Theodore Harris
BALCHEMAbout Theodore Harris
Theodore L. Harris, age 60, is Chairman, President, and CEO of Balchem Corporation (BCPC), serving as CEO since April 2015 and Chairman since January 2017; he also serves on the board of Pentair plc . Under his leadership, Balchem delivered record FY2024 results: revenue $953.7 million and adjusted EBITDA $250.3 million, with strong free cash flow and debt reduction, alongside progress on sustainability targets . Pay-versus-performance data show cumulative TSR outperformance versus its peer index in several years and adjusted EBITDA increasing to $250.3 million in 2024; the year-end value of $100 invested in BCPC since 12/31/2019 reached $164.52 in 2024 . The board deems Harris’s broad managerial, international, operational and sales experience key to executing growth strategies and long-term value creation .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Ashland Global Holdings Inc. (NYSE) | Senior Vice President; President, Performance Materials | Nov 2014–Apr 2015 | Led specialty chemicals segment, applying operational and commercial leadership relevant to Balchem’s portfolio . |
| Ashland Inc. | SVP/President, Performance Materials & Ashland Supply Chain | 2011–2014 | Combined P&L and supply chain leadership; strategic execution aligning manufacturing and materials management . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Pentair plc (NYSE) | Director | Current | Current public company directorship per BCPC proxy . |
| Balchem Corporation | Chairman, President & CEO; Class 1 Director | CEO since 2015; Chair since 2017 | Director since 2015; next election 2028 (Class 1 rebalanced in 2024) . |
Fixed Compensation
| Component (2024) | Amount | Notes |
|---|---|---|
| Base Salary | $1,155,000 | 2024 salary for Harris . |
| Company 401(k) Matching | $20,700 | Fully vested match up to 6% of eligible compensation in company stock . |
| Other Perquisites | $33,786 | Auto allowance, financial planner reimbursement, auto insurance/maintenance, business auto expenses, employee award points . |
| CEO Pay Ratio | 120:1 | CEO total comp $6,872,769 vs median employee $57,332 (2024) . |
Performance Compensation
Annual Incentive (ICP) — Design and 2024 Payout
| Metric | Weight | Threshold | Target | Stretch | Maximum | 2024 Actual | Payout % |
|---|---|---|---|---|---|---|---|
| Adjusted EBITDA | 60% | $230.9M | $241.1M | $253.2M | $265.2M | $250.3M | 122.9% . |
| Revenue | 20% | $920.5M | $962.0M | $986.1M | $1,010.1M | $953.7M | 86% . |
| Free Cash Flow | 20% | $120.0M | $133.3M | $140.0M | $146.6M | $147.2M | 200% . |
| ESG Modifier | +/- 10% | — | — | — | — | Applied +6% for execs | +6% modifier . |
| Aggregate Payout Level | — | — | — | — | — | — | 131.0% of target (before ESG); ESG +6% applied . |
| Harris 2024 ICP Paid | $1,843,753 | — | — | — | — | — | Disclosed non-equity incentive comp . |
Notes:
- ICP targets (as % of base salary): CEO 115% .
- No discretionary cash bonuses approved in 2024 .
Long-Term Incentive (LTIP) — 2024 Grants and Structure
| Grant Date | Instrument | Quantity | Terms | Grant FV/Strike |
|---|---|---|---|---|
| 02/08/2024 | Performance Shares (EBITDA & TSR PSUs) — target | 11,770 | 50% EBITDA vs 3-year target; 50% relative TSR vs Russell 2000; performance period 2024–2026; pays in Feb 2027 . | Grant-date FV included in total awards . |
| 02/08/2024 | Time-Based Restricted Shares | 6,650 | Cliff vest after 3 years; change-in-control double trigger per plan; death vests . | Grant-date FV included . |
| 02/08/2024 | Stock Options | 21,500 | 10-year term; vest 20% after 1 year, 40% after 2 years, 40% after 3 years . | Strike $143.43 . |
| 09/15/2022 | One-time retention Options (4 premium tranches) | 130,000 | 25% FMV; 25% FMV+10%; 25% FMV+15%; 25% FMV+20%; vesting: 25% at year 3, 25% at year 4, 50% at year 5; 10-year expiry . | Grant-date FV ≈ $6.3M . |
2022–2024 PSU Payout (earned in Feb 2025):
| Component | Actual Performance | Payout % of Target |
|---|---|---|
| EBITDA growth (2021→2024) | 31.0% vs 24.2% target; 31.5% max | 192.4% . |
| Relative TSR | Balchem TSR 8.0%; percentile rank 63.7 vs Russell 2000 | 154.7% . |
| Aggregate PSU Payout | — | 172.4% . |
Equity Mix and Multipliers
| Role | Target Equity Multiplier (of Base Salary) |
|---|---|
| CEO (2024) | 3.30x . |
Equity Ownership & Alignment
Beneficial Ownership (as of April 21, 2025)
| Holder | Total Beneficial Ownership | % of Class | Breakdown |
|---|---|---|---|
| Theodore L. Harris | 218,525 | <1% | 156,950 options exercisable within 60 days; 1,946 shares in 401(k); 59,629 shares held directly . |
Outstanding Unvested Equity (12/31/2024)
| Category | Shares | Value Basis |
|---|---|---|
| Unvested Time-Based Restricted Shares | 18,910 | $163.00/share = $3,082,330 . |
| Unvested Performance Shares (at target) | 36,080 | $163.00/share = $5,881,040 . |
Selected Option Holdings and Vesting Profile (CEO):
- Multiple option tranches outstanding with strikes from $74.57 to $150.85 (incl. 09/15/2022 premium series); 02/08/2034 grant: 21,500 options at $143.43 .
