DEF 14A of Eastern Co
Filed Mar 12, 2025 · FY20240001654954-25-002632
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS At the Annual Meeting, seven directors will be elected to serve for one-year terms, which expire at the annual meeting of shareholders in 2026 or when a successor is duly elected and qualified. Mr. Fredrick D. DiSanto, Mr. John W. Everets, Mr. Charles W. Henry, Mr. James A. Mitarotonda, Mrs. Peggy B. Scott, Mr. Michael J. Mardy and Mr. Ryan A. Schroeder are the Company’s nominees for election at the Annual Meeting. Messrs. DiSanto, Everets, Henry, Mitarotonda and Mardy and Mrs. Scott are current directors whose terms expire in 2025. Mr. Schroeder, the Company’s President and Chief Executive Officer, has been nominated to fill the vacancy created when the Company’s former Chief Executive Officer stepped down from the Board. Unless otherwise specified in your proxy, the persons with power of substitution named in the proxy card will vote your Common Shares FOR each of the Company’s nominees. If a nominee is unable or unwilling to accept the nomination, the proxies will be voted for the election of such other person as may be recommended by the Board. However, the Board has no reason to believe that the Company’s nominees will be unavailable for election at the Annual Meeting. Approval of the election of each director nominee requires the affirmative vote of a majority of the votes duly cast by holders of Common Shares represented at the Annual Meeting that are entitled to vote on the matter. The Board recommends a vote FOR the election of each of Mr. Fredrick D. DiSanto, Mr. John W. Everets, Mr. Charles W. Henry, Mr. James A. Mitarotonda, Mrs. Peggy B. Scott, Mr. Michael J. Mardy and Mr. Ryan A. Schroeder as directors. Proxies will be voted FOR the election of each of the nominees unless otherwise specified. Each director and each director nominee has furnished the biographical information set forth below with respect to his or her present principal occupation, business and other affiliations. Information regarding the beneficial ownership of equity securities of the Company of each director and each director nominee is provided under “Security Ownership of Certain Beneficial Owners and Management” in this proxy statement. Unless otherwise indicated, each director and each director nominee has been employed in the principal occupation or employment listed for at least the past five years.
Company Nominees for Election at the 2025 Annual Meeting
Company Nominees for Election at the 2025 Annual Meeting
For a one-year term expiring in 2026
For a one-year term expiring in 2026 Fredrick D. DiSanto, age 63, is the Chairman and Chief Executive Officer of The Ancora Group, a provider of investment advisory, wealth management and retirement plan services to individuals and institutions, and has served in such capacities since 2014 and 2006, respectively. Mr. DiSanto was the President and Chief Operating Officer of Maxus Investment Group, a provider of financial advisory services, from 1998 until December of 2000. From 2001 to 2006, after Maxus Investment Group was sold to Fifth Third Bank, Mr. DiSanto served as Executive Vice President and Manager of Fifth Third Bank’s Investment Advisor Division. Mr. DiSanto is an experienced public company director and has knowledge and background in finance, strategic planning, governance and international business. He currently serves on the Boards of Directors of Regional Brands, Inc. and Ampco-Pittsburgh Corporation. Previously, he served on the respective Boards of Directors of the Alithya Group, Axia Net Media Corporation and LNB Bancorp, Inc. Mr. DiSanto has served as a director of the Company since 2016. Mr. DiSanto is Chairman of the Compensation Committee and serves on the Audit, Executive, Capital Allocation and Investment, and Nominating and Corporate Governance Committees. John W. Everets, age 78, has been a Partner in Arcturus Capital LLC, a venture capital firm in Boston, since 2016 and currently serves on the board of Pearl Diver Credit Company (NYSE: PDCC), a publicly-traded closed-end investment company, since July 2024. Mr. Everets was the Chairman and Chief Executive Officer of SBM Financial, an investor group in Portland, Maine, from May 2010 until October 2016. Mr. Everets was also Chairman and Chief Executive Officer of The Bank of Maine from May 2010 until October 2016. Mr. Everets’ directorships at public companies in the past five years include Independent Director at Medallion Bank (since 2019), Medallion Financial Corp. (since 2017). Mr. Everets also serves on the Board of Directors of Newman’s Own Foundation. Mr. Everets is a former director of The Bank of Maine, which merged into Camden National Bank Financial Security Assurance, FSA, Dairy Mart and The Martin Currie Business Trust Edinburgh. From 1993 to 2004, Mr. Everets was the Chairman and Chief Executive Officer of HPSC, a provider of financing to medical and dental practices, which was acquired by GE Healthcare Financial Services, a provider of capital, financial solutions and related services for the global healthcare industry in 2004. Mr. Everets became Chief Executive Officer of GEHPSC from 2004 until 2006. Mr. Everets has served as a director of the Company since 1993 and as Vice-Chairman of the Board since July 2024. He brings to the Board extensive knowledge of the Company’s business. Mr. Everets is Chairman of the Capital Allocation and Investment Committee and serves on the Audit and Compensation Committees. Charles W. Henry, age 75, is an attorney and partner with the law firm Henry, Giardina & Langer, LLP located in Woodbury, Connecticut. Mr. Henry brings to the Board extensive knowledge of the Company’s business. Mr. Henry’s independent legal expertise is valuable to the Company if, and when, matters of law or regulation arise in the normal course of the Company’s business. His law firm does not provide any services to the Company. Mr. Henry has served as a director of the Company since 1989. Mr. Henry is Chairman of the Nominating and Corporate Governance Committee and serves on the Compensation, Executive, and Environmental, Health, and Safety Committees. James A. Mitarotonda, age 70, is currently the Chairman, President and CEO at Barington Capital Group, L.P., an activist investment firm. He is also the Chairman, President and CEO of Barington Companies Investors, LLC, the general partner of Barington Companies Equity Partners, L.P., an activist investment fund. From 2019 to 2022, Mr. Mitarotonda served as a Special Advisor to L Brands, Inc., a specialty retailer of women’s apparel and personal care products. Over the past five years, Mr. Mitarotonda has also served as (i) a director and audit committee member of Rambus, Inc. from April 2021 until April 2022; (ii) a director of Avon Products, Inc., a global manufacturer and marketer of beauty and related products, from April 2018 to January 2020; (iii) a director of OMNOVA Solutions Inc., a global provider of emulsion polymers and specialty chemicals, from March 2015 to April 2020; and (iv) a director of A. Schulman Inc., an international supplier of plastic compounds and resins, from October 2005 until August 2018. Prior to such time, Mr. Mitarotonda served as a director of The Pep Boys – Manny, Moe & Jack, an automotive aftermarket service and