Eric Palomaki
About Eric Palomaki
Eric L. Palomaki, age 43, is Chief Operating Officer of Core Molding Technologies (CMT). He joined CMT on September 19, 2018 as VP, Operations; was promoted to EVP, Operations & R&D in November 2020; and became COO in March 2024. He holds an MBA from the Jack Welch Management Institute and a B.S. in Mechanical Engineering from Rensselaer Polytechnic Institute . Company performance metrics used in compensation show 2024 net sales down 15% to $302.4M vs. 2023, EBIT down 37% to $16.7M, and cash from operations up 1% to $35.2M; the Company’s $100 investment value (TSR proxy) was $89.26 (2024), $142.65 (2023), and $153.18 (2022) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Acuity Brands Lighting | Vice President, Advanced Manufacturing Engineering | 2013–2017 | Led advanced manufacturing engineering at a 12,000-employee, $3.5B commercial lighting company . |
| North American Lighting | Roles in automotive industry | 2012–2013 | Operational roles in automotive manufacturing . |
| TRW Automotive | Roles in automotive industry | 2007–2012 | Operational roles in automotive manufacturing . |
Fixed Compensation
Multi-year summary compensation for Eric Palomaki (NEO):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 361,299 | 386,438 | 419,505 |
| Bonus ($) | — | — | — |
| Stock Awards ($) | 261,800 | 299,200 | 316,796 |
| Non-Equity Incentive (STIP) ($) | 282,964 | 390,766 | 205,725 |
| All Other ($) | 19,625 | 21,450 | 22,425 |
| Total ($) | 925,688 | 1,097,854 | 964,451 |
- Base salaries for NEOs were increased by 3.5% in June 2024 .
Performance Compensation
STIP (Annual Cash Incentive) Design and Results
- Target opportunity: NEOs at 80% of base salary; payout scales 0% below 65% of target to 150% at 150% of target metric performance .
- Metrics and weights: EBIT before STIP (75%), Operating Cash Flow (25%) .
2024 STIP metrics and payout:
| Metric | Target ($000) | Weight | Actual ($000) | Performance Result | Notes |
|---|---|---|---|---|---|
| EBIT (before STIP) | 27,247 | 75% | 21,550 | 40% achievement | Adjusted for FX ($1,170) and severance ($1,202) |
| Operating Cash Flow | 26,271 | 25% | 18,879 | 134% achievement | — |
| Overall payout | — | — | — | 61.3% of target (NEO) | Payout ≈ 49% of base salary for NEOs (80% target × 61.3%) |
2023 STIP metrics and payout:
| Metric | Target ($000) | Weight | Actual ($000) | Performance Result | Payout |
|---|---|---|---|---|---|
| EBIT (before STIP) | 24,503 | 75% | 31,497 | 122% | — |
| Free Cash Flow | 24,767 | 25% | 34,424 | 138% | — |
| Overall payout | — | — | — | 126% of target | 101% of base for NEOs (80% target × 126%) |
LTIP (Equity) Structure and Awards
- Structure: Transitioning 2023–2025 to 50% performance-based and 50% time-based stock awards (3-year cycles). In 2024: NEO awards 30% performance-based / 70% time-based; in 2025 and thereafter 50/50. CMT does not grant options/SARs .
- Award sizing as % of base salary (2024): Palomaki 24% performance-based and 56% time-based (total 80%); 2023: 8% performance-based and 72% time-based (total 80%) .
Specific grants to Palomaki:
| Year | Grant Type | Shares | Grant Date | Grant-Date Fair Value ($) | Vesting |
|---|---|---|---|---|---|
| 2024 | Time-based RS | 11,562 | 3/7/2024 | 221,800 | 1/3 annually over 3 years; subject to 3-year employment anniversary and ownership requirement |
| 2024 | Performance RS (target) | 4,955 | 3/7/2024 | 95,000 | 100% at 3 years; metrics: EBIT as % of sales and ROCE; accel. on death/disability/CoC |
| 2023 | Time-based RS | 11,238 | 3/10/2023 | 269,300 | 1/3 annually over 3 years; conditions as above |
| 2023 | Performance RS (target) | 1,873 | 3/10/2023 | 29,900 | 100% at 3 years; performance metrics; accel. on death/disability/CoC |
2025 plan awards (granted March 11, 2025):
| Year | Grant Type | Threshold (#) | Target (#) | Max (#) | Grant Date |
|---|---|---|---|---|---|
| 2025 | Performance RS | 6,725 | 13,450 | 20,175 | 3/11/2025 |
| 2025 | RS (time-based) | — | 13,450 | — | 3/11/2025 |
Outstanding equity at 12/31/2024 (Palomaki):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Unvested RS (#) | 8,391 | 11,238 | 11,562 |
| Market value of RS ($) | 138,787 | 185,877 | 191,235 |
| Unearned Performance Shares at target (#) | — | 1,873 | 4,955 |
| Market/payout value ($) | — | 30,979 | 81,956 |
Vesting conditions and governance protections:
- No vesting before 3rd anniversary of employment with CMT; time-based grants vest one-third each year thereafter; performance awards vest 100% at 3-year mark subject to performance .
