Gregory Rustowicz
COLUMBUS MCKINNONAbout Gregory Rustowicz
Gregory P. Rustowicz is Executive Vice President, Finance and Chief Financial Officer of Columbus McKinnon (CMCO). He joined CMCO in August 2011 as Vice President, Finance and CFO and was promoted to EVP, Finance and CFO in July 2022; age 65; prior roles include VP Finance & Corporate Treasurer at Momentive Performance Materials, ~20 years in financial management at PPG Industries, and earlier a CPA at KPMG . Company context during his tenure: fiscal 2025 net sales of $965M, Adjusted EBITDA of $150.5M, and a GAAP net loss of $5.1M driven by non-cash pension settlement, facility consolidation impairments, and acquisition-related costs; cumulative TSR value for 2025 measured at 72.26 vs peer group 272.34, indicating underperformance over the disclosed horizon .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Momentive Performance Materials | Vice President, Finance and Corporate Treasurer | 2007–2011 | Corporate treasury and finance leadership at a specialty materials company |
| PPG Industries | Various finance leadership roles incl. Group CFO (Glass, Fiberglass & Chemicals), CFO Transitions Optical, Assistant Treasurer & Global Credit Director | 20 years (dates not disclosed) | Multi-division CFO roles, global treasury and credit leadership |
| KPMG | CPA (early career) | Not disclosed | Public accounting foundation (CPA) |
External Roles
- None disclosed in the proxy for Mr. Rustowicz .
Fixed Compensation
| Component | Fiscal 2025 detail |
|---|---|
| Base salary | $515,000 (increase of $15,000; +3%) |
| Salary actually paid (SCT) | $511,494 (reflects proration/timing) |
| Perquisites and other | Financial planning reimbursement $10,000; 401(k) company contributions $20,908; NQDC company contributions $20,607; relocation payment $5,157 |
Performance Compensation
Annual Incentive Plan (AIP) – Design, Targets, Results (FY2025)
| Metric | Weight | Threshold | Target | Maximum | Result | Payout vs Target |
|---|---|---|---|---|---|---|
| Adjusted EBIT (consolidated) | 37.5% | $101.8M | $127.3M | $146.4M | $101.9M | 50% |
| Free Cash Flow | 37.5% | $48.0M | $56.5M | $65.0M | $24.2M | 0% |
| Strategic Goals | 25.0% | 0–200% scale | 0–200% scale | 0–200% scale | Avg. 98% | 98% (NEO average) |
| Executive | Target bonus (% of base) | Overall AIP rating (% of target) | Actual payout (% of base) | Actual payout ($) |
|---|---|---|---|---|
| Gregory P. Rustowicz | 70% | 44% | 31% | $157,989 |
Notes: AIP weights FY2025: 37.5% Adjusted EBIT, 37.5% Free Cash Flow, 25% Strategic Goals .
Long-Term Incentives (granted in FY2025)
| Element | Grant date | Quantity/terms |
|---|---|---|
| Performance Stock Units (PSUs) | 7/22/2024 | 12,220 target PSUs; 3-year performance period FY2025–FY2027; 50% Sales Growth and 50% EBITDA margin improvement; annual (25% each year) and cumulative (25%) measurement; payout: Threshold 50% (1% sales growth/0 bps margin), Target 100% (5%/50 bps), Max 200% (9%/80 bps) |
| RSUs (time-based) | 5/20/2024 | 4,914 RSUs; vest 33% annually on each of the 1st–3rd anniversaries |
| Non-qualified Stock Options | 5/20/2024 | 12,402 options @ $45.34 strike; vest 33% annually; 10-year term |
Additional PSU vesting outcome: FY2023 PSU tranche (ROIC-based) vested at 63.3% after ROIC certified at 5.8% for FY2025 (vests in FY2026) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 95,657 shares (less than 1% of class) |
| Components of ownership | 76,089 shares owned directly; 242 shares allocated to ESOP; 19,326 unvested RSUs subject to forfeiture |
| Outstanding RSUs (not yet vested, as of 3/31/2025) | 2,351 (granted 5/16/2022), 5,281 (granted 5/22/2023), 4,914 (granted 5/20/2024) |
| Outstanding PSUs (unearned, as of 3/31/2025) | 7,055 (5/16/2022 ROIC FY2025), 7,922 (5/22/2023 ROIC FY2026), 12,220 (7/22/2024 Sales/EBITDA FY2025–FY2027) |
| Outstanding options (selected tranches) | Exercisable: 28,333 @$15.16 (exp. 5/23/2026); 19,500 @$24.33 (5/22/2027); 11,897 @$38.70 (5/22/2028); 13,422 @$35.16 (5/20/2029); 20,667 @$25.52 (5/18/2030); 16,096 @$54.26 (5/17/2031); 15,994 @$33.12 (5/16/2032); 7,079 @$36.16 (5/22/2033). Unexercisable: 7,996 @$33.12 (5/16/2032); 14,157 @$36.16 (5/22/2033); 12,402 @$45.34 (5/20/2034) |
| Hedging/pledging | Company prohibits hedging and pledging by directors, officers and employees |
| Ownership guidelines | CFO required to hold 4x base salary; 50% after-tax retention of vested shares until met; officers subject to retention requirement |
Observation: As of 3/31/2025, the stock price used in tables was $16.93; many option strikes are above this level, which may limit near-term monetization; only the 2016 grant at $15.16 was in-the-money at that reference price (note 18) .
