Cheryl Beranek
ClearfieldAbout Cheryl Beranek
Cheryl Beranek, age 62, is President and Chief Executive Officer of Clearfield, Inc. and has served on the Board since December 2007; she is not independent due to her executive role and serves on no Board committees . FY2024 results deteriorated amid industry demand resets: net sales fell to $166.7M from $268.7M, gross margin compressed to 17.3% from 31.7%, and net income swung to a loss of $(12.5)M from $32.5M in FY2023; the company repurchased 1.16M shares (~$33.1M) and ended FY2024 with $155.5M cash/investments and $2.2M debt . Over 2021–2024, cumulative TSR per “Pay vs Performance” was $518.78 (2022 peak) and $193.16 (2024), with net sales and net income disclosed for each year .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Clearfield, Inc. | President & CEO | 2007–present | Led fiber connectivity strategy and operations; management insight to Board |
| APA Cables & Networks (former Clearfield subsidiary) | President | 2003–2007 | Built cable assembly/contract manufacturing capabilities |
| Americable | President | 2002–2003 | Drove niche fiber termination/distribution offerings |
| Americable | Chief Operating Officer | 2001–2002 | Operational leadership in fiber products |
| Transition Networks Inc. | VP Marketing | 1996–2001 | Product marketing for global fiber premise market |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Key Tronic Corporation (Nasdaq: KTCC) | Director | Jan 2024–present | Current public company directorship |
| CyberOptics Corporation (Nasdaq: CYBE) | Director | May 2020–Nov 2022 | Company acquired by Nordson in Nov 2022 |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 374,415 | 425,000 | 425,000 |
| Director Fees ($) | 0 (exec director) | 0 (exec director) | 0 (exec director) |
| All Other Compensation ($) | 20,112 | 21,262 | 20,482 |
Notes:
- CEO receives no Board compensation due to executive status .
- Stock ownership guideline for CEO is 6x base salary; executives with 5+ years exceed guidelines; retention requirement applies if not compliant .
Performance Compensation
Summary Compensation Mix
| Component | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Bonus ($) | — | — | 140,250 (discretionary) |
| Stock Awards ($) | 398,649 | 615,600 | 999,971 |
| Option Awards ($) | 224,642 | — | — |
| Non-Equity Incentive Plan ($) | 954,757 | — | — (no payout) |
| Total Compensation ($) | 1,972,574 | 1,061,862 | 1,585,703 |
Annual Cash Incentive (2024 Bonus Program)
| Metric | Weighting | Target | Maximum | Actual | Payout |
|---|---|---|---|---|---|
| Net Sales ($000s) | 75% | 207,000 | 258,750 | 166,705 | 0% (below target) |
| Gross Profit ($000s) | 25% | 49,000 | 61,500 | 28,889 | 0% (below target) |
| CEO Target/Max as % of Salary | 60% / 200% | — | — | — | 0%; $0 |
- Discretionary Cash Bonus: $140,250 (55% of target) recognizing strategic accomplishments (U.S. FieldShield® cable production readiness for BABA/BEAD and inventory actions driving positive CFO) .
