DEF 14A of Mayville Engineering Company, Inc.
Filed Mar 11, 2025 · FY20240001558370-25-002650
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS The Company’s bylaws provide that the directors shall be divided into three classes, with the classes to be as nearly equal in number as possible, and with the directors serving three-year terms. At the Annual Meeting, the shareholders will elect two directors to hold office until the 2028 annual meeting of shareholders and until their respective successors are duly elected and qualified. Unless shareholders otherwise specify, the shares represented by the proxies received will be voted in favor of the election as directors of the two persons named as nominees herein. The Board has no reason to believe that the listed nominees will be unable or unwilling to serve as directors if elected. However, in the event that any nominee should be unable to serve or for good cause will not serve, the shares represented by proxies received will be voted for another nominee selected by the Board. Each director will be elected by a plurality of the votes cast at the Annual Meeting, assuming a quorum is present. For this purpose, “plurality” means that the nominees receiving the largest number of votes will be elected as directors. Any shares not voted at the Annual Meeting, whether due to abstentions, broker non-votes or otherwise, will have no impact on the election of the directors. Votes will be tabulated by an inspector of elections appointed by the Company. The Board is presently composed of seven members, six of whom are non-employee, independent directors. As previously announced, Allen J. Carlson, a director since January 2016, is retiring from the Board following the Annual Meeting on April 22, 2025. The following sets forth certain information, as of February 21, 2025, about the Board’s nominees for election at the Annual Meeting and each director of the Company whose term will continue after the Annual Meeting.
Nominees for Election at the Annual Meeting
Nominees for Election at the Annual Meeting Terms expiring at the 2028 Annual Meeting Jagadeesh (Jag) A. Reddy, 53, joined the Company as President and Chief Executive Officer, as well as a director, in July 2022. Prior to joining us, Mr. Reddy served as a member of the senior leadership team at W.R. Grace & Co. since 2018, most recently as the head of its Strategy and Growth function, as well as the Managing Director of its Advanced Refining Technologies hydroprocessing joint venture with Chevron. Before joining W.R. Grace & Co., he served as Vice President and General Manager, Water Technologies Strategic Business Unit from 2014 to 2017, and Vice President, Corporate Strategy from 2012 to 2014 at Pentair plc. Previously, Mr. Reddy held leadership roles of increasing responsibility at ITT Corporation and its spin-off, Xylem Inc. Mr. Reddy also held product management and mergers and acquisitions roles at Danaher Corporation and United Technologies. He started his career in manufacturing operations at Denso Corporation. Mr. Reddy earned a master’s of business administration degree in Finance and Strategy from the Kellogg School of Management and a master’s degree in Engineering Management from the McCormick School of Engineering, both at Northwestern University. He also holds a master’s degree in Industrial Engineering from the University of Tennessee and a bachelor’s degree in Mechanical Engineering from Sri Venkateswara University in India. We believe that Mr. Reddy is qualified to serve as a director of our company because he has extensive senior management experience and serves as our President and Chief Executive Officer. Jay O. Rothman, 65, has been a member of the Board since July 2008. He has served as President of the Universities of Wisconsin since June 2022. Prior to serving in his current position, Mr. Rothman served as the Chairman and Chief Executive Officer of Foley & Lardner LLP, a national law firm, from June 2011 to May 2022. Mr. Rothman serves as director of Quad/Graphics, Inc. Mr. Rothman received a bachelor’s degree from Marquette University in 1982 and his law degree from Harvard Law School in 1985. We believe that Mr. Rothman’s career as an executive, as well as a business attorney, qualifies him to serve as a member of the Board. THE BOARD RECOMMENDS THE FOREGOING NOMINEES FOR ELECTION AS DIRECTORS AND URGES EACH SHAREHOLDER TO VOTE “FOR” SUCH NOMINEES. SHARES OF THE COMPANY’S COMMON STOCK REPRESENTED BY EXECUTED BUT UNMARKED PROXIES WILL BE VOTED “FOR” SUCH NOMINEES.