- Ownership requirement: for RS vesting, executive must hold CMT shares equal to 20% of base salary for 60 consecutive days as of vesting date; exceptions for CoC/death/disability .
- No option grants; re-pricing of options/SARs prohibited; minimum 1-year vesting for most awards; dividends not paid on unvested awards; clawback applies .
Equity Ownership & Alignment
Beneficial ownership (as of March 21, 2025):
| Item | Amount |
|---|---|
| Shares beneficially owned | 165,253 |
| Percent of class | 1.8% (of 9,258,054 shares) |
| Breakdown | 109,807 shares with sole voting/investment power; 35,168 restricted shares subject to future vesting; 20,278 performance-based shares subject to future vesting |
Alignment policies:
- Stock ownership guidelines: NEOs must hold shares = 2x base salary; five-year accumulation period; NEOs (including Palomaki) met requirements as of 12/31/2024; unvested performance shares excluded from compliance .
- Anti-hedging and anti-pledging: Executives may not hedge, short, pledge or hold shares on margin .
Employment Terms
Severance and change-in-control economics:
| Scenario | Cash Severance | Equity Treatment | STIP Treatment | Other |
|---|---|---|---|---|
| Termination without cause / good reason (not in CoC context) | 12 months continued compensation for NEOs | Cash severance equal to market value of all unvested shares at termination date | If termination before completion of measuring period, receive full target STIP for the period | Accrued salary, unused vacation, and earned but unpaid plan amounts |
| Change in Control + termination without cause / good reason | Lump-sum = 2.99x average base salary + average STIP (5-year average), capped by 280G base amount limit | Cash severance equal to market value of all unvested shares | Earned but unpaid amounts paid | Accrued amounts as above |
| Equity acceleration on CoC / death / disability | RS: accelerated vesting upon death, disability, or CoC; Performance Shares: vest at target (100%) upon CoC/death/disability; if CoC after performance period but before vest, vest based on actual performance | — | — | — |
Insider Trading and Vesting Signal Check
- Open-market purchase: On March 14 and 17, 2025, Palomaki purchased a total of 2,000 CMT shares at ~$14, totaling ~$28,000, signaling confidence amid 2025 transition; SEC Form 4 filings reflect 2025 transactions .
- Ongoing Form 4 activity: Multiple 2024 filings tied to equity grants/withholding and 2025 awards; see SEC/MktBeat indices for Palomaki’s filings .
Compensation Committee & Governance
- Compensation Committee (2024): Andrew O. Smith (Chair), Thomas R. Cellitti, Ralph O. Hellmold, Salvador Miñarro; all independent under NYSE American rules .
- Independent consultant: Pearl Meyer engaged for 2024 program and peer benchmarking; Committee determined no conflicts .
- Peer group (for 2024 pay setting): Includes CECO Environmental, Dorman Products, Gentherm, Myers Industries, UFP Technologies, and others; median sales ≈ $409M .
- Say-on-Pay: ~97% approval at 2024 annual meeting .
- Clawback: Board-adopted 2023 policy to recover excess incentive comp upon restatements (3-year lookback) .
Performance & Pay Alignment Snapshot
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Value of $100 Investment (CMT) | 153.18 | 142.65 | 89.26 |
| Net Sales ($000) | — | 357,738 | 302,378 |
| EBIT ($000) | — | 26,537 | 16,695 |
| Cash from Operations ($000) | — | 34,842 | 35,151 |
| Net Income ($000) | 12,203 | 20,324 | 13,299 |
Notes: 2024 variable pay fell with lower EBIT/TSR, while LTIP mix is increasing performance-based weighting (30% in 2024; 50% from 2025), tightening pay-performance linkage .
Investment Implications
- Alignment improving: The shift to 50% PSU weighting by 2025 and STIP focus on EBIT/Cash Flow directly tie Palomaki’s pay to profitability and capital efficiency, with clawback and no-pledging policies reducing governance risk .
- Retention and M&A optics: Non-CoC severance (12 months for NEOs) is moderate; however, equity accelerates on consummation of a CoC and CoC severance can reach up to 2.99x salary+STIP (subject to 280G), potentially elevating transaction costs and influencing timing around strategic events .
- Insider signal: March 2025 open-market buying (~$28k) is a positive sentiment indicator and suggests limited near-term selling pressure despite ongoing vesting cycles .
- Ownership and skin-in-the-game: 1.8% beneficial ownership with meaningful unvested RS/PSU exposure and compliance with 2x salary ownership guideline indicate strong alignment, while anti-hedge/pledge rules lower forced-sale risk .