retail chain, from August 2006 to February 2016, and as Chairman from July 2008 to July 2009. Mr. Mitarotonda has also served as a director of Barington/Hilco Acquisition Corp., a special purpose acquisition company, from February 2015 until January 2018, as Chief Executive Officer from February 2015 to May 2015, and as Chairman from February 2015 until May 2017. He also served as a director of Ebix, Inc., a supplier of software and e-commerce services to the insurance, financial and healthcare industries, from January 2015 to March 2015; The Jones Group Inc., a designer, marketer and wholesaler of branded clothing, shoes and accessories, from June 2013 to April 2014; Griffon Corporation from November 2007 to January 2012; Ameron International Corporation, a multinational manufacturer of products and materials for the chemical, industrial, energy, transportation and infrastructure markets, from March 2011 to October 2011; and Gerber Scientific, Inc., an international supplier of automated manufacturing systems, from June 2010 to August 2011. Mr. Mitarotonda received a B.A. in economics from Queens College and a M.B.A from New York University’s Graduate School of Business Administration (now known as the Stern School of Business). Mr. Mitarotonda has served as a director of the Company since 2015 and as Chairman of the Board since January 2016. Mr. Mitarotonda serves on the Nominating and Corporate Governance and Capital Allocation and Investment Committees, and as Chair of the Executive Committee. Peggy B. Scott, age 73, has served as the Chairperson of the board of Cleco Corporate Holdings LLC (NASDAQ: CNL), a public utility holding company, since April 2016, and was Chief Executive Officer from February 2017 until January 2018. She also serves on the board and Governance Committee of Martin Sustainable Resources, LLC, and as the Chairperson of the Audit Committee. Earlier, she served on the Blue Cross Blue Shield of Louisiana Foundation board from 2005 to 2024, including roles as Chairperson and President, and on the board of Gresham Smith Partners from June 2020 until June 2022. Her recent public company service includes Benefytt Technologies, Inc. (NASDAQ: BFYT) from 2019 until its acquisition in 2020. Previously, Mrs. Scott served as the Executive Vice President, Chief Operating Officer, Chief Financial Officer and Treasurer of Blue Cross Blue Shield of Louisiana (BCBS), and as Chief Strategy Officer, overseeing growth strategies and operational performance in challenging markets. Prior to BCBS, she held senior executive positions in U.S. and international companies where she led transformations, growth strategies and operations in seven foreign countries. Earlier, Mrs. Scott was an office Managing Partner with Deloitte, a global public accounting firm, advising diverse companies, including manufacturers and industrial companies.
For a one-year term expiring in 2026
Mrs. Scott has served as a director of the Company since May 2019. She is Chairperson of the Environmental, Health, and Safety Committee and serves on the Audit and Compensation Committees. Mrs. Scott is a Certified Public Accountant (CPA) and also Certified in Valuations (ABV and CVA) and Financial Forensics (CFF). She has expertise in strategy, finance, operations, acquisitions and international business. Michael J. Mardy, age 76, is currently Chairman of the board of directors of Vince Holding Corp. (NYSE: VNCE), a member of the board of directors of Newman’s Own, Inc., and a member of the board of trustees of Penn Medicine Princeton Health. He also serves on the board of The Orchard Yarn and Thread Company, Inc since January 2024. He was previously a member of the board of directors of Lulu’s Fashion Lounge Holdings, Inc. (NASDAQ: LVLU), Modus Link Global Solutions, Keurig Green Mountain, DAVIDs TEA, and True Leaf Brands. From 2003 to 2018, Mr. Mardy served as Executive Vice President, Chief Financial Officer and Director of Tumi Holdings, an international manufacturer and marketer of travel goods and accessories based in South Plainfield, New Jersey. In addition to serving as an advisor to small growth companies, he has held several positions in finance working for Nabisco Brands and Keystone Foods and started his career at Coopers and Lybrand (now PricewaterhouseCoopers) as an audit supervisor. Mr. Mardy has served as a director of the Company since June 2022 and is Chairman of the Audit Committee and serves on the Environmental, Health, and Safety Committee. Ryan A. Schroeder, age 49, joined Eastern in 2024. Mr. Schroeder has served as President and CEO of the Company since November 2024. Prior to joining Eastern, Mr. Schroeder most recently served as CEO at Plaskolite LLC, a manufacturer of engineering thermoplastics, from 2020 through 2023. Prior to that, Mr. Schroeder spent four years as President, Americas for IMI Norgren, a manufacturer of motion and fluid control products, from 2016 to 2020, and prior to joining IMI Norgren, he served in a variety of roles at Parker Hannifin, a diversified manufacturer of motion and control technologies and systems for a variety of mobile, industrial and aerospace markets, from 2003 to 2016, including general manager of the hydraulic valve division, general manager of the hydraulic pump motor division as well as business unit manager, plant manager and supply chain manager of the company’s hydraulic cylinder division. He earned an MBA from the Carlson School of Management and a BA from Michigan State University. Mr. Schroeder brings to the Board extensive knowledge and experience in the manufacturing industry.
Summary of Annual Director Compensation
Summary of Annual Director Compensation During fiscal year 2024, the Company paid non-employee directors individually in Common Shares as follows: the annual retainer for the Chairman of the Board is $125,000; for Vice-Chairman it is $90,000 effective July 30, 2024; for directors it is $70,000; the Chairman of the Audit Committee received an additional $10,000; the Chairman of the Compensation Committee, the Chairperson of the Environmental, Health and Safety Committee, and the Chairman of the Capital Allocation and Investment Committee each received an additional $7,500; the Chairman of the Nominating and Corporate Governance Committee received an additional $2,000. In addition to the annual retainer fee, all non-employee directors were compensated for all meetings in addition to the Board’s five regularly scheduled meetings as follows: $1,500 for each in-person meeting and $500 for each telephonic meeting. Effective February 3, 2025, a 15% increase in compensation was given to the committee chairs and compensation for meetings over the five regularly scheduled meetings for fiscal year 2025. Each director receives their fees in the form of Common Shares. The Common Shares are issued under the Directors’ Fee Program (the “Directors’ Fee Program”) provided for in the 2020 Plan. The Company maintains a minimum share ownership requirement for non-employee directors. The Common Share ownership requirement will be deemed to have been met once the total net realizable share value held by a non-employee director exceeds five (5) times the annual base retainer paid to the non-employee director. Non-employee directors should attain this target within five (5) years of becoming a member of the Board.
