | |
Directors Whose Terms do not Expire at the Annual Meeting
| Troy A. Stoner | Senior Director, Electronic & Intelligence Systems, Space Intelligence & Weapons Systems division of Boeing Defense, Space and Security AGE DIRECTOR SINCE 61 2022 TERM EXPIRES 2026 COMMITTEES ▶ Compensation ▶ Nominating and Corporate Governance | | Mr. Stoner has served as the Senior Director, Electronic and Intelligence Systems for the Space Intelligence and Weapons Systems division of Boeing Defense, Space and Security since March 2025 and served as Director, Electronic Systems from June 2023 until March 2025. Mr. Stoner served as Chief Executive Officer of Argon ST, a specialist in systems engineering and a subsidiary of The Boeing Company from April 2020 until May 2023. Prior to that, Mr. Stoner served Boeing in a series of advancing roles including Senior Program Manager, Missions & Payloads, Autonomous Systems from December 2019 to March 2020, Senior Manager, Autonomous Systems, Boeing Strategy from November 2017 to November 2019, Senior Maritime Representative, Boeing Global Sales and Marketing, April 2016 to October 2017, and Senior Manager, Boeing Strategy from May 2015 to March 2016. Mr. Stoner retired from the U.S. Navy after 30 years of service. | | | Qualifications | | | Mr. Stoner brings to the Board extensive business experience with strategy, leadership and operations at companies within the defense, space and security markets. Our Board and management team value his in-depth knowledge of the U.S. Navy as well as his extensive expertise in military defense systems and U.S. Navy planning and procurement processes. | |
Directors Whose Terms do not Expire at the Annual Meeting
| GRAHAM CORPORATION 2025 PROXY STATEMENT | 9 |
Directors Whose Terms do not Expire at the Annual Meeting
| Lisa M. Schnorr | Former Senior Vice President and Project Lead, Digital Enablement for Constellation Brands, Inc. AGE DIRECTOR SINCE 59 2014 TERM EXPIRES 2027 COMMITTEES ▶ Audit (Chair) ▶ Compensation | | Ms. Schnorr has served as a director since 2014. Before retiring in May 2021, she worked for Constellation Brands (NYSE: STZ), a Fortune 500 company and a leading international producer of beer, wine and spirits with operations in the U.S., Mexico, New Zealand and Italy. Ms. Schnorr joined Constellation Brands in 2004 and earned promotions through a series of positions with increasing responsibility, including Vice President of Compensation and HRIS (2011-2013), Senior Vice President of Total Rewards (2014-2015), Corporate Controller (2015-2017), Chief Financial Officer of the Wine & Spirits Division (2017-2019), and Senior Vice President and Project Lead of Digital Enablement (2019-2021). Before joining Constellation Brands, Ms. Schnorr held financial and accounting positions at various public and private companies and she began her career in 1987 at PricewaterhouseCoopers (formerly Price Waterhouse), all in Rochester, New York. Ms. Schnorr has been a member of the board of directors of Warrior Met Coal (NYSE: HCC), since August 2022 where she serves as Chair of the Nominating and Corporate Governance Committee. Ms. Schnorr served as a member of the board of directors of Vintage Wine Estates (formerly Nasdaq: VWE) from June 2021 until February 2025 where she served as Chair of the Audit Committee. She holds a B.S. degree in Accounting from the State University of New York at Oswego. | | | Qualifications | | | With her background and experience in strategic planning, audit, financial planning and analysis, capital allocation, public company governance and risk management, human resources and investor relations, Ms. Schnorr offers a global business and organizational perspective to the Board. The Board believes that Ms. Schnorr’s background and expertise enables her to guide us through a continued period of organic and acquisition-related growth and allows her to provide insight and leadership to our Audit Committee and Compensation Committee. | |
Directors Whose Terms do not Expire at the Annual Meeting
| Daniel J. Thoren | Executive Chairman of the Company AGE DIRECTOR SINCE 62 2021 TERM EXPIRES 2027 | | Mr. Thoren was appointed Executive Chairman in June 2025 and previously served as our Chief Executive Officer from September 2021 to June 2025 and became our President and Chief Operating Officer in June 2021. Prior to joining the Company, Mr. Thoren had been employed by Barber-Nichols, LLC (“Barber-Nichols”), a premier supplier of specialty turbomachinery, pumps and electronic drives that address critical applications for the defense and aerospace/space industries, from 1991 until we acquired Barber-Nichols in June 2021, and served in progressively increasing roles, including his service as Barber-Nichols’ President and Chief Executive Officer from 1997 until May 2021 and its Chairman of the Board of Directors through June 2021. | | | Qualifications | | | As our Executive Chairman and former Chief Executive Officer, and as a result of his day-to-day leadership of the business, Mr. Thoren provides the Board with valuable insight regarding the operations of our Company and our management team and he performs a critical role in the Board’s discussions regarding strategic planning and development. Our Board also benefits from Mr. Thoren’s proven strong leadership skills and experience at Barber-Nichols. | |
Directors Whose Terms do not Expire at the Annual Meeting
| 10 | GRAHAM CORPORATION 2025 PROXY STATEMENT |
Directors Whose Terms do not Expire at the Annual Meeting
| Corporate Governance • Director Independence |
Our “Pay for Performance” Philosophy
Our “Pay for Performance” Philosophy Our executive compensation programs contain key components and features that reinforce our “pay for performance” philosophy. For example: • A significant portion of our named executive officers’ compensation is “at-risk,” and depends on either meeting performance-based criteria or continuing in service to the Company. Both our short-term and long-term incentive compensation programs use goals that tie to our performance in key financial metrics. During fiscal year 2025, we paid 50% of our long-term incentive compensation in performance-vesting restricted stock units (“PSUs”). The PSUs cliff vest on the third anniversary of the date of grant only upon the achievement of predetermined performance metrics. Our named executive officers received the other 50% of long-term incentive compensation in time-vesting restricted stock units (“RSUs”) that vest in equal installments on each of the first three anniversaries of the date of grant, subject to the executive officer’s continued employment at each such date. • We require all of our named executive officers to hold substantial amounts of our stock. We believe that our robust stock ownership guidelines drive an ownership culture and enhance the connection between our management and our stockholders. • We do not reimburse or “gross-up” our named executive officers for any of the taxes associated with any of the compensation and benefits we provide to them. • We maintain “double-triggered” provisions in our agreements with our named executive officers under which payment is triggered only by certain terminations of employment subsequent to a change in control of our Company. • The Compensation Committee incorporates tally sheets as an analytical tool as part of its annual executive compensation review to help ensure that compensation is consistent with performance goals. • We provide limited perquisites and personal benefits to named executive officers beyond those provided to all other employees. • Our policies strictly prohibit our executive officers and directors from engaging in any hedging, pledging or other monetization transactions involving our securities.