- Illustrative vesting calendar (unvested shares delivering): 2025: 12,760 (Jan 1), 5,980 (Feb 10); 2026: 11,550 (Jan 1), 6,280 (Feb 8); 2027: 11,770 (Jan 1), 6,650 (Feb 8) .
Ownership Policy and Trading Limitations:
- Stock Ownership Requirements updated Feb 13, 2025: CEO 5x base salary (up from 3x); Directors 5x retainer; CFO 3x; others 2x; five years to comply; all directors/officers currently in compliance .
- Insider Trading Policy prohibits holding BCPC securities in margin accounts or pledging as collateral; hedging prohibited .
Employment Terms
- Harris Employment Agreement (Apr 22, 2015) auto-renews annually unless notice; includes non-compete and non-solicit obligations during employment and for two years post-termination .
- Termination/Change-in-Control (as of 12/31/2024, illustrative):
- Termination without cause or for Good Reason: base $2,310,000 + ICP bonus $1,843,753; no automatic equity acceleration absent CoC; committee discretionary treatment per plan .
- Involuntary termination within 24 months post-CoC: base $2,310,000 + ICP bonus $1,843,753 + equity acceleration valued at $13,020,200 (time-based RS fully, PSUs at target; options/SARs fully exercisable) .
- Voluntary termination within 24 months post-CoC: base $1,155,000 + ICP bonus $1,843,753 + equity acceleration $13,020,200 .
- No tax gross-ups provided under agreements/policies .
- Executive Severance Policy adopted Feb 12, 2025 (general officers):
- Termination w/o cause outside CoC period: CEO 2x salary + 2x target bonus; 24 months COBRA; potential accelerated vesting in lieu of cash .
- Involuntary termination within CoC period: CEO 3x salary + 3x target bonus; 36 months COBRA; time-based equity accelerates; PSUs at target .
- Deferred Compensation Plan: voluntary deferrals (up to 75% salary, 100% ICP) with market tracking; in Feb 2025, company approved matching (up to 6% of base for exec deferrals), consistent with 401(k) match; Harris aggregate balance $4,847,692 (2024) .
Board Governance
- Board Composition and Independence: 6 of 7 directors independent; Harris is the sole non-independent director; all committees (Audit, Compensation, Governance, Executive) comprised solely of independent directors .
- Committees and Roles:
- Audit Committee: Chair Daniel Knutson; members include Olivier Rigaud, Monica Vicente; all designated independent; multiple financial experts .
- Compensation Committee: Chair Matthew Wineinger; members David Fischer, Kathleen Fish, Daniel Knutson; independent; engages Pearl Meyer as independent consultant; evaluates risk and clawback policy administration .
- Governance Committee: Chair Kathleen Fish; oversees ownership policy compliance, succession planning, sustainability and ESG reviews .
- Executive Committee: chaired by Lead Director; supports CEO succession and evaluation criteria .
- Board Chair and Dual Role: Board supports combined CEO/Chair structure, emphasizing decisive leadership and clear accountability, with an empowered independent Lead Director (Wineinger) to reinforce independence and executive sessions of independent directors after each meeting .
- Meeting Attendance: 2024 average attendance 97.4% for Board and 94.3% for committees; employee directors do not receive director compensation (Harris) .
Director Compensation (Harris as Director)
- As an employee director, Harris receives no separate director compensation .
