Kenneth R. Bowling
About Kenneth R. Bowling
Executive Vice President, Chief Financial Officer, and Treasurer of Culp, Inc. (CULP). Age 63 as of FY2025; joined Culp in 1997 and has served as CFO since 2007 (28 years at the company; 18 years as CFO) . During FY2024–FY2025, Culp navigated industry headwinds: FY2024 adjusted operating loss improved by $16.3M vs. FY2023 to $(10.6)M; FY2025 adjusted operating loss improved ~15% YoY to $(9.0)M despite lower sales, with a restructuring program expected to drive $10–$11M in annualized savings . Say‑on‑Pay support rebounded from 67.6% in 2023 to ~83% in 2024 following shareholder engagement and program changes .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Culp, Inc. | Controller, Culp Velvets/Prints | 1997–2001 | Division controllership foundational to later corporate finance roles |
| Culp, Inc. | Corporate Controller | 2001–2002 | Centralized accounting oversight |
| Culp, Inc. | Corporate Controller & Assistant Treasurer | 2002–2004 | Expanded treasury support |
| Culp, Inc. | VP, Finance & Treasurer | 2004–2007 | Broadened finance leadership |
| Culp, Inc. | Chief Financial Officer | 2007–present | Long-tenured CFO through multiple cycles and restructuring |
| Culp, Inc. | Corporate Secretary | 2008–(role held during tenure) | Governance, corporate secretary duties |
| Culp, Inc. | Senior Vice President | 2016–2019 | Executive leadership expansion |
| Culp, Inc. | Executive Vice President | 2019–present | Elevated executive scope |
External Roles
- None disclosed in company filings for Mr. Bowling .
Fixed Compensation
| Metric | FY 2024 | FY 2025 |
|---|---|---|
| Base salary ($) | 298,477 | 301,600 |
| Target bonus ($) | — | 211,120 (AIP target opportunity) |
| Target bonus (% of salary) | — | 70% (211,120 / 301,600) |
| Actual bonus paid ($) | 44,335 (paid for FY2024 performance) | 0 (below threshold across all metrics) |
| Stock awards grant-date FV ($) | 226,986 | 242,901 |
| Above‑market deferred comp earnings ($) | 9,302 | 10,536 |
| Company contrib. to non‑qualified deferral ($) | — | 72,983 |
| Perquisites ($) | $8,400 auto; $2,600 executive health (included in All Other Comp) | $8,400 auto; $2,600 executive health (included in All Other Comp) |
Notes:
- All Other Compensation total: $92,500 in FY2024 and $97,988 in FY2025; FY2025 breakdown includes 401(k) match $12,445, life insurance $1,560, non‑qualified deferral contribution $72,983, perquisites $11,000 .
Performance Compensation
Annual Incentive Plan (AIP) design and results
- FY2025 metrics (Executive Shared Services; applies to Bowling): Adjusted Operating Income (loss) 60% weight; Adjusted Operating Cash Flow 20%; Net Sales 20%; negative moderator and gate based on AOI; all components below threshold; payout = 0% .
- FY2024 metrics: same weights; executive shared services paid 21% of target; Bowling received $44,335 .
| AIP (Executive Shared Services) | FY 2025 Threshold | FY 2025 Target | FY 2025 Maximum | Weight | Actual/Payout |
|---|---|---|---|---|---|
| Adjusted Operating Income (loss) ($) | 7,204,000 | 12,632,000 | 18,632,000 | 60% | Below threshold; 0% |
| Net Sales ($) | 222,919,000 | 238,000,000 | 254,000,000 | 20% | Below threshold; 0% |
| Adjusted Operating Cash Flow ($) | (2,500,000) | 2,000,000 | 6,500,000 | 20% | Below threshold; 0% |
Long-Term Incentives (LTIP)
| Grant Year | Type | Grant date | Target units | Performance period | Metric/Structure | TSR modifier | Vesting/Status | Grant-date FV ($) |
|---|---|---|---|---|---|---|---|---|
| FY2025 | Performance RSUs | 8/08/2024 | 45,402 | FY2025–FY2027 | 3‑yr cumulative adjusted operating income (loss) | +/-25% vs peer TSR | Cliff after ~3 years; currently expected to vest 0% based on outlook | 242,901 |
| FY2024 | Perf RSUs | Sep 2023 | 18,884 | 3 discrete 1‑yr periods; 3‑yr cumulative gate | Annual AOI with 3‑yr positive AOI gate | +/-25% vs peer TSR | Vests after ~3 years (≈Sep 2026) if earned; none expected to vest | — |
| FY2024 | Time-based RSUs | Sep 2023 | 18,884 | Service | 3‑yr time‑vest only | — | Vests after ~3 years (≈Sep 2026) | — |
| FY2022 | Perf RSUs | — | — | FY2022–FY2024 | 3‑yr cumulative AOI | (with TSR) | Earned 0% (below threshold) | — |
| FY2022 | Time-based RSUs | — | — | Service | 3‑yr time‑vest only | — | 6,882 shares vested to Bowling in FY2025 | — |
Program notes:
- All NEO equity in FY2025 was 100% performance‑based RSUs; no time‑based RSUs to NEOs in FY2025, reflecting shareholder feedback and expense control .