Use of Peer Group Compensation Data and Tally Sheets
Use of Peer Group Compensation Data and Tally Sheets Peer Group Compensation Data. When making compensation decisions, the Compensation Committee may consider executive compensation programs and individual elements of compensation paid to other named executive officers at a group of comparably-sized companies both within our industry and in our geographic region or which we otherwise consider to be our peers. When selecting our peer group shown below, the Compensation Committee considered the companies’ revenue, market capitalization, number of employees, and industry classification.
Use of Peer Group Compensation Data and Tally Sheets
| Allient, Inc. | Energy Recovery, Inc. | Perma-Pipe International Holdings, Inc. | | Astronics Corporation | Gulf Island Fabrication, Inc. | SIFCO Industries, Inc. | | CECO Environmental Corp. | Hurco Companies, Inc. | The Eastern Company | | CPI Aerostructures, Inc. | Natural Gas Services Group, Inc. | The Gorman-Rupp Company | | DMC Global, Inc. | Park Aerospace Corp. | Thermon Group Holdings, Inc. |
Use of Peer Group Compensation Data and Tally Sheets
The Compensation Committee may use peer group compensation data to provide an informational perspective on our compensation practices, levels of base salary, and the design of annual cash and long-term equity incentive compensation programs and the overall competitiveness of our compensation program. Tally Sheets. The Compensation Committee analyzes tally sheets prepared for each named executive officer as part of its responsibilities for our executive compensation programs. Tally sheets present the dollar amount of each component of compensation for each named executive officer. The purpose of tally sheets is to bring together, in summary form, all of the elements of total direct compensation for our named executive officers so that the Compensation Committee may analyze both the individual elements of compensation (including the weighting of each element as compared to each other element) and the aggregate amount of total direct compensation. During fiscal year 2025, the Compensation Committee used tally sheets to assist in its review of the compensation of our named executive officers. No compensation changes were made with respect to fiscal year 2025 compensation based on those tally sheet reviews.
Executive Compensation Components
| Total Direct Compensation | = | Base Salary | + | Annual Incentive Compensation | + | Long-Term Incentive Compensation |
Executive Compensation Components
| Compensation Element | Form of Compensation | Purpose | Performance Criteria | | Base Salary | Cash | Provide compensation that is not “at-risk” to compensate our named executive officers for services rendered during the fiscal year | Not performance based | | Annual Incentive Compensation | Cash | Motivate our named executive officers to attain strategic short-term Company and individual objectives | Adjusted EBITDA, bookings and individual officer goals linked to achievement of Company strategic objectives | | Long-term Incentive Compensation | PSUs | Incentivize our named executive officers to focus on Company growth and profitability, align their compensation with our business strategy, and create value for our stockholders | 50% three-year cumulative revenue metric and 50% three-year adjusted ROIC metric | | | RSUs | Encourage retention of our named executive officers over a three-year period | Not performance based |
Executive Compensation Components
The Compensation Committee seeks to align the annual and long-term compensation elements of our named executive officer compensation to our strategic plan. We strive to strike a balance between establishing incentives that motivate our named executive officers to achieve meaningful results, while ensuring that we sufficiently recognize our named executive officers for achieving results that are within their control. The Compensation Committee believes that the diversity of the selected forms of compensation and performance metrics help to manage the pay for performance challenges presented by our business while creating the proper focus among our named executive officers to facilitate our growth. We establish each element that comprises targeted total direct compensation for the named executive officers annually. We do not have a specific policy for the allocation of compensation between short-term and long-term compensation or cash and equity compensation, as the allocation of these items is primarily driven by market compensation information and Company performance and goals. We generally do not consider gains realized from prior compensation, such as stock option exercises, restricted stock vesting and vesting of RSUs or PSUs, in setting other elements of compensation. We believe that reducing or limiting awards because of prior gains realized by a named executive officer would unfairly penalize the officer for outstanding past performance and reduce the motivation for continued outstanding achievement. Similarly, our severance and change-in-control arrangements, which we discuss in detail under the heading “Potential Payments upon Termination or Change in Control,” do not affect our decisions regarding other elements of compensation. Those arrangements serve specific purposes that are unrelated to the determination of a named executive officer’s compensation for a specific year. In support of our compensation philosophy, our executive compensation is heavily weighted toward incentive (variable) compensation, and the proportion of variable, or “at risk,” compensation increases as the level of responsibility increases. As shown below, in fiscal year 2025, we provided 67% of Mr. Thoren's, our Chief Executive Officer for the period, target compensation through annual and long-term incentive compensation, and, on average, we provided 50% of our other named executive officers’ target compensation through annual and long-term incentive compensation. Beginning in fiscal year 2023, our Compensation Committee grants awards consisting of RSUs and PSUs. We believe the use of such awards supports our long-term compensation philosophy as well as emphasizes performance and alignment of executives’ interests with our stockholders. The Compensation Committee will continue to review our executive compensation programs, as well as consider the outcome of the “say-on-pay” votes when making future compensation decisions for the named executive officers.
