Luke E. Alverson
About Luke E. Alverson
Luke E. Alverson, age 47, has served as Senior Vice President, General Counsel and Corporate Secretary of CSW Industrials since February 2016; previously he held roles of increasing responsibility at Flowserve Corporation culminating as Vice President, Corporate Legal Services and Assistant Secretary, and prior to that practiced at Vinson & Elkins and Hallett & Perrin in Dallas . As CSWI’s chief compliance officer, the Senior Vice President and General Counsel reports directly to the Audit Committee, underscoring Alverson’s oversight of ethics and compliance across the enterprise . During FY2025, CSWI delivered revenues of $878.3m (+10.8% YoY), adjusted EBITDA of $227.9m (+13.9%), adjusted EPS of $8.41 (+20%), and operating cash flow of $168.4m (+2.5% YoY) ; the FY2023 performance share cycle achieved 151.5% TSR, ranking at the 95th percentile vs Russell 2000, vesting at 200% of target .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| CSW Industrials, Inc. | SVP, General Counsel & Secretary | 2016–present | Leads legal, governance and compliance; serves as chief compliance officer reporting to Audit Committee |
| Flowserve Corporation | VP, Corporate Legal Services; Assistant Secretary | 2008–2016 | Corporate legal, governance and securities compliance for a global industrial manufacturer |
| Vinson & Elkins LLP; Hallett & Perrin, P.C. | Associate | Pre-2008 | Corporate and securities legal practice in Dallas |
Fixed Compensation
Multi-year compensation for Luke E. Alverson:
| Metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Salary ($) | 375,000 | 412,000 | 423,000 |
| Stock Awards ($) | 436,848 | 573,257 | 659,147 |
| Non-Equity Incentive Plan ($) | 243,891 | 280,191 | 244,548 |
| All Other Compensation ($) | 78,308 | 77,010 | 76,820 |
| Total ($) | 1,134,047 | 1,342,458 | 1,403,515 |
AIP target was 55% of base salary in FY2025 (unchanged vs FY2024), equating to $232,650 target for Alverson . The Company caps AIP payouts at 200% of target and maintains threshold performance requirements .
Performance Compensation
Annual Incentive Program (AIP) – FY2025 detail for Alverson:
| Metric | Weight | Target ($) | Actual payout | Payout % | Notes |
|---|---|---|---|---|---|
| Consolidated EBITDA | 60% | $139,590 | $149,780 | 107% | Measured EBITDA $219.8m; excludes impacts from acquisitions and certain one-time items |
| Consolidated Operating Cash Flow | 15% | $34,898 | $29,768 | 85% | Measured OCF $167.3m; excludes acquisition and other specified cash impacts |
| Individual Performance | 25% | $58,163 | $65,000 | 112% | Goals across strategy execution, HCM metrics, risk management, ESG and safety |
| Total AIP Award | — | $232,650 | $244,548 | 105% | AIP payout matrix 0–200%; straight-line interpolation |
Long-Term Incentive Program (LTIP) – FY2025 awards and structure:
| Component | LTIP target | Mix | Performance metric | Vesting | Payout cap |
|---|---|---|---|---|---|
| Performance Shares (PSUs) | $253,800 (50% of $507,600) | 50% PS / 50% RS | TSR vs Russell 2000 (relative) | Cliff vest after 3-year period | 200% |
| Restricted Stock (RS) | $253,800 (50% of $507,600) | 50% PS / 50% RS | Stock price; ownership alignment | Ratable over 3 years; voting/dividends from grant | N/A |
Grant specifics FY2025:
- Performance Shares granted 5/28/2024: 1,093 target shares; grant-date fair value $362,395 using Monte Carlo ($331.56/share); payout range 0–200% .
- Restricted Stock granted 10/1/2024: 814 shares; grant-date fair value $296,752 using $364.56/share .
Program design guardrails:
- Negative TSR caps performance share vesting at 100% even if percentile >51st .
- No perquisites beyond broad-based plans; no duplication of metrics across AIP and LTIP; independent compensation consultant; clawback policy; no hedging/pledging; no option repricing; no excise tax gross-ups (best-of-net applied) .
Equity Ownership & Alignment
Ownership, guidelines, and vesting detail:
| Item | Detail |
|---|---|
| Stock ownership guideline | 3x annual base salary; for Alverson: 4,353 shares needed as of 3/31/2025; retention rule requires holding 75% of net after-tax vested shares until guideline met |
| Current ownership vs guideline | 17,075 shares held; 11.8x salary multiple; in compliance with guideline/retention requirements |
| Beneficial ownership (6/30/2025) | 15,309 shares; <1% of shares outstanding |
| Anti-hedging/pledging | Hedging, pledging, margin accounts, short sales prohibited under Insider Trading Policy |
| Section 16(a) compliance | Directors and executive officers complied with reporting requirements in FY2025 |
Unvested and performance-contingent equity (as of 3/31/2025):
| Award type | Unvested shares | Market/payout value ($) | Vesting dates / performance period |
|---|---|---|---|
| Restricted Stock | 2,217 | 646,300 (at $291.52/share) | 10/01/2025: 1,245; 10/01/2026: 700; 10/01/2027: 271 |
| Performance Shares (FY2023 cycle) | 1,526 (incl. dividend equivalents) | 889,719 (assumes 200% vesting; vested effective 4/1/2025) | |
| Performance Shares (FY2024 cycle) | 1,747 (incl. dividend equivalents) | 1,018,571 (assumes 200% vesting; performance period 4/1/2023–3/31/2026) | |
| Performance Shares (FY2025 cycle) | 1,097 (incl. dividend equivalents) | 639,595 (assumes 200% vesting; performance period 4/1/2024–3/31/2027) |
2025 vesting activity:
- Shares acquired on vesting in FY2025: 3,710; value realized $1,045,058 (gross at vesting-date price; includes shares surrendered for taxes) .
