Thomas E. Ferguson
About Thomas E. Ferguson
Thomas E. Ferguson, 68, has served as AZZ’s President & Chief Executive Officer and as a non‑independent director since 2013. Prior to AZZ, he served as interim CEO of FlexSteel Pipeline Technologies (2013) and held senior leadership roles at Flowserve, including President, Flow Solutions Group (2010–2012) and President, Pump Division (2003–2009) . Under his tenure, AZZ’s long‑term incentives have paid above target on relative TSR cycles (e.g., FY2022 PSU payout at 134% of target, 67th percentile rank), signaling multi‑year value creation . FY2024 execution featured record sales/EBITDA in both Precoat Metals and Metal Coatings, and Ferguson’s pay mix remained heavily performance‑based (78% “at risk”) .
Past Roles
| Organization | Role | Years | Strategic Impact / Notes |
|---|---|---|---|
| AZZ Inc. | President & CEO; Director (non‑independent) | 2013–present | CEO and Board member; led portfolio transformation including Precoat integration . |
| FlexSteel Pipeline Technologies | Interim CEO | 2013 | Interim leadership ahead of joining AZZ . |
| Flowserve Corporation | President, Flow Solutions Group | 2010–2012 | Led global business line . |
| Flowserve Corporation | President, Pump Division | 2003–2009 | Division leadership in core industrial equipment . |
| Flowserve Corporation | Senior Vice President | 2006–2010 | Corporate senior leadership . |
| Flowserve Corporation | President, Flow Solutions Division | 2000–2002 | Division leadership . |
| Flowserve Corporation | VP & GM, Flow Solutions NA | 1999–2000 | Regional GM role . |
| Flowserve Corporation | VP, Marketing & Technology, Flow Solutions | 1997–1999 | Product/technology leadership . |
External Roles
- No other public company directorships disclosed in AZZ proxy biographies for Ferguson .
Fixed Compensation
| Metric | FY2023 | FY2024 |
|---|---|---|
| Base Salary ($) | $940,256 | $940,256 |
| Target Bonus (% of Salary) | 100% | 100% |
| Actual STI Payout (% of Salary) | 120% | 131.3% |
| Actual STI Payout ($) | $1,119,353 | $1,234,556 |
Performance Compensation
- Short‑Term Incentive (design and outcomes example – FY2022 CEO):
Ferguson’s STI metrics balanced earnings, cash flow, and qualitative goals; results paid above target on EPS and qualitative components.
| Metric | Weight | Target | Actual | % of Target Achieved | Vesting/Payment |
|---|---|---|---|---|---|
| Diluted EPS | 50% | $2.70 | $3.34 | 124% | Cash (annual) |
| Company Cash Flow | 25% | $85.2m | $57.61m | 68% | Cash (annual) |
| Qualitative (discretionary) | 25% | n/a | n/a | 160% | Cash (annual) |
- Long‑Term Incentive (equity mix 50% RSUs / 50% PSUs; RSUs 3‑year ratable vest; PSUs 3‑year performance on relative TSR):
FY2022 PSUs (granted May 4, 2021) paid 134% and vested May 4, 2024; future cycles use similar relative TSR framework and peer set approach .
| Grant Year | Grant Date | Vehicle | Shares/Units (#) | Max (#) | Grant‑Date Fair Value ($) | Vesting / Performance |
|---|---|---|---|---|---|---|
| 2024 LTI | 04/28/2023 | RSU | 26,932 | — | 1,016,144 | 1/3 annually over 3 years |
| 2024 LTI | 04/28/2023 | PSU (target) | 26,932 | 53,864 | 1,156,191 | 3‑yr relative TSR; payout 0–200% |
| 2023 LTI | 05/09/2022 | RSU | 23,899 | — | 1,071,392 | 1/3 annually over 3 years |
| 2023 LTI | 05/09/2022 | PSU (target) | 19,916 | 39,832 | 1,075,265 | 3‑yr relative TSR; payout 0–200% |
Additional notes:
- FY2025 proxy shows “pay at risk” for CEO at 82%, with FY2025 STI above target; FY2023 PSUs (granted 5/9/2022) paid 134% at 67th percentile .
- 2024 committee allowed discretionary qualitative adjustments (100–150% of award targets) reflecting transformation execution; STI payouts disclosed per NEO .
Equity Ownership & Alignment
| Date (Record) | Shares Beneficially Owned | % Outstanding | RSUs/PSUs Vesting ≤60 days |
|---|---|---|---|
| Apr 28, 2023 | 170,550 | <1% | 42,693 (22,861 RSUs; 17,941 PSUs; 1,891 DEs) |
| May 10, 2024 | 228,672 | <1% | — (not counted unless vest ≤60 days) |
| Apr 30, 2025 | 211,458 | <1% | 35,635 (7,967 RSUs; 26,687 PSUs; 981 DEs) |
- Executive stock ownership guideline: CEO must hold 4x base salary or at least 100,000 shares; Ferguson has attained required threshold (confirmed in FY2023 disclosures) .