Directors Continuing in Office
Directors Continuing in Office Steven L. Fisher, 70, has been a member of the Board since November 2013. He has previously served as an executive at Caterpillar Inc., where he was a Division Chief Financial Officer from 1991 to 1998 and Vice President from 2005 to 2014. Mr. Fisher currently serves as a member of the advisory board of Palmer Johnson Power Systems. Mr. Fisher received a bachelor’s degree in Accounting from Bradley University and is a licensed Certified Public Accountant. We believe Mr. Fisher’s substantial experience as an executive of a public company in the manufacturing industry and accounting expertise qualifies him to serve on the Board. Robert L. McCormick, 64, has been a member of the Board since December 2022. Mr. McCormick retired from Douglas Dynamics in 2024, but he had previously served as an officer at Douglas Dynamics Inc. where he was the Vice President and Chief Financial Officer and Treasurer from 2004 to 2017, Chief Operating Officer from 2017 to 2019 and President and Chief Executive Officer from 2019 to July 2024. Mr. McCormick also served as a Director on the Board of Douglas Dynamics Inc. from 2019 to 2024. Prior to joining Douglas Dynamics, Mr. McCormick also served as President and Chief Executive Officer of Xymox Technology Inc. from 2001 to 2004. Prior to that, he served in various capacities in the Newell Rubbermaid Corporation, including President from 2000 to 2001 and Vice President Group Controller from 1997 to 2000. Mr. McCormick graduated from the University of Wisconsin - Whitewater with a bachelor’s degree in Accounting in 1982 and received his CPA certificate in 1984. Since 2017, he has been a member of the Board of Directors for nonprofit organization The Parenting Network. We believe that Mr. McCormick’s over 40 years of experience in the manufacturing industry and his years as the Chief Executive Officer or Chief Financial Officer of a public company qualifies him to serve as a member of the Board. Terms expiring at the 2027 Annual Meeting Timothy L. Christen, 66, has been a member of the Board since June 2016 and has served as our non-executive Chair of the Board since July 2022. He also serves as a director of Expensify, a cloud-based expense management platform, since 2021 and CPA.com, a provider of innovative strategies and solutions to accounting firms and their clients, since 2018. Mr. Christen is Chairman Emeritus of Baker Tilly US, LLP, a national public accounting firm where he served as a partner from 1990 to 2016 and as Chairman and Chief Executive Officer from 1999 to 2016, and Baker Tilly International Ltd., a top ten global accounting network where he served as Chairman from 2017 to 2021. He was appointed as a trustee of the Financial Accounting Foundation (FAF) as of January 1, 2021. Mr. Christen also served as director of the American Institute of CPAs from 2014 to 2017, serving as Chairman from 2015 to 2016. He earned his bachelor’s degree in Accounting from the University of Wisconsin-Platteville and is a licensed Certified Public Accountant. We believe Mr. Christen’s forty-plus years of accounting expertise and substantial strategy, risk and management experience over his 16 years as the Chief Executive Officer of a national public accounting firm qualifies him to serve as a member of the Board. Jennifer J. Kent, 53, has been a member of the Board since December 2020. She has served as Chief Legal Officer and Corporate Secretary of Kohl’s Corporation, a retailer, since February 2023. Prior to serving in her current position, Ms. Kent was the Executive Vice President and Chief People & Legal Officer of Quad/Graphics, Inc., a marketing experience company, and served in that role since June 2015 under its previous title of Executive Vice President of Administration, General Counsel & Secretary. Ms. Kent joined Quad in August 2010 as Assistant General Counsel and was promoted to Vice President and General Counsel in December 2013. Prior thereto, Ms. Kent held various positions in motorcycle manufacturer Harley-Davidson Motor Company’s legal department from 2003 to 2010, including Associate General Counsel. Ms. Kent earned her law degree from Stanford University and a bachelor’s degree in journalism from the University of Iowa. We believe Ms. Kent’s over 20 years of broad business and leadership experience, including managing legal, compliance, human resources, corporate communications, government affairs, real estate, and safety and environmental management functions at a public company, qualifies her to serve on the Board.