Fiscal Year 2025 Total Target Compensation*
Fiscal Year 2025 Total Target Compensation* * The fair market value of the RSUs and PSUs are based upon the closing price at the date of grant. Information is presented for fiscal year 2025. We also provide compensation and benefits to our named executive officers through the following programs:
Annual Cash Incentive Compensation
Annual Cash Incentive Compensation Our Annual Executive Cash Bonus Program, which we refer to as the Cash Bonus Program, is designed to compensate our named executive officers for above-average performance through an annual cash incentive award related both to Company and individual performance. We instituted the Cash Bonus Program to effectively align short-term individual performance with Company performance. The Compensation Committee designed the Cash Bonus Program to provide a clear link between the named executive officers’ goals and our performance and business objectives. In fiscal year 2025, the Compensation Committee used a combination of consolidated adjusted EBITDA or divisional adjusted EBITDA, consolidated bookings or divisional bookings, and personal objectives as the performance metrics to evaluate our named executive officers’ performance under the Cash Bonus Program. The consolidated adjusted EBITDA and divisional adjusted EBITDA performance metrics are based on 2025 fiscal year-end results. Consolidated bookings and divisional bookings represent new orders received by us (or the applicable division) and entered into backlog during fiscal year 2025, reduced by the impact of any backlog cancellations. Consolidated bookings include consolidated net orders for Graham Mfg., Barber-Nichols, P3 Technologies, LLC ("P3"), Ahmedabad, India, and Suzhou, PRC. The Compensation Committee selected consolidated adjusted EBITDA/divisional adjusted EBITDA and consolidated bookings/divisional bookings as the quantitative measures of short-term performance because it believes that these metrics impact our annual profitability and future growth. For fiscal year 2025, the Compensation Committee established personal goals for our named executive officers, which included the following: • Mr. Thoren - Develop a plan to achieve step change in profitability over a three-year period, further develop acquisition pipeline, optimize business processes, capital prioritization and deployment to fuel growth, pursue clearly understood markets with moated technology, and continue development of leadership succession plan. • Mr. Thome - Support the enterprise resource planning (“ERP”) project implementation, develop a plan to optimize corporate expenses and supporting financing and long-term capital structures, support M&A opportunities, and assume responsibility for and enhance corporate compliance program of the Company. • Mr. Smith - Optimize business development and sales process, oversee implementation of ERP in the Batavia facility, and complete research and development testing on specified products. • Mr. Malone - Develop, document and implement succession plan at Barber-Nichols, complete P3 acquisition integration plan, create operational and profitability improvement plan for Arvada, develop market strategy for the Company, define performance-oriented culture, initiatives and measures at Barber-Nichols to improve performance, assist with identifying acquisition targets. The Compensation Committee assigned the weightings applicable to the three metrics to align our named executive officers’ goals with our current business objectives as follows:
Annual Cash Incentive Compensation
| Metric | Weighting | | Consolidated Adjusted EBITDA/Divisional Adjusted EBITDA(1) | 50% | | Bookings(2) | 20% | | Personal goals | 30% |
Annual Cash Incentive Compensation
(1) For Messrs. Thoren and Thome includes consolidated adjusted EBITDA and for Messrs. Smith and Malone includes consolidated adjusted EBITDA (15%) and divisional adjusted EBITDA (35%). For Messrs. Thoren and Thome includes consolidated bookings and for Messrs. Smith and Malone includes consolidated bookings (6%) and divisional bookings (14%).
