Richard Htwe
BADGER METERAbout Richard Htwe
Vice President – Global Operations at Badger Meter, Inc. (BMI); joined the company in January 2023 and has been a Named Executive Officer (NEO) since 2023 . Company performance linked to 2024 incentives was strong: adjusted EBITDA and absolute free cash flow exceeded maximum targets, resulting in a 200% annual bonus payout for NEOs , while company-level pay-versus-performance metrics showed TSR value of $339.87 on a $100 base, Net Income of $124,942k, and EBITDA of $190,072k in 2024 . Education and age are not disclosed in BMI’s proxy statements.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Not disclosed | — | — | Not disclosed in company filings |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Not disclosed | — | — | Not disclosed in company filings |
Fixed Compensation
Multi-year summary compensation:
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 300,000 | 310,000 |
| Sign-on Bonus ($) | 50,000 | — |
| Stock Awards ($) | 154,836 | 203,098 |
| Annual Bonus ($) | 240,000 | 248,000 |
| Change in Pension Value ($) | — | 12,315 |
| All Other Compensation ($) | 36,366 | 46,490 |
| Total ($) | 781,202 | 819,903 |
Perquisites and other benefits detail:
- 2024 perquisites included ESSOP match $5,750, defined contribution credit $20,778, dividends on restricted stock $1,048, vehicle allowance $15,462, taxable supplemental LTD premiums $3,403, and taxable financial planning $49 .
- 2023 perquisites included ESSOP match $5,062 and defined contribution credit $17,042; dividends on restricted stock $478; vehicle usage $11,100; taxable supplemental LTD premiums $2,280; taxable financial planning $405 .
Target bonus opportunity:
- For non-CEO officers (including Htwe), target annual bonus levels ranged from 40%–50% of base salary depending on role and scope; specific individual target percent for Htwe is not separately disclosed .
Performance Compensation
Annual bonus metrics (2024):
| Metric | Threshold | Target | Maximum | Actual | Payout |
|---|---|---|---|---|---|
| Adjusted EBITDA ($mm) | 146.7 | 158.4 | 170.1 | 191.5 | 200% |
| Absolute Free Cash Flow ($mm) | 95.0 | 106.0 | 116.0 | 142.2 | 200% |
LTIP structure and metrics:
- PSU weighting and vesting: For 2024 grants, other NEOs’ LTIP mix was 60% PSUs / 40% RSAs; PSUs vest based on two equally weighted metrics—adjusted free cash flow conversion (50%) and adjusted ROIC (50%)—over a three-year period; achievement levels: 50% threshold, 100% target, 200% maximum; vesting occurs on the third anniversary of grant (no interim/pro-rata vesting) .
- 2022–2024 PSU outcome (company-level): FCF conversion actual 111.6% vs target 112.5%; ROIC actual 28.9% vs target 17.0%; blended vesting achievement 148.1% of target; aggregate target shares 13,132 and actual earned shares 19,448 for NEOs .
Grants of plan-based awards:
| Grant Year | Grant Date | RSAs (#) | RSAs Fair Value ($) | PSUs Threshold (#) | PSUs Target (#) | PSUs Max (#) | PSUs Fair Value ($) | Annual Bonus Threshold ($) | Annual Bonus Target ($) | Annual Bonus Max ($) |
|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 3/3/2023 | 625 | 77,356 | 313 | 626 | 1,252 | 77,480 | 60,000 | 120,000 | 240,000 |
| 2024 | 3/1/2024 | 508 | 81,239 | 381 | 762 | 1,524 | 121,859 | 62,000 | 124,000 | 248,000 |
Vesting schedules:
- RSAs vest ratably over three years; dividends accrue and are paid upon full vesting .
- PSUs vest/pay out on the third anniversary of grant based on performance achievement .
Option awards: No new options granted since March 2020; standard 10-year life and 20% per-year vesting for historical grants (Htwe currently has no options outstanding) .
