Donald Young
ASPEN AEROGELSAbout Donald R. Young
Donald R. Young, 67, is President, Chief Executive Officer, and a Class III director of Aspen Aerogels; he has served as CEO and director since November 2001. He previously held senior operating roles at Cabot Corporation and worked in the investment business at Fidelity Management & Research; he holds a BA from Harvard College and an MBA from Harvard Business School . Under his leadership, Aspen reported 2024 record revenue of $452.7 million (+90% YoY), 40% gross margin, $13.4 million net income, and $89.9 million Adjusted EBITDA; the company highlighted strong momentum in PyroThin EV thermal barriers and Energy Industrial segments . In pay-versus-performance disclosure, Aspen’s cumulative TSR (indexed to $100) measured $53 in 2024 alongside positive net income and Adjusted EBITDA improvement .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Cabot Corporation | Senior operating roles (US and abroad) | Not disclosed | Specialty chemicals leadership experience relevant to scaling manufacturing, technology commercialization |
| Fidelity Management & Research | Investment professional | Not disclosed | Capital markets perspective; informs investor engagement and capital allocation |
External Roles
- No other current public-company directorships for Young are disclosed; as CEO, he is an employee director at Aspen (non-independent) and receives no additional director compensation .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 515,000 | 515,000 | 515,000 |
| Target Annual Bonus (% of salary) | Not disclosed | 110% | 110% |
| Non-Equity Incentive (Actual $) | 804,011 | 1,331,275 | 1,274,625 |
Notes:
- CEO agreement (amended and restated Aug 30, 2024) sets base salary at $515,000 and CEO bonus target at not less than 110% of salary; term through Aug 30, 2027 with automatic 1-year renewals .
Performance Compensation
Annual Bonus Design and 2024 Outcome
- 2024 Corporate Bonus Plan metrics and weighting: Revenue (25%), Adjusted EBITDA (75%); threshold/target/maximum levels pre-set; maximum payout capped at 225% (reduced to 200% beginning 2025) .
| Measure | Weight | Threshold ($000) | Target ($000) | Max ($000) | Actual ($000) | Payout (%) |
|---|---|---|---|---|---|---|
| Revenue | 25% | 360,000 | 400,000 | 480,000 | 452,699 | 182% |
| Adjusted EBITDA | 75% | 0 | 34,000 | 78,000 | 97,596 | 225% |
| Weighted payout | — | — | — | — | — | 214.3% |
- CEO 2024 bonus paid: $1,274,625 (225% of target after individual modifier; plan capped at 225%) .
Long-Term Incentives (LTI) – Structure and Grants
- 2024 LTI mix (NEOs): 75% stock options, 25% RSUs; CEO grant on Mar 5, 2024: 87,284 options at $16.34 exercise price (grant-date FV $974,990) and 19,889 RSUs (FV $324,986); options and RSUs vest ratably over 3 years (2025–2027) .
- 2025 LTI redesign: 50% PSUs (3-year rTSR vs Russell 2000; 0–200% payout), 25% options, 25% RSUs; objective is stronger TSR alignment .
Pay Mix and Governance Changes
- ~79% of CEO 2024 target total direct compensation was at-risk (STI + LTI) .
- Equity Grant Policy adopted May 30, 2024 (blackout/approval timing safeguards) .