DIRECTOR COMPENSATION IN FISCAL 2024
DIRECTOR COMPENSATION IN FISCAL 2024
DIRECTOR COMPENSATION IN FISCAL 2024
| Name (1) | Fees Earned or Paid in Cash ($) | Stock Awards ($) (2) | Option Awards ($) | Non-equity Incentive Plan Compensation ($) | Change in pension value and nonqualified deferred compensation earnings ($) | All Other Compensation ($) (3) | Total ($) | | Fredrick D. DiSanto | - | 79,988 | - | - | - | 396 | 80,384 | | John W. Everets | - | 79,986 | - | - | - | - | 79,986 | | Charles W. Henry | - | 74,495 | - | - | - | - | 74,495 | | James A. Mitarotonda | - | 127,012 | - | - | - | 1,236 | 128,248 | | Michael J. Mardy | - | 82,007 | - | - | - | - | 82,007 | | Peggy B. Scott | - | 79,990 | - | - | - | - | 79,990 |
DIRECTOR COMPENSATION IN FISCAL 2024
| (1) This table discloses the compensation received by all non-employee directors who served as a director in 2024. Mr. Hernandez did not receive any compensation for his service as a director of the Company. | | (2) The amounts listed are director fees paid in newly issued stock of the Company and could include adjustments for fractional shares from previous periods. | | (3) The amounts listed represent the dollar value of insurance premiums paid by, or on behalf of, the Company during the covered fiscal year with respect to life insurance for the benefit of the director. All non-employee directors are provided a life insurance benefit. Messrs. DiSanto and Mitarotonda have a $50,000 benefit and Messrs. Everets, Henry, and Mardy and Mrs. Scott have a $25,000 benefit. The life insurance benefit is reduced after age 70. |
DIRECTOR COMPENSATION IN FISCAL 2024
Mr. Schroeder did not serve on the Board during 2024. For information on compensation for Mr. Hernandez, who served during 2024 as a director and the President and Chief Executive Officer of the Company, see the executive compensation tables beginning on page 27.
Named Executive Officer and other Executive Officer Biographies
Named Executive Officer and other Executive Officer Biographies Nicholas Vlahos, 43, joined Eastern in 2017. Effective February 2023, Mr. Vlahos was appointed as Chief Financial Officer of the Company. From 2022 until his appointment as Chief Financial Officer, Mr. Vlahos served as Vice President of Finance, Treasurer and Secretary of the Company. Prior to this role, from 2017 to 2022, Mr. Vlahos was the Company’s Treasurer. Before joining Eastern, Mr. Vlahos served as Director of Finance, Accounting and Human Resources at Fischer Technology, Inc., the North American division of Helmut Fischer GmbH, the market leader for manufacturing of coating thickness and material measurement equipment. Prior to joining Fischer Technology, Inc. he served as controller and general manager for Inframat Corporation, a research and development contractor for the US government. He earned an MBA and a BA from Central Connecticut State University. For biographical information regarding Mr. Schroeder, please refer to the section entitled “Item No. 1 – Election of Directors” above.
Base salary
Base salary Base salaries are set after referencing market data for similar positions from Salary.com survey reports on compensation in the manufacturing sector and the Company’s independent benchmarking of peer companies. The Company selects peer companies based on comparable size, nature of operations, and complexity and scope of business activities. The peer companies that the Company uses as a benchmark for base salaries are as follows:
Base salary
The compensation of Ryan Schroeder, President and Chief Executive Officer, is determined by the Compensation Committee and approved by the Board. Under the terms of his employment agreement, Mr. Schroeders’s base salary was initially set at $475,000 for the year ended December 31, 2024. In connection with his appointment as President and Chief Executive Officer on November 4, 2024, Mr. Schroeder received a pro-rated base salary of $69,423 for 2024. Effective January 1, 2025, Mr. Schroeder’s base salary increased by 4.2% to $495,000. The compensation of Nicholas Vlahos, Vice President and Chief Financial Officer, is determined by the Compensation Committee and approved by the Board. Mr. Vlahos’s base salary was $370,000 for the year ended December 31, 2024. Effective January 1, 2025, Mr. Vlahos’s base salary increased by 2.0% to $377,400. The base salary for Mark Hernandez, the former President and Chief Executive, was $530,450 for the year ended December 31, 2024. Mr. Hernandez resigned effective November 4, 2024. Total compensation of Messrs. Schroeder and Vlahos is below the average for similar positions at comparable organizations in the United States as reported by Salary.com and the Company’s independent benchmarking of peer companies.
Short-Term Incentives — Annual Cash Incentives
Short-Term Incentives — Annual Cash Incentives For fiscal year 2024, the named executive officers were eligible to receive short-term incentive compensation based on the annual financial performance and operational goals of the Company. Short-term incentives were based on specific goals in the Company’s annual operating plan, as approved by the Compensation Committee on December 14, 2023 for Mr. Vlahos and Mr. Hernandez. In connection with his appointment as Chief Executive Officer, the Compensation Committee approved Mr. Schroeder’s short-term incentive on November 4, 2024. Seventy-five percent of the short-term incentive for Mr. Schroeder, Mr. Hernandez and Mr. Vlahos was determined by the Company’s 2024 earnings per share and twenty-five percent was determined by working capital efficiency of the Company. Working capital was defined as the combined current assets less current liabilities less cash of the businesses. Working capital efficiency is calculated as the average quarterly working capital divided by sales. The Company’s 2024 earnings per share goal was $2.50. The Company’s working capital efficiency goal for 2024 was 26.0%. Determination of the Company’s results and achievement of performance targets is subject to final approval by the Compensation Committee. In 2024, if the Company achieved its earnings per share and working capital efficiency goals, Mr. Schroeder was eligible to earn a total short-term incentive equal to 75% of his base salary. The threshold for earning each component of the short-term incentive was achieved at 80% of the goal. At 80% achievement of each goal, Mr. Schroeder was eligible to earn 35% of the associated short-term incentive. If the Company achieved less than 80% of a goal, Mr. Schroeder was not eligible to earn the associated short-term incentive. At 125% achievement of each goal, Mr. Schroeder was eligible to earn 180% of the associated short-term incentive. Mr. Schroeder was eligible to earn a maximum short-term incentive of 150% of his base salary. In 2024, if the Company achieved its earnings per share and working capital efficiency goals, Mr. Hernandez was eligible to earn a total short-term incentive equal to 100% of his base salary. The threshold for earning each component of the short-term incentive was achieved at 80% of the goal. At 80% achievement of each goal, Mr. Hernandez was eligible to earn 35% of the associated short-term incentive. If the Company achieved less than 80% of a goal, Mr. Hernandez was not eligible to earn the associated short-term incentive. At 125% achievement of each goal, Mr. Hernandez was eligible to earn 180% of the associated short-term incentive. Mr. Hernandez was eligible to earn a maximum short-term incentive of 200% of his base salary. In 2024, if the Company achieved its earnings per share and working capital efficiency goals, Mr. Vlahos was eligible to earn a total short-term incentive equal to 55% of his base salary. The threshold for earning each component of the short-term incentive was achieved at 80% of the goal. At 80% achievement, Mr. Vlahos was eligible to earn 35% of the associated short-term incentive. At less than 80% of each goal, Mr. Vlahos was not eligible to earn the associated short-term incentive. At 125% achievement of each goal, Mr. Vlahos was eligible to earn 180% of the associated short-term incentive. Mr. Vlahos was eligible to earn a maximum short-term incentive of 110% of his base salary. In 2024, Mr. Schroeder earned an annual cash incentive of $16,126, or approximately 23% of his prorated base salary. The annual cash incentive of $16,126 was received for the Company’s achievement of 105% of its working capital efficiency goal for 2024 and did not include any payment for the Company’s earnings per share goal for 2024. Pursuant to the terms of the separation agreement entered into between Mr. Hernandez and the Company on November 4, 2024 (the “Separation Agreement”), Mr. Hernandez received a working capital bonus of $140,787, which represented an estimate of Mr. Hernandez’s annual bonus for 2024, based on 31% against a pro-rated target of 100%. In 2024, Mr. Vlahos earned an annual cash incentive of $53,223, or approximately 14% of his base salary. The annual cash incentive of $53,223 was received for the Company’s achievement of 105% of its working capital efficiency goal for 2024 and did not include any payment for the Company’s earnings per share goal for 2024. The following table shows the incentive calculation for fiscal year 2024 based on the short-term incentive earned:
Short-Term Incentives — Annual Cash Incentives
| | Mr. Schroeder | Mr. Hernandez | Mr. Vlahos | | Base Salary | $69,423* | $530,450 | $370,000 | | Incentive achievement | 23% | 0% | 14% | | Incentive earned | $16,126 | $0 | $53,223 |
Short-Term Incentives — Annual Cash Incentives
*Represents Mr. Schroeder’s pro-rated base salary in connection with his appointment as Chief Executive Officer in November 2024.
