Mark Hershey
ARMSTRONG WORLD INDUSTRIESAbout Mark Hershey
Mark A. Hershey is Senior Vice President & Chief Operating Officer of Armstrong World Industries (AWI), appointed effective April 1, 2025; age 55 as of April 2025 . He has served in senior leadership roles at AWI since 2011, including SVP, Americas; SVP, General Counsel & Business Development; SVP, General Counsel; Chief Compliance Officer; and Secretary, reflecting deep operating and legal/compliance expertise within the company . Company performance during 2024 included net sales growth of 12% to $1,446 million, adjusted EBITDA up 13% to $486 million, and an annualized absolute TSR of 15.3% for the 2022–2024 PSU period, underscoring strong execution of AWI’s strategy . AWI’s 2024 say‑on‑pay vote approval declined to 61% (from ~95% historically), prompting board/shareholder engagement and program adjustments; this context informs ongoing incentive design and governance scrutiny for all NEOs, including Hershey .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Armstrong World Industries | Senior Vice President & Chief Operating Officer | Apr 2025–present | Role oversees company operations at enterprise level; formally appointed by Board . |
| Armstrong World Industries | Senior Vice President, Americas | Jan 2022–Mar 2025 | Led Americas region commercial operations . |
| Armstrong World Industries | Senior Vice President, General Counsel & Business Development | Jan 2020–Jan 2022 | Led legal function and corporate/business development . |
| Armstrong World Industries | Senior Vice President, General Counsel | Jul 2011–Jan 2022 | Chief legal officer responsibilities; long-tenured leadership . |
| Armstrong World Industries | Chief Compliance Officer | Feb 2012–Jan 2022 | Oversight of company compliance programs . |
| Armstrong World Industries | Secretary | Apr 2016–Jan 2022 | Corporate secretary duties . |
External Roles
No external directorships or public board roles for Hershey are disclosed in the latest proxy or 8‑K filings .
Fixed Compensation
Multi‑year compensation (Summary Compensation Table amounts; all figures in USD):
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary | $490,000 | $497,350 | $520,418 |
| Target bonus % (AIP) | — | — | 70% |
| Actual AIP paid | $243,530 | $463,040 | $575,590 |
| Stock awards (grant‑date fair value) | $754,784 | $825,879 | $795,393 |
| All other compensation | $82,936 | $48,424 | $82,936 |
| Total reported compensation | $1,571,250 | $1,834,693 | $1,974,337 |
AIP design and outcomes (2024):
| Component | Weighting | Target | Actual | Payout factor |
|---|---|---|---|---|
| Revenue | 30% | $1,352M | $1,376M | 135% |
| Adjusted EBITDA | 70% | $458M | $478M | 168% |
| Blended AIP payout | — | — | — | 158% of target |
Perquisites and benefits (2024 detail):
| Item | Amount |
|---|---|
| Cash dividends on RSUs/PSUs | $23,663 |
| Company match (401(k) + NQDCP) | $58,094 |
| Executive long‑term disability premium | $1,179 |
Performance Compensation
2024 LTIP grant structure (awarded Feb 21, 2024):
| Instrument | Weight | Target value | Vesting |
|---|---|---|---|
| PSUs | 60% | $419,820 | Performance period 1/1/2024–12/31/2026; vest based on Absolute TSR (60%), adjusted FCF (25%), MF adjusted EBITDA (15%) with linear payouts 50–275% of target; no payout below threshold . |
| RSUs | 40% | $279,880 | Three‑year cliff vest on 3/1/2027 (if in good standing) . |
2024 LTIP PSU metric targets (company‑level):
| Metric | Weight | Target | Payout scale |
|---|---|---|---|
| Absolute TSR | 60% | 10.0% annualized; ending share price $160.35 from $120.47 start | 50% at 5.0%; 100% at 10.0%; 200% at 15.0%; 300% at 20.0% |
| Adjusted FCF (3‑yr cumulative) | 25% | $863M | 50% at $734M; 100% at $863M; 200% at $993M |
| Mineral Fiber adjusted EBITDA (3‑yr cumulative) | 15% | $1,187M | 50% at $1,009M; 200% at $1,365M; 300% at $1,365M+ |
2022–2024 PSU results (finalized April 8, 2025):
| Metric | Hershey PSUs granted | Outcome | Payout factor | Hershey PSUs vested |
|---|---|---|---|---|
| Absolute TSR | 27,009 total NEO reference; Hershey grant 11,659 | 15.3% annualized | 206% | 14,412 |
| Cumulative adjusted FCF | Hershey grant 11,659 | $768M vs $860M target | 73% | 2,128 |
| Cumulative MFV | Hershey grant 11,659 | Below threshold | 0% | 0 |
| Weighted PSU payout | — | — | 142% of target | 16,540 total to Hershey |
Program changes impacting incentives:
- LTIP mix shifted from 100% PSUs historically to 60% PSUs/40% RSUs beginning 2023–2024; maintained for 2025 after peer review .