- SEIG performance awards: Unearned portions canceled Mar 6, 2024; 304,666 shares canceled for Young (156,950 earned in Dec 2021 and vested June 29, 2024) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 1,171,539 shares (1.41% of outstanding) |
| Composition | 451,151 shares held (incl. unvested restricted stock) and 720,388 options exercisable within 60 days of the record date |
| Stock Ownership Guidelines | CEO 5x base salary (raised May 30, 2024); all NEOs met or are expected to be compliant within transition period |
| Hedging/Pledging | Hedging and pledging of company stock prohibited; 10b5-1 preclearance and plan governance in place |
| 2024 Realizations | Options exercised: 691,124 shares; value realized $14,562,344; stock awards vested: 174,791 shares; value realized $4,046,575 |
Vested vs Unvested/Key Vesting Schedules (as of 12/31/2024)
| Award Type | Grant Date | Amount | Vesting/Expiration |
|---|---|---|---|
| RSU | 3/5/2024 | 19,889 | Vests 1/3 on 3/5/2025, 3/5/2026, 3/5/2027 |
| RSU | 6/1/2023 | 24,473 | Vests 1/3 each March 8 through 3/8/2026 |
| RSU | 2/23/2022 | 3,170 | Final tranche vests 2/23/2025 |
| Option | 3/5/2024 | 87,284 | Vests 1/3 annually through 3/5/2027; strike $16.34; exp. 3/5/2034 |
| Option | 9/7/2023 | 170,000 | All shares vest 9/7/2026; strike $6.51; exp. 9/7/2033 |
| Option | 6/1/2023 | 56,281 ex / 112,562 unex | Vests 1/3 annually through 3/8/2026; strike $6.81; exp. 6/1/2033 |
| Various earlier options | 2018–2022 | see table | Multiple tranches; strikes $3.63–$26.29; expiries 2028–2032 |
Potential selling pressure watchlist (time-based):
- 2025 vestings: RSUs (~1/3 of 19,889 + 1/3 of 24,473 + final 3,170) and multiple option tranches; subject to company trading windows/10b5-1 plans .
Employment Terms
| Term | CEO Agreement (Amended & Restated Aug 30, 2024) |
|---|---|
| Term | Through Aug 30, 2027; auto-renew 1-year terms |
| Compensation | Salary $515,000; bonus target not less than 110% of salary; LTI per board approval; reimbursement of up to $10,000 legal fees for amendment |
| Severance – Qualifying Termination (no cause/good reason) | Cash: 2x (salary + target bonus); pro rata current-year bonus; prior-year unpaid bonus; COBRA up to 24 months; 6 months outplacement; full acceleration of equity (subject to performance terms); vested options exercisable 2 years (not beyond original term) |
| Good Reason / Cause | Defined (includes material duty reduction, comp cut outside across-the-board action, relocation >40 miles without remote option, etc.) |
| Double Trigger | Acceleration upon qualifying termination within 24 months after change of control (CIC) |
| Clawback | Company-wide policy amended June 1, 2023 to comply with SEC/NYSE and expand discretionary recoupment |
| Non-compete/Non-solicit | Customary restrictive covenants are disclosed for other NEOs; CEO agreement focuses on cause, confidentiality, and related protections; specific non-compete duration not specified in proxy |
Estimated severance economics (as of 12/31/2024):
| Scenario | Cash Severance ($) | Equity Acceleration ($) | Benefits/Outplacement ($) | Total ($) |
|---|---|---|---|---|
| Qualifying Termination (no CIC) | 3,437,625 | 2,048,270 | 20,000 | 5,505,895 |
| CIC + Qualifying Termination | 3,437,625 | 2,048,270 | 20,000 | 5,505,895 |
Director & Board Governance
- Board structure: Young is a Class III director (term ends 2026) and is not independent; the Chair is independent (William P. Noglows). Aspen separates CEO and Chair roles, increasing independent oversight .
- Independence: All directors other than Young are independent under NYSE rules .
- Committees (2024): Audit (Chair: Kathleen M. Kool); Compensation & Leadership Development (Chair: Mark L. Noetzel; transitions to Noglows after annual meeting); Nominating, Governance & Sustainability (Chair: Rebecca B. Blalock; transitions to Cari Robinson after annual meeting) .
- Meetings: 9 board and 20 committee meetings in 2024; no director attended fewer than 75% .
- Executive sessions: Committees meet regularly in executive session; robust risk oversight including cybersecurity subcommittee under Audit .
Director Compensation (Young)
- Employee directors do not receive additional director retainers/equity; Young’s director service is compensated solely via his executive pay .
