Erica McLaughlin
CABOTAbout Erica McLaughlin
Erica McLaughlin (age 48) is Executive Vice President, Chief Financial Officer, and Head of Corporate Strategy at Cabot Corporation. She joined Cabot in 2002, became CFO in May 2018, added Corporate Strategy in October 2018, and was elected EVP in December 2022 . Under the “Creating for Tomorrow” strategy, Cabot delivered a 12% adjusted EPS CAGR over FY22–FY24 (top end of 8–12% goal) and generated $1.2B of cumulative DFCF; FY24 total segment EBIT rose to $701M while adjusted EPS reached $7.06, with $265M returned to shareholders (≈55% of DFCF), initiatives in EV/battery materials, and an 8% dividend increase . Cabot’s TSR improved from a $100 base to $339 by FY24 (company PVP disclosure), reflecting robust shareholder value creation during this period .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Cabot Corporation | EVP, CFO & Head of Corporate Strategy | Dec 2022–present (CFO since May 2018; Strategy since Oct 2018) | Led capital allocation and investor communications; oversight of strategy and balance sheet; strengthened liquidity . |
| Cabot Corporation | VP, Business Operations (Reinforcement Materials) & GM, Tire | Jun 2016–May 2018 | Commercial and operating leadership in core segment tied to tire customers . |
| Cabot Corporation | VP, Investor Relations & Corporate Communications | Jul 2011–Jun 2016 | Built market credibility and transparency with investors . |
| Cabot Corporation | Finance & Corporate Planning leadership roles | 2002–2011 | Financial planning and analysis across businesses . |
External Roles
No public company directorships or external board roles were disclosed for Ms. McLaughlin in Cabot’s FY2024 10-K or 2025 Proxy .
Fixed Compensation
| Component | FY2024 Value | Notes |
|---|---|---|
| Base Salary | $607,541 | 5% increase approved in Nov 2023 effective Jan 2024 . |
| Target Bonus % | 80% of base | CFO STI target for FY24. |
| Target Bonus ($) | $486,033 | Based on target % and salary. |
| Actual STI Paid | $689,652 | Total payout 142% of target (corporate 138.4% + individual 150%) . |
Performance Compensation
Annual STI – metrics, targets, actuals, payout (Corporate portion = 70% weight)
| Metric (weight) | Threshold (50%) | Target (100%) | Max (200%) | FY2024 Actual | Payout % |
|---|---|---|---|---|---|
| Adjusted EBIT (60%) | $488M | $671M | $633M | $633M | 137.7% |
| NWC Days (20%) | 80 | 75–73 | 68 | 73 | 100.0% |
| DFCF (20%) | $270M | $365–405M | $500M | $479M | 179.0% |
| Weighted Corporate Payout | 138.4% |
Notes: Individual performance factor was judged discretionary; Ms. McLaughlin’s individual component was assessed at 150% for FY2024, yielding total STI at 142% of target .
Long-Term Incentives – structure, metrics, vesting
- Mix: 35% PSUs, 35% stock options, 30% time-based RSUs (TSUs) (by grant-date value) .
- PSU metrics and weighting: Adjusted EPS (65%) and Adjusted RONA (35%); three annual performance tranches with a three-year overall vest; 0–200% payout per tranche .
- Option vesting: 30%/30%/40% over 3 years; 10-year term; strike = closing price at grant .
- TSU vesting: Cliff vest at 3 years; dividend equivalents in cash during vesting on earned PSUs/TSUs .
- FY2024 PSU tranche achievements: Fiscal 2024 tranche for FY2024–2026 awards earned at 185.6% (EPS 177.9%, RONA 200%); the 2022 grant’s FY2024 tranche earned at 181.5%; the 2023 grant’s FY2024 tranche at 123.5% .