2024 DIRECTOR COMPENSATION
2024 DIRECTOR COMPENSATION Directors who are employees of the Company receive no compensation for service as members of either the Board or committees thereof. Directors who are not employees of the Company, receive an annual retainer of $40,000 and an additional $1,000 per Committee meeting in excess of ten meetings annually. The non-executive Chair of the Board also receives an annual cash retainer of $35,000 and $25,000 in restricted stock units. The chairperson of each of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee also receive an annual cash retainer of $15,000, $12,000 and $10,000, respectively. In addition, our non-employee directors receive an annual equity grant of restricted stock units with a target grant date value of $125,000. The restricted stock units generally vest on the first anniversary of the grant date (or the next annual meeting of the shareholders, if earlier), contingent on the non-employee director’s continued service until the vesting date or earlier death or disability. Our non-employee directors are permitted to defer the settlement of their restricted stock units, and any awards deferred are reflected in the Stock Awards column of the table below in the year granted. We also reimburse all ordinary and necessary expenses incurred in the conduct of our business. The following table provides information regarding the compensation of our non-employee directors during 2024:
2024 DIRECTOR COMPENSATION
| | Fees Earned or | Stock | Total | | Name | Paid in Cash ($) | Awards(1) | ($) | | Allen J. Carlson | $40,000 | $125,010 | $165,010 | | Timothy L. Christen | $75,000 | $150,023 | $225,023 | | Steven L. Fisher | $55,000 | $125,010 | $180,010 | | Jennifer J. Kent | $52,000 | $125,010 | $177,010 | | Robert L. McCormick | $40,000 | $125,010 | $165,010 | | Jay O. Rothman | $50,000 | $125,010 | $175,010 |
2024 DIRECTOR COMPENSATION
| (1) The amounts reported in this column represent the aggregate grant date fair value of director restricted stock unit awards granted to directors on April 16, 2024, as computed in accordance with Financial Accounting Standard Board Accounting Standards Codification Topic 718. These amounts reflect the accounting cost that will be incurred by the Company over the requisite service period of one-year, beginning at the date of grant, for these restricted stock units and do not represent the actual economic value that may be realized by the non-employee director. For information on the assumptions used to calculate the grant date fair value of the restricted stock units, please see Note 18 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024. Pursuant to Securities and Exchange Commission rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Mr. Christen had 10,832 unvested restricted stock units outstanding as of December 31, 2024 and each other current non-employee director had 9,026 unvested restricted stock units outstanding as of December 31, 2024. |
2024 Executive Compensation Highlights
2024 Executive Compensation Highlights Our executive compensation program has three primary elements: base salary, annual incentives and long-term equity incentives. Each of these compensation elements serves a specific purpose in our compensation strategy. Base salary is an essential component to any market-competitive compensation program. Annual incentives reward the achievement of short-term goals, while long-term incentives drive our NEOs to focus on long-term sustainable shareholder value creation. Based on our performance and consistent with the design of our program, the Compensation Committee made the following executive compensation decisions for fiscal 2024:
2024 Executive Compensation Highlights
| ● | Annual incentives (cash bonuses). Based on our financial performance in 2024, annual incentive awards were earned at 135.2% of each NEO’s applicable target award opportunity. Please see the “Annual Incentives” section below for more information. |
2024 Executive Compensation Highlights
| ● | Long-term equity incentives. For 2024, the Compensation Committee granted long-term equity incentives using a mix of performance stock units (“PSUs”) and time-based restricted stock units (“RSUs”). PSUs are earned based on the achievement of pre-determined financial performance goals at the end of a three-year performance measurement period. RSUs vest ratably over a three-year period based solely on continued service. Please see the “Long-Term Equity Incentives” section below for more information. |
Compensation Practices & Policies
| What We Do | | What We Don’t Do | | | ✓ | Heavily emphasize variable compensation | ✘ | No tax gross ups | | ✓ | Require compliance with rigorous stock ownership guidelines | ✘ | No stock option backdating or repricing without shareholder approval | | ✓ | Maintain a Compensation Recovery (Clawback) Policy | ✘ | No hedging or pledging | | ✓ | Provide double-trigger equity award vesting upon a change in control | ✘ | No supplemental executive retirement plans | | ✓ | Use an independent compensation consultant | ✘ | No significant perquisites |
Executive Compensation Philosophy
| ● | Competitive: Compensation is designed to attract and retain top talent by aligning with market benchmarks for similar roles. |
Executive Compensation Philosophy
| ● | Aligned with strategy: Pay programs are structured to support both annual objectives and long-term business plans. |
Executive Compensation Philosophy
| ● | Performance-driven: Variable incentives are tied to specific goals that drive shareholder value over the long term. |
Executive Compensation Decision-Making Process
