Martin Baumeister

About Martin Baumeister

Senior Vice President at CTS. He manages the sensors and mechatronics area of CTS’ business and participated in company- and segment-level incentive plans in 2024; he commenced employment in 2020 and became an executive officer in August 2022 . 2024 company performance context for pay: sales $516M (down 6% YoY), GAAP EPS $1.89 (vs. $1.92), adjusted EPS $2.17 (vs. $2.22), and cash from operations $99M (vs. $89M) . Long-term (2022–2024) performance RSUs paid at 130% of target on metrics including three-year RTSR at 92% (200% payout) and operating cash flow of $309M (200% payout) despite three-year sales growth of 0.6% (0% payout) . 2024 total compensation: salary $368,064, stock awards $510,982, annual incentive $43,144, all other comp $17,250 (total $939,440) .

Past Roles

External Roles

Not disclosed in the 2025 and 2024 proxy statements reviewed; no external directorships listed for Baumeister in those filings .

Fixed Compensation

Performance Compensation

Annual Incentive (Management Incentive Plan, 2024)

Notes: Company MIP Goals are 60% Adjusted EPS, 30% Sales, 10% Working Capital, plus ESG modifier; Baumeister’s MIP is 20% Company MIP Goals and 80% Supplemental goals for his business .

Long-Term Incentives

• 2022–2024 Performance RSU Plan (paid 2025)

  • Metrics and results:
    • Three-year sales growth: 0.6% → 0% payout weight (35% weight)
    • Three-year RTSR: 92% → 200% payout (35% weight)
    • Three-year operating cash flow: $309M → 200% payout (30% weight)
    • Weighted payout: 130% of target
  • Baumeister target and payout: 4,466 target RSUs; 5,806 shares paid (130% x target) in 2025 .

• 2024–2026 Performance RSU grant (made 2/7/2024; pays in 2027 subject to certification)

  • Target 3,666 units; threshold 733; max 7,332; grant-date fair value $156,575 .
  • Plan metrics: three-year sales growth (60%) and three-year operating cash flow (40%); RTSR serves as a ±20% modifier (25th/75th percentile bounds) .

• 2024 Service-based RSUs (made 2/7/2024)

  • 8,298 RSUs granted; grant-date fair value $354,407 .
  • Split: 2,445 units with 3-year vesting; 5,853 units with 2-year cliff vesting .

Equity Ownership & Alignment

Beneficial Ownership and Guidelines

Unvested and Unearned Equity at 12/31/2024

Near-term Vesting Schedule (Service-based RSUs; scheduled as of 12/31/2024)

These RSU vesting dates may create predictable liquidity events (e.g., sell-to-cover transactions) around vest dates; monitoring Form 4 filings around these dates can help assess near-term selling pressure .

Employment Terms

Severance and Change-in-Control (CIC) Economics

• Executive Severance Policy (Tier 2 for Baumeister): if terminated in an eligible manner, nine months of base salary paid in installments; nine months of medical/dental benefits at active rates; up to $15,000 outplacement; exclusions apply (e.g., cause, resignation not qualifying as involuntary, death/disability, retirement without notice, sale with comparable job offer, where CIC severance applies) .
• Estimated payment on eligible severance at 12/31/2024: $280,290 salary severance; $20,381 health/dental; $15,000 outplacement; no accelerated equity; total $315,671 .
• CIC scenario (assumes CIC and qualifying termination at 12/31/2024): $868,899 severance based on base salary and incentive pay; $27,175 welfare benefits equivalent; $15,000 outplacement; $1,416,907 accelerated vesting; no 280G reduction; total $2,327,982 .

Death, Disability, and Retirement Provisions

• Death/Disability: Accelerated vesting of service-based and performance RSUs (performance at target, or greater of target/actual if post-CIC); Baumeister estimated value $1,416,907 at 12/31/2024 .
• Retirement: Pro-rata vesting of performance RSUs (actual performance for full period) if age 55+, 5 years of service, and 1 year notice; none of the continuing NEOs met all criteria as of 12/31/2024 .

Compensation Summary (Reported)

Compensation Structure Analysis

• Strong at-risk/equity component: 2024 stock awards ($510,982) were the largest pay element for Baumeister, reflecting emphasis on long-term alignment via performance- and service-based RSUs .
• Annual incentive highly formulaic and risk-balanced: cliff thresholds and 200% caps; 2024 company-level sales missed threshold, while EPS and working capital achieved minimums; Baumeister’s segment goals all missed, driving a 20.9% payout (vs. 55% target) .
• Long-term plan paid 130% for 2022–2024 due to cash flow and RTSR performance despite flat three-year sales, indicating cash generation and relative shareholder returns drove value even in slower revenue conditions .
• Special strategic plan non-payout: Baumeister was eligible for the Focus 2025 RSU Plan (4,500 target RSUs) but the five-year revenue trigger was not met; no payout was earned, removing a potential overhang from a large one-time award .
• Governance quality: >97% Say-on-Pay approval in 2024; hedging and pledging prohibited; clawback policy in place .

Compensation Peer Group (for RTSR modifier and market benchmarking)

• Representative comparator set used for RTSR and pay benchmarking included companies such as Badger Meter, Diodes, ESCO Technologies, Gentherm, Littelfuse, Materion, Silicon Labs, Stoneridge, Vishay Precision Group, Methode Electronics, and others (with adjustments over time for M&A) .

Investment Implications

• Alignment: No pledging, hedging prohibitions, and Baumeister exceeding ownership guidelines are positive alignment indicators; equity-heavy pay mix and multi-year PRSU design tie outcomes to RTSR, sales growth, and cash flow .
• Execution risk: 2024 segment underperformance (0% achievement on supplemental goals) led to a 20.9% MIP payout; investors should track recovery in sensors/mechatronics KPIs tied to Baumeister’s goals (adjusted operating earnings, bookings, working capital) .
• Trading signals/flow: Known RSU vesting dates through 2027 and a 2025 PRSU share payout create potential sell-to-cover activity; monitor Form 4 filings around February vesting windows for short-term supply dynamics .
• Change-of-control sensitivity: CIC acceleration ($1.42M equity) and severance ($0.87M) suggest meaningful upside in a transaction scenario; absent CIC, Tier 2 severance is limited to salary installments, benefits, and outplacement with no equity acceleration .