- Anti‑hedging/anti‑pledging: Hedging and pledging are prohibited for directors and executive officers; transactions require pre‑clearance under Insider Trading Policy .
- Options/SARs: Legacy SARs remained outstanding historically; at 4/30/2020, 66,471 SARs were exercisable but out‑of‑the‑money at the then price ($31.39), implying no payable value; by FY2022, no NEO stock options outstanding .
Employment Terms
| Provision | Key Terms |
|---|---|
| Agreement history | Initial CEO agreement Nov 2013; Amended & Restated Sept 29, 2016 (30,000 RSU cliff vest 9/29/2019); Second Amended CEO Agreement Oct 3, 2019 extended term to Oct 3, 2022 with automatic one‑year renewals unless notice given ≥120 days prior . |
| Base/Bonus eligibility | Annual base salary (reviewed by Board/Committee) and STI/LTI eligibility under plans; targets set as % of salary . |
| Severance (non‑CIC) | If terminated without Cause or for Good Reason: (i) Accrued Amounts, (ii) 24 months base salary paid over time (payroll), (iii) pro‑rated STI for year of termination; Committee may deem RSUs/PSUs vested at its discretion; release required; 409A 6‑month delay if applicable . |
| Change‑in‑Control (CIC) | If terminated without Cause or for Good Reason in connection with a CIC (from definitive agreement to 12 months post‑CIC): (i) Accrued Amounts, (ii) 299% of base salary lump sum (subject to release), (iii) all unvested equity vests (per FY2023 proxy); excise tax best‑net cutback applies . |
| Restrictive covenants | Non‑compete and non‑solicit for 12 months post‑employment; standstill and non‑disparagement provisions; geographic scope across AZZ operating footprint; blackouts and 10b5‑1 plan mechanics noted in agreements . |
| Clawbacks | Executive Officer Incentive Compensation Recovery Policy (Rule 10D‑1 compliant) adopted June 29, 2023; Amended Compensation Recovery Policy supplements for broader misconduct/restatement recoupment; 2024 review concluded no recovery required related to an immaterial accounting reclassification . |
Board Governance
- Role and independence: Ferguson is a non‑independent director; he serves on no board committees .
- Board leadership: Independent Chair Daniel R. Feehan (Chair since 2019), providing governance counterbalance to CEO dual role .
- Director pay: As an executive, Ferguson receives no additional director compensation (non‑employee director retainers/equity do not apply to him) .
Compensation Committee, Peer Benchmarking, Say‑on‑Pay
- Consultant: Meridian serves as the Compensation Committee’s independent advisor; committee determined no conflicts .
- Peer groups: Historical peer set centered on industrials; after the Precoat acquisition/disposition, AZZ revised its FY2024 industry peer group (building products, steel, construction materials, aluminum, etc.) to better match the focused coatings portfolio .
- Market positioning: Committee does not target specific percentiles; generally aligns salary/STI/LTI around median subject to discretion .
- Say‑on‑Pay: 98.3% shareholder approval in 2022, indicating strong support for pay program .
Risk Indicators & Red Flags
- Hedging/pledging prohibited; transactions pre‑cleared—reduces misalignment/leveraged risk .
- No equity repricing disclosed; LTI heavily performance‑based (relative TSR PSUs) .
- Section 16 compliance noted as timely in FY2024 .
- CIC cash multiple (2.99x base salary) and equity acceleration are material obligations in a sale scenario .
Investment Implications
- Alignment: CEO holds >100k shares and meets elevated ownership guideline, with 78–82% of pay at risk and PSUs tied to relative TSR—favorable alignment with long‑term shareholder value creation .
- Execution and value creation: Above‑target STI and PSU outcomes (e.g., FY2022 PSUs at 134%) and record segment performance support confidence in operating execution under Ferguson .
- Retention vs. dilution/overhang: Multi‑year RSU/PSU structures create ongoing vesting but anti‑hedging/pledging policies and ownership guidelines mitigate short‑term selling pressure; monitor annual LTI grant sizes and earned PSU levels for dilution risk .
- Transaction sensitivity: In a strategic sale, 2.99x base salary CIC cash plus equity acceleration could be a meaningful cash/equity overhang; however, double‑trigger protections and best‑net excise cutback are standard market features .
- Governance: Independent chair and committee structure offset CEO/director dual role; long‑standing Meridian engagement and strong say‑on‑pay reduce governance risk premia .