Executive Compensation Decision-Making Process The Role of the Compensation Committee. The Compensation Committee oversees the executive compensation program for our NEOs. The Committee is comprised of independent, non-employee members of the Board. The Compensation Committee works very closely with its independent consultant and management to examine the effectiveness of the Company’s executive compensation program throughout the year. The Compensation Committee makes all final compensation and equity award decisions regarding our NEOs, except for the CEO, whose compensation is determined by the independent members of the full Board, based upon recommendations of the Compensation Committee. The Role of Management. Members of our management team attend regular Compensation Committee meetings where executive compensation, Company and individual performance, and competitive compensation levels and practices are discussed and evaluated. Only Compensation Committee members can vote on decisions regarding NEO compensation. The CEO reviews his recommendations pertaining to the compensation of the other NEOs with the Compensation Committee providing management input, transparency, and oversight. Approvals of NEO compensation other than CEO compensation are made by the Compensation Committee. The CEO does not participate in the deliberations of the Compensation Committee regarding his own compensation. Independent members of the Board make all final determinations regarding CEO compensation. The Role of the Independent Consultant. For 2024, the Compensation Committee retained Pearl Meyer and Partners, LLC (“Pearl Meyer”) to provide it with market information, analysis and other advice relating to executive compensation on an ongoing basis. The Compensation Committee engaged Pearl Meyer to, among other things, assist in developing an appropriate group of peer companies to help us determine the appropriate level of overall compensation for our executive officers, as well as to assess each separate element of compensation, with a goal of ensuring that the compensation we offer to our executive officers, individually as well as in the aggregate, is competitive and fair. The Compensation Committee has conducted an independent assessment of Pearl Meyer in accordance with NYSE and SEC rules. We do not believe the retention of, or the work performed by, Pearl Meyer creates any conflict of interest. The Role of Peer Group Companies. The Compensation Committee strives to set a competitive level of total compensation for each NEO as compared with executive officers in similar positions at peer companies. For purposes of setting 2024 compensation levels, in conjunction with the recommendation of Pearl Meyer, the Compensation Committee took into account publicly-available data for a group of peer companies (the “2024 Compensation Peer Group”) listed below along with executive compensation survey data, where appropriate. Selection criteria for determining our Company’s compensation peer group also generally include U.S.-based companies in industrials and materials sectors with comparable revenues and market capitalization.
Annual Incentives (Cash Bonus)
Annual Incentives (Cash Bonus) Our NEOs have the opportunity to earn a performance-based annual incentive (cash bonus). Actual bonus payouts depend on the achievement of pre-determined financial performance goals and can range from 0% to 200% of target award amounts. Target annual bonus opportunities are expressed as a percentage of base salary and were established by the NEO’s level of responsibility and their ability to impact overall results. The Compensation Committee also considers market data in setting target award amounts. Target award opportunities for 2024 were as follows:
Annual Incentives (Cash Bonus)
| Name | 2024 Base Salary ($) | 2024 Target Bonus Opportunity (%) | 2024 Target Bonus Opportunity ($) | | Jagadeesh (Jag) A. Reddy | 715,000 | 100 | 715,000 | | Todd M. Butz | 473,800 | 75 | 355,350 | | Ryan F. Raber | 473,800 | 70 | 331,660 |
Annual Incentives (Cash Bonus)
For 2024, financial performance goals were based on the achievement of Company Adjusted EBITDA and Free Cash Flow, each weighted 50%. The Compensation Committee chose Adjusted EBITDA and Free Cash Flow to ensure a balanced focus on liquidity, operational efficiency, and sustainable profitability, driving long-term value creation. Adjusted EBITDA represents net income before interest expense, provision for income taxes, depreciation, amortization, stock-based compensation expense, legal costs due to a former fitness customer and adjusted for items to be determined unusual in nature or infrequent in occurrence for the year ended December 31, 2024, as approved by the Compensation Committee. Free Cash Flow represents net cash provided by, or used in, operating activities, less cash flows used in the purchase of property, plant and equipment and the gain on lawsuit settlement, and adjusted for items to be determined unusual in nature or infrequent in occurrence for the year ended December 31, 2024, as approved by the Compensation Committee. The following tables present a reconciliation of net income, the most directly comparable measure calculated in accordance with GAAP to Adjusted EBITDA and Free Cash Flow.
Annual Incentives (Cash Bonus)
| ($'s in millions) | Twelve Months Ended December 31, 2024 | | Net income | $26.0 | | Interest expense | 11.0 | | Provision for income taxes | 7.6 | | Depreciation and amortization | 37.5 | | EBITDA | 82.1 | | Stock-based compensation expense | 5.2 | | Legal costs due to former fitness customer | 2.1 | | GAAP restructuring charges | 0.5 | | Non-GAAP restructuring charges | 0.9 | | Gain on lawsuit settlement | (25.5) | | Adjusted EBITDA | $65.3 |
Annual Incentives (Cash Bonus)
| ($'s in millions) | Twelve Months Ended December 31, 2024 | | Net cash provided by operating activities | $89.8 | | Less: Purchase of property, plant and equipment | (12.1) | | Less: Gain on lawsuit settlement | (25.5) | | Plus: GAAP restructuring charges | 0.5 | | Plus: Non-GAAP restructuring charges | 0.9 | | Plus: Legal fees in excess of budget | 0.3 | | Free cash flow | $53.9 |
Annual Incentives (Cash Bonus)
The table below shows the 2024 goals as well as actual results.