Performance Stock Units (PSUs) – FY2024 Performance Awarded Nov 16, 2023
| Item | Value |
|---|---|
| Shares Granted (#) | 19,098 |
| Performance Metric | Adjusted EBITDA Target $7.84M |
| Actual Adjusted EBITDA | -$9.10M (did not meet) |
| Vesting Condition | 1-year cliff subject to metric and continued employment |
| Outcome | Forfeited (no vest) |
| Clawback | Subject to Compensation Recoupment Policy |
Restricted Stock (Time-Based)
| Grant | Shares | Vesting Schedule |
|---|---|---|
| Nov 16, 2023 | 6,667 | 1/3 annually starting Nov 16, 2023 (vests 2024/2025/2026) |
| Nov 16, 2024 | 19,098 | 1/3 annually starting Nov 16, 2024 (vests 2025/2026/2027) |
Equity Ownership & Alignment
Beneficial Ownership (as of Dec 30, 2024)
| Owner | Shares Beneficially Owned | % Outstanding | Notes |
|---|---|---|---|
| Cheryl Beranek | 516,527 | 3.6% | Includes options exercisable within 60 days: 50,573 shares |
| Shares Outstanding | 14,126,604 | — | As of record date |
Outstanding Equity Awards (as of Sept 30, 2024)
| Award Type | Details |
|---|---|
| Stock Options | 16,000 exercisable / 8,000 unexercisable at $12.43 expiring 11/13/2025 (vest 20% over 5 years) |
| Stock Options | 17,776 exercisable at $23.74 expiring 11/16/2025 (vest 1/3 over 3 years) |
| Stock Options | 5,865 exercisable / 2,932 unexercisable at $66.48 expiring 11/16/2026 (vest 1/3 over 3 years) |
| Restricted Stock (2022 grant) | 563 unvested; $21,934 market value at $38.96 |
| Restricted Stock (2023 grant) | 6,667 unvested; $259,733 market value |
| Restricted Stock (2024 grant) | 19,098 unvested; $744,058 market value |
| PSUs (2024 performance) | 19,098 unearned; $744,058 “payout value” not realized due to metric miss |
Alignment and Policies:
- Hedging and pledging of Clearfield stock are prohibited for directors and executive officers; short sales and public options trading prohibited .
- Stock ownership guidelines: CEO at 6x salary; executives/directors with 5+ years exceed guidelines; 50% net shares retention requirement if below guideline .
- Equity grant timing policy prevents grants around earnings/8-K events and restricts CEO delegated grants to non-officers under strict procedures .
Insider Selling Pressure Indicators:
- Upcoming scheduled RSU vesting and option expirations in 2025–2027 may create mechanical sell pressure for tax/option exercises (2025 and 2026 expiries at $12.43/$23.74/$66.48; RSU tranches in Nov 2025–2027) .
Employment Terms
| Scenario (Hypothetical on Sept 30, 2024) | Cash Payment ($) | Accelerated Equity ($) | Benefits ($) | Tax Gross-Up ($) | Total ($) |
|---|---|---|---|---|---|
| Termination without Cause / Good Reason or Non-Renewal | 1,528,739 | 212,240 | 9,266 | — | 1,750,245 |
| Change in Control (no termination) | 425,000 | 1,982,024 | — | — | 2,407,024 |
| Change in Control + Termination (without Cause/Good Reason) | 1,953,739 | 1,982,024 | 9,266 | — | 3,945,029 |
| Death/Disability | 425,000 | — | 9,266 | — | 2,434,266 (incl. $2M life insurance to estate) |
Key Contract Features:
- CEO employment agreement since Dec 16, 2008; auto-renews; target bonus must be 60% of salary; maximum 150% under agreement (CEO agreed to 60%/200% for FY2024 Bonus Program) .
- Severance (no-Cause/good reason/non-renewal): 2x salary + average bonus (3 yrs), prorated bonus for year of termination, 1 year COBRA premiums, and full acceleration of stock options; similar benefits post-CIC with enhanced average bonus rule; single-trigger base salary lump sum on CIC .
- Equity acceleration: 2007 Plan single-trigger; 2022 Plan double-trigger if assumed; single-trigger if not assumed; PSUs vest on CIC if not assumed or upon qualifying termination within 24 months post-CIC if assumed .
- Code 280G Tax Gross-Up Plan applies only to Ms. Beranek and COO Hill; reimburses excise taxes on CIC payments; no new participants allowed since Jan 2023 .
Board Governance and Director Service
- Director since 2007; no committee memberships; not independent (CEO) .
- Board structure: non-executive Chair (Ronald G. Roth), all committees chaired by independent directors; CEO not Chair and not on committees—mitigating dual-role independence concerns .
