Walter C. Johnsen
About Walter C. Johnsen
Walter C. Johnsen (age 74) is Chairman and Chief Executive Officer of Acme United Corporation (ACU), serving as CEO since November 30, 1995 and as Chairman & CEO since January 1, 2007; he has been a director since 1995 and previously was Vice Chairman and a principal of Marshall Products, Inc. . Under his leadership, ACU reports a 10-year average annual sales growth of 7% and highlighted 2024 operational achievements (cost reductions ~$2M annual savings, capacity expansion, and integration of the Elite First Aid acquisition) . Recent performance indicators disclosed in the proxy’s pay-versus-performance table show ACU TSR value of an initial $100 investment at $67 (2022), $131 (2023), and $116 (2024), alongside net income of $3.0M (2022), $8.1M (2023), and $10.0M (2024) . Education was not disclosed in the proxy .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Acme United Corporation | President & CEO | 1995–2006 | Led turnaround and growth; set base for long-tenured CEO leadership |
| Acme United Corporation | Chairman & CEO | 2007–present | Oversight of strategy; drove diversification toward first aid/medical (~61% of sales in 2024) |
| Marshall Products, Inc. | Vice Chairman and principal | Not disclosed | Medical supply distribution leadership background |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| TOMI Environmental Solutions, Inc. (public) | Director | Since Feb 1, 2016 | Public-company board service |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 966,681 | 1,024,684 |
| All Other Compensation ($) | 42,487 (healthcare reimbursement, life insurance premiums, 401(k) match) | 54,787 (same categories) |
| Total Compensation ($) | 1,844,535 | 1,231,621 |
Notes:
- ACU provides standard benefits (medical/dental, disability, life insurance); no defined benefit pension/SERP for NEOs .
- 401(k) match equals 50% of first 6% of eligible compensation (IRS limit $350,000 for 2024) .
Performance Compensation
Annual Cash Incentive (Plan Architecture and Outcomes)
| Component | Details |
|---|---|
| Company bonus pool | 15% of budgeted pre-tax income; increases to 16% at 110% of budget and decreases to 14% at 90% of budget; contingent on achieving budget (after bonus accrual) |
| Individual baseline | Allocation equals 15% of base salary, adjusted for individual performance; historical individual payout range 0–25% of base salary; total awards capped by accrual |
| 2023–2024 outcome | No plan bonuses in 2023 and 2024; transaction-based cash bonuses paid primarily for the November 1, 2023 asset disposition of Camillus and Cuda product lines |
| 2024 bonus paid to Johnsen ($) | 152,150 (transaction-based) |
| 2023 bonus paid to Johnsen ($) | 519,188 (transaction-based) |
Stock Options (Long-term Incentive)
| Item | 2023 Grant | 2024 Grant | Vesting | Notes |
|---|---|---|---|---|
| Shares granted to Johnsen | 25,000 | — (no options granted to NEOs in 2024) | 25% after first anniversary; then 25% each of next three anniversaries | Exercise price $30.47 (2023 awards) |
Outstanding Options at 12/31/2024 (Johnsen)
| Exercisable (#) | Unexercisable (#) | Exercise Price ($) | Expiration |
|---|---|---|---|
| 45,000 | — | 21.49 | 8/3/2026 |
| 60,000 | — | 23.94 | 1/24/2027 |
| 45,000 | — | 24.92 | 10/16/2027 |
| 13,500 | — | 23.94 | 1/23/2028 |
| 45,000 | — | 22.66 | 8/8/2028 |
| 25,000 | — | 19.48 | 8/7/2029 |
| 10,000 | — | 24.06 | 1/21/2030 |
| 45,000 | — | 23.05 | 8/12/2030 |
| 15,000 | 5,000 | 32.64 | 1/26/2031 |
| 33,750 | 11,250 | 39.56 | 8/11/2031 |
| 15,000 | 15,000 | 29.35 | 8/3/2032 |
| 6,250 | 18,750 | 30.47 | 8/2/2033 |
Vesting policy: options typically vest 25% one day after the first anniversary and 25% one day after each of the next three anniversaries; ten-year term .