FY2024 LTI Grants (Nov 10, 2023)
| Award | Quantity | Exercise/Notes | Grant-Date Fair Value |
|---|---|---|---|
| TSUs | 5,443 | 3-year cliff vest | $404,959 |
| PSUs (target) | 6,350 | EPS (65%) + RONA (35%); 3 annual tranches | $472,440 |
| Stock Options | 17,231 | $74.40 strike; 10-year term; 30/30/40 vest | $472,612 |
Equity Ownership & Alignment
Beneficial Ownership and Outstanding Awards (as of Jan 15, 2025 / Sep 30, 2024)
| Item | Amount |
|---|---|
| Total beneficial ownership | 95,390 shares; <1% of class . |
| Options exercisable | 3,151 (2017, $62.24) + 8,910 (2018, $61.17) . |
| Options unexercisable | 8,997 (2021, $58.27) + 11,653 (2022, $73.84) + 17,231 (2023, $74.40) . |
| Unvested TSUs (counts; market value at $111.77) | 5,277 ($589,810) + 5,078 ($567,568) + 5,443 ($608,364) . |
| Unearned PSUs (counts; payout value at $111.77) | 2,666 ($297,979) + 8,468 ($946,468) . |
| FY2024 realized equity (vest/exercise) | Options: 86,865 exercised ($4,048,967 value) ; Stock vested: 24,406 shares ($1,873,087) . |
Alignment, pledging/hedging, guidelines:
- Ownership guideline: 3× base salary for direct reports to CEO; all Management Executive Committee members with ≥5 years under guidelines had met them as of filing .
- Hedging/pledging prohibited for directors and LTI participants; no single-trigger change-in-control vesting; no option repricing without shareholder approval .
- Related-party transactions: none reported since start of FY2024 .
Employment Terms
Change-in-Control and Separation Economics (illustrative values if event on Sep 30, 2024)
| Scenario | Severance Pay | Accelerated Unvested Equity | Benefits/Perqs | Total |
|---|---|---|---|---|
| Death | — | $5,154,742 | $1,822,622 | $6,977,364 |
| Disability | — | $5,154,742 | — | $5,154,742 |
| Involuntary Termination within 2 years post-CoC (w/o cause or for good reason) | $3,057,126 | $5,848,722 | $152,530 | $9,058,378 |
Plan mechanics and governance:
- Senior Management Severance Protection Plan: for CFO, 2× base salary + bonus (greater of highest in last 3 years or current target) upon qualifying termination post-CoC; 2 years of benefits; pro-rated bonus; outplacement up to 15% of base .
- No excise tax gross-ups; “better-of” cutback vs. pay full and pay excise tax (whichever yields higher after-tax outcome) .
- Clawback: Dodd-Frank compliant recovery policy adopted Sept 2023; discretionary recoupment policy also in place .
- Employment agreements: NEOs generally serve without individual employment contracts (exception: China-based EVP); CFO has no individual employment agreement .
Perquisites and deferred comp:
- 2024 “All Other Compensation” included 401(k) and Supplemental 401(k) contributions ($34,500 and $94,440), a 10% deferred comp credit on eligible deferrals ($16,642), and other items ($5,243); executive physical exam cost $3,644; covered by Death Benefit Protection Plan (up to $3M) .
- Supplemental 401(k) aggregate balance: $943,468 (as of FY2024 year-end); no 2024 deferrals to nonqualified deferred comp by Ms. McLaughlin .
Investment Implications
- Pay-for-performance alignment: Strong linkage via STI (Adjusted EBIT, DFCF, NWC days) and PSUs (Adjusted EPS, RONA) with above-target FY2024 performance translating into a 142% STI payout and high PSU tranche earn-outs; investor support evident with 98% Say‑on‑Pay approval in 2024 .
- Retention and overhang: Material unvested TSUs/PSUs and unexercised options create multi-year retention incentives; vesting cadence (annual PSU tranches; 3-year TSU vest; 3-year option vest) moderates near-term selling pressure but implies periodic supply as awards vest .
- Alignment safeguards: Robust stock ownership guidelines, prohibition on hedging/pledging, clawback policies, no option repricing or single‑trigger CoC vesting reduce governance risk and signal alignment with long-term shareholder value .
- Performance credibility: As CFO and Head of Corporate Strategy, McLaughlin helped drive execution of a strategy delivering a 12% adjusted EPS CAGR over FY22–FY24, $1.2B DFCF, and TSR outperformance (value of $100 investment to $339), while returning $265M to shareholders in FY2024—supportive of investor confidence in capital allocation discipline .
Overall: Compensation structure and policies are investor-friendly with clear operating and capital efficiency metrics, strong shareholder alignment mechanisms, and favorable execution record—supporting lower compensation/governance risk and constructive trading signals tied to sustained operating performance and capital returns .