Annual Cash Incentive Compensation
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Annual Cash Incentive Compensation
The Compensation Committee typically establishes the goals for the Cash Bonus Program during our annual budgeting process following the commencement of the fiscal year. The Compensation Committee typically approves such goals during our first quarter, subject to the ratification of the Board. The Compensation Committee approves the personal goals for our Chief Executive Officer. Our Chief Executive Officer develops the personal goals for our other named executive officers in alignment with our corporate strategy and recommends these goals to our Compensation Committee Chair for approval. For fiscal year 2025, the Compensation Committee set target bonus levels as follows: Mr. Thoren – 100% of base salary; and Messrs. Thome, Smith and Malone – 50% of base salary. Mr. Malone’s bonus was based on the total salary received during fiscal 2025, which was comprised of the salary he received while acting as General Manager of Berber-Nichols and the prorated salary for the time he served as Chief Operating Officer. The Compensation Committee uses a stretch maximum payout level to better incentivize and reward above target performance. Each named executive officer may receive anywhere from 0% to 200% of his target bonus level depending on the attainment of objectives, as follows:
Annual Cash Incentive Compensation
| Target Level | Consolidated Adjusted EBITDA/Divisional Adjusted EBITDA Payout as Percentage of Target Bonus | Consolidated Bookings/ Divisional Bookings Payout as Percentage of Target Bonus | | Threshold | 50% | 50% | | Target | 100% | 100% | | Maximum | 200% | 200% |
Annual Cash Incentive Compensation
We use linear interpolation to determine the percentage of the target bonus payable based on performance in between threshold and target or target and maximum. The Compensation Committee may consider extraordinary events that either positively or negatively affect financial performance, and may in its discretion, include or exclude the impact of these events in approving awards under the Cash Bonus Program. During fiscal year 2025, the Compensation Committee exercised this discretion and adjusted EBITDA to add back ERP implementation costs, acquisition related costs, Barber-Nichols supplemental bonus costs and equity based compensation as applicable. For fiscal year 2025, threshold, target, maximum, and actual quantitative performance metrics used under the Cash Bonus Program for our named executive officers were as follows ($ in millions):
Annual Cash Incentive Compensation
| Performance Measure | Threshold | Target | Maximum | Actual | | Consolidated Adjusted EBITDA(1) | $18.9 | $25.3 | $37.9 | $26.7 | | Consolidated Bookings | $187.2 | $234.0 | $280.8 | $231.1 | | Divisional Adjusted EBITDA - Graham Manufacturing | $9.4 | $12.5 | $18.8 | $19.3 | | Divisional Bookings - Graham Manufacturing | $104.8 | $131.0 | $157.2 | $82.2 | | Divisional Adjusted EBITDA - Barber-Nichols/P3 | $13.8 | $18.4 | $27.6 | $13.8 | | Divisional Bookings - Barber-Nichols/P3 | $82.4 | $103.0 | $123.6 | $148.9 |
Annual Cash Incentive Compensation
(1) Refer to Appendix A of this proxy statement for our definition of Adjusted EBITDA and a reconciliation of such measure to the most directly comparable U.S. GAAP measure. At its June 2, 2025 meeting, the Compensation Committee reviewed the achievement of Company and individual objectives during fiscal year 2025 and approved the award of cash incentive compensation under the Cash Bonus Program for each named executive officer. Based on our performance during fiscal year 2025, the Compensation Committee determined that the consolidated adjusted EBITDA achieved was above the target level but below the maximum level for the consolidated adjusted EBITDA component; the consolidated bookings achieved was below the target level but above the threshold level for the consolidated bookings component; the divisional adjusted EBITDA – Graham Manufacturing achieved was above the maximum level for the divisional adjusted EBITDA – Graham Manufacturing component; the divisional bookings – Graham Manufacturing achieved was below the threshold level for the divisional bookings – Graham Manufacturing component; the divisional adjusted EBITDA – Barber-Nichols/P3 achieved was at the threshold level for the divisional adjusted EBITDA – Barber-Nichols/P3 component; and the divisional bookings – Barber-Nichols/P3 achieved was above the maximum level for the divisional bookings – Barber-Nichols/P3 component of the Cash Bonus Program. Because the divisional adjusted EBITDA - Barber-Nichols/P3 component was approximately 0.1% below the threshold level, the Compensation Committee used its discretion to award at the threshold level for the divisional EBITDA - Barber-Nichols/P3 component. The Compensation Committee determined that each of our named executive officers, achieved the following percentages of their respective target personal goals: Mr. Thoren – 65%; Mr. Thome – 130%; Mr. Smith –
Annual Cash Incentive Compensation
| GRAHAM CORPORATION 2025 PROXY STATEMENT | 25 |
Annual Cash Incentive Compensation
78%; and Mr. Malone – 155%. Based on these results and achievements, the cash incentive compensation earned under the Cash Bonus Program for our named executive officers for fiscal year 2025 was as follows:
Annual Cash Incentive Compensation
| Named Executive Officer | Bonus Award | Percent of Target Bonus | Percent of Maximum Available Bonus | | Daniel J. Thoren | $471,000 | 94% | 47% | | Christopher J. Thome | $204,660 | 114% | 57% | | Alan E. Smith | $190,839 | 116% | 58% | | Matthew J. Malone | $195,450 | 114% | 57% |
Annual Cash Incentive Compensation
The Compensation Committee sets what it believes are challenging goals for maximum bonus awards and expects that maximum bonus awards will be made only in extraordinary circumstances. The amount of these cash awards earned by each named executive officer in fiscal year 2025 is shown in the “Non-Equity Incentive Plan Compensation” column of the Fiscal Year 2025 Summary Compensation Table. Under the Cash Bonus Program, special awards may be made to a named executive officer who has made an extraordinary contribution to us during the fiscal year. Such awards are generally recommended in writing by our Chief Executive Officer to the Chair of the Compensation Committee and approved by the Compensation Committee before grant. The Compensation Committee did not approve any such awards in fiscal year 2025.