Employment Terms
Severance and change-in-control (CIC) economics for NEOs (Alverson is Level Two participant):
- Termination without cause or for good reason: lump sum equal to 12 months base salary; pro-rata bonus (greater of prior-year actual or current-year target); health and welfare benefit continuation for 12 months; immediate vesting of unvested equity awards scheduled to vest within 12 months of termination . For Alverson, estimated totals at 3/31/2025: $1,533,825 including $423,000 termination payment, pro-rata bonus $280,191, equity vesting $807,802, benefits $22,832 .
- CIC (single-trigger for equity; double-trigger for cash): immediate full vesting of all unvested equity upon CIC; if terminated without cause or for good reason within two years post-CIC, lump sum equal to 2x (12 months base salary + target bonus), pro-rata bonus, and 24 months of health and welfare benefit continuation; no excise tax gross-ups; “best-of-net” cutback methodology to optimize after-tax outcome . For Alverson, estimated totals at 3/31/2025 upon CIC termination: $3,557,397 including termination payment $1,311,300, pro-rata bonus $280,191, equity vesting $1,920,242, benefits $45,664 .
- Clawback policy: NYSE-compliant Dodd-Frank recoupment of incentive compensation paid in past three years upon a financial restatement; no fault requirement .
- Ownership and retention: executives must meet/share retention guidelines; unvested restricted stock counts toward guideline; performance-based unvested awards do not .
- Anti-hedging/pledging: prohibited .
- AIP/LTIP caps and thresholds: AIP max 200%; LTIP PSUs max 200%; threshold requirements enforced; FY2026 AIP matrix adds lower threshold levels to align with market practices (EBITDA 30% payout at 70% of target; OCF 30% payout at 60% of target) .
Compensation Structure Considerations
| Topic | Program feature |
|---|---|
| Pay mix and risk | Majority of NEO pay “at risk”; Alverson LTIP target 120% of salary; AIP target 55% of salary |
| Performance metrics | AIP: Consolidated EBITDA and Operating Cash Flow plus individual performance; LTIP PSUs: TSR vs Russell 2000; RS: time-based |
| Benchmarking & governance | Peer group of 15 diversified industrials reviewed annually; independent consultant (WTW engaged late FY2025); strong “what we do / don’t do” list including no perquisites, no option repricing, ownership guidelines |
| Say-on-pay | 97.6% approval in 2024, the highest in Company history |
Performance & Track Record Context
| Metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Revenues ($m) | — | — | 878.3 (+10.8%) |
| Adjusted EBITDA ($m) | 174.1 | 200.0 | 227.9 (+13.9%) |
| Adjusted EPS ($) | — | — | 8.41 |
| TSR (initial $100) | 234.13 | 395.35 | 491.27 |
| FY2023 PSU TSR result | — | — | 151.5% TSR; 95th percentile; 200% vesting |
Compensation Committee & Peer Group
- Compensation & Talent Development Committee members: Kent Sweezey (Chair), Darron Ash, Bobby Griffin, Linda Livingstone; six meetings in FY2025 . Independent consultant engaged by committee; WTW engaged late FY2025 .
- Peer group used for FY2025 benchmarking: AAON; Armstrong World Industries; Barnes Group; Columbus McKinnon; EnPro Industries; ESCO Technologies; Franklin Electric; Gibraltar Industries; Helios Technologies; Innospec; Kadant; Mueller Water Products; PGT Innovations; SPX Technologies; Standex International .
Investment Implications
- Alignment: Strong skin-in-the-game—Alverson holds 17,075 shares (11.8x salary), exceeding 3x guideline; hedging/pledging prohibited; retention rule enforces ongoing accumulation .
- Retention risk: Material unvested equity through October 2027 (RS) and PSUs through March 2027; CIC/severance economics are standardized with double-trigger cash and single-trigger equity acceleration, mitigating flight risk while preserving shareholder alignment .
- Pay-for-performance: FY2025 AIP paid ~105% of target driven by EBITDA overachievement (+10.8% measured, 107% payout) and OCF under target (85% payout); LTIP PSUs tied to multi-year relative TSR with 200% vest for FY2023 cycle (95th percentile), emphasizing market-relative value creation .
- Selling pressure: 2025 vestings realized $1.045m; while vesting can create tax-related sales, anti-hedging/pledging and ownership retention requirements reduce misalignment risks; no data here on open-market sales beyond vesting disclosures .
- Governance quality: High say-on-pay support (97.6%), robust clawback, no tax gross-ups, and no perquisites suggest low governance red flags for compensation practices .