Long-term incentives and performance-based stock appreciation rights and options
Long-term incentives and performance-based stock appreciation rights and options On January 15, 2021, the named executive officers were granted performance stock awards that vested on March 1, 2024 following the achievement of certain performance goals (the “2023 Performance Period”). The performance goal was the Company’s return on invested capital achieved in fiscal year 2023 (the “2023 ROIC”). For this purpose, the 2023 ROIC is defined as the sum of the Company’s average annual fixed assets, intangible assets, and current assets as of the end of fiscal year 2023; reduced by the sum of the Company’s average annual current liabilities and cash as of the end of fiscal year 2023; then divided by tax-adjusted EBIT. On March 15, 2022, the named executive officers were granted performance stock awards which vest on March 1, 2025, provided certain performance goals are achieved (the “2024 Performance Period”). One third of the award vests after three years, subject to continued employment on the vesting date. One third of the award has a performance goal based upon the Company’s ROIC achieved in fiscal year 2024 (the “2024 ROIC”). The ROIC is defined as the sum of the Company’s average annual fixed assets, intangible assets, and current assets as of the end of fiscal year 2024; reduced by the sum of the Company’s average annual current liabilities and cash as of the end of fiscal year 2024; then divided by tax-adjusted EBIT. The final third of the award has a performance goal based upon the Company’s EBITDA target for 2024. The stock awards vested only for the one third vesting piece based upon the Company’s performance during the 2024 Performance Period. On April 24, 2023, the named executive officers were granted performance stock awards which vest on March 1, 2024, March 1, 2025 and March 1, 2026, provided certain performance goals are achieved (the “2023, 2024 and 2025 Performance Periods”). One ninth of the award vests on each of March 1, 2024, 2025 and 2026, subject to continued employment on the vesting date. One ninth of the award has a performance goal based upon the Company’s ROIC achieved in each fiscal year 2023, 2024, and 2025 (the “2023 to 2025 ROIC”). The 2023 to 2025 ROIC is defined as the sum of the Company’s average annual fixed assets, intangible assets, and current assets as of the end of each fiscal year 2023, 2024, and 2025; reduced by the sum of the Company’s average annual current liabilities and cash as of the end of each fiscal year 2023, 2024, and 2025; then divided by tax-adjusted EBIT. One ninth of the award has a performance goal based upon the Company’s EBITDA target for each year, 2023, 2024, and 2025. The stock awards vested only for the one ninth vesting piece based upon the Company’s performance during the 2024 Performance Period. On May 15, 2024, the named executive officers were granted performance stock awards which vest on March 1, 2025, March 1, 2026 and March 1, 2027, provided certain performance goals are achieved (the “2024, 2025 and 2026 Performance Periods”). One sixth of the award has a performance goal based upon the Company’s return on invested capital employed achieved in each fiscal year 2024, 2025, and 2026 (the “2024 to 2026 ROIC”). The 2024 to 2026 ROIC is defined as the Company’s earnings before interest and taxes divided by total assets less current liabilities as of the end of each fiscal year 2024, 2025, and 2026. One sixth of the award has a performance goal based upon the Company’s EBITDA target for each year, 2024, 2025, and 2026. The performance stock awards are also subject to a relative TSR multiplier based on the Company’s TSR for the applicable performance period compared to the Russell Top 2000 Value Index for the same period. The stock awards did not vest based upon the Company’s performance during the 2024 Performance Period. On January 15, 2025, the named executive officers were granted performance stock awards which vest on March 1, 2026, March, 1, 2027 and March 1, 2028, provided certain performance goals are achieved (the “2025, 2026 and 2027 Performance Periods”). One sixth of the award has a performance goal based upon the Company’s ROIC achieved in each fiscal year 2025, 2026, and 2027 (the “2025 to 2027 ROIC”). The 2025 to 2027 ROIC is defined as the sum of the Company’s average annual fixed assets, intangible assets, and current assets as of the end of each fiscal year 2025, 2026, and 2027; reduced by the sum of the Company’s average annual current liabilities and cash as of the end of each fiscal year 2025, 2026, and 2027; then divided by tax-adjusted EBIT. One sixth of the award has a performance goal based upon the Company’s EBITDA target for each year, 2025, 2026, and 2027. The performance stock awards are also subject to a relative TSR multiplier based on the Company’s TSR for the applicable performance period compared to the Russell Top 2000 Value Index for the same period. The performance periods are as follows:
Long-term incentives and performance-based stock appreciation rights and options
| | Grantee | | Performance Targets and Vesting Schedule Payouts | | | | | Options (units) & Performance Stock Awards | | | | | | | | | Target Vesting Schedule | Achievement | Payout | | | Schroeder | Vlahos | | | | | | | | 34% Vests after 1 year | Achieved | Vested | | 2023 | | | 33% EBITDA Target | EBITDA Achieved | | | Performance | ---- | 2,478 | $22.4M to 28.0M | $25.6M | 79% | | Period | | | | | | | | | | 33% ROIC Target | ROIC Achieved | | | | | | 6.6% to 8.3% | 8.60% | 100% | | | | | 34% Vests after | Vesting Period | Vested | | | | | 3 years | ---- | 100% | | 2024 | | | 33% EBITDA Target | EBITDA Achieved | | | Performance | ---- | 408 | $49.2M to 61.5M | $2.2M | 0% | | Period | | | 33% ROIC Target | ROIC Achieved | | | | | | 11.3% to 17% | -2.10% | 0% | | | | | 34% Vests after | Vesting Period | Vested | | | | | 2 years | ---- | 100% | | 2024 | | | 33% EBITDA Target | EBITDA Achieved | | | Performance | | | $27.4M to 34.2M | $2.2M | 0% | | Period | ---- | 906 | 33% ROCE Target | ROCE Achieved | | | | | | 7.8% to 9.8% | -2.50% | 0% | | | | | 50% EBITDA Target | EBITDA Achieved | Vested | | 2024 | | 1,762 | $25.8M to 35.4M | $2.2M | 0% | | Performance | ---- | Award | 50% ROCE Target | ROCE Achieved | | | Period | | 2,448 | 7.6% to 10.5% | -2.50% | 0% | | | | Stock Options | | | | | | | | 34% Vests after | Vesting Period | Vested | | | | | 3 years | ---- | ---- | | 2025 | | | 33% EBITDA Target | EBITDA Achieved | | | Performance | | | $31.0M to 38.7M | ---- | | | Period | ---- | 2,667 | 33% ROCE Target | ROCE Achieved | | | | | | 8.5% to 10.6% | ---- | | | | | | 50% EBITDA Target | EBITDA Achieved | Vested | | 2025 | | 1,711 | $29.3M to 40.3M | ---- | ---- | | Performance | ---- | Award | 50% ROCE Target | ROCE Achieved | | | Period | | 2,376 | 8.0% to 11.0% | ---- | | | | | Stock Options | | | | | 2025 Performance Period | 4,553 Award 6,120 Stock Options | 1,711 Award 2,376 Stock Options | 50% EBITDA Target $25.7M to 38.5M 50% ROCE Target 7.0% to 10.4% | EBITDA Achieved ---- ROCE Achieved ---- | Vested ---- |