Pay-versus-Performance (Selected Indicators)
| Year | CEO Compensation Actually Paid ($) | ACU TSR Value of $100 | Net Income ($000s) |
|---|---|---|---|
| 2022 | 996,952 | 67 | 3,037 |
| 2023 | 2,457,648 | 131 | 8,148 (excludes $9.6M gain on asset disposition) |
| 2024 | 1,065,571 | 116 | 10,022 |
Equity Ownership & Alignment
| Holder | Beneficial Ownership (#) | % of Class | Notes |
|---|---|---|---|
| Walter C. Johnsen | 663,499 | 16.2% | Includes 348,500 shares issuable upon exercise of options |
| Shares outstanding (Record Date 3/5/2025) | 3,754,498 | — | Reference base for % calculation |
Additional alignment factors:
- Insider Trading Policy in place; however, ACU has not adopted practices or procedures restricting hedging by employees or directors (no anti-hedging policy disclosed) .
- No disclosure of stock pledging by Mr. Johnsen in the proxy; related party transactions: none since January 1, 2023 .
Employment Terms
| Element | Key Terms |
|---|---|
| Change-in-Control Plan | Applies to Corporate VP level+; participants currently include Johnsen (CEO/Chair), Olschan (President/COO), Driscoll (CFO) . CIC occurs upon >50% stock or asset acquisition; if within 1 year post-CIC the participant voluntarily or involuntarily separates for any reason, lump-sum severance is paid (single-trigger upon post-CIC separation) . |
| CIC Economics | Executive directors (Johnsen, Olschan): 36 months’ salary + average monthly bonus (3-year lookback) times months; continuation of medical/life/other insurance for the same months; 280G cutback to avoid excess parachute payments (no tax gross-up) . Senior VP/VP (Driscoll): 24 months . |
| Severance (non-CIC) | If Change-in-Control Plan does not apply: lump-sum equal to one month’s salary per year of service with minimum/maximum caps. Executive directors: minimum 9 months, maximum 30 months; SVP/VP: minimum 6 months, maximum 18 months; death benefits also provided (9 months for executive director, 6 months for SVP/VP) . |
| Deferred Compensation Plan | Executives may defer all/portion of annual bonus; earns prime rate +1% compounded quarterly; Company matches 20% of deferred amount up to $10,000 annually; paid at separation from service . |
| 401(k) Plan | Employee deferrals up to IRS limits ($23,000; $30,500 age 50+ in 2024) with Company matching 50% of first 6% of eligible comp; invested per participant direction . |
| Perquisites | Limited; “All Other Compensation” consists of reimbursement of out-of-pocket health care expenses, payment of life premiums, and 401(k) match . |
| Employment agreements | No individual fixed-term employment contract disclosed for Mr. Johnsen in the proxy . |
Board Governance and Service
- Role and tenure: Chairman and CEO; director since 1995; non-independent due to executive role .
- Board structure: Board combines CEO and Chair; the Company does not have a Lead Independent Director; standing committees (Executive, Audit, Compensation, Nominating) are comprised solely of independent non-employee directors .
- Committees (independent):
- Audit (Ward—Chair; Holden, Davidson, Barker, Conway; Ward is an “audit committee financial expert”) .
- Compensation (Holden—Chair; Davidson; Murphy) .
- Nominating (Holden—Chair; Davidson; Ward) .
- Meetings/attendance: Board held seven meetings in 2024; each director attended at least 75% of applicable Board and committee meetings; all directors attended the 2024 annual meeting .
- Director compensation (context for governance): Non-employee directors received an annual fee ($47,790), meeting fees ($2,735 Board; $1,245 committee), chair fees ($2,370 per committee meeting; plus $5,765 annual to Audit Chair), and 2024 option grants (modified—2,500 options plus equivalent cash in lieu) .
Dual-role implications:
- Combining Chair and CEO centralizes authority and can weaken independent oversight absent a Lead Independent Director; ACU explicitly has no Lead Independent Director, though independent committees and annual strategic planning sessions are in place for risk oversight .
Performance & Track Record (Selected 2024 Highlights)
- First Aid/Medical now ~61% of total sales (diversification) .
