Gerald N. Herman
BRUKERAbout Gerald N. Herman
Gerald N. Herman, 67, is Executive Vice President and Chief Financial Officer of Bruker (CFO since June 2018; EVP & CFO since May 1, 2021), having joined the company in 2016 as Vice President and Corporate Controller; he is a CPA with an MBA from the University of Chicago and an M.S. in Taxation from Bentley University . In 2024, Bruker’s non-GAAP operating margin was 15.4% (down 300 bps YoY) and non-GAAP diluted EPS declined 6.6% to $2.41, which, alongside mixed goal attainment, produced a CFO cash incentive payout at 87.0% of target (82.4% financial, 97.5% individual) .
| Performance Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($USD) | $2,530,700,000 | $2,964,500,000 | $3,366,400,000 |
| EBITDA ($USD) | $547,900,000* | $604,000,000* | $594,100,000* |
| Values with * retrieved from S&P Global. |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Bruker Corporation | Interim CFO → CFO; EVP & CFO | 2018–present (EVP & CFO since 2021) | Led finance through growth/integration; co-architect of annual ICP goals and structure with CEO for execs . |
| Bruker Corporation | VP & Corporate Controller | 2016–2018 | Systems/controls foundation pre-CFO; public company reporting . |
| PAREXEL International | Corporate VP — Clinical Operations | 2014–Feb 2016 | Oversaw clinical ops at global CRO; operating rigor . |
| PAREXEL International | Corporate VP & Controller – Finance | 2008–2013 | Financial leadership and controls at public company . |
| Presstek, Inc. | Vice President — Corporate Controller | pre-2008 | Corporate controllership at public company . |
| Arthur Andersen LLP | Senior Manager | 1979–1987 | Audit/consulting; foundational CPA experience . |
External Roles
- No public-company directorships or external corporate roles disclosed for Mr. Herman in the proxy .
Fixed Compensation
| Metric ($USD) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary (Summary Compensation Table) | 570,982 | 603,538 | 635,385 |
| Non-Equity Incentive (Actual) | 270,588 | 506,969 | 387,476 |
| All Other Compensation | 16,518 | 17,922 | 19,032 |
| Total Compensation | 1,898,666 | 2,204,302 | 2,288,269 |
Notes:
- 2024 approved base salary was set at $644,234 (5% YoY increase from $613,556), while SCT reflects actual cash paid over the year .
Performance Compensation
Annual Incentive (ICP) Design and 2024 Outcomes (CFO)
- Structure: Financial goals 70% of target; individual goals 30%; financial component linearly pays 0–200%, individual 0–125% at committee discretion .
- 2024 payout (CFO): 82.4% financial, 97.5% individual, yielding total 87.0% of target; actual cash bonus $387,476 vs. target $450,964 (70% of base) .
| Metric (Corporate; applies to CEO & CFO) | Weight | 2024 Target | 2024 Actual | % of Incentive Goal Achieved |
|---|---|---|---|---|
| Currency-Adjusted Revenue Growth | 15% | $363.0M increase | $230.8M increase | 63.6% |
| Non-GAAP Operating Profit Improvement | 20% | $37.8M increase | $4.5M decrease | 0.0% |
| Working Capital Ratio Reduction | 20% | $0.021 reduction | $0.041 reduction | 194.4% |
| Non-GAAP EPS Increase | 15% | $0.21 increase | $0.13 increase | 61.9% |
| Financial Goals Total | 70% | — | — | 82.4% |
| Individual Goals (CFO) | 30% | Qualitative | Commercial excellence over-delivery; slight under-delivery in ops/org effectiveness | 97.5% |
| Total ICP Payout (CFO) | — | — | — | 87.0% |
Long-Term Incentives (Time-based RSUs and Stock Options)
- Program: Time-based RSUs and stock options vest ratably over four years; CFO options are priced at 110% of grant-date close, exercisable upon vesting, 10-year term; 2024 grants on Aug 9, 2024 .