Long-term incentives and performance-based stock appreciation rights and options
| | Grantee | | Performance Targets and Vesting Schedule Payouts | | | | | Options (units) & Performance Stock Awards | | | | | | | | | Target Vesting Schedule | Achievement | Payout | | | Schroeder | Vlahos | | | | | | | | 50% EBITDA Target | EBITDA Achieved | Vested | | 2026 | | 1,711 | $31.8M to 43.7M | ---- | ---- | | Performance | ---- | Award | 50% ROCE Target | ROCE Achieved | | | Period | | 2,376 | 8.4% to 11.6% | ---- | | | | | Stock Options | | | | | | | | 50% EBITDA Target | EBITDA Achieved | Vested | | 2026 | 4,419 | 1,711 | $29.4M to 44.0M | ---- | ---- | | Performance | Award | Award | 50% ROCE Target | ROCE Achieved | | | Period | 5,940 | 2,376 | 7.7% to 11.5% | ---- | | | | Stock Options | Stock Options | | | | | | | | 50% EBITDA Target | EBITDA Achieved | Vested | | 2027 | 4,419 | 1,711 | $31.8.8M to 43.7M | ---- | ---- | | Performance | Award | Award | 50% ROCE Target | ROCE Achieved | | | Period | 5,940 | 2,376 | 8.4% to 12.6% | ---- | | | | Stock Options | Stock Options | | | |
Retirement and Other Post-Termination Plans
Retirement and Other Post-Termination Plans 401(k) Plan The Company maintains The Eastern Company Savings and Investment Plan (the “SIP”), a contributory savings plan under Section 401(k) of the Internal Revenue Code, for the benefit of certain eligible employees, including executive officers. An eligible employee who participates in the SIP may execute a salary reduction agreement requiring the Company to reduce his or her taxable earnings by a percentage of his or her compensation (as elected by the participant) and to contribute that amount to the SIP. The amount of the contribution could not exceed $23,000 for calendar year 2024, plus an additional $7,500 catch-up contribution for those participants ages 50 and older. If an employee executes such a salary reduction agreement, the Company will make a matching contribution to the SIP on behalf of the employee. For 2024, the matching contribution equaled 50% of that portion of an employee’s salary reduction contribution that did not exceed 6% of his or her compensation. Effective June 1, 2016, the SIP was amended to increase the non-discretionary profit-sharing contribution to 3%, and eligibility for the profit-sharing contribution was extended to all non-union U.S. employees. The SIP was also amended to provide for a non-discretionary contribution (the “transitional credit”) for certain non-union U.S. employees who were eligible to participate in the Salaried Employees Retirement Plan of The Eastern Company (the “Salaried Plan”). Earnings in excess of $345,000 for calendar year 2024 cannot be taken into account under the SIP. An employee is fully vested in his or her salary reduction contributions and the earnings on those contributions. An employee will become vested in any matching contributions, transitional credits, and non-discretionary profit-sharing contributions, and the earnings thereon, under a graded vesting schedule, with full vesting after completing five years of service or upon reaching age 65. Employees who are participating in the SIP may direct that their account balances be invested in one or more investment options offered under the plan. Pension Benefits The Company maintains the Salaried Plan for the benefit of certain eligible employees, including executive officers. On April 5, 2016, the Board passed a resolution freezing benefit accruals under the Salaried Plan, effective as of May 31, 2016. As a result, compensation and years of service earned after May 31, 2016 are not taken into account in determining the amount of a member’s retirement benefit under the Salaried Plan. No named executive officer is eligible for the Salaried Plan. An employee reaches his or her normal retirement date and can begin benefits without reduction upon reaching age 65 (or, if later, the earlier of the attainment of age 70 or the completion of five years of participation in the plan). An employee reaches his or her early retirement date when he or she reaches age 55 after completing 20 years of service. An employee who is eligible for early retirement can elect to begin to receive his or her benefits on an actuarially reduced basis. In addition, if an employee’s age and years of service equal at least 90, the employee can elect to begin to receive his or her benefits with a smaller reduction for early commencement than is otherwise applicable for early retirement.
Equity Grant Procedures
Equity Grant Procedures In accordance with the Company’s Stock-Based Award Grant Date Policy (the “Grant Date Policy”), the Compensation Committee does not grant equity awards in anticipation of the release of material nonpublic information, and the Company does not time the release of material nonpublic information based upon grant dates of equity. Annual equity grants under the 2020 Plan are approved at the Compensation Committee’s regularly scheduled meeting held each year in December, and such awards are granted with a grant date of January 15 of the following year (or if January 15 is not a trading date on NASDAQ, on the next succeeding trading day). Grants to new hires, or for retention, promotion or special recognition are made with a grant date of whichever of the following dates next succeeds the Compensation Committee’s approval of such equity award: January 15, May 15, August 15 and November 15 (or, in each case, if such date is not a trading day, then on the next succeeding trading day). During the fiscal year ended December 28, 2024, we did not grant stock options (or similar awards, including SARs) to our NEOs during the four business days prior to or the one business day following the filing of our periodic reports or the filing or furnishing of a Form 8-K that discloses material nonpublic information.