- Board met 10 times in FY2024; each nominee then serving attended ≥75% of meetings; regular executive sessions without management .
- Non-employee director compensation (FY2024): $40,000 annual retainer + ~$60,000 annual RSU grant; chair retainers +$10,000; increases to $50,000 retainer and ~$80,000 equity effective after 2025 meeting; CEO receives no director pay .
- Governance practices: annual elections; majority-vote resignation policy; shareholder engagement; robust clawback; ownership guidelines; ESG oversight by Nominating & Corporate Governance .
Performance & Track Record
- FY2024 highlights: U.S. FieldShield® cable manufacturing infrastructure for BABA/BEAD; BABA self-certification; inventory actions boosting cash flow; multiple product launches; 3D interactive fiber installation tool via BILT app .
- Capital allocation: repurchased 1,164,190 shares for ~$33.06M in FY2024 .
- Pay vs Performance: TSR values and net sales/net income disclosed for 2021–2024 (e.g., FY2024 TSR $193.16 with net sales $166,705k and net loss $(12,453)k) .
Compensation Structure Analysis
- Added PSUs (50% of FY2024 LTI) with adjusted EBITDA performance—stronger pay-for-performance alignment; PSUs forfeited after metric miss .
- Discretionary bonuses paid despite missing AIP targets, justified by strategic initiatives—investors should monitor for recurring discretionary awards if targets continue to be missed .
- Clawback policy updated to comply with SEC/Nasdaq and includes discretionary recoupment for errors/detrimental conduct .
- Ownership and grant policies (no hedging/pledging; equity granting windows) reduce misalignment/award timing risk .
- Say-on-pay approval improved to 94% in 2024 after engagement and program updates .
Related Party Transactions and Red Flags
- Related person: compensation to non-executive employee Andre Hill (son of COO and son-in-law of CEO) $159,718 in FY2024—disclosed; no other related transactions over $120k .
- Red flags: legacy 2007 Plan single-trigger vesting on CIC; CEO employment includes single-trigger base salary on CIC; presence of excise tax gross-up plan (limited to two executives) .
- No hedging/pledging allowed—a positive governance feature .
- Strong say-on-pay support (94%) mitigates immediate governance concerns .
- No SEC investigations/legal proceedings disclosed in proxy .
Compensation Peer Group and Shareholder Feedback
- Compensia engaged; peer group defined and minimally updated for FY2025 setting; focus on communications/electronics comparables .
- Shareholder feedback actions: enhanced disclosures, recoupment policy, ownership guidelines, new 2022 Plan (replacing “liberal” CIC definition), performance-based equity introduced .
Equity Ownership & Ownership Guidelines
- CEO holds 516,527 shares (3.6%); options exercisable within 60 days: 50,573 shares .
- CEO ownership guideline 6x salary; seasoned executives meet/exceed; retention rule if below .
Investment Implications
- Alignment: Significant at-risk pay (75% of FY2024 target comp) with clear performance metrics and clawback; CEO holds 3.6% beneficial ownership; hedging/pledging banned; strong say-on-pay support—positive for alignment .
- Retention/Transition: Robust severance (2x salary+avg bonus), double-trigger equity under 2022 Plan if assumed, single-trigger cash on CIC and legacy equity acceleration; excise tax gross-up in place—attractive retention but shareholder-unfriendly CIC features warrant monitoring .
- Trading Signals: Near-term RSU vesting and 2025–2026 option expirations can create mechanical sell/exercise flows; PSUs forfeited in FY2024 highlight near-term performance pressure; discretionary bonus despite AIP miss suggests Board support for strategic repositioning—watch for inventory normalization, BEAD-driven demand, and margin recovery trajectory .
- Governance: CEO is not Chair and sits on no committees; Board independence (7/8 nominees) and policies mitigate dual-role concerns; continued shareholder engagement is a positive .