Annual Incentives (Cash Bonus)
| Payout Level | % of Target | 2024 Performance Metrics and Levels | | | | | Adjusted EBITDA ($M) | Free Cash Flow ($M) | | | | (50% Weighting) | (50% Weighting) | | Maximum | 200% | 91.2 | 54.0 | | Target | 100% | 76.0 | 45.0 | | Threshold | 50% | 57.0 | 33.8 | | Actual Results(1) | | 65.3 | 53.9 | | | | 71.8% of Target | 198.6% of Target | | Weighted Results | | 35.9% | 99.3% | | Total | | 135.2% of Target | |
Annual Incentives (Cash Bonus)
| (1) The actual percent of target achieved is calculated based on straight-line interpolation between incremental goal levels established between threshold and target and target and maximum. |
Annual Incentives (Cash Bonus)
Based on the results above, the NEOs earned 135.2% of their target awards. The value of actual awards earned are listed in the “Non-Equity Incentive Plan Compensation” column of the “Summary Compensation Table” below.
Long-Term Equity Incentives
Long-Term Equity Incentives Equity compensation directly aligns the interests of the NEOs with those of our shareholders. In 2024, the Compensation Committee granted long-term incentive awards using a mix of 30% Performance Stock Units (“PSUs”) and 70% time-based Restricted Stock Units (“RSUs”). For 2025 long-term incentive awards, the Compensation Committee decided to increase the emphasis on performance-based equity and granted awards to the NEOs using a mix of 50% PSUs and 50% RSUs.
Long-Term Equity Incentives
| Equity Type | Weight | | Details | | | 2024 Grant | 2025 Grant | | | PSUs | 30% | 50% | ● Rewards the achievement of financial goals at the end of a three-year performance period ● Focuses on efficient capital allocation and strong operational performance by measuring Return on Invested Capital (“ROIC”) and Adjusted EBITDA. ROIC represents net operating profit after taxes divided by invested capital for the represented period. Adjusted EBITDA represents net income before interest expense, provision for income taxes, depreciation, amortization, stock-based compensation expense, legal costs due to the former fitness customer and adjusted for items to be determined unusual in nature or infrequent in occurrence for the three-year performance period, as approved by the Compensation Committee. ● Determines the number of earned PSUs, ranging from 50% (threshold) to 200% (maximum) of the target award, with no PSUs earned for performance below the threshold level. | | RSUs | 70% | 50% | ● Vests ratably over a three-year period based solely on continued service. ● Helps support our leadership retention objectives and instill an ownership mentality. |
Long-Term Equity Incentives
The Compensation Committee determines target long-term incentive opportunities based upon a number of factors including competitive market data, total overall compensation provided to each NEO, Company performance during the fiscal year preceding the year of grant, and historic grants. Please see the “Grants of Plan-Based Awards” table below for details.
Long-Term Equity Incentives
| | Grant Value | | RSU's (70% Weighted) | | PSU's (30% Weighted) | | | Name | % of 2024 Base Salary | Total ($) | Grant Value ($) | # of Shares (1) | Grant Value ($) | # of Shares (1) | | Jagadeesh (Jag) A. Reddy | 280 | 2,000,000 | 1,400,000 | 108,950 | 600,000 | 46,693 | | Todd M. Butz | 205 | 970,000 | 679,000 | 52,841 | 291,000 | 22,646 | | Ryan F. Raber | 205 | 972,000 | 680,400 | 52,950 | 291,600 | 22,693 |
Long-Term Equity Incentives
| (1) The number of RSUs and PSUs granted was determined by dividing the grant value by the grant date fair value, which was the closing price of the Company’s common stock on the grant date, March 15, 2024. |
401(k) Plan; ESOP; Nonqualified Deferred Compensation
401(k) Plan; ESOP; Nonqualified Deferred Compensation Mayville Engineering Company, Inc. 401(k) Plan and ESOP. Our NEOs are eligible to participate in the 401(k) Plan on the same basis as other employees who satisfy the 401(k) Plan’s eligibility requirements. The 401(k) Plan has an employee stock ownership component under which participants may invest their accounts in shares of our Common Stock. In addition to the employee stock ownership component of the 401(k) Plan, we maintain the separate ESOP. Our NEOs are eligible to participate in the ESOP on the same basis as other employees who satisfy the ESOP’s eligibility requirements. Under our 401(k) Plan, our NEOs, along with other 401(k) Plan participants, are eligible for an employer match program providing a 50% match for employee contributions, up to 6% and discretionary profit sharing contributions. In 2024, the Company did not make any discretionary contribution under the 401(k) Plan. Additionally, we did not make any discretionary contributions under the ESOP for 2024. We do not provide any defined-benefit pension benefits. Mayville Engineering Company Deferred Compensation Plan. Our NEOs are eligible to participate in the Mayville Engineering Company Deferred Compensation Plan (the “Deferred Compensation Plan”), which permits eligible participants to make elective deferrals of up to 50% of the participant’s annual base salary and up to 100% of the participant’s annual