Say-on-Pay & Shareholder Feedback
- Say-on-Pay approval: 97.1% in 2024 (for compensation in 2023) ; approximately 72.3% approval in 2023, with subsequent outreach and program refinements including consultant change and peer group refresh .
Compensation Peer Group (Benchmarking)
- 2024 peer group includes Ashland Global, Cabot, FMC, H.B. Fuller, Ingevity, Minerals Technologies, Sensient Technologies, Stepan, Quaker Chemical, Element Solutions, Lancaster Colony, TreeHouse Foods, and others, selected for industry/size comparability; updated in Dec 2023 with Pearl Meyer input .
Performance & Track Record
| Year | CEO Total (SCT) | CEO CAP | Non-CEO Avg SCT | Non-CEO Avg CAP | BCPC $100 Since 12/31/2019 | Peer $100 Since 12/31/2019 | Net Income ($M) | Adjusted EBITDA ($M) |
|---|---|---|---|---|---|---|---|---|
| 2020 | $4,620,255 | $5,611,326 | $1,022,275 | $1,366,466 | 113.96 | 115.20 | 84.62 | 174.2 |
| 2021 | $5,761,673 | $12,201,461 | $1,260,686 | $2,362,829 | 167.40 | 142.61 | 96.10 | 189.8 |
| 2022 | $11,948,265 | $7,975,827 | $1,190,453 | $608,803 | 121.95 | 123.18 | 105.37 | 215.7 |
| 2023 | $5,889,707 | $10,939,071 | $1,298,379 | $1,667,102 | 149.36 | 124.91 | 108.54 | 230.9 |
| 2024 | $6,872,769 | $8,371,060 | $1,837,292 | $2,265,811 | 164.52 | 118.83 | 128.48 | 250.3 |
Notes: CAP reflects SEC-defined “compensation actually paid” adjustments; peer group TSR uses Dow Jones U.S. Specialty Chemicals Index .
Risk Indicators & Policies
- Clawback: Incentive-Based Compensation Recovery Policy adopted 2023; applies broadly to incentive comp tied to financial reporting; no indemnification for recovered compensation .
- Hedging/Pledging: Prohibited for directors and employees; margin accounts and pledging not allowed .
- Related Party Transactions: None during 2024 involving directors/officers or immediate family members; policy in place for review/approval .
- Equity Award Practices: No option/SAR repricing; minimum vesting periods; no liberal share recycling; change-in-control definitions require substantial transactions; double-trigger vesting under Executive Severance Policy .
Board Service History and Dual-Role Implications
- Harris is a Class 1 director standing for re-election to 2028; Chairman since 2017; board leadership combines CEO/Chair to promote decisive accountability with a robust Lead Director role and executive sessions to preserve independence .
- Independence mitigation: All committees are independent; Lead Director sets agendas, leads executive sessions, acts as liaison, and chairs when Chair absent .
- Meeting Attendance: High participation rates (Board 97.4% in 2024), supporting active oversight .
Employment & Contracts Summary
- Harris Agreement: Auto-renewal; non-compete/non-solicit for two years post-termination; illustrative termination benefits disclosed; equity acceleration under plan on CoC-linked involuntary termination; reduction to avoid excess parachute taxes if beneficial .
- Executive Severance Policy (2025): Sets standardized multiples and COBRA coverage; permits substitution of equity acceleration in lieu of cash severance under specified conditions .
Equity Ownership & Alignment Notes
- Stock Ownership Guidelines updated to CEO 5x salary; compliance confirmed; policy supports long-term alignment .
- Upcoming vesting dates suggest potential share deliveries in 2025–2027; transactions subject to Insider Trading Policy, blackout windows, and pre-clearance .
Investment Implications
- Pay-for-performance design ties ICP to Adjusted EBITDA and FCF with a capped structure and ESG modifier; 2024 payouts aligned with above-target EBITDA and FCF, supporting alignment with value creation .
- The 2022 one-time retention options with premium strike tranches and 5-year staged vesting are a retention lever that could reduce near-term departure risk; upcoming vest tranches in 2025–2027 may create episodic selling pressure, managed by policy constraints .
- Strong governance mitigants (independent committees, Lead Director, clawback, ownership policy, anti-pledging) offset dual-role concerns; high Say-on-Pay approval in 2024 following shareholder engagement indicates improved alignment and reduced compensation-related risk .
- Harris’s beneficial ownership (<1%) and policy-driven ownership requirements bolster skin-in-the-game; prohibitions on hedging/pledging reduce misalignment risk .