David A. Valkanoff
BENCHMARK ELECTRONICSAbout David A. Valkanoff
David A. Valkanoff, 61, is Executive Vice President and Chief Operating Officer of Benchmark Electronics (BHE) since July 2023, with 30+ years of global operations leadership across aerospace/defense, industrial, automotive, semiconductor, and electronics sectors . He previously served as Vice President of Operations for Carrier Global’s Refrigeration segment (Oct 2019–Jul 2023) and held executive roles at TPG, Celestica (global Lean Six Sigma sponsor), Visteon, and Nissan; he holds an MBA from Central Michigan University and a BA in Economics and Management from Albion College . Under the company’s 2024 performance framework, annual incentives paid out at 94.52% of target on aggregate results; Benchmark reported 2024 revenue of $2,656 million and net income of $63 million, and an SEC “Pay vs Performance” TSR value of 149.30 for 2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Carrier Global Corporation (NYSE: CARR) | Vice President of Operations, Refrigeration Segment | Oct 2019–Jul 2023 | Led operations for Refrigeration; multi-site global operations leadership |
| TPG | Executive roles | — | Operations leadership |
| Celestica | Executive roles; global Lean Six Sigma sponsor | — | Supported communications, A&D, enterprise/cloud, renewables, health tech, and semi equipment customers; Lean Six Sigma sponsorship |
| Visteon | Executive roles | — | Operations leadership |
| Nissan | Executive roles | — | Operations leadership |
Fixed Compensation
| Year | Base Salary ($) | % Increase vs prior year | Notes |
|---|---|---|---|
| 2023 | 475,000 | — | Benchmark-set market/merit process |
| 2024 | 484,500 | 2.0% | Company-wide 2% NEO increases effective Oct 2024 |
| Year | Non-Equity Annual Incentive ($) | % of Base Salary Earned | All Other Compensation ($) | Perquisite Detail |
|---|---|---|---|---|
| 2024 | 315,730 | 66.2% | 158,831 | Included $120,709 relocation, $2,930 financial planning, $398 health club, $2,458 executive physical |
Performance Compensation
Annual Incentive (2024 Design and Outcome)
| Metric | Weight | Target (Company) | Actual (Company) | Achievement vs Target | Payout Component (as % of base salary) | Form of Payout |
|---|---|---|---|---|---|---|
| Revenue | 40% | $2.808B | $2.656B | 72.95% | 20.4% | Cash (paid early 2025) |
| Adjusted Operating Income | 45% | $129.2M | $122.0M | 83.09% | 26.2% | Cash |
| Adjusted Inventory | 15% | $636.4M | $577.6M | 186.34% | 19.6% | Cash |
| Total | 100% | — | — | 94.52% (aggregate) | 66.2% | Cash |
Target/threshold/maximum opportunity as % of salary: 70% target (35% threshold, 140% max) .
Long-Term Incentives (granted 2024)
| Award Type | Grant Date | Units | Grant Date Fair Value ($) | Vesting/Performance | Performance Metrics |
|---|---|---|---|---|---|
| RSUs | Feb 22, 2024 | 16,881 | 500,000 | Time-based; beginning 2024, RSUs vest 33% per year over 3 years (2025–2027) | |
| PSUs (2024–2026) | Feb 22, 2024 | 16,881 (target) | 500,000 | 3-year performance period ending Dec 2026; payout 0–250% of target | Revenue, Operating Income Margin, ROIC (equally weighted) |
Grant pricing reference: Closing price was $29.62 on Feb 22, 2024 (grant date) .