Summary Compensation Table
Summary Compensation Table The table below summarizes the total compensation paid or earned by each of the Company’s named executive officers for the fiscal years ended December 30, 2023 and December 28, 2024.
Summary Compensation Table
| Name and Principal Position | Year (1) | Salary ($) | Bonus ($) | Stock Awards ($) (2) | Option Awards ($) (3) | Non-Equity Incentive Plan Compensation ($) (4) | Non- Qualified Deferred Compensation Earnings ($) | All Other Compen- sation ($) (5) | Total ($) | | Ryan Schroeder, 49 President and CEO | 2024 | $69,423 | $- | $- | $- | $16,126 | $- | $3,313 | $88,862 | | Mark Hernandez, 58 Former President and CEO | 2024 2023 | 459,087 485,288 | - - | 532,945 782,100 | 229,651 | - 261,105 | - - | 1,188,669 22,094 | 2,410,352 1,550,587 | | Nicholas Vlahos, 43 | 2024 | 370,000 | - | 148,729 | 63,792 | 53,223 | - | 21,108 | 656,852 | | Vice President and CFO | 2023 | 339,327 | - | 140,000 | - | 88,725 | - | 20,134 | 558,186 |
Summary Compensation Table
| (1) The 2024 and 2023 fiscal years each consisted of 52 weeks. | | (2) Represents the aggregate grant date fair value for performance stock awards granted on May 15, 2024, April 24, 2023 and July 10, 2023, computed in accordance with FASB ASC Topic 718 while using a Monte Carlo simulation model for the relative TSR multiplier. A discussion of the assumptions used in calculating these values may be found in the “Accounting Policies” and “Stock-Based Compensation” sections included in the notes to our financial statements included in our Annual Reports on Form 10-K for the fiscal years ended December 28, 2024 and December 30, 2023. For 2024, the following amounts reflect the grant date fair value of the performance stock awards, assuming that the highest level of performance is achieved under the 2020 Plan: Mr. Hernandez, $532,945; and Mr. Vlahos, $148,729. For 2023, the following amounts reflect the grant date fair value of the performance stock awards, assuming that the highest level of performance is achieved under the 2020 Plan: Mr. Hernandez, $782,100; and Mr. Vlahos, $140,000. For more information on the Company’s performance stock awards, please refer to the “Long-term incentives and performance-based stock appreciation rights and options” section above and the “Stock Based Awards” section below. | | (3) Represents the aggregate grant date fair value for performance stock options granted on May 15, 2024 computed in accordance with FASB ASC Topic 718 while using a Monte Carlo simulation model for the relative TSR multiplier using a Black-Scholes model. There were no options or SARs granted by the Company to the named executive officers in 2023. For 2024, the following amounts reflect the grant date fair value of the performance stock options, assuming that the highest level of performance is achieved under the 2020 Plan: Mr. Hernandez, $229,651; and Mr. Vlahos, $63,792. For more information on the Company’s performance stock awards, please refer to the “Long-term incentives and performance-based stock appreciation rights and options” section above and the “Stock Based Awards” section below. | | (4) Amounts shown were earned in the applicable year and paid in the subsequent year under the Company’s short-term incentive plan. Mr. Hernandez did not earn a short-term incentive award for 2024 due to his resignation on November 4, 2024. Mr. Schroeder earned a short-term incentive award in the amount of $16,126 and Mr. Vlahos earned a short-term incentive award for 2024 in the amount of $53,223. For more information on the Company’s non-equity incentive compensation, please refer to the “Short-Term Incentives — Annual Cash Incentives” section above. | | (5) Included in this column are Company contributions to the SIP (including matching contributions, transitional credits and profit-sharing contributions), company-paid term life insurance premiums, the value of group term life insurance in excess of $50,000, and life insurance under the Salaried Plan. The Company’s contributions to the SIP (including matching contributions, transitional credits and profit-sharing contributions) for Mr. Schroeder equaled $3,179 for 2024, for Mr. Hernandez equaled $20,700 for 2024 and $19,800 for 2023, for Mr. Vlahos $20,700 for 2024 and $19,800 for 2023. Company-paid term life insurance premiums for Mr. Schroeder equaled $134 for 2024, for Mr. Hernandez $2,294 for 2023, for Mr. Vlahos $408 for 2024 and $334 for 2023. Severance paid upon termination for Mr. Hernandez equaled $1,167,969 for 2024, including: (i) the equivalent of his 2024 base salary of $530,500, (ii) an estimated 2024 working capital short-term incentive award in the amount of $140,787, (iii) immediate vesting of outstanding and unvested performance-based restricted stock unit awards with respect to 14,800 underlying shares of Company common stock, or the cash equivalent thereof, and (iv) a lump sum payment for unused vacation pay in the amount of $47,206. For more information on the Company’s SIP, please refer to the “Retirement and Other Post-Termination Plans” section above. For more information on the Company’s employment agreements and separation agreements with its named executive officers, please refer to the “Termination of Employment and Change in Control Arrangements” section below. |
Summary Compensation Table
STOCK BASED AWARDS On April 29, 2020, the shareholders approved the 2020 Plan, which by its terms will terminate on February 19, 2030. The 2020 Plan authorizes the grant of incentive stock options and non-qualified stock options to purchase Common Shares, the grant of shares of restricted stock, and the grant of other stock-based awards (such as SARs). The Compensation Committee determines the terms and conditions of the awards granted under the 2020 Plan, subject to the terms of the 2020 Plan. Awards are permitted to be granted to salaried officers and other key employees of the Company, whether or not such employees are also serving as directors of the Company. The 2020 Plan also provides for the grant of nonqualified stock options to non-employee directors of the Company. The purchase price of the Common Shares subject to each incentive stock option granted under the 2020 Plan may not be less than the fair market value of the Common Shares on the date of grant. The purchase price of Common Shares subject to non-qualified stock options granted under the 2020 Plan, and the price (if any) which must be paid to acquire a share of restricted stock granted under the 2020 Plan, is set by the Compensation Committee. Incentive stock options must be exercised within ten years of the date of grant. Non-qualified stock options must be exercised within the period set forth in the 2020 Plan or, if the 2020 Plan permits, within the period established by the Compensation Committee. Moreover, options may not be exercised more than three months after termination of employment or termination of service as a director. However, in the case of death or disability, the option may be exercised within one year after death or disability by the estate of such named executive officer. The three month period is also extended to one year for an optionee who terminates employment or terminates service as a director at or after reaching age sixty-five (65).