Long-Term Equity Incentive Compensation
Long-Term Equity Incentive Compensation The Compensation Committee designed our Stock-Based Long-Term Incentive Award Plan for Senior Executives, which we refer to as the Stock Bonus Plan, to motivate our named executive officers to increase stockholder value by providing them with long-term stock-based awards for above-average Company performance. Our long-term incentive opportunities are intended to be competitive with the long-term incentive opportunities offered by the companies constituting our peer group. We issue awards pursuant to our 2020 Plan, a comprehensive executive compensation plan that provides for the grant of stock options, restricted stock, RSUs, PSUs and other stock-related awards, as well as other awards that may be settled in cash or other property. All of our named executive officers currently employed by us are eligible to participate in the 2020 Plan. The Compensation Committee designed the Stock Bonus Plan to create a tight link between the named executive officers’ stock-based compensation and the Company’s performance and business objectives. In fiscal year 2025, the Compensation Committee granted half of the awards in the form of RSUs, and the other half in the form of PSUs. RSUs. We granted RSUs because we believe that RSUs help us retain our named executive officers by offering our named executive officers the opportunity to receive shares of our common stock if they continue to be employed by us on the date the RSUs vest. Unless the Compensation Committee determines otherwise, shares granted vest in equal installments on each of the first three anniversaries of the date of grant, subject to the named executive officer’s continued employment at each such date. PSUs. We granted PSUs because we believe that PSUs help us reward our named executive officers by conditioning the receipt of shares of our common stock upon the satisfaction of longer-term predetermined Company objectives. Unless the Compensation Committee determines otherwise, the PSUs vest on the third anniversary of the date of grant, subject to satisfaction of the performance metrics for the applicable three-year period and subject to continued employment through the third anniversary of the date of grant. The Compensation Committee typically approves the performance metrics and the other terms of the PSUs during our first quarter. For fiscal year 2025 grants, the performance metrics applicable to the PSUs are 50% based upon the Company’s three-year cumulative revenue metric with linear interpolation applied between points and no payout if the results are below threshold and 50% based upon the Company three-year average ROIC change (compared to the ROIC for fiscal 2024) with linear interpolation applied between points and no payout if the results are below 0 basis points . With respect to these grants, the Compensation Committee may consider extraordinary events that either positively or negatively affect the performance metrics, and may in its discretion, include or exclude the impact of these events. The Compensation Committee determines the number of RSUs and PSUs to award to our named executive officers based on a percentage of each named executive officer’s annual base salary. The Compensation Committee determined the number of RSUs and PSUs to award to our named executive officers by using each such officer’s Long-Term Incentive Percentage of Base Salary, which we refer to as the L-T Percentage. For fiscal year 2025, the L-T Percentage in effect for each of our named executive officers was as follows: Mr. Thoren – 170%; Mr. Thome - 70%; and Messrs. Smith and Malone – 60%. The number of RSUs awarded was determined by multiplying 50% of each named executive officer’s base salary in effect on the date of grant by such officer’s L-T Percentage, and then dividing the product by the closing price of the Company’s common stock on the NYSE on the date of grant. The number of PSUs was determined by multiplying 50% of each named executive officer’s base salary in effect on the
Long-Term Equity Incentive Compensation
| 26 | GRAHAM CORPORATION 2025 PROXY STATEMENT |
Long-Term Equity Incentive Compensation
date of grant by such officer’s L-T Percentage, and then dividing the product by the closing price of the Company’s common stock on the NYSE on the date of grant. The closing price of our common stock was $25.56 on June 4, 2024, the date of grant. The Compensation Committee seeks to establish performance goals that are challenging but attainable based on our three-year business and financial plan for the year. When establishing performance goals, the Compensation Committee reviews and discusses our business and financial plans for that year and the opportunity to generate stockholder value. The Compensation Committee establishes a range of performance goals for the performance period as well as payment thresholds, targets and maximums for each goal. Additional information regarding the awards granted to each named executive officer in fiscal year 2025 is set forth in the Fiscal Year 2025 Summary Compensation Table and the Fiscal Year 2025 Grants of Plan-Based Awards table. For the fiscal year ended March 31, 2026 (“fiscal year 2026"), the L-T Percentage approved for each of our named executive officers was as follows and reflects the promotion of Mr. Malone to President and Chief Executive Officer and Mr. Thoren's appointment as our Executive Chair: Mr. Malone – 125%; Mr. Thoren – 50%; Mr. Thome - 70%; and Mr. Smith – 60%.
Employment Agreements and Potential Payments upon Termination or Change in Control
Employment Agreements and Potential Payments upon Termination or Change in Control We have employment agreements with each of our named executive officers. The decisions to enter into employment agreements and the terms of those agreements were based on our need to motivate and retain talent for our long-term growth and are consistent with similarly-situated executive officers at comparably sized companies in our industry and geographic region. The material terms of the employment agreements with our named executive officers are described under the heading “Employment Agreements.”
Employment Agreements and Potential Payments upon Termination or Change in Control
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Employment Agreements and Potential Payments upon Termination or Change in Control
Pursuant to their respective employment agreements, we have agreed to provide payments to certain of our named executive officers in the event of a termination of employment as a result of normal and early retirement, involuntary termination, death, and disability. Messrs. Malone, Thoren and Thome are also eligible to receive additional payments in the event of termination following a change in control. We believe these arrangements promote stability and continuity of leadership to the benefit of our named executive officers and the Company. See “Potential Payments upon Termination or Change in Control” for further information regarding these arrangements.
