David Johnson
About David Johnson
David T. Johnson is Vice President, Chief Financial Officer and Treasurer of American Vanguard (AVD), a role he has held since March 2008; he is 68 years old and previously served as Finance Director at Amcor Flexibles UK and VP Finance at Eaton Aerospace’s Sterer Engineering subsidiary . In 2024, AVD reported net sales of $549.5 million and adjusted EBITDA of $40 million, and the company’s pay-versus-performance table shows cumulative TSR value of $24 (per $100 initial investment) for 2024, underscoring a challenging year; Johnson also helped lead the interim “Office of the CEO” after the July 2024 CEO transition and outlined remediation for identified internal-control material weaknesses on the Q1’25 call . Management’s 2025 framework ties cash incentives to formulaic KPIs (Adjusted EBITDA, net sales, net trade working capital, transformation and manufacturing/opex), while equity awards for 2024 included options with TSR-based exercise triggers, aligning upside with shareholders; no cash bonus was paid to NEOs for 2024 performance given results .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| American Vanguard (AVD) | VP, CFO & Treasurer | Since Mar 2008 | Long-tenured finance leader; co-led interim Office of CEO in 2H’24 to drive transformation and cash/working capital focus . |
| Amcor Flexibles UK Ltd. | Finance Director | Jun 2003–Mar 2008 | Finance leadership at $500M decorative packaging subsidiary of Amcor . |
| Eaton Aerospace (Sterer Engineering) | VP Finance | Apr 2001–Jun 2003 | Division finance leadership within large multinational . |
External Roles
- Not disclosed for Johnson in AVD filings reviewed .
Fixed Compensation
Multi-year compensation (CFO – David T. Johnson):
| Metric (USD) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary | $410,033 | $428,278 | $429,048 |
| Target Bonus % of Base | n/d | n/d | 60% (non-CEO NEOs) |
| Actual Bonus Paid | $0 | $0 | $0 |
| Stock Awards (Grant-Date FV) | $199,634 | $180,680 | $43,073 |
| Option Awards (Grant-Date FV) | — | — | $204,354 |
| All Other Compensation | $53,767 | $79,793 | $286,795 (incl. $250k OCEO transformation benefit) |
| Total Compensation | $849,684 | $688,751 | $963,270 |
Notes:
- AVD paid no cash bonuses to NEOs for 2024 given performance; similar for 2023 .
Performance Compensation
Short-term incentive (STI) design and 2024 outcome:
| Year | Metric | Weighting | Target | Actual | Payout | Vesting/Timing |
|---|---|---|---|---|---|---|
| 2024 | Adjusted EBITDA | 60% | Company-wide target (not disclosed) | Below threshold; pool unfunded | 0% | Cash bonus; none paid |
| 2024 | Net Sales | 20% | Company-wide target (not disclosed) | Below threshold; pool unfunded | 0% | Cash bonus; none paid |
| 2024 | Operating Expenses | 20% | Company-wide target (not disclosed) | Below threshold; pool unfunded | 0% | Cash bonus; none paid |
| 2024 | SMART Goal Modifier | 80–120% | Applies to STI formula | Not applicable (no pool) | 0% | — |
2025 forward-looking STI framework for NEOs (target = 60% of base for non-CEO):
| Year | Metric | Weighting | Target | Payout Range | Notes |
|---|---|---|---|---|---|
| 2025 | Adjusted EBITDA | 50% | Company-wide (not disclosed) | 0–180% of target bonus (aggregate) | Key profitability KPI . |
| 2025 | Net Sales | 20% | Company-wide (not disclosed) | 0–180% of target bonus (aggregate) | Growth KPI . |
| 2025 | Net Trade Working Capital | 20% | Company-wide (not disclosed) | 0–180% of target bonus (aggregate) | Balance-sheet efficiency KPI . |
| 2025 | Transformation Execution | 5% | Company goals (not disclosed) | 0–180% of target bonus (aggregate) | Strategy execution KPI . |
| 2025 | Manufacturing/Opex | 5% | Company goals (not disclosed) | 0–180% of target bonus (aggregate) | Cost discipline KPI . |
Equity awards (CFO) – 2024 grants and vesting mechanics:
| Grant Type | Grant Date | Shares/Options | Grant-Date FV (USD) | Strike | Vesting | Additional Conditions |
|---|---|---|---|---|---|---|
| RSUs (time-based) | 1/22/2024 | 4,190 | $43,073 | — | 3 equal tranches on 1st, 2nd, 3rd anniversaries; continuous employment required | — |
| Stock Options (TSR-conditioned) | 1/22/2024 | 48,888 | $204,354 | $10.28 | Time-based vest on 3rd anniversary (1/22/2027) | Exercisability requires 1/3 at $20 and 2/3 at $25 FMV for 20 consecutive trading days . |
| Stock Vested (2024) | — | 5,482 | $91,111 value realized | — | As per prior grants | — |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 74,335 shares (as of April 5, 2025); under 1% of class . |
| Unvested RSUs (12/31/2024) | 21,010 units; market value $97,276 . |
| Options – Exercisable/Unexercisable | 0 / 48,888; strike $10.28; expiration 1/22/2027 . |
| Stock Ownership Guidelines | CEO 4x salary; other Section 16 officers (incl. CFO) 2x salary . |
| Guideline Compliance | Not specifically disclosed for Johnson . |
| Hedging/Pledging | Hedging prohibited; directors and Section 16 officers are prohibited from hedging and from holding Company securities in margin accounts . |
| Insider Policy & Trading Plans | Insider Trading Policy requires pre-clearance, blackout windows, and allows Rule 10b5‑1 trading plans; policy covers controlled entities and family members . |
Vesting and potential sell-pressure indicators:
- 2024 RSUs vest in equal tranches on the first, second, and third anniversaries of 1/22/2024, creating potential periodic share deliveries in 2025–2027; trading is further constrained by pre-clearance/blackouts and any 10b5‑1 plans .