Employment Terms
| Topic | Terms |
|---|---|
| Employment agreement | No individual employment agreement disclosed for CFO; CEO has one. CFO compensation approved by full Board |
| Severance (non‑CIC) | Executive Severance Plan: cash severance = 1x base salary; health and welfare at active rate for one year; outplacement up to $15,000; equity treated per “Retirement” provisions |
| Change-in-control (CIC) | Double trigger. Lump sum up to 3x (salary + greater of current or pre‑CIC target bonus) + 36 months COBRA cash + actuarial equivalent of 3 additional years pension accrual; equity fully vests unless otherwise provided; other specified payments |
| Clawback | Broad clawback for accounting restatements and specified misconduct; covers cash and equity incentives (time- and performance-based) |
| Hedging/Pledging | Hedging, short sales, derivatives, and pledging/margin accounts prohibited |
Estimated Potential Payments (CFO) as of 3/31/2025
| Scenario | Gross amount ($) |
|---|---|
| Voluntary termination | 1,047,254 |
| Retirement | 1,462,613 |
| Involuntary termination (without cause) | 1,185,908 |
| Termination in connection with CIC | 4,268,415 |
| Death | 1,962,613 |
Performance & Track Record
- Fiscal 2025 company results: Net sales $965M; Adjusted EBITDA $150.5M; net loss of $5.1M due to non-cash pension settlement ($22.1M), facility consolidation impairments ($9.6M), and $10.3M acquisition costs; record orders and progress on footprint simplification .
- Pay and incentives: 2024 Say-on-Pay approval >88% (indicates shareholder support for pay program design) . AIP metrics emphasize Adjusted EBIT and Free Cash Flow; FY2025 AIP paid below target (Rustowicz actual $157,989; 31% of base), reflecting EBIT at threshold and FCF below threshold with strategic goals near target .
- Capital allocation and M&A: Company agreed to acquire Kito Crosby for $2.7B, financed by $800M 7% participating convertible preferred (initial conversion price $37.68) and $3.05B of committed debt (term loan, revolver, bridge); pro forma targets include >$2.1B revenue, ~$70M run-rate net cost synergies in three years, and near-term deleveraging from strong cash generation; preferred entails governance rights and potential ownership up to ~43% as-converted post-approvals .
Compensation Structure Analysis
- Mix and risk: For FY2025, CFO target pay mix: base $515,000; AIP target $360,500 (70% of base); LTI target $849,750 (165% of base). Half of LTI in PSUs tied to multi-year Sales Growth and EBITDA margin improvement; remaining split between time-based RSUs and stock options, maintaining a strong at-risk component tied to operating and market performance .
- Metric rigor: FY2025 PSU goals set pre-macro slowdown; no adjustments made despite tougher environment, indicating discipline in performance calibration; FY2023 ROIC PSUs paid at 63.3% (below target) .
- Governance safeguards: No excise tax gross-ups; anti-hedging/pledging; robust clawback; independent compensation consultant; stock ownership guidelines (CFO 4x salary) .
Say-on-Pay & Shareholder Feedback
- 2024 Say-on-Pay approval: >88% support, which the Compensation Committee interpreted as alignment of NEO pay with performance .
Equity Grant and Vesting Detail (FY2025 awards)
| Type | Grant date | Quantity | Vesting | Other terms |
|---|---|---|---|---|
| PSUs | 7/22/2024 | 12,220 target | Cliff at FY2027 end; annual and cumulative performance measurement | Sales Growth and EBITDA margin improvement; 50%/50% weighting; 50–200% payout curve |
| RSUs | 5/20/2024 | 4,914 | 33% per year on 1st–3rd anniversaries | Dividends reinvested; paid in shares when vested |
| Options | 5/20/2024 | 12,402 | 33% per year on 1st–3rd anniversaries | Strike $45.34; 10-year term |
Deferred Compensation and Retirement
- Non-Qualified Deferred Compensation (NQDC): FY2025 contributions and balances — Executive contributions $19,371; company contributions $20,607; aggregate earnings $20,646; withdrawals $39,284; aggregate balance $230,024 as of 3/31/2025 .
- Pension/SERP: No ongoing participation after pension settlement/annuity purchase; CMCO Pension Plan frozen and obligations transferred via annuities in 2024 .
Investment Implications
- Alignment and retention: Ownership guidelines (4x salary) with 50% retention and prohibition on hedging/pledging, plus a high proportion of performance-conditioned equity, indicate solid alignment; near-term selling pressure appears limited given many option strikes exceed the $16.93 reference price at 3/31/2025, reducing in-the-money optionality absent stock appreciation .
- Pay-for-performance: FY2025 underperformance on FCF and low EBIT versus target yielded sub-target AIP payouts, while PSUs retain multi-year leverage to Sales/EBITDA margin — a reasonable design to balance operating discipline and strategic transformation payoffs .
- CIC economics: Standard but sizable CIC protections (up to 3x salary+bonus, accelerated vesting) could be value-dilutive in change-in-control scenarios, but are balanced by double-trigger provisions and no excise tax gross-ups; downside is manageable versus market norms .
- Execution and leverage risk: The Kito Crosby acquisition and financing structure raise integration and deleveraging execution stakes for the finance function; while synergy and scale targets are attractive, the convertible preferred (potential ~43% as-converted ownership post-approvals) and sizable debt facilities introduce dilution/governance and balance sheet risks to monitor through close and integration .