- Strategic acquisition: assets of Elite First Aid, Inc. (May 23, 2024) and successful integration in Q4 2024 .
- Productivity and cost actions: ~$2M ongoing annual savings from SG&A and operational improvements .
- Capacity expansion: 30% increase at 340,000 sq ft Rocky Mount, NC distribution center via new racking .
- Liquidity: ~ $47M availability under $65M revolver at 12/31/2024 to fund growth/M&A .
Compensation Structure Analysis
- Mix shift: 2024 total compensation decreased versus 2023 ($1.23M vs $1.84M), driven by no option grant in 2024 and lower transaction-based cash bonus; base salary increased to $1.025M .
- Equity design: ACU emphasizes non-qualified stock options with 4-year ratable vesting; options only have value with stock price appreciation, aligning long-term incentives with TSR, but no RSUs/PSUs are disclosed for NEOs .
- Cash incentive rigor: Annual plan anchored to budgeted pre-tax income with pool scaling and individual performance adjustments; no plan bonuses in 2023–2024, but transaction-based bonuses were paid for a strategic asset disposition .
- Governance features: 280G cutback (no gross-up); no defined benefit/SERP; limited perquisites; existence of a Deferred Compensation Plan (prime+1% with company match) .
Equity Ownership & Insider Dynamics
- Significant insider ownership: Johnsen beneficially owns 16.2% of outstanding shares (663,499), including 348,500 issuable upon option exercise—aligning incentives with shareholders .
- Option expirations: Multiple tranches expiring 2026–2033; 2023 grant (25,000 shares at $30.47) is partially exercisable (6,250 exercisable; 18,750 unexercisable at 12/31/2024) .
- Hedging/pledging: No anti-hedging practice disclosed; no pledging by Johnsen disclosed in the proxy .
Employment Terms (Economics Summary)
| Trigger | Cash Multiple | Benefits Continuation | Notes |
|---|---|---|---|
| Change in Control + separation within 1 year (voluntary or involuntary) | 36 months (CEO/Chair) of salary plus average monthly bonus times months (lump sum) | Same months (medical, life, other) | 280G cutback to ≤2.99x “base amount” (no gross-up) |
| Non-CIC severance (involuntary other than gross misconduct, death, reduction in responsibility/status/compensation, or distant transfer) | 1 month per year of service; min 9 months, max 30 months for CEO/Chair (lump sum) | Death benefits to beneficiaries (9 months for CEO/Chair) | Applies only if CIC Plan does not apply |
Board Service History, Committees, and Independence
- Board service since 1995; currently Chairman (no Lead Independent Director) and non-independent director due to CEO role .
- Not a member of independent committees (Audit, Compensation, Nominating are independent-only) .
- Board attendance at least 75% for all directors in 2024; Board met seven times .
Risk Indicators & Red Flags
- Combined CEO/Chair with no Lead Independent Director (oversight concentration risk) .
- Single-trigger CIC severance upon post-CIC separation (voluntary or involuntary) with a 36-month multiple for CEO—generous by small-cap standards (mitigated by 280G cutback) .
- No anti-hedging policy disclosed (potential misalignment risk if hedging is undertaken; no evidence of hedging by Johnsen disclosed) .
- Related party transactions: none since Jan 1, 2023 (mitigates conflict-of-interest concerns) .
Investment Implications
- Strong ownership alignment: Johnsen’s 16.2% stake and option-heavy LTI design align incentives with shareholder value creation; option expirations 2026–2033 can influence exercise decisions around price/volatility .
- Incentive quality: Cash bonus plan linked to budgeted pre-tax income, and 2023–2024 restraint (no plan bonuses) indicate discipline; however, transaction-based payouts introduce discretionary elements that investors should monitor for consistency with long-term pay-for-performance .
- Governance watch items: Combined Chair/CEO without a Lead Independent Director and generous CIC terms merit attention, though independent committees, attendance, and 280G cutback are mitigating factors .
- Execution track record: Continued diversification toward first aid/medical, accretive M&A (Elite First Aid), and cost/capacity actions supported net income growth (2022–2024) and operational resilience, though 2024 TSR declined from 2023’s rebound—sustained value creation will hinge on realizing growth and margin improvements outlined by management .