Jaco van der Merwe
About Jaco van der Merwe
Jaco G. van der Merwe, age 52, has served as President & CEO of Astec Industries since January 6, 2023 and is the only non‑independent director on the Board . He previously led Astec’s Energy segment and served as Group President (2016–2019); prior roles include senior leadership at Epiroc/Atlas Copco and earlier positions at Denel Aviation; he holds a Metallurgical Engineering degree from Tshwane University of Technology and an MBA from the University of Pretoria . Under his tenure, 2024 Adjusted EBITDA was $111.8M (up modestly vs. 2023 $110.0M), GAAP Net Income was $4.1M, and cumulative TSR value on a $100 basis was $84.57 versus peer group $196.11, with “Compensation Actually Paid” to PEO at $3.15M reflecting equity valuation changes .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Astec Industries | President & CEO | Jan 2023–present | Enterprise transformation; ERP execution focus and EBITDA/WCT targets in AIP |
| Astec Industries | Group President (incl. Energy) | Aug 2016–Jan 2019 | Segment leadership; operational execution pre-CEO transition |
| Epiroc / Atlas Copco | VP Marketing, Deephole Drilling; President/GM Mining & Rock Excavation Customer Center | 2010–2016 | Global P&L and go-to-market leadership in mining and drilling |
| Denel Aviation | Various roles | Pre‑1998 | Early technical/operations career |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Not disclosed in 2025 proxy for Jaco G. van der Merwe | — | — | — |
Fixed Compensation
Multi-year CEO compensation (SCT totals):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 400,000 | 720,548 | 779,838 |
| Bonus ($) | — | — | — |
| Stock Awards ($) | 465,763 | 1,329,805 | 2,187,089 |
| Non-Equity Incentive ($) | 268,500 | 1,120,170 | 464,848 |
| All Other Compensation ($) | 77,802 | 147,404 | 232,313 |
| Total ($) | 1,212,065 | 3,317,927 | 3,664,088 |
Base salary progression and target bonus:
| Item | 12/31/23 | Change | 12/31/24 |
|---|---|---|---|
| Base Salary ($) | 725,000 | +10.3% | 800,000 |
| Target AIP (% of base) | 100% | — | 100% |
| Target AIP ($) | — | — | 800,000 |
Board approves CEO salary changes (CEO not in deliberations), guided by FW Cook market study; raises aligned to market comparables .
Performance Compensation
Annual cash incentive (AIP) structure and 2024 outcomes:
| Metric | Weighting | Threshold | Target | Maximum | Actual 2024 | Unweighted Payout % |
|---|---|---|---|---|---|---|
| Adjusted EBITDA | 50% | $110.4M | $138.0M | $165.6M | $111.8M | 52% |
| Working Capital Turnover (WCT) | 25% | 3.2x | 4.0x | 4.8x | 3.6x | 77% |
| Strategy Execution (ERP milestones) | 25% | 50% | 100% | 200% | 50% | 50% |
| Weighted Overall Payout (% of target) | — | — | — | — | — | 58.1% |
CEO 2024 AIP payout: $464,848 (58.1% of $800,000 target) .