short-term cash incentive compensation. Each year, we credit to the account of each participant an amount reflecting the amount, if any, of any reduced allocations, due solely to the participant’s elective deferrals under the Deferred Compensation Plan with respect to our “safe harbor” contributions and discretionary employer contributions to the ESOP and 401(k) Plan and employer non-elective contributions to the 401(k) Plan for the year. Deferred amounts credited to a participant’s account are generally distributed following the participant’s separation from service, in a lump sum or up to five annual installments, as elected by the participant. Upon a change in control, the Deferred Compensation Plan will terminate, and all amounts deferred under the plan will be distributed, generally in a lump sum. A participant’s Deferred Compensation Plan account is deemed to be invested in one or more alternate investment options, such as a mutual fund, for purposes of tracking the deemed investment gain or loss on the participant’s account. During 2024, the investment options under the Deferred Compensation Plan generally followed the investment options available under the 401(k) Plan, except that there is no Common Stock investment alternative available under the Deferred Compensation Plan. The accounts of the participants, including the NEOs, in the Deferred Compensation Plan reflect amounts contributed to the plan by the participants, as well as earnings on these voluntary deferred amounts. The Deferred Compensation Plan is non-funded and unsecured in that it represents only a contractual promise by us to make benefit payments in the future and participants in the Deferred Compensation Plan have the status of general unsecured creditors of our Company.
Other Elements of Compensation
| ● | short-term and long-term disability insurance; and |
Summary Compensation Table for 2024
Summary Compensation Table for 2024 The following table provides information regarding the compensation of our named executive officers during 2024 and 2023.
Summary Compensation Table for 2024
| | | | | | | Non-equity | Non-qualified | | | | | | | | Stock | Option | incentive plan | deferred | All other | | | | | Salary | Bonus | awards | awards | compensation | compensation | compensation | | | Name and Principal Position | Year | ($) | ($) | ($)(1) | ($)(2) | ($)(3) | earnings ($) | ($)(4) | Total ($) | | Jagadeesh (Jag) A. Reddy | 2024 | 715,000 | — | 2,000,000 | — | 966,968 | — | 10,350 | 3,692,318 | | President and Chief Executive Officer | 2023 | 695,250 | — | 825,000 | 825,000 | 567,880 | — | 43,196 | 2,956,326 | | | 2021 | | | | | | | | | | Todd M. Butz | 2024 | 473,800 | — | 970,000 | — | 480,576 | — | 10,350 | 1,934,726 | | Chief Financial Officer | 2023 | 473,800 | — | 375,000 | 375,000 | 464,400 | — | 9,900 | 1,698,100 | | | | | | | | | | | — | | Ryan F. Raber | 2024 | 473,800 | — | 972,000 | — | 448,538 | — | 10,350 | 1,904,688 | | Executive Vice President – Strategy, Sales & Marketing | 2023 | 473,800 | — | 415,000 | 415,000 | 387,000 | — | 9,900 | 1,700,700 |
Summary Compensation Table for 2024
| (1) The Stock Awards column represents the aggregate grant date fair value, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC Topic 718”), for RSUs and PSUs that were granted pursuant to the Mayville Engineering Company, Inc. 2019 Omnibus Incentive Plan (the “Omnibus Plan”). Information about the assumptions that we used when valuing equity awards is set forth in our Annual Report on Form 10-K in Note 18 to the Consolidated Financial Statements for our fiscal year ended December 31, 2024. Pursuant to Securities and Exchange Commission rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions and, in the case of the PSUs, are based on the probable outcome of the applicable financial performance conditions. The maximum values of the 2024 PSU awards at the grant date assuming the highest level of performance conditions are attained are as follows: Mr. Reddy – $1,200,000; Mr. Butz – $582,000; and Mr. Raber – $583,200. |
Summary Compensation Table for 2024
| (2) The Option Awards column represents the aggregate grant date fair value, computed in accordance with ASC Topic 718, for stock options that were granted pursuant to the Omnibus Plan. Information about the assumptions that we used when valuing equity awards is set forth in our Annual Report on Form 10-K in Note 18 to the Consolidated Financial Statements for our fiscal year ended December 31, 2024. Pursuant to Securities and Exchange Commission rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. |
Summary Compensation Table for 2024
| (3) The amounts in this column for 2024 represent annual cash bonuses earned for 2024 performance and paid in 2025. |
Summary Compensation Table for 2024
| (4) The amounts in this column for 2024 represent amounts credited by us to the named executive officer’s account under our 401(k) Plan for 2024. |
Outstanding Equity Awards as of December 31, 2024
Outstanding Equity Awards as of December 31, 2024 The following table contains information concerning equity awards held by our named executive officers that were outstanding as of December 31, 2024.
