John Schaller
About John Schaller
John R. Schaller is Executive Vice President at Core & Main (CNM), appointed July 2024, after serving as President of Core & Main (Dec 2022–Jul 2024) and President, Waterworks, since formation (Apr 2021) with earlier leadership roles at Opco dating back to 2018. He has more than 40 years of industry experience, beginning at Sidener Supply Company in 1979; he holds a B.A. in Forestry (University of Missouri–Columbia) and an M.B.A. (Webster University), and is 69 years old . Company performance in fiscal 2024 included record net sales of over $7.4B, net income of $434M, Adjusted EBITDA of $930M, operating cash flow of ~$621M, and TSR of 39%, providing favorable context for incentive alignment in his current role .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Core & Main | Executive Vice President | Jul 2024–present | Executive leadership across the distribution platform; part of senior team through CEO/CFO transition . |
| Core & Main | President (company-level) | Dec 2022–Jul 2024 | Oversaw operations during a period of continued sales growth and acquisitions . |
| Core & Main / Holdings / Opco | President, Waterworks (Company formation/Opco/Holdings) | Apr 2021 (Company); Aug 2019 (Holdings); Jan 2018 (Opco) | Led the core Waterworks segment through expansion and integration of acquired businesses . |
| Opco | Senior Regional VP; Regional VP | Prior to 2018 | Multi-region P&L and operating leadership in distribution . |
| Sidener Supply Company (ultimately part of CNM) | Various; President at time of sale to U.S. Filter | 1979–circa 1998 (19 years) | Built and led operations through sale into a consolidator, contributing to CNM’s legacy footprint . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Water and Sewer Distributors of America | Director (prior) | N/A | Industry association board experience . |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base salary rate ($) | — | $470,000 | $500,000 (effective Apr 29, 2024) |
| Salary paid ($) | $430,577 | $461,923 | $491,923 |
| Target annual bonus (% salary) | — | — | 85% |
| Target annual bonus ($) | — | — | $425,000 |
| Actual annual bonus ($) | $598,400 | $448,539 | $225,144 |
Notes:
- 2024 MICP payout was 53% of target based on company results vs. goals (see Performance Compensation) .
Performance Compensation
Annual Cash Incentive (MICP) Design and Results – Fiscal 2024
| Metric | Weight | Minimum | Target | Growth Target | Maximum | Actual | Payout vs Target |
|---|---|---|---|---|---|---|---|
| MICP Adjusted EBITDA | 75% | 93% of plan / $910M → 25% | 100% / $980M → 100% | 108% / $1,056M → 150% | 116% / $1,132M → 200% | $922M | 37% |
| MICP Working Capital % | 25% | 91% / 20.4% → 25% | 100% / 18.6% → 100% | 103% / 18.0% → 150% | 106% / 17.5% → 200% | 18.6% | 100% |
| Weighted payout | — | — | — | — | — | — | 53% |
Schaller’s 2024 MICP payout: $225,144 on $425,000 target (85% of $500,000 base) at 53% payout .
Long-Term Incentive (LTI) – Grants and Vesting
- 2024 LTI mix (NEOs): 75% stock options, 25% RSUs; three-year, equal annual vesting; RSUs accrue dividend equivalents payable at vest; “Qualifying Retirement” acceleration applies (10 years’ service and age 62+) .
- Schaller 2024 grants: 3,744 RSUs and 29,382 options at $50.12 strike; 3-year ratable vesting beginning Mar 7, 2025 .
| Award (Schaller) | Grant Date | Quantity | Strike/Price | Vesting | Grant Date Fair Value ($) |
|---|---|---|---|---|---|
| RSUs | Mar 7, 2024 | 3,744 | — | 3 equal annual tranches | 187,649 |
| Stock Options | Mar 7, 2024 | 29,382 | $50.12 | 3 equal annual tranches (10-yr term) | 562,543 |
Special performance share awards introduced in 2025 for certain executives (4-year PSAs on 2028 Net Sales and Adj. EBITDA); Schaller was not listed among recipients disclosed (awards were to Witkowski, Bradbury, Cowles, Huebert, Whittenburg) .
Equity Ownership & Alignment
Beneficial Ownership (Record Date: Apr 28, 2025)
| Holder | Class A Shares | Class A % | Class B (paired with Partnership Interests) | Class B % | Combined Voting Power % |
|---|---|---|---|---|---|
| John R. Schaller | 20,114 | * | 850,214 | 11.0% | * |
Notes:
- Class B shares have voting rights but no economic rights; each Class B share pairs with a Partnership Interest exchangeable 1:1 into Class A (subject to Exchange Agreement terms) .
- All covered persons meet stock ownership guidelines; Section 16 officers must hold 3x base salary; retention of 50% net shares until compliance; five-year window to comply .
Outstanding and Unvested Equity (FY2024 year-end)
| Instrument | Unvested Quantity | Terms | Indicative Value/Notes |
|---|---|---|---|
| RSUs (aggregate) | 11,703 (3,744 2024; 5,316 2023; 2,643 2022) | 3-year ratable vesting; dividend equivalents on vest | $660,517 at $56.44 reference price |
| Options (unexercised, unvested) | 92,410 (29,382 @ $50.12; 43,736 @ $22.11; 19,292 @ $20.81) | 10-year term; 3-year ratable vesting | CIC/death/disability acceleration “spread” value illustrated at $56.44: $2,374,525 |
Insider trading/retention indicators:
- 2024 exercises: 60,452 options exercised; value realized $3,057,062; RSUs vested 5,301 shares, $255,985 value realized (implies liquidity events but not necessarily sales beyond tax/cover) .