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END The following table displays the units of unvested SARs and performance stock awards held by each of the named executive officers at the end of fiscal year 2024.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| | | | | | | | Stock Awards | | | | | | | Number of Securities Underlying Unexercised SARs (#) | | | | | | | | | | Name | Grant Date | Exercisable (#) | Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned units (#) | Exercise Price ($) | Expiration Date | Number of Shares or Units of Stock that Have Not Vested (#) | Market value of shares of units of stock that have not vested ($) | Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#) | Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($) | | Ryan Schroeder | - | - | - | - | - | - | - | - | - | - | | Mark Hernandez | - | - | - | - | - | - | - | - | - | - | | Nicholas Vlahos | 4/29/2020(1) | 500 | - | - | 20.20 | 4/29/2025 | | | | | | | 3/15/2022(2) | | - | - | | 3/15/2027 | 408 | $8,976 | 792 | $17,424 | | | 4/24/2023(3) | | | | | 4/24/2028 | 1,813 | $48,117 | 3,520 | $93,421 | | | 5/15/2024(4) | | | 7,200 | | 5/1/2029 | | | | | | | 5/15/2024(5) | | | | 28.69 | 5/1/2029 | | | 3,960 | $105,098 |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| (1) On April 29, 2020, the Compensation Committee granted SARs under the 2020 Plan as follows: Nicholas Vlahos – 1,000. The SARs have an exercise price of $20.20 (equal to the fair market value of a Common Share on the date of grant), and were scheduled to vest on February 1, 2023 based on performance targets set by the Board, and to be exercisable for a period of five years (provided that the named executive officer remains an employee of the Company on the applicable vesting date and the Company meets certain performance thresholds prescribed in the SAR award agreement). The performance target for vesting of the SARs was based on the Company’s book value at the end of fiscal year 2022 and the ROIC for fiscal year 2022. On March 1, 2023, the Compensation Committee approved the vesting of 50% of the SARs, or 500 Common Shares, for Mr. Vlahos based on the Company’s adjusted book value target; the other 50% of the SARs did not vest due to not achieving the ROIC goal. | | (2) On March 15, 2022, the named executive officers were granted performance stock awards which vest on March 1, 2025, provided certain performance goals are achieved (the “2024 Performance Period”). One third of the award vests after three years. One third of the award has a performance goal based upon the Company’s ROIC achieved in fiscal year 2024. The ROIC is defined as the sum of the Company’s average annual fixed assets, intangible assets, and current assets as of the end of fiscal year 2024; reduced by the sum of the Company’s average annual current liabilities and cash as of the end of fiscal year 2024; then divided by tax-adjusted EBIT. The final third of the award has a performance goal based upon the Company’s EBITDA target for 2024. | | (3) On April 24, 2023, the named executive officers were granted performance stock awards which vest on March 1, 2024, March 1, 2025 and March 1 2026, provided certain performance goals are achieved (the “2023, 2024 and 2025 Performance Periods” ). One ninth of the award vests on each vesting date. One ninth of the award has a performance goal based upon the Company’s ROIC achieved in fiscal year 2023, 2024 and 2025. The ROIC is defined as the sum of the Company’s average annual fixed assets, intangible assets, and current assets as of the end of fiscal year; reduced by the sum of the Company’s average annual current liabilities and cash as of the end of fiscal year; then divided by tax-adjusted EBIT. The ninth of the award has a performance goal based upon the Company’s EBITDA target for 2023, 2024, and 2025. | | (4) On May 15, 2024, the named executive officers were granted performance stock options which vest on March 1, 2025, March, 1, 2026 and March 1, 2027, provided certain performance goals are achieved (the “2024, 2025 and 2026 Performance Periods”). One sixth of the award has a performance goal based upon the Company’s ROCE achieved in each fiscal year 2024, 2025, and 2026. The ROCE is defined as the Company’s earnings before interest and taxes divided by total assets less current liabilities as of the end of each fiscal year 2024, 2025, and 2026. One sixth of the award has a performance goal based upon the Company’s EBITDA target for each year, 2024, 2025, and 2026. The stock awards did not vest based upon the Company’s performance during the 2024 Performance Period. | | (5) On May 15, 2024, the named executive officers were granted performance stock awards which vest on March 1, 2025, March, 1, 2026 and March 1, 2027, provided certain performance goals are achieved (the “2024, 2025 and 2026 Performance Periods”). One sixth of the award has a performance goal based upon the Company’s ROCE achieved in each fiscal year 2024, 2025, and 2026. The ROCE is defined as the Company’s earnings before interest and taxes divided by total assets less current liabilities as of the end of each fiscal year 2024, 2025, and 2026. One sixth of the award has a performance goal based upon the Company’s EBITDA target for each year, 2024, 2025, and 2026. The stock awards did not vest based upon the Company’s performance during the 2024 Performance Period. |
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE As required by Item 402(v) of Regulation S-K, we are providing the following information regarding the relationship between executive compensation and our financial performance for each of the last three completed calendar years. In determining the “compensation actually paid” to our NEOs, we are required to make various adjustments to amounts that have been reported in the Summary Compensation Table in previous years, as the SEC’s valuation methods for this section differ from those required in the Summary Compensation Table.
Pay Versus Performance Table
Pay Versus Performance Table The table below summarizes compensation values both previously reported in our Summary Compensation Table, as well as the adjusted values required in this section for fiscal years 2022, 2023 and 2024. Note that for our NEOs other than our principal executive officer (the “PEO”), compensation is reported as an average.
