Gunnar Kleveland

About Gunnar Kleveland

Gunnar Kleveland, 55, is President & CEO of Albany International (appointed September 2023). He is a former Royal Norwegian Air Force fighter pilot with 15 years’ service, and brings two decades of Textron operating leadership across P&L, manufacturing, and supply chain; prior roles include CEO of Textron Specialized Vehicles, President of TRU Simulation + Training, and EVP of Integrated Operations at Bell Helicopter . Education: RNoAF Academy; BS Professional Aeronautics (Embry‑Riddle); MBA (Midwestern State University); executive programs at Duke, Thunderbird, and Michigan State; multilingual in English, Norwegian/Scandinavian languages, and German . Company performance under his tenure (FY2024): net sales $1,230.6M (+~7% YoY), net income $87.6M, diluted EPS $2.80; AIN Adjusted EBITDA was $232.0M; Pay‑vs‑Performance TSR index value was 111.47 for 2024 . Governance: Albany separates Chair and CEO; non‑executive Chair is John R. Scannell; Kleveland is not independent and serves solely as a director/executive, with committees fully independent .

Past Roles

External Roles

Fixed Compensation

Performance Compensation

Long‑term incentives (2024 cycle):

• MPP performance shares: 3‑year period (2024–2026); CEO metric 100% Aggregate AIN Adjusted EBITDA; 0–200% payout; settlement in stock early 2027 .
• RSUs: vest ratably over 3 years; settled in Class A common stock; one‑third vests in Mar 2025/2026/2027 .

Program updates effective Feb 2025:

• LTIP revised to RSUs + PSUs with equal weight metrics: Adjusted EBITDA, ROIC, relative TSR; PSU payout 0–200%; RSUs vest ratably over 3 years .

Equity Ownership & Alignment

Outstanding equity awards and vesting schedule (selected, as of Dec 31, 2024):

Employment Terms

• Employment agreement (Aug 21, 2023) on appointment as CEO: base salary $900,000; APP, MPP, RSUs, and a one‑time sign‑on RSU award; eligible for ongoing APP/MPP programs; standard executive benefits and vacation .
• Severance: if terminated without Cause or resigns for Good Cause (includes Change‑in‑Control), cash severance equal to 2x base salary + 2x APP target, paid over 24 months; plus vesting of earned performance awards; 50% of unvested RSUs vest; subject to confidentiality and non‑disparagement; release required .
• Change‑in‑Control: RSU and Phantom Stock Plans state 100% acceleration upon termination following a change of control; Post‑Termination table for CEO reflects 50% RSU vesting and no incremental severance absent a qualifying termination, highlighting plan‑vs‑agreement nuance .
• Post‑termination economics (illustrative if event occurred 12/31/2024): total estimated value $5,525,558 for termination without cause or with Good Reason, comprised of $3,708,000 cash severance, $669,909 performance shares, and $1,147,649 RSUs; identical totals shown for termination in connection with a change‑in‑control (absent additional severance trigger), while voluntary separation/retirement yields only performance share value .

Board Service & Governance

• Board service: Director since 2023; not independent; no committee seats indicated .
• Leadership structure: Albany separates Chair and CEO; Chair sets agendas and leads independent sessions; facilitates oversight while CEO focuses on operations .
• Director compensation: He is not listed in the non‑employee director compensation table, indicating no additional Board retainer for the CEO/director .
• Board/committee independence and attendance: 8 of 9 directors independent; fully independent committees; aggregate attendance 97% Board, 96% committees in 2024 .

Compensation Structure Diagnostics

• Pay‑for‑performance design: APP metrics emphasize Adjusted EBITDA (60%) and Free Cash Flow (20%) with safety and control quality; long‑term equity split between performance shares and time‑vested RSUs; clawback policy adopted Aug 24, 2023 .
• APP outcome: CEO overall APP attainment of 108.2%; cash earned $1,003,014 for 2024 .
• Shift in 2025 to include ROIC and relative TSR in PSUs indicates stronger alignment to capital efficiency and market performance .
• Hedging/pledging prohibited; strict insider trading policy filed on 2024 10‑K as Exhibit 19 .
• Say‑on‑Pay support at 93.88% (2024), suggesting shareholder acceptance of program structure .
• Peer group for benchmarking: 19 industrial/aerospace peers including Teledyne, Curtiss‑Wright, Hexcel, HEICO, BWXT, among others; Pearl Meyer engaged; CEO targeting near median with higher variable pay .

Director Compensation (for completeness)

Note: Applies to non‑employee directors; the CEO/director was not a beneficiary of director retainer/equity .

Investment Implications

• Alignment: Strong variable pay mix and new LTIP metrics (ROIC, rTSR) improve capital discipline and market linkage; anti‑hedging/pledging and ownership guidelines support alignment, though CEO had not met 5x salary guideline by YE2024, typical for a newer hire .
• Retention risk: Robust severance economics (2x salary + 2x APP target) and multiple multi‑year equity cycles (2023 and 2024 MPP/RSUs) with scheduled vesting through 2027 reduce near‑term attrition risk; APP paid above target in 2024 underscores achievable annual goals .
• Trading signals: 2024 APP attainment at 108.2% despite under‑target AIN Adjusted EBITDA ($232M vs $269.7M target) suggests control/safety over‑achievement and discretionary adjustments mattered; monitoring future PSU metrics (ROIC, rTSR) and any Form 4 insider activity will be key to gauge selling pressure around vest dates (Mar annually) .
• Governance: Separation of Chair/CEO and independent committees mitigate dual‑role concerns; high Say‑on‑Pay (93.88%) reduces governance overhang; no related party transactions reported .

SHAREHOLDER PERFORMANCE REFERENCES