Outstanding Equity Awards as of December 31, 2024
| | Option Awards | | | | Stock Awards | | | | | | | | | | | | Equity | Equity | | | | | | | | | Incentive | Incentive | | | | | | | | | Plan | Plan | | | | | | | | | Awards; | Awards; | | | | | | | | | Number | Market | | | | | | | | | of | or Payout | | | | | | | | | Unearned | Value of | | | | | | | | | Shares, | Unearned | | | | | | | | | Units or | Shares, | | | Number of | Number of | | | Number | Market | Other | Units or | | | Securities | Securities | | | of Shares | Value of | Rights | Other | | | Underlying | Underlying | Option | | of Stock | Shares of | That | Rights | | | Unexercised | Unexercised | Exercise | Option | That | Stock That | Have Not | That | | | Options (#) | Options (#) | Price | Expiration | Have Not | Have Not | Vested | Have Not | | Name | Exercisable | Unexercisable | ($) | Date | Vested (#) | Vested(1)($) | (#) | Vested ($) | | Jagadeesh A. Reddy | 44,451 | 44,450(2) | $16.22 | 2/28/2033 | | | | | | | | | | | 166,433(3) | 2,616,327 | 46,693(6) | 734,014 | | Todd M. Butz | 20,205 | 20,205(2) | $16.22 | 2/28/2033 | | | | | | | 69,963 | — | $10.32 | 2/28/2032 | | | | | | | 39,683 | — | $14.01 | 2/28/2031 | | | | | | | 39,126 | — | $17.00 | 5/08/2029 | | | | | | | | | | | 64,401(4) | 1,012,384 | 22,646(6) | 355,995 | | Ryan F. Raber | 22,360 | 22,360(2) | $16.22 | 2/28/2033 | | | | | | | 77,426 | — | $10.32 | 2/28/2032 | | | | | | | 43,291 | — | $14.01 | 2/28/2031 | | | | | | | 27,594 | — | $17.00 | 5/08/2029 | | | | | | | | | | | 65,743(5) | 1,033,480 | 22,693(6) | 356,734 |
Outstanding Equity Awards as of December 31, 2024
| (1) Market value computed by multiplying the number of restricted stock units that have not vested by $15.72, which was the closing price of a share of our Common Stock on the last trading day of 2024. |
Outstanding Equity Awards as of December 31, 2024
| (2) The options will vest 50% on February 28, 2025. |
Outstanding Equity Awards as of December 31, 2024
| (3) 25,432 restricted stock units will vest on February 28, 2025; 32,051 restricted stock units will vest on July 19, 2025; and 36,317 restricted stock units will vest each on March 15, 2025, 2026 and 2027. |
Outstanding Equity Awards as of December 31, 2024
| (4) 11,560 restricted stock units will vest on February 28, 2025; and 17,614 restricted stock units will vest each on March 15, 2025, 2026 and 2027. |
Outstanding Equity Awards as of December 31, 2024
| (5) 12,793 restricted stock units will vest on February 28, 2025; and 17,650 restricted stock units will vest each on March 15, 2025, 2026 and 2027. |
Outstanding Equity Awards as of December 31, 2024
| (6) Performance stock units will vest on March 15, 2027. Pursuant to Securities and Exchange Commission rules, the number of 2024 performance stock units shown is based on achievement of the target level of the applicable three-year performance conditions because performance through December 31, 2024 was trending above the threshold performance level but below the target performance level. |
Pay versus Performance
Pay versus Performance In accordance with rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we are providing the following disclosure regarding executive “compensation actually paid” (“CAP”), as calculated per SEC disclosure rules, in accordance with the rules applicable to smaller reporting companies. CAP represents a required calculation of compensation that differs significantly from the Summary Compensation Table calculation of compensation, the NEO realized or earned compensation, as well as from the way in which the compensation committee views annual compensation decisions. The amounts in the table below are calculated in accordance with SEC rules and do not represent amounts actually earned or realized by NEOs, including with respect to equity awards which remain subject to forfeiture if the vesting conditions are not satisfied.