| 2024 Grant (Aug 9, 2024) | Shares/Units | Exercise Price | Vesting | Grant Date Fair Value ($) |
|---|---|---|---|---|
| RSUs | 15,106 | — | 25% per year 2025–2028 | 936,572 |
| Stock Options | 13,742 | $68.20 | 25% per year 2025–2028; 10-yr expiry 8/09/2034 | 309,805 |
| Aggregate Economic Value | — | — | — | 1,246,377 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 110,543 shares; includes options to purchase 61,037 shares exercisable within 60 days of Apr 1, 2025; <1% of class . |
| 2024 Shares Vested (RSUs) | 11,153 shares vested; value realized $685,240; 4,103 shares withheld for taxes ($251,423) . |
| Outstanding Options (selected) | 12/01/2016: 8,004 (exercisable), $22.51, exp. 12/01/2026 ; 8/09/2018: 11,594 (exercisable), $34.02, exp. 8/09/2028 ; 8/08/2019: 11,344 (exercisable), $41.95, exp. 8/08/2029 ; 8/06/2020: 13,599 (exercisable), $43.50, exp. 8/06/2030 ; 8/05/2021: 7,363 (exercisable) + 2,455 (unexercisable), $81.32, exp. 8/05/2031 ; 8/11/2022: 6,342 (exercisable) + 6,344 (unexercisable), $62.00, exp. 8/11/2032 ; 8/10/2023: 2,791 (exercisable) + 8,376 (unexercisable), $66.35, exp. 8/10/2033 ; 8/09/2024: 13,742 (unexercisable), $68.20, exp. 8/09/2034 . |
| Unvested RSUs (as of 12/31/2024) | 8/05/2021: 1,963 ($115,071 MV) ; 8/11/2022: 6,261 ($367,020) ; 8/10/2023: 9,126 ($534,966) . |
| Pledging/Hedging | Prohibited for executives; includes margin and collateral pledges and hedging instruments . |
| Ownership Guidelines | Executives must hold shares = 2x base salary; 5-year attainment window; 50% of net-after-tax shares from vests/options must be held until compliant; all executives are in compliance . |
Vesting cadence insight:
- 2024 grants vest annually on 8/9 in 2025–2028; prior grants vest on anniversaries through 2025–2027. This creates predictable annual vesting dates that may coincide with insider trading windows; policy prohibits hedging/pledging and imposes blackout/trading rules per Insider Trading Policy .
Employment Terms
- Cash Severance: No company severance/change-in-control cash benefits for Mr. Herman; only Busse and Srega have specific severance contracts; for others (including Herman), no cash severance arrangements exist .
- Equity on Termination/CIC: Under 2016 Plan, double-trigger vesting applies if awards are assumed/continued and the executive is terminated without cause or resigns for good reason within 24 months post-CIC; if awards are not assumed/continued, options vest and time-based RSUs are treated as vested at CIC; death/disability accelerates time-based RSUs and keeps vested options exercisable for 90 days .
- CIC Value (Dec 31, 2024 reference): Unvested RSUs value for Mr. Herman would be $1,902,571 if accelerated (price per share $58.62) .
- Clawback: Mandatory recovery of incentive-based compensation upon accounting restatement (Nasdaq-compliant); plan also allows rescission and recovery for cause/policy breaches; awards subject to recoupment and company trading policies; no excise tax gross-ups .
- Related-Party Transactions Governance: CFO reviews/approves related-person transactions ≤$500,000 (and product/service ordinary-course items ≥$50,000); transactions >$500,000 escalated to Audit Committee; this makes CFO a gatekeeper for RPT review .
Compensation Structure Analysis
| Element | 2022 | 2023 | 2024 | Commentary |
|---|---|---|---|---|
| Cash (Salary + Bonus) | $841,570 | $1,110,507 | $1,022,861 | Cash component fell in 2024 on lower ICP vs 2023; suggests pay-for-performance responsiveness . |
| Equity (RSUs + Options, SCT grant-date fair value) | $1,040,578 | $1,075,873 | $1,246,377 | Higher 2024 equity mix; options for CFO priced at 110% of close, increasing performance leverage . |
| ICP Target | — | — | $450,964 (70% of base) | Target unchanged vs 2023; CFO target is 70% of base; payouts 0–200% financial, 0–125% individual . |
Peer benchmarking and governance:
- Compensation consultant: Aon; 2024 fees $288,955 comp-related, $384,950 non-comp (insurance brokerage); committee deemed independent .
- 2024 peer group: Agilent, Bio-Rad, Bio-Techne, Charles River, Entegris, Haemonetics, Integra LifeSciences, Mettler Toledo, MKS, Onto Innovation, OSI Systems, Revvity, Teradyne, Waters, Watts Water; Bruker size positioned near peer medians; used as market check vs median practices .
Investment Implications
- Alignment: Herman’s 2024 cash bonus paid at 87% of target aligns with mixed corporate outcomes (revenue/EPS growth below targets; strong working capital improvement), signaling incentive sensitivity to operating results .
- Retention and selling pressure: Four-year ratable vesting of substantial RSUs and options (2024–2028) supports retention; predictable annual vest dates may create periodic liquidity events although hedging/pledging are prohibited and ownership guidelines enforce ongoing share retention .
- Change-in-control risk: No cash severance for CFO reduces potential windfall risk; equity uses double-trigger vesting if assumed, mitigating immediate CIC acceleration; as of 12/31/2024, unvested RSUs represented ~$1.9M of potential value under acceleration .
- Governance and RPT oversight: Robust clawback and no hedging/pledging are shareholder-friendly; CFO’s RPT approval authority up to $500k centralizes initial review, with audit committee escalation above that threshold (monitor for process discipline) .
- Pay mix trend: Rising equity weight and above-market option strike (110% of close) heighten performance leverage for CFO; 2024 equity value increased YoY despite lower ICP, keeping long-term interests aligned with TSR and value creation .