- 2025 PSU maximum payout reduced from 275% to 250% weighted average; retirement provision tightened from 55/5 to 60/5 for equity treatment eligibility (10‑month service minimum retained) .
- AIP metrics remained revenue and adjusted EBITDA for 2025; LTIP metrics adjusted to reintroduce Mineral Fiber Volume (MFV) in 2025 in place of MF adjusted EBITDA .
Clawback and trading policies:
- Mandatory clawback compliant with SEC/NYSE adopted Oct 18, 2023; recovery of erroneously awarded incentive compensation upon restatements, irrespective of misconduct .
- Prohibitions on hedging, short sales, derivative transactions, margin accounts, and pledging of company stock under Insider Trading Policy; pre‑clearance required for transactions and Rule 10b5‑1 plans .
Equity Ownership & Alignment
| Item | Amount | Notes |
|---|---|---|
| Common shares beneficially owned | 45,263 | As of March 31, 2025. |
| Unvested RSUs (NEO RSUs) | 8,100 | Aggregate unvested RSUs per proxy ownership table. |
| Unearned PSUs (at threshold amounts, as of 12/31/2024) | 2023 PSU threshold 5,298; 2024 PSU threshold 3,527 | 2023 awards vest 12/31/2025; 2024 awards vest 12/31/2026; actual payouts depend on performance . |
| Stock options | None | NEOs do not receive stock option grants . |
| Ownership guidelines | 3x base salary; retention of 50% of net shares until met | Hershey met guideline as of Dec 2024 . |
| Shares outstanding | 43,424,918 | For ownership % context. |
| Ownership % of shares outstanding | ~0.10% (45,263 / 43,424,918) | Based on disclosed counts; below 1% threshold for any individual . |
| Pledging/Hedging | Prohibited | Reduces alignment risk. |
Vesting schedule detail (as of FY2024 year‑end):
| Grant | Units | Vesting |
|---|---|---|
| RSUs granted 2/21/2024 | 2,351 | Vest 3/1/2027 (three‑year cliff) . |
| RSUs granted 3/1/2023 | 3,532 | Vest 3/1/2026 (three‑year cliff) . |
| PSUs granted 3/1/2023 | 5,298 (threshold reference) | Performance period ends 12/31/2025; vest based on metrics . |
| PSUs granted 2/21/2024 | 3,527 (threshold reference) | Performance period ends 12/31/2026; vest based on metrics . |
Employment Terms
| Provision | Term |
|---|---|
| Appointment and role | Appointed SVP & COO effective April 1, 2025 . |
| Severance (no CIC) | 1.5x current base salary + target AIP; plus pro‑rated AIP for year of termination . |
| Severance (with CIC; double‑trigger) | 2.0x current base salary + target AIP; plus pro‑rated AIP; equity awards feature double‑trigger vesting upon CIC . |
| Non‑compete | 12 months post‑termination (no competition with AWI businesses) . |
| Non‑solicit customers | 24 months post‑termination . |
| Non‑solicit employees | 24 months post‑termination . |
| Tax gross‑ups | None for 280G/4999; no tax gross‑ups generally . |
Compensation Structure Analysis
- Pay mix and risk: Hershey’s 2024 total direct compensation included salary ($520k), AIP ($576k), and LTIP at target ($700k), with at‑risk pay tied to revenue/EBITDA and multi‑year PSUs; RSUs add retention and lower risk versus options .