Fiscal Year 2025 Summary Compensation Table
| Name and Principal Position | Fiscal Year | Salary(1) ($) | Bonus ($) | Stock Awards(2) ($) | Non-Equity Incentive Plan Compensation(3) ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(4) ($) | All Other Compensation(5) ($) | Total ($) | | Daniel J. Thoren | 2025 | 500,000 | — | 850,024 | 471,000 | — | 32,350 | 1,853,374 | | Executive Chairman, Former CEO | 2024 | 400,000 | 730,000(6) | 400,004 | 698,000 | — | 23,039 | 2,251,043 | | Christopher J. Thome | 2025 | 359,986 | — | 252,022 | 204,660 | — | 25,976 | 842,644 | | VP - Finance, CFO, CAO and Corporate Secretary | 2024 | 312,000 | — | 155,994 | 265,200 | — | 24,693 | 757,887 | | Alan E. Smith | 2025 | 330,000 | — | 197,988 | 190,839 | 76,611 | 16,963 | 812,401 | | VP and General Manager - Batavia | 2024 | 312,000 | — | 155,994 | 241,566 | 70,072 | 16,165 | 795,797 | | Matthew J. Malone | 2025 | 341,667(7) | 54,275(8) | 197,988 | 195,450 | — | 38,637 | 828,017 | | President & CEO, Former VP and GM - Barber-Nichols | 2024 | 312,000 | 312,396(9) | 155,994 | 249,132 | — | 45,486 | 1,075,008 |
Fiscal Year 2025 Summary Compensation Table
| Executive Compensation • Fiscal Year 2025 Grants of Plan-Based Awards |
Fiscal Year 2025 Grants of Plan-Based Awards
Fiscal Year 2025 Grants of Plan-Based Awards The following table shows information regarding the grants of annual incentive cash compensation and restricted stock during fiscal year 2024 to our named executive officers.
Fiscal Year 2025 Grants of Plan-Based Awards
| | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock | Grant Date Fair Value of Stock and Option | | Name | Type of Award | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | or Units (#) | Awards (2) ($) | | Daniel J. Thoren | PSUs(3)(4) | 6/4/24 | | | | 8,314 | 16,628 | 33,256 | | 425,012 | | | RSUs(3)(4) | 6/4/24 | | | | | | | 16,628 | 425,012 | | | Annual Incentive | | 250,000 | 500,000 | 1,000,000 | | | | | | | Christopher J. Thome | PSUs(3)(4) | 6/4/24 | | | | 2,465 | 4,930 | 9,860 | | 126,011 | | | RSUs(3)(4) | 6/4/24 | | | | | | | 4,930 | 126,011 | | | Annual Incentive | | 89,997 | 179,993 | 359,986 | | | | | | | Alan E. Smith | PSUs(3)(4) | 6/4/24 | | | | 1,936 | 3,873 | 7,746 | | 98,994 | | | RSUs(3)(4) | 6/4/24 | | | | | | | 3,873 | 98,994 | | | Annual Incentive | | 82,500 | 165,000 | 330,000 | | | | | | | Matthew J. Malone | PSUs(3)(4) | 6/4/24 | | | | 1,936 | 3,873 | 7,746 | | 98,994 | | | RSUs(3)(4) | 6/4/24 | | | | | | | 3,873 | 98,994 | | | Annual Incentive | | 85,417 | 170,834 | 341,667 | | | | | |
Fiscal Year 2025 Grants of Plan-Based Awards
(1) The amounts shown in these columns reflect the incentive cash compensation amounts that potentially could have been earned during fiscal year 2025 based upon the achievement of Company and individual performance goals under our Cash Bonus Program. The amount of actual cash awards earned in fiscal year 2025 by our named executive officers under our Cash Bonus Program are set forth in the “Non-Equity Incentive Plan Compensation” column in the Fiscal Year 2025 Summary Compensation Table. For more information regarding annual incentive cash compensation under our Cash Bonus Program, see “Annual Cash Incentive Compensation” in the CD&A. (2) The amounts in this column reflect the aggregate grant date fair value pursuant to FASB ASC Topic 718, Compensation – Stock Compensation of the stock awards granted in fiscal year 2025. A discussion of the assumptions used to calculate the grant date fair values is set forth in Note 1 (The Company and Its Accounting Policies) and Note 13 (Stock Compensation Plans) to the Consolidated Financial Statements in our Annual Report. (3) Per the terms of the awards, upon death or disability of a named executive officer, and, for Mr. Smith, upon termination without cause or resignation for good reason within the 12 month period following a change in control, any outstanding RSUs will vest in full, and any outstanding PSUs will vest pro-rata based on the target level of the applicable performance goals, as further described under “Potential Payments upon Termination or Change of Control” below. In addition to death and disability, for Messrs. Thoren, Thome and Malone, per their employment agreements, upon termination without cause or resignation for good reason following a change in control, any outstanding RSUs and PSUs will vest in full, as further described under “Potential Payments upon Termination or Change of Control” below. (4) Per the terms of the award, upon the retirement of the individual at the age of 65 or later, any outstanding RSUs will continue to vest in accordance with the vesting schedule for the award, and any outstanding PSUs will vest pro-rata based on the satisfaction of the applicable performance goals as determined at the end of the performance period, as further described under “Potential Payments upon Termination or Change of Control” below.
Termination Following a Change in Control
| Executive Compensation • Estimated Payments Upon Termination or Change in Control |
Pay Versus Performance
Pay Versus Performance The following table sets forth the compensation information of our principal executive officer (the “PEO”) and the average compensation information of our other named executive officers (“non-PEO NEOs”), both as reported in the Summary Compensation Table in this proxy statement and with certain adjustments to reflect the “compensation actually paid” to such individuals, as defined under the SEC’s pay versus performance disclosure rules, for each of fiscal year 2025, fiscal year 2024 and fiscal year 2023. For further information concerning our pay-for-performance philosophy and how we align executive compensation with Company financial performance, refer to the CD&A in this proxy statement.