- Company prohibits hedging, pledging, and short sales; all covered persons currently satisfy ownership guidelines (reduces misalignment and margin-call risk) .
Section 16 compliance:
- One delinquent Form 4 for Schaller in fiscal 2024, related to share forfeitures for tax withholding upon RSU vesting (administrative timing item) .
Employment Terms
| Term | Detail |
|---|---|
| Employment agreement | None disclosed for Schaller; no contractual severance if terminated without “cause” or upon “good reason”; no additional CoC severance . |
| Annual incentive eligibility | Participates in MICP; 2024 target 85% of salary . |
| Equity acceleration | RSUs/options generally accelerate on death or disability; on change-in-control, no automatic acceleration if awards are assumed/replaced; otherwise accelerates (see values above) . |
| Clawbacks | Dodd-Frank policy for restatements; separate clawback/forfeiture policy for others; both cover excess incentive-based comp . |
| Trading policies | No hedging, pledging, or short sales permitted . |
| Ownership guidelines | Section 16 officers at 3x base salary; company states all covered persons in compliance . |
| Perquisites/benefits | Executive medical program; vehicle allowance; company-paid life insurance; 401(k) match; amounts by NEO disclosed . |
Compensation Structure Analysis
- Cash vs equity mix: 2024 total comp $1.50M comprised of $491,923 salary; $225,144 cash bonus; $750,192 equity grant fair value (RSU $187,649; Options $562,543) — equity-heavy, with 75% options/25% RSUs, emphasizing stock appreciation sensitivity .
- Pay-for-performance: 2024 MICP paid at 53% of target, reflecting EBITDA underperformance vs plan (37% payout) offset by working capital at target (100% payout), indicating discipline against preset goals .
- Award terms: Three-year ratable vesting for RSUs and options; “Qualifying Retirement” acceleration (age 62+ with 10+ years), which Schaller meets, supports retention but also creates scheduled vesting supply; company’s no-hedge/pledge policy mitigates adverse alignment risks .
- No special PSAs disclosed for Schaller in 2025 transition awards (select peers received multi-year PSAs tied to 2028 Net Sales/Adj. EBITDA) .
Performance & Track Record
- Industry tenure: 40+ years, including 19 years at Sidener Supply culminating as President at sale into U.S. Filter; progressed through regional and senior roles at Opco and Core & Main .
- Company outcomes: FY2024 record net sales >$7.4B, net income $434M, Adjusted EBITDA $930M, OCF ~$621M, TSR 39%; continued M&A deployment ($741M across 10 acquisitions) and buybacks ($176M, 4M shares) .
- 2024 insider activity: Exercised 60,452 options; RSUs vesting delivered 5,301 shares; mechanical late Form 4 filing for tax-related RSU withholdings .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 20,114 Class A shares; 850,214 Class B/Partnership Interests (11.0% of Class B outstanding) . |
| Ownership guidelines | 3x base salary for Section 16 officers; company reports all covered persons in compliance . |
| Pledging/hedging | Prohibited . |
| Vested vs unvested | 11,703 unvested RSUs ($660,517 at $56.44 ref); 92,410 unvested options across 2022–2024 grants; CIC/death/disability acceleration examples disclosed . |
Employment Terms
| Topic | Key Points |
|---|---|
| Severance | None for Schaller (no employment agreement); no incremental CoC severance . |
| Incentive metrics | MICP based 75% on Adjusted EBITDA and 25% on Working Capital % (after acquisition adjustments) . |
| Clawbacks | Dodd-Frank restatement clawback and broader clawback/forfeiture policy in place . |
| Equity vesting | 3-year ratable; Qualifying Retirement, death, disability accelerations; assumed awards upon CoC avoid automatic vesting . |
Investment Implications
- Alignment: Meaningful ownership via 850,214 Class B/Partnership Interests (11.0% of Class B outstanding) and option-heavy LTI design heighten exposure to CNM equity value; no hedging/pledging and guideline compliance reinforce alignment .
- Retention risk: Absence of an individual employment/severance agreement suggests lower guaranteed downside protection vs peers; however, age-based Qualifying Retirement eligibility plus substantial unvested equity may anchor retention; note scheduled annual vesting could create periodic sellable supply post-vesting .
- Pay-for-performance: 2024 bonus paid at 53% due to EBITDA under-plan while working capital met target, signaling discipline; option-tilted awards amplify sensitivity to multi-year value creation vs merely time vesting .
- Trading signals: 2024 option exercises (60,452; $3.06M value realized) indicate monetization during the year; not inherently negative given continued large unvested/economic exposure and policy constraints, but worth monitoring around future vest dates and blackout windows .
- Governance safeguards: Robust clawbacks and prohibitions on hedging/pledging reduce downside governance risks; administrative late Form 4 noted across several insiders (including Schaller) tied to tax withholdings, not discretionary sales .
Net: Schaller’s incentives are tightly linked to CNM equity performance via options and substantial Partnership Interests while cash compensation flexes with core profitability and working capital discipline. Lack of severance protection modestly elevates retention sensitivity, but sizeable unvested equity and ownership guidelines mitigate near-term departure risk. Continued monitoring of vesting calendars, option exercises, and 2028 strategic PSA targets (for peers) provides forward signals on leadership confidence and execution cadence .
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