- Metric rigor: 2024 AIP targets implied +4% revenue and +7% adjusted EBITDA vs prior year; actuals exceeded targets, producing 158% payout; LTIP PSU hurdles for Absolute TSR/FCF/MF EBITDA are structured with linear caps and thresholds .
- Governance response: Following 61% say‑on‑pay in 2024, AWI committed to limit off‑cycle awards, enhance disclosures, reduce PSU maxima in 2025, and reintroduce MFV as a metric, indicating responsiveness to investor feedback .
- Options risk: No option grants to NEOs; reduces potential repricing risk and volatility‑linked incentives .
- Clawbacks/hedging/pledging: Robust clawback policy and trading prohibitions strengthen pay‑for‑performance alignment and mitigate misalignment risk .
Related Party Transactions
No related person transactions since January 1, 2024 were required to be disclosed; Governance Committee oversees such reviews under written policy .
Compensation Peer Group (benchmarking)
Peer companies used for compensation benchmarking in 2024:
| Peer group constituents |
|---|
| AAON, Inc.; Advanced Drainage Systems, Inc.; American Woodmark Corp; The AZEK Co., Inc.; Apogee Enterprises, Inc.; CSW Industrials, Inc.; Eagle Materials, Inc.; Franklin Electric Co, Inc.; Gibraltar Industries, Inc.; Griffon Corp; Interface, Inc.; Masonite International Corp; Quanex Building Products Corp; Simpson Manufacturing Co., Inc.; SPX Technologies, Inc.; Trex Company, Inc. |
AWI targets pay levels around market median for NEOs, with deviations based on performance and role; CEO’s LTIP target was positioned near the 75th percentile due to performance/tenure (context for program design) .
Say‑on‑Pay & Shareholder Feedback
- 2024 say‑on‑pay approval: 61% in favor (down from typical ≥95% historically), with most concerns focused on the CEO retention grant structure .
- Engagement and responses: Spring/Fall 2024 outreach covered metrics, succession, board refresh; actions included limiting off‑cycle awards, reintroducing MFV metric in 2025 PSUs, reducing PSU maxima, and enhancing “plain English” CD&A disclosures .
Expertise & Qualifications
Company disclosures list Hershey’s executive roles and tenure; formal education details are not provided in the latest proxy or 8‑K filings .
Work History & Career Trajectory
| Organization | Role progression | Time at AWI |
|---|---|---|
| Armstrong World Industries | GC (2011–2022), CCO (2012–2022), Secretary (2016–2022), GC & BD (2020–2022), SVP, Americas (2022–2025), SVP & COO (2025–) | With AWI since 2011 |
Equity Ownership & Potential Selling Pressure
- Near‑term vesting events: 2023 PSUs vest 12/31/2025; 2024 PSUs vest 12/31/2026; RSUs from 2023/2024 vest on three‑year cliffs (3/1/2026 and 3/1/2027); these dates can create episodic supply but hedging/pledging is prohibited, and ownership guidelines require retention until multi‑year targets are met .
- Ownership alignment: Hershey met the 3x salary ownership guideline by Dec 2024, holds 45,263 shares plus 8,100 unvested RSUs; no options outstanding .
Investment Implications
- Alignment and retention: Hershey’s compensation is materially performance‑based (AIP and PSUs) with added RSU retention; he has met stock ownership guidelines, and AWI’s prohibitions on hedging/pledging plus clawbacks strengthen alignment with shareholders .
- Execution track record: Company‑level 2024 performance exceeded revenue and EBITDA targets (AIP paid at 158%) and delivered strong TSR; Hershey’s leadership across the Americas and now as COO aligns with these results, though specific individual attribution is not disclosed .
- Governance signals: The 2024 say‑on‑pay outcome introduces scrutiny and potential program adjustments; 2025 changes (lower PSU caps, MFV metric reinstatement, tighter retirement criteria) indicate responsiveness, reducing pay inflation and windfall risks for NEOs .
- Supply watch: Monitor PSU vesting in late 2025 and 2026 and RSU cliffs in 2026/2027 for potential selling pressure, though ownership guidelines and policy constraints may temper near‑term dispositions .