Pay Versus Performance
| Year | Summary Compensation Table Total for PEO(1) | Compensation “Actually Paid” to PEO(2) | Average Summary Compensation Table Total for non-PEO NEOs(3) | Average Compensation “Actually Paid” to non- PEO NEOs(4) | Value of Initial Fixed $100 Investment Based On Total Shareholder Return(5) | Net Income(6) | | 2025 | $1,853,374 | $2,695,627 | $827,687 | $1,044,729 | $186.85 | $12,230 | | 2024 | $2,251,043 | $4,758,685 | $876,231 | $1,780,074 | $198.19 | $4,556 | | 2023 | $1,074,557 | $1,849,004 | $597,638 | $832,497 | $95.03 | $367 |
Pay Versus Performance
(1) Reflects total compensation reported for Daniel J. Thoren (our PEO) as reported in the Summary Compensation Table for the corresponding fiscal year. Mr. Thoren has served as our Chief Executive Officer since September 2021. (2) The dollar amounts reported represent the amount of compensation “actually paid” to our PEO in the applicable fiscal year, as computed in accordance with the SEC’s pay versus performance disclosure rules. The dollar amounts do not necessarily reflect the actual amount of compensation earned by or paid to our PEO during the applicable fiscal year. The following table provides additional information as to the amounts deducted from and added to the Summary Compensation Table Total for fiscal year 2025 for our PEO pursuant to the SEC’s rules to determine Compensation “Actually Paid” to PEO:
Pay Versus Performance
| | PEO | | | 2025 | | Summary Compensation Table Total for PEO | $1,853,374 | | Adjustments for defined benefit pension plan | | | (Deduct): Aggregate change in actuarial present value included in Summary Compensation Table Total for the covered fiscal year | — | | Add: Service cost for the covered fiscal year | — | | Add: Prior service cost for the covered fiscal year | — | | Adjustments for stock awards and option awards | | | (Deduct): Aggregate value for stock awards and option awards included in Summary Compensation Table Total for the covered fiscal year | $850,024 | | Add: Fair value at year end of awards granted during the covered fiscal year that were outstanding and unvested at the covered fiscal year end | $1,437,657 | | Add: Year-over-year change in fair value at covered fiscal year end of awards granted in any prior fiscal year that were outstanding and unvested at the covered fiscal year end | $142,338 | | Add: Vesting date fair value of awards granted and vested during the covered fiscal year | — | | Add: Change as of the vesting date (from the end of the prior fiscal year) in fair value of awards granted in any prior fiscal year for which vesting conditions were satisfied during the covered fiscal year | $112,282 | | (Deduct): Fair value at end of prior fiscal year of awards granted in any prior fiscal year that failed to meet the applicable vesting conditions during the covered fiscal year | — | | Add: Change in incremental fair value of awards modified during the covered fiscal year | — | | Add: Dividends or other earnings paid on awards in the covered fiscal year prior to vesting if not otherwise included in the Summary Compensation Table Total for the covered fiscal year | — | | Compensation “Actually Paid” to PEO | $2,695,627 |
Pay Versus Performance
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Pay Versus Performance
Reflects the average compensation information for the non-PEO NEOs as a group based on total compensation reported in the Summary Compensation Table for the corresponding year. The non-PEO NEOs for fiscal years 2025 and 2024 were Christopher J. Thome, Alan E. Smith and Matthew J. Malone, and the non-PEO NEOs for fiscal year 2023 were Christopher J. Thome and Matthew J. Malone. (4) The dollar amounts reported represent the average amount of compensation “actually paid” to the non-PEO NEOs in the applicable year, as computed in accordance with the SEC’s pay versus performance disclosure rules. The dollar amounts do not necessarily reflect the actual average amount of compensation earned by or paid to the non-PEO NEOs during the applicable fiscal year. The following table provides additional information as to the amounts deducted from and added to the Average Summary Compensation Table Total for fiscal year 2025 for non-PEO NEOs pursuant to the SEC’s rules to determine Average Compensation “Actually Paid” to non-PEO NEOs:
Pay Versus Performance
| | Other Non-PEO NEOs (Average) | | | 2025 | | Summary Compensation Table Total for Non-PEO NEOs | $827,687 | | Adjustments for stock awards and option awards | | | Deduct: Aggregate value for stock awards and option awards included in Summary Compensation Table Total for the covered fiscal year | $215,999 | | Add: Fair value at year end of awards granted during the covered fiscal year that were outstanding and unvested at the covered fiscal year end | $365,322 | | Add: Year-over-year change in fair value at covered fiscal year end of awards granted in any prior fiscal year that were outstanding and unvested at the covered fiscal year end | $61,445 | | Add: Vesting date fair value of awards granted and vested during the covered fiscal year | — | | Add: Change as of the vesting date (from the end of the prior fiscal year) in fair value of awards granted in any prior fiscal year for which vesting conditions were satisfied during the covered fiscal year | $6,274 | | Deduct: Fair value at end of prior fiscal year of awards granted in any prior fiscal year that failed to meet the applicable vesting conditions during the covered fiscal year | $— | | Add: Change in incremental fair value of awards modified during the covered fiscal year | — | | Add: Dividends or other earnings paid on awards in the covered fiscal year prior to vesting if not otherwise included in the Summary Compensation Table Total for the covered fiscal year | — | | Compensation “Actually Paid” to Non-PEO NEOs | $1,044,729 |
Pay Versus Performance
(5) Total Stockholder Return (“TSR”) is cumulative for the measurement periods calculated in accordance with Item 201(e) of Regulation S-K. Cumulative Company TSR is calculated by dividing the difference between the Company’s stock price at the end and the beginning of the measurement period by the Company’s stock price at the beginning of the measurement period. The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for the applicable fiscal year.