Equity Ownership & Alignment
Beneficial ownership and outstanding awards:
| Item | Value |
|---|---|
| Beneficially owned shares (as of Feb 28, 2025) | 1,133 shares; <0.1% of common stock |
| Ownership breakdown | 208 shares jointly held with spouse; 925 restricted stock (sole voting/investment power) |
| Unvested RSAs (12/31/2024) | 925 shares; market value $196,211 (using 12/31/2024 close $212.12) |
| Unearned PSUs (12/31/2024) | 2,776 shares; market value $588,845 (at 12/31/2024 close; PSU valuation assumptions per plan) |
| Options (exercisable/unexercisable) | None |
| Stock vested (2024) | 208 shares vested; value realized $33,263 |
Ownership policy and pledging:
- Executive stock ownership guideline: at least 2x annual base salary (CEO 3x); new executives must reach target within six years; as of 12/31/2024, all executive officers either met/exceeded or were within the six-year window .
- Hedging/pledging prohibited: Executives and directors may not short, hedge, hold in margin accounts, or pledge BMI stock as collateral .
Employment Terms
- Role and start date: Vice President – Global Operations; joined January 2023 .
- Employment contracts: BMI does not use employment contracts or provide severance protection except following a change-in-control; protections are double-trigger (require change-in-control plus qualifying termination) .
- KEESA change-in-control terms (non-CEO executives): two years of salary and annual incentive compensation; continued benefits for two years; six-month non-compete; 280G/4999 excise tax “best net” cutback provision .
- “Good reason” definition includes material adverse changes, compensation/benefits reductions, relocation >35 miles, materially greater required travel, or certain notice failures; detailed conditions apply .
- Potential change-in-control payments (as of 12/31/2024): Salary and incentives $868,000; value of unvested options/restricted stock $196,211; value of unvested PSUs $294,423; retirement benefits $33,005; welfare benefits & other $106,742; total $1,498,381 .
- Clawback: Incentive compensation subject to recoupment in case of material restatement and may be recouped for illegal/fraudulent conduct or material code breaches causing harm .
- Tax gross-ups: None provided to executive officers .
Retirement and deferred comp:
- Non-qualified supplemental retirement plan present value (2024): $12,315; credited service 2.0 years; no payments in 2024 .
- Deferred compensation: Executive deferral program exists; Htwe is not shown as participating in 2024; only the CFO participated .
Compliance and related matters:
- Section 16 reporting: Company noted delinquent Form 4 filings related to 2021–2023 PSU vesting for certain officers; subsequently filed March 6, 2024 .
- Related party transactions: None in 2024 .
Investment Implications
- Pay-for-performance alignment: Htwe’s annual bonus and PSU outcomes are directly tied to robust company-level EBITDA and cash metrics; 2024 bonus paid at 200% due to exceeding maximum targets, with PSUs governed by 3-year FCF conversion and ROIC hurdles—reducing risk of short-term gaming and enhancing capital discipline .
- Vesting and potential selling pressure: RSAs vest ratably over three years and PSUs cliff-vest at the 3-year anniversary, creating predictable settlement windows; Htwe’s 2024 RSA/PSU grants (RSAs: 508; PSUs target: 762) and outstanding unvested awards (RSAs: 925; PSUs: 2,776) suggest upcoming vesting events rather than option-driven selling pressure (Htwe has no options) .
- Ownership alignment and risk controls: A 2x salary ownership guideline, strict anti-hedging/pledging policy, and clawback provisions strengthen alignment and reduce governance risk; no tax gross-ups, double-trigger KEESA, and clearly defined “good reason” limit controversial severance optics .
- Change-of-control economics and retention: KEESA protections (two years salary and bonus plus benefits) provide retention and continuity through potential transactions; Htwe’s illustrative CIC payout as of 12/31/2024 is ~$1.50M, modest relative to CEO, limiting parachute-related overhang while securing key operations leadership continuity .
- Track record context: Company’s TSR, Net Income, and EBITDA progression during 2020–2024 supports incentive quality and likely investor confidence in operations execution; however, executive-specific achievements or controversies for Htwe are not disclosed, so monitoring future vesting outcomes and operating KPIs remains prudent .