Long-Term Incentive (LTI) design and 2024 grants:
| Award Type | Grant Date | Target Value ($) | Units Granted | Vesting | Performance Metrics |
|---|---|---|---|---|---|
| RSUs (time-based) | 2/26/24 | 1,075,000 | 30,523 | Equal installments on first three anniversaries (2/26/25, 2/26/26, 2/26/27) | Time-based only |
| PSUs – Adjusted ROIC | 2/26/24 | 537,500 | 15,261 (target) | Vests 3rd anniversary (2/26/27), 0–200% earned | 3‑yr average Adjusted ROIC (50% PSU value) |
| PSUs – Relative TSR (custom comparator) | 2/26/24 | 537,500 | 15,261 (target) | Vests 3rd anniversary (2/26/27), 0–200% earned | Relative TSR (50% PSU value; 25th/50th/75th percentile thresholds) |
Grant date fair values: RSUs $1,075,020; PSUs $537,492 (ROIC) and $574,577 (TSR) . Prior-cycle PSUs granted 2/28/22 paid 0% (below threshold) upon performance completion (12/31/24), indicating underperformance on 2022–2024 measures .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 43,221 shares; <1% of class (22,803,976 shares outstanding) |
| Ownership Guidelines | CEO required to hold 5x annual base salary; until met, must retain 50% of net shares; PSUs excluded from count until earned |
| Hedging/Pledging | Hedging prohibited for directors/officers/employees; plan prohibits pledging/transfer of un-delivered awards; no pledging disclosures for CEO |
| Options Outstanding | Company reports only RSUs/PSUs outstanding; no options outstanding as of 12/31/24 |
Employment Terms
Severance economics and triggers:
| Scenario (as of 12/31/24) | Cash Severance | Health Benefits | Equity Acceleration | Outplacement | Total |
|---|---|---|---|---|---|
| Involuntary Termination (no CIC) | $2,400,000 (1.5x salary+target bonus) | $38,726 | $1,593,026 | $10,000 | $4,041,752 |
| Involuntary Termination in connection with CIC | $4,800,000 (3.0x salary+target bonus) | $77,453 | $3,133,681 | $25,000 | $8,036,134 |
| Retirement/Death/Disability | — | — | $3,133,681 | — | $3,133,681 |
Current Executive & Key Employee Severance Plan (effective 1/1/25): Tier I executives receive 2.0x salary+target bonus for regular termination and 3.0x for CIC, plus 24/36 months of health benefits, double-trigger CIC vesting, and outplacement up to $25,000; requires 12‑month non‑compete, non‑solicit, and non‑recruit covenants (Tier I) . Equity plan treatment on CIC: single‑trigger full vesting if awards are not assumed; if assumed, double‑trigger acceleration upon qualifying termination within one year .
Clawback: Adopted Oct 2, 2023, compliant with Exchange Act Section 10D‑1/Nasdaq; covers incentive compensation on restatements and misconduct, at Committee discretion for service‑based awards .
Board Service and Governance
- Board service: Director since 2023; Class I; current term expires 2026; no committee memberships; only non‑independent director; independent Chair presides over executive sessions each quarter .
- Governance mitigants: Independent directors on all committees; anti‑hedging policy; majority voting for directors; no “poison pill”; outside advisors authorized by Board/committees .
Director compensation: CEO receives no additional compensation for Board service .
Compensation Committee Analysis
- Committee composition: All independent; Compensation Committee chaired by Linda I. Knoll; Tracey H. Cook serves; Nominating and Corporate Governance Committee chaired by Mary L. Howell .
- Practices: Independent consultant (FW Cook) used; high proportion of at‑risk pay; no guaranteed bonuses or tax gross‑ups; targets aligned to shareholder interests; no single‑trigger severance features (note: equity plan provides single‑trigger vesting only if awards are not assumed) .
Investment Implications
- Pay-for-performance alignment: 2024 AIP paid 58.1% of target driven by EBITDA/WCT/ERP milestones; LTI balanced between RSUs and PSUs with strict ROIC/relative TSR hurdles and 0–200% payout range; prior-cycle PSUs paid 0%, underscoring performance sensitivity on ROIC/TSR .
- Retention and selling pressure: CEO holds 43,221 shares (<1%); RSU tranches vest on 2/26/25, 2/26/26, 2/26/27, and PSUs on 2/26/27—expect periodic vestings that can create liquidity events; hedging is prohibited and executives must retain 50% of net shares until guidelines are met, which moderates near‑term selling pressure .
- Change-in-control leverage: Tier I CIC multiple at 3.0x salary+target plus full equity acceleration (subject to single/double‑trigger mechanics) implies meaningful payout on strategic transactions, with restrictive covenants protecting the franchise post‑termination .
- Governance quality: Independent Chair and fully independent committees offset CEO dual role; robust clawback and anti‑hedging policies reduce headline risk, though absolute CEO ownership is modest versus shares outstanding .
Monitoring priorities: track quarterly AIP metric progression (EBITDA/WCT) and PSUs’ ROIC/relative TSR trajectory; watch upcoming RSU/PSU vesting dates for potential Form 4 activity; assess ERP milestones and working capital efficiency improvements as leading indicators for incentive payouts .