Pay Versus Performance
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Analysis of the Information Presented in the Pay Versus Performance Table
Analysis of the Information Presented in the Pay Versus Performance Table In accordance with Item 402(v) of Regulation S-K, the Company is providing the following graphs with respect to the relationships between information presented in the Pay Versus Performance table. For purposes of these graphs, we refer to compensation “actually paid” as “CAP.”
Analysis of the Information Presented in the Pay Versus Performance Table
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Analysis of the Information Presented in the Pay Versus Performance Table
| Director Compensation • Director Compensation Programs |
Director Compensation
Director Compensation
Director Compensation Programs
Director Compensation Programs The Compensation Committee annually reviews and approves compensation for our independent directors. Messrs. Malone and Thoren, our President & Chief Executive Officer and Executive Chairman, respectively, are not independent directors under applicable NYSE and SEC rules and, therefore, do not receive any additional compensation for services as a director. The compensation that we paid to Messrs. Malone and Thoren, in fiscal year 2025, is disclosed in the Fiscal Year 2025 Summary Compensation Table in this proxy statement. We use a combination of cash and equity-based compensation to attract and retain our independent directors. As described below, independent director compensation consists of an annual cash retainer, payable quarterly; an additional cash retainer for the Lead Independent Director and the chair of each committee of the Board, payable quarterly; and RSUs. We also reimburse our independent directors for reasonable expenses incurred in connection with their attendance at Board and committee meetings. We do not provide retirement benefits to our independent directors. Cash Compensation. For fiscal year 2025, each of our independent directors received an annual cash retainer fee of $55,000 for service on the Board. The Compensation Committee approved an increase to the annual cash retainer fee for service on the Board to $57,000 for fiscal year 2026. The Chair of the Board and each of our independent directors serving as a chair of committees of the Board receive additional fees for such service in fiscal year 2025. For fiscal year 2025, the Chair of the Board received an additional annual fee of $50,000, the Chair of the Audit Committee received an additional annual fee of $15,000, the Chair of the Compensation Committee received an additional annual fee of $12,500 and the Chair of the Nominating and Corporate Governance Committee received an additional annual fee of $7,000. The Compensation Committee approved an increase to the additional annual fee for the Chair of the Nominating and Corporate Governance Committee to $12,500 for fiscal year 2026 and the Lead Independent Director will receive the additional annual fee previously paid to the Chair of the Board. Restricted Stock Units. During fiscal year 2025, equity compensation awards to independent directors were made in the form of RSUs awarded under the 2020 Plan. On June 4, 2024, the Compensation Committee awarded 2,934 RSUs to each of our then serving independent directors, with a grant date fair market value of approximately $74,993 and which vest on the first anniversary of the date of grant. Messrs. Stoner and Painter and Ms. Schnorr elected to defer the payment of shares of common stock underlying these RSUs until he or she is no longer a member of the Board. The Compensation Committee approved a change to our director compensation to increase the grant value of the independent director annual stock award to $77,000 for fiscal year 2026.
Stock Ownership Guidelines
| Director Compensation • Fiscal Year 2025 Director Compensation Table |
Fiscal Year 2025 Director Compensation Table
Fiscal Year 2025 Director Compensation Table The following table shows information regarding the compensation of our independent directors serving for all or part of fiscal year 2025.
Fiscal Year 2025 Director Compensation Table
| Name | Fees Earned or Paid in Cash ($) | Stock Awards(1) ($) | All Other Compensation ($) | Total ($) | | James J. Barber | 69,375 | 74,993 | — | 144,368 | | Alan Fortier(2) | 13,750 | 74,993 | — | 88,743 | | Cari L. Jaroslawsky | 63,250 | 74,993 | — | 138,243 | | Jonathan W. Painter | 106,250 | 74,993 | — | 181,243 | | Lisa M. Schnorr | 71,250 | 74,993 | — | 146,243 | | Troy A. Stoner | 56,250 | 74,993 | — | 131,243 |
Fiscal Year 2025 Director Compensation Table
(1) The amounts shown in this column represent the estimated grant date fair value of the RSUs granted to each independent director during fiscal year 2025. The value of each such RSUs is computed in accordance with FASB ASC Topic 718 on the same basis as disclosed in footnote (2) to the Fiscal Year 2025 Summary Compensation Table. Each independent director was granted 2,934 RSUs during fiscal year 2025 under the 2020 Plan. (2) Mr. Fortier’s service as a director ended at the 2024 annual meeting of stockholders. The table below presents the aggregate number of unvested RSUs outstanding for each of our independent directors serving at March 31, 2025. None of our independent directors serving at March 31, 2025 held any unexercised stock option awards as of such date.
Fiscal Year 2025 Director Compensation Table
| Name | Number of unvested RSUs | | James J. Barber | 2,934 | | Alan Fortier | 2,934 | | Cari L. Jaroslawsky | 2,934 | | Jonathan W. Painter | 2,934 | | Lisa M. Schnorr | 2,934 | | Troy A. Stoner | 2,934 |
Fiscal Year 2025 Director Compensation Table
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Fiscal Year 2025 Director Compensation Table
| Proposal Two: Advisory Vote on the Compensation of our Named Executive Officers • Board Recommendation |