PSU Results (Prior Cycle 2022–2024)
| Metric | Threshold (50%) | Target (100%) | Maximum (250%) | Actual | Outcome |
|---|---|---|---|---|---|
| Revenue | $2.527B | $2.956B | $3.399B | $2.656B | Below target |
| Operating Income Margin | 4.41% | 5.00% | 5.59% | 4.59% | Below target |
| ROIC | 11.90% | 14.00% | 16.11% | 9.87% | Below target |
| Aggregate | — | — | — | — | Earned at 43.55% of target |
Outstanding and Recently Vested Equity (as of Dec 31, 2024)
| Category | Shares/Units | Market/Payout Value ($) |
|---|---|---|
| Unvested RSUs | 31,768 | 1,442,268 |
| PSU (target, unearned) | 16,881 | 766,397 |
| Shares acquired on vesting in 2024 | 4,963 | 211,722 |
Scheduled RSU Vesting by Date (Valkanoff)
| Vesting Date | RSUs |
|---|---|
| Feb 22, 2025 | 5,627 |
| Aug 15, 2025 | 4,962 |
| Feb 22, 2026 | 5,627 |
| Aug 15, 2026 | 4,963 |
| Feb 22, 2027 | 5,627 |
| Aug 15, 2027 | 4,962 |
Note: 2024 grants shifted RSU vesting from four years to three years (33% annually) to align with peers .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 7,158 shares as of Mar 21, 2025 (less than 1%) |
| Ownership as % of shares outstanding | 0.02% (7,158 / 36,095,562 shares outstanding) |
| Unvested equity overhang | 31,768 RSUs and 16,881 PSUs (target) outstanding as of Dec 31, 2024 |
| Pledging/Hedging | Prohibited for directors and executives (anti-pledging, anti-hedging policy) |
| Stock ownership guidelines | CEO 5x salary; CFO 3x; other NEOs 2x salary; retain 20% of each RSU vesting until threshold met; updated Aug 2024 |
| Compliance status | All NEOs either in compliance or progressing toward required amount (for newer executives) |
Employment Terms
| Scenario | Cash Severance | Health Benefits | Equity Acceleration | Total |
|---|---|---|---|---|
| Termination without cause / Good reason | $800,230 | $25,363 | — | $825,593 |
| Change in Control + qualifying termination (double-trigger) | $1,600,460 | $38,045 | $2,208,665 (RSUs and PSUs at target accelerated) | $3,847,170 |
Additional terms:
- Agreements auto-renew annually unless terminated; include 2-year non-compete and non-solicit; confidentiality is indefinite .
- For non-CEO NEOs (including Valkanoff), severance equals 100% of annual base salary plus achievement-level bonus; health insurance continuation for one year; death/disability entitles prorated bonus; amounts reduced by 50% if other employment is secured (offset provision) .
- Golden parachute excise tax cutback to avoid 4999 excise tax where it increases net after-tax amounts .
- Company adopted an updated Dodd-Frank compliant clawback policy in 2023; recovers erroneously awarded incentive compensation for restatement periods .
Compensation Structure Notes and Governance
- Pay mixes emphasize at-risk pay: annual incentive tied to revenue (40%), Adjusted Operating Income (45%), and Adjusted Inventory (15%); 2024 aggregate achievement was 94.52% of target .
- Long-term incentive awards are 50% PSUs and 50% RSUs (at target) for 2024; PSUs tied to Revenue, Operating Income Margin, and ROIC; 0–250% payout range .
- Best practices include anti-hedging/pledging, double-trigger vesting on change-in-control, no option repricing, no tax gross-ups other than qualified relocation expenses; use of independent consultant .
- Say-on-Pay: 2024 shareholder support exceeded 96% .
- Compensation peer group (10-K peer index) includes Celestica, Flex, Jabil, Kimball Electronics, Plexus, Sanmina .
Investment Implications
- Alignment and retention: Significant unvested RSUs and PSUs (target) plus 3-year RSU vesting cadence provide ongoing retention hooks; anti-pledging/hedging and ownership guidelines improve alignment with shareholders .
- Near-term selling pressure: Multiple RSU vesting dates in 2025–2027 (e.g., ~10.6K RSUs scheduled in 2025) may create periodic liquidity events for tax withholding/sales, though policy constraints mitigate speculative activity .
- Pay-for-performance: 2024 annual incentive paid at 66.2% of salary for Valkanoff, reflecting below-target revenue and AOI but strong inventory reduction execution (186% of target), indicating operational discipline in working capital under his COO remit .
- Long-term performance risk: 2022–2024 PSU cycle paid at 43.55% due to revenue, margin, and ROIC underperformance vs targets; future PSU realization depends on achieving 2024–2026 goals across the same metrics, heightening execution risk .
- Company performance context: 2024 revenue of $2.656B and net income of $63M, with BHE’s pay-versus-performance TSR value at 149.30 vs peer index 375.27, underscores the need for sustained outperformance to drive higher PSU outcomes and equity value accretion .