- Double‑trigger CoC acceleration vests RSUs at target on qualifying termination following a change in control .
Compensation benchmarking:
- FY2025 peer group narrowed to smaller issuers after investor feedback; target pay positioning at/near median remains paused given macro and results .
Equity Ownership & Alignment
| As of | Beneficial ownership (shares) | Ownership % | 401(k) included | Notes |
|---|---|---|---|---|
| Jul 29, 2024 | 50,766 (<1%) | <1% | Includes ~18,170 shares in 401(k) | Also includes 4,357 time‑based RSUs vested but not yet issued at that date |
| Jul 29, 2025 | 57,383 (<1%) | <1% | Includes ~18,170 shares in 401(k) | — |
Additional alignment policies and status:
- Stock ownership guidelines: NEOs must hold 2x base salary; Bowling not yet at threshold and must retain at least 50% of net shares until compliant .
- Hedging/pledging: Hedging prohibited; pledging strongly discouraged with pre‑clearance; no executive pledges outstanding .
- Outstanding awards: Performance RSUs from FY2025 (45,402 target) and FY2024 (18,884 target) outstanding; FY2024 time‑based RSUs 18,884 outstanding (3‑yr vest) .
Employment Terms
| Term | Bowling detail |
|---|---|
| Employment agreement | No individual employment agreement; severance protection via longstanding plan |
| Change‑in‑control (CoC) severance | Double trigger; approx 2x total cash (base + target bonus) on qualifying termination; additional 1x total cash for non‑compete; subject to 280G cutback |
| Estimated CoC cash (as of FY2025 end) | CoC payment $1,020,313; non‑compete payment $512,720; total $1,533,033 |
| Equity on CoC + qualifying termination | RSUs vest at target; estimated value $406,272 at FY2025 year‑end stock price |
| Death/Disability | AIP pays target bonus (Bowling: $211,120); LTIP RSUs vest at target; equity values same as CoC example |
| Clawback | SEC/NYSE‑compliant clawback adopted 9/28/2023 for incentive pay tied to financial reporting measures; mandatory recovery on restatement with limited exceptions |
| Anti‑hedging/pledging | Hedging prohibited; pledging discouraged with pre‑clearance; none pledged |
| Perquisites | Limited; auto allowance and executive health program |
Performance & Track Record
- FY2025: Consolidated operating loss $(18.4)M; adjusted operating loss $(9.0)M (≈15% YoY improvement) as restructuring completed; no AIP payouts; no LTIP performance shares earned; base salaries frozen .
- FY2024: Adjusted operating loss $(10.6)M (improved $16.3M YoY); executive shared services AIP paid 21% of target; Bowling received $44,335 .
- Restructuring: Expected $10–$11M annualized savings via footprint consolidation and supply chain optimization .
Risk Indicators & Red Flags
- No tax gross‑ups on CoC; double‑trigger equity; robust clawback and anti‑hedging policies .
- Activist settlement: 22NW cooperation agreements added directors and created a Strategy Committee; standstill in effect, which may stabilize governance near‑term .
- Say‑on‑Pay: 67.6% in 2023 improved to ~83% in 2024 after program changes; continued scrutiny likely if performance lags .
Investment Implications
- Strong pay‑for‑performance alignment near term: zero FY2025 AIP payout and multiple LTIP performance cycles projected at 0% reduce near‑term insider selling pressure and indicate tight linkage to profitability/TSR outcomes .
- Retention risk moderate: Base pay below median peer levels and repeated zero performance vesting could pressure retention; offset by severance protections, deferred comp contributions, and time‑based RSUs from FY2024 that vest in 2026 .
- Alignment and governance: Ownership guidelines, no pledging, clawback, and double‑trigger equity treatment enhance shareholder alignment; activist engagement has sharpened focus on capital allocation and strategy .