Pay versus Performance
| | Summary | Summary | | | | | Value of Initial | | | | Compensation | Compensation | Compensation | Compensation | Average | Average | Fixed $100 | | | | Table Total | Table Total | Actually | Actually | Summary | Compensation | Investment | | | | for CEO | for CEO | Paid to | Paid to | Compensation | Actually | Based on | | | | Jagadeesh (Jag) | Robert | CEO Jagadeesh | CEO Robert D. | Table for Non- | Paid to Non- | the Total | Net Income | | | A. Reddy | D. Kamphuis | (Jag) A. Reddy | Kamphuis | CEO NEOs(2) | CEO NEOs(2) | Shareholder | (in millions) | | Fiscal Year | ($) | ($) | ($) | ($) | ($) | ($) | Return(3) | ($) | | 2024 | 3,692,318 | — | 4,268,060 | — | 1,919,707 | 1,994,401 | 105.43 | 26.0 | | 2023 | 2,956,326 | — | 2,820,325 | — | 1,799,020 | 1,878,498 | 96.71 | 7.8 | | 2022 (1) | 1,269,605 | 1,416,066 | 1,836,915 | (1,346,967) | 1,687,167 | 1,583,306 | 84.91 | 18.7 |
Pay versus Performance
| (1) Robert D. Kamphuis retired as CEO effective September 30, 2022, and Jagadeesh A. Reddy was appointed CEO effective July 19, 2022. |
Pay versus Performance
| (2) Non-CEO NEOs reflect the average Summary Compensation Table total compensation and average Compensation Actually Paid for the following executives by fiscal year: |
Pay versus Performance
2024: Todd M. Butz and Ryan F. Raber 2023: Todd M. Butz, Ryan F. Raber and Randall P. Stille. Mr. Stille left our company effective November 3, 2023. 2022: Todd M. Butz and Ryan F. Raber
Pay versus Performance
| (3) Total shareholder return is based on the value of an initial fixed investment of $100 in our common stock as of December 31, 2021. |
Pay versus Performance
Deductions from, and additions to, total compensation in the Summary Compensation Table by year to calculate CAP include:
Pay versus Performance
| | Fiscal 2024 | | Fiscal 2023 | | Fiscal 2022 | | | | | CEO Jagadeesh | Average Non- | CEO Jagadeesh | Average Non- | CEO Jagadeesh | CEO Robert D. | Average Non- | | | (Jag) A. Reddy | CEO NEOs (1) | (Jag) A. Reddy | CEO NEOs (2) | (Jag) A. Reddy | Kamphuis | CEO NEOs (1) | | Total compensation from summary compensation table | $3,692,318 | $1,919,707 | $2,956,326 | $1,799,020 | $1,269,605 | $1,416,066 | $1,687,167 | | Adjustments for equity awards | | | | | | | | | Adjustments for grant date values in the summary compensation table | (2,000,000) | (971,000) | (1,650,000) | (776,667) | (650,000) | — | (790,000) | | Fair value of unvested awards granted in the current year | 2,446,708 | 1,187,882 | 1,447,334 | 681,272 | 1,217,310 | — | 1,052,009 | | Change in year-end fair values for unvested awards granted in prior years | 138,291 | 46,263 | 112,820 | 68,636 | — | — | (39,888) | | Fair values at vest date for awards granted and vested in current year | — | — | — | — | — | — | — | | Change in fair values between prior year-end fair values and vest date fair values for awards granted in prior years | (9,257) | (188,451) | (46,155) | 266,032 | — | (1,521,442) | (325,982) | | Forfeitures during current year equal to prior year-end fair value | — | — | — | (159,795) | — | (1,241,591) | — | | Dividends or dividend equivalents not otherwise included in total compensation | — | — | — | — | — | — | — | | Total adjustments for equity awards | 575,742 | 74,694 | (136,001) | 79,478 | 567,310 | (2,763,033) | (103,861) | | Compensation actually paid (as calculated) | $4,268,060 | $1,994,401 | $2,820,325 | $1,878,498 | $1,836,915 | (1,346,967) | $1,583,306 |
Pay Versus Performance: Graphical Description
Pay Versus Performance: Graphical Description The illustrations below provide a graphical description of CAP (as calculated in accordance with the SEC rules) and the following measures:
Pay Versus Performance: Graphical Description
| ● | the Company’s cumulative Total Shareholder Return (“TSR); and |
Pay Versus Performance: Graphical Description
| ● | the Company’s Net Income |