Pay Versus Performance Table
| Year | Summary Comp Table Total for First PEO ($) (1)(2) | Summary Comp Table Total for Second PEO ($) (1)(2) | Summary Comp Table Total for Third PEO ($) (1)(3) | Comp Actually Paid to First PEO ($) (1)(5) | Comp Actually Paid to Second PEO ($) (1)(5) | Comp Actually Paid to Third PEO ($) (1)(5) | Average Summary Comp Table Total for Non-PEO Named Executive Officers ($) (1)(6) | Average Comp Actually Paid to Non-PEO Named Executive Officers ($) (1)(7) | Value of Initial Fixed $100 Investment Based on Total Shareholder Return ($)(8) | Net Income ($)(9) (in thousands) | | 2024 | $88,861 | $2,410,352 | $- | $88,861 | 1,289,463 | $- | $656,852 | $631,483 | $121.21 | $(8,529) | | 2023 | - | 1,550,558 | 1,103,178 | - | 1,745,288 | 579,612 | 588,186 | 628,350 | 114.55 | 8,585 | | 2022 | - | - | 897,734 | - | - | 788,324 | 612,198 | 533,547 | 77.34 | 12,301 |
Pay Versus Performance Table
| (1) During fiscal year 2024, Ryan Schroeder (“First PEO”) and Mark Hernandez (“Second PEO”) each served for a period of time as our PEO. During fiscal year 2023, Mark Hernandez and August M. Vlak (“Third PEO”) each served for a period of time as our PEO, and Mr. Vlak was the PEO during fiscal year 2022. During fiscal year 2024, the non-PEO named executive officer (NEO) was Nicholas Vlahos. During fiscal year 2023, the non-PEO named executive officers (NEOs) were Nicholas Vlahos and James P. Woidke. During fiscal year 2022, the non-PEO named executive officers (NEOs) were John L. Sullivan III, Peter O’Hara and James P. Woidke. Mr. Sullivan served as the Company’s principal financial officer through May 15, 2022 and as an employee of the Company through June 4, 2022, and Mr. O’Hara served as the Company’s principal financial officer beginning on May 16, 2022 through February 3, 2023. | | (2) The dollar amounts reported are the amounts of total compensation reported for Mr. Schroeder for the applicable fiscal year in the “Total” column of the Summary Compensation Table (SCT). | | (3) The dollar amounts reported are the amounts of total compensation reported for Mr. Hernandez for the applicable fiscal year in the “Total” column of the SCT. | | (4) The dollar amounts reported are the amounts of total compensation reported for Mr. Vlak for the applicable fiscal year in the “Total” column of the SCT. | | (5) The following table sets forth the adjustments made to the SCT total for each year represented in the pay versus performance table to arrive at “compensation actually paid” to our PEO, as computed in accordance with Item 402(v) of Regulation S-K: | | (6) The dollar amounts reported represent the average of the amounts reported for the non-PEO NEOs for the applicable fiscal year in the “Total” column of the Summary Compensation Table. | | (7) The following table sets forth the adjustments made, on an average basis, to the average SCT total for each year represented in the pay versus performance table to arrive at “average compensation actually paid” to our non-PEO NEOs: | | (8) The amounts reported represent the measurement period value of an investment of $100 in our stock on December 31, 2021 (the last trading day before the 2022 fiscal year), and then valued again on each of December 31, 2022 (the last trading day of the 2022 fiscal year), December 29, 2023 (the last trading day of the 2023 fiscal year), December 28, 2024 (the last trading day of the 2023 fiscal year), based on the closing price per share of the Company’s common stock as of such dates and assuming the reinvestment of dividends. | | (9) The amounts reported represent net income for the applicable fiscal year calculated in accordance with generally accepted accounting principles in the United States. |
Pay Versus Performance Table
| | 2024 First PEO | 2024 Second PEO | 2023 Second PEO | 2023 Third PEO | 2022 Third PEO | | SCT Total for PEO | $88,861 | $2,410,352 | $1,550,558 | $1,103,178 | $897,630 | | Less: Amount reported under the “Stock Awards” column in the SCT | $-- | $(762,597) | $(782,100) | $-- | $(277,056) | | Add: Fair value as of fiscal year-end of awards granted during the fiscal year that are outstanding and unvested as of the end of the fiscal year | $-- | $-- | $976,830 | $-- | $225,576 | | Add: Change in fair value as of fiscal year-end, compared to prior fiscal year-end, of awards granted in any prior fiscal year that are outstanding and unvested as of the end of the fiscal year | $-- | $-- | $-- | $-- | $(54,426) | | Add: Change in fair value as of vesting date, compared to prior fiscal year-end, of awards granted in any prior fiscal year for which all vesting conditions were satisfied at fiscal year-end or during the fiscal year | $-- | $202,908 | $-- | $-- | $(3,400) | | Less: for any awards granted in any prior fiscal year that fail to meet the applicable vesting conditions during the covered fiscal year, the amount equal to the fair value at the end of the prior fiscal year | $-- | $(561,200) | $-- | $(523,566) | -- | | Total Adjustments | $-- | $(1,120,889) | $194,700 | $(523,566) | $(109,306) | | Compensation Actually Paid to PEO | $88,861 | $1,289,463 | $1,745,288 | $579,612 | $788,324 |
Pay Versus Performance Table
| | 2024 | 2023 | 2022 | | Average SCT Total for Non-PEO NEOs | $656,852 | $739,442 | $612,198 | | Less: Amount reported under the “Stock Awards” column in the SCT | $(212,521) | $(70,000) | $(158,456) | | Add: Fair value as of fiscal year-end of awards granted during the fiscal year that are outstanding and unvested as of the end of the fiscal year | $137,739 | $88,000 | $130,140 | | Add: Change in fair value as of fiscal year-end, compared to prior fiscal year-end, of awards granted in any prior fiscal year that are outstanding and unvested as of the end of the fiscal year | $12,188 | $1,632 | $(48,636) | | Add: Change in fair value as of vesting date, compared to prior fiscal year-end, of awards granted in any prior fiscal year for which all vesting conditions were satisfied at fiscal year-end or during the fiscal year | $37,225 | $450 | $(1,700) | | Total Adjustments | $(25,369) | $20,082 | $(78,652) | | Average Compensation Actually Paid to Non-PEO NEOs | $631,483 | $759,524 | $533,547 |
Relationships between Compensation Actually Paid and Performance Measures
Relationships between Compensation Actually Paid and Performance Measures The Company enthusiastically embraces a pay-for performance philosophy. Over the last several years, the Company has not achieved the performance goals across our key metrics and as such the pay for the performance has been below expectations but underscores the effectiveness of our compensation program; however, with the recent change in management we are beginning to see true alignment between shareholder returns and executive compensation. For 2024, our shareholders’ value increased by approximately 20% of the value on their shareholder return and accordingly, the executive compensation actually paid for the PEO & non-PEO NEOs was decreased by approximately 40% and 16%, respectively. For 2024, the executive compensation actually paid for the PEO & the non-PEO NEOs as a percentage of net income was 11% and 7%, respectively. For 2023, our shareholders’ value increased by approximately 15% of the value on their shareholder return and accordingly, the executive compensation actually paid for the PEO & non-PEO NEOs was increased by approximately 17% and 9%, respectively. For 2023, the executive compensation actually paid for the PEO & the non-PEO NEOs as a percentage of net income was 20% and 7%, respectively. For 2022, the executive compensation actually paid for the PEO & the non-PEO NEOs as a percentage of net income was 6% and 4%, respectively. The program we have designed continues to incentivize our executive team to drive the results that create value for our shareholders and motivate our executive team to sustain that value creation in the future fiscal years by rewarding the value created in the current fiscal year. We believe our compensation program exemplifies a properly functioning pay-for-performance approach to compensation. We have constructed a compensation program that incentivizes our executive team to outperform our peers thereby generating significant value for our shareholders.