Say-on-Pay & Shareholder Feedback
| Year | Say-on-Pay Approval |
|---|---|
| 2022 | 93% |
| 2023 | 78% |
| 2024 | 72% |
- 2025 design changes in response: add PSUs (50% of LTI) with relative TSR; reduce bonus cap to 200% starting 2025; enhanced disclosure; increased ownership guidelines (CEO 5x salary) .
Compensation Peer Group (Benchmarking)
- 2025 peer group updated to higher-tech, higher-growth, profitable manufacturing/energy companies (e.g., Array Technologies, Enphase Energy, Hexcel, Wolfspeed, Plug Power, etc.) .
- Policy targets executive pay opportunities around market median; more formulaic, performance-oriented incentives .
Related Party Transactions and Red Flags
- Prohibited hedging/pledging; no repricing without shareholder approval; robust clawback; no tax gross-ups; double-trigger CIC vesting; equity grant timing policy adopted .
- Related party: settlement and financing interactions with Koch affiliates (significant shareholder) disclosed; note repurchase from Wood River (Koch affiliate) and associated lock-ups in 2024 .
- Section 16 compliance: one Form 4 correction for Young (decrease of 485 shares due to prior-year dispositions not previously reported) .
Multi-Year CEO Compensation Summary
| Component ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | 515,000 | 515,000 | 515,000 |
| Stock Awards | 249,992 | 249,995 | 324,986 |
| Option Awards | 749,990 | 1,496,426 | 974,990 |
| Non-Equity Incentive | 804,011 | 1,331,275 | 1,274,625 |
| All Other Comp | 44,425 | 33,335 | 10,350 |
| Total | 2,363,418 | 3,626,031 | 3,099,951 |
Performance & Track Record
- 2024 execution: revenue +90% YoY to $452.7M; PyroThin revenue $306.8M (+179%); Energy Industrial revenue $145.9M (+13%); gross margin 40%; net income $13.4M; Adjusted EBITDA $89.9M .
- Commercial wins: awards with EU luxury sports OEM (SOP 2025), ACC/Mercedes (SOP 2027), Volvo Truck program; Automotive News PACE Award; strong liquidity position at year-end ($220.9M cash/equivalents) .
- Pay vs performance: 2024 cumulative TSR index at $53; compensation actually paid aligns directionally with TSR and profit metrics over time .
Compensation Structure Analysis (Signals)
- Tilt toward at-risk and performance-based pay (79% at-risk for CEO 2024) and addition of PSUs in 2025 increases direct linkage to relative TSR (market-based performance) .
- Governance positives: stronger ownership guidelines (CEO 5x), clawback expansion, equity grant timing policy, no tax gross-ups, no repricing; double-trigger vesting mitigates windfalls .
- Risk watch: 2024 large option exercises ($14.56M value realized) and upcoming RSU/option vestings could create periodic selling supply; insider trading policy and 10b5-1 oversight apply .
Investment Implications
- Alignment: 1.41% beneficial ownership, heightened ownership guidelines, and 2025 PSU adoption improve shareholder alignment; hedging/pledging prohibitions and clawback lower governance risk .
- Incentive quality: 2024 bonus tied 75% to Adjusted EBITDA and 25% to revenue with rigorous targets; 2025 bonus cap reduced to 200% addresses payout concerns after a 214% company funding year .
- Retention/CIC economics: CEO severance of ~2x salary+bonus target plus equity acceleration is within market norms; double-trigger CIC protection balances retention with shareholder safeguards .
- Trading signals: Monitor 2025–2027 vesting calendar (noted above) and any new 10b5-1 plan disclosures; while 2024 exercises were significant, formal policy controls mitigate opportunistic trading risks .
- Say-on-Pay trajectory: Decline to 72% in 2024 prompted constructive changes (PSUs, caps, guidelines); continued engagement and outcome of 2025 vote will signal investor acceptance of the revamped program .