- 2024 options cannot be exercised unless the stock trades at or above $20 (1/3) and $25 (2/3) for 20 consecutive trading days after time-vesting on 1/22/2027, aligning upside with TSR and limiting near-term exercise-driven selling pressure .
Employment Terms
Change-in-control (CIC) economics for non-CEO NEOs (double trigger within 24 months of CIC; requires release of claims):
| Component (Illustrative, as of 12/31/2024) | CFO Amount |
|---|---|
| Cash – 2x Base Salary | $858,096 |
| Cash – 2x Average Bonus | $87,760 |
| COBRA (24 months) | $64,650 |
| Outplacement | $10,000 |
| Equity Acceleration (unvested) | $97,276 |
| Total CIC Payments (Illustrative) | $1,117,782 |
Additional terms and policies:
- Clawback policy: recoupment of excess incentive compensation upon a material restatement tied to fraud/misconduct during the prior 3 completed fiscal years .
- No excise or income tax gross-ups on CIC payments for NEOs .
- Anti-hedging policy applies to directors and Section 16 officers; also prohibits holding shares in margin accounts .
- Non-compete and non-solicit provisions for the CFO are not specifically disclosed in the proxy filings reviewed .
Perquisites and benefits (selected 2024 items):
- Automobile allowance of $18,000; insurance premiums of $1,545; Company 401(k) contributions of $47,750; OCEO transformation benefit of $250,000 for service in the interim Office of CEO (Q3–Q4’24) .
Performance & Track Record
Operating and shareholder outcomes:
- AVD 2024 net sales $549.5 million; adjusted EBITDA $40 million (final audited vs prior $42 million unaudited), reflecting destocking and specific product/market headwinds; management lowered 2025 guidance to net sales $535–$545 million and adjusted EBITDA $40–$44 million .
- Pay-versus-performance disclosures show cumulative TSR values (value of $100 initial investment): 2020 $100, 2021 $106, 2022 $141, 2023 $72, 2024 $24, highlighting significant TSR pressure in 2023–2024; net income was $(124.9) million in 2024 and net sales $549.5 million .
- On the Q1’25 call, Johnson detailed remediation plans for material weaknesses identified during the 2024 close, and highlighted $86 million year-over-year reduction in net trade working capital and ~$20 million lower debt versus the prior year, supporting balance-sheet strengthening amid cycle challenges .
AVD pay-versus-performance (selected):
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Cumulative TSR ($100 basis) | $100 | $106 | $141 | $72 | $24 |
| Net Income ($000s) | $15,242 | $18,587 | $27,404 | $7,519 | $(124,855) |
| Net Sales ($000s) | $458,704 | $557,676 | $609,615 | $579,371 | $549,520 |
Compensation Governance, Peer Group, Say‑on‑Pay
- Compensation consultant: Exequity LLP; Compensation Committee evaluated and affirmed consultant independence .
- Comparator “Proxy Peers” (specialty chemicals) used for benchmarking included: AdvanSix (ASIX), Arcadium Lithium (ALTM), Aspen Aerogels (ASPN), Balchem (BCPC), Core Molding Tech (CMT), CVR Partners (UAN), Ecovyst (ECVT), Hawkins (HWKN), Haynes International (HAYN), Innospec (IOSP), Intrepid Potash (IPI), LSB Industries (LXU), Quaker Chemical (KWR), Tredegar (TG) .
- Say‑on‑pay results: 2022 83% (contested proxy), 2023 91%, 2024 93% approval; average ~89% over three years .
| Year | Say‑on‑Pay Approval |
|---|---|
| 2022 | 83% (contested) |
| 2023 | 91% |
| 2024 | 93% |
Investment Implications
- Alignment: Johnson’s 2024 option grant requires sustained share-price thresholds ($20/$25 for 20 days) after time-vesting in 2027, tightly linking personal upside to TSR; combined with a robust anti-hedging/margin policy and 2x-salary ownership guideline for Section 16 officers, the structure supports long-term alignment and discourages short-term de-risking of equity exposure .
- Selling pressure: Near-term selling pressure appears limited by policy constraints and the fact that 2024 options are not exercisable until 2027 and only upon hitting price triggers; RSU tranches vest annually through 2027, but pre-clearance/blackout requirements mitigate opportunistic timing, and no pledging disclosure was found for Johnson .
- Retention and risk: CIC protection provides 2x salary and 2x average bonus plus benefits/acceleration (illustrative total ~$1.12 million), supporting retention amid a multi-year transformation; however, 2024’s material weaknesses and TSR declines elevate execution risk, placing a premium on continued working capital and cost discipline that management outlined on the Q1’25 call .
- Pay-for-performance: With no 2024 bonus and a KPI-driven 2025 STI (50% Adjusted EBITDA, 20% net sales, 20% working capital, 10% transformation/manufacturing), compensation levers reinforce deliverables investors care about (profitability, cash conversion, operating leverage) during the recovery phase .