Andy Cheung
About Andy Cheung
Andy Cheung is Executive Vice President and Chief Financial Officer of Commercial Vehicle Group (CVGI), appointed effective October 11, 2022, after more than 25 years at Johnson Controls in global finance, general management, procurement, and corporate development roles across the U.S., Belgium, China, and Japan . He holds a BBA in Accounting from the Hong Kong University of Science & Technology and an MBA from the University of Chicago; he is also a CPA (inactive) . As of September 2022 he was 47 years old . Context on company performance relevant to pay-for-performance: CVGI’s 2024 total shareholder return (TSR, $100 base) was 39.12 (vs. 110.26 in 2023), with 2024 net loss of $35.7M and adjusted operating income of $6.5M, underscoring a challenging year and informing the Compensation Committee’s decision to pay zero annual bonuses for 2024 .
Company performance context (annual):
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenue ($) | 782,583,000* | 835,469,000* | 723,355,000 |
| EBITDA ($) | 42,582,000 | 58,301,000* | 26,398,000* |
Values retrieved from S&P Global where asterisked.
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Johnson Controls | VP & CFO, Global Products | Dec 2017–Oct 2022 | Senior P&L finance leadership for global products; extensive M&A/JV experience |
| Johnson Controls Hitachi Air-Conditioning (Tokyo) | Chief Financial Officer | Oct 2015–Nov 2017 | JV finance leadership in Japan; integration and transformation exposure |
| Johnson Controls (Tokyo) | VP Finance, Joint Venture Formation | Jun 2014–Sep 2015 | JV formation and strategic transactions |
| Johnson Controls (Asia Pacific Automotive) | VP Finance & IT; VP & GM; VP Procurement | 2010–2014 | Regional leadership across finance/operations/procurement |
| Johnson Controls (various) | Internal audit and controllership roles | Prior to 2010 | Global finance controls roles; Asia/U.S./Europe experience |
External Roles
No current public company board roles disclosed in reviewed SEC filings .
Fixed Compensation
| Item | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base salary ($) | 95,192 | 450,000 | 479,424 |
| Annual base salary (policy/reference) | — | — | 480,000 (stated 2024 base) |
| Target bonus (% of salary) | 65% (offer terms) | 65% (plan design) | 65% (plan design) |
| Actual annual incentive paid ($) | 292,500 (paid in 2023 for 2022 plan) | 506,903 (paid in 2024 for 2023 plan) | 0 (Committee negative discretion) |
| Stock awards ($, grant-date fair value) | 220,000 | 388,199 | 368,420 |
| Discretionary/sign-on cash bonus ($) | 100,000 (sign-on) | — | — |
| All other compensation ($) | — | 13,200 | 13,800 |
| Total SCT pay ($) | 707,692 | 1,358,302 | 861,644 |
Performance Compensation
Annual Incentive Plan (AIP) – 2024 outcomes
| Metric (weight) | Threshold | Target | Superior | Actual | Payout for metric | Weighted payout |
|---|---|---|---|---|---|---|
| Operating Income Margin (60%) | 1.9% | 2.9% | 3.9% | 0.9% | 0% | 0% |
| New Revenues ($M) (20%) | 80 | 100 | 120 | 105.4 | 127% | 25% |
| Operating Working Capital % of Sales (20%) | 22.0% | 20.0% | 18.0% | 21.1% | 75% | 15% |
| Total AIP payout before discretion | — | — | — | — | — | 40% |
| Committee discretion (final payout) | — | — | — | — | — | 0% (all NEOs) |
- 2024 target award opportunities: Cheung 65% of salary; Committee approved same target % for 2025 .
- 2024 AIP metrics were consolidated New Revenues, Operating Income Margin, and Operating Working Capital % of Sales; 60% weighting on profitability (Operating Income Margin) .
Long-Term Incentives (LTI)
| Component | Grant date | Award size | Performance/vesting | Payout range | Settlement |
|---|---|---|---|---|---|
| Restricted Stock (RS) | Mar 28, 2024 | 57,297 shares; $368,420 FV | Time-based: 1/3 vested 12/31/2024; remainder vests 12/31/2025 and 12/31/2026 | n/a | Shares |
| Cash Performance Awards (2024 cycle) | Mar 28, 2024 | Threshold/Target/Max: $180,000/$360,000/$720,000 | 3-year TSR vs peer group (0–200% of target) and Year 1 ROIC (0–200%); performance period 1/1/2024–12/31/2026; vests/pays after 12/31/2026 | 0–200% | Cash |
Additional vesting detail (unvested as of 12/31/2024):
- 2022 grant (33,742 RS): vested ratably 12/31/2023 and 12/31/2024; remainder vests 12/31/2025 .
- 2023 grant (RS): 1/3 vested 12/31/2023 and 12/31/2024; remainder vests 12/31/2025 .
- 2024 grant (RS): 1/3 vested 12/31/2024; remainder vests 12/31/2025 and 12/31/2026 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 135,220 shares (<1% of outstanding; 34,640,434 shares outstanding as of Mar 17, 2025) |
| Unvested RS (12/31/2024) | 67,172 shares; market value $166,587 at $2.48 close |
| Options | None outstanding; no options granted in 2024; no shares subject to options within 60 days of Mar 17, 2025 |
| 2024 vested RS | 48,072 shares vested; value realized $119,219 (at vest dates) |
| Pledging/hedging | No pledging of NEO/director holdings; company prohibits hedging and pledging, with limited board-approved exceptions (no margin accounts) |
| Ownership guidelines | CFO must hold ≥3x base salary; no mandated timeframe but executives may not sell until compliant; one-year post-vesting hold and restriction until guidelines met (tax withholding share surrender permitted) |
Employment Terms
| Term | Detail |
|---|---|
| Start date and offer terms | Appointed CFO effective Oct 11, 2022; base salary $450,000; guaranteed 2022 bonus ≥$292,500; sign-on $100,000 cash and equity ($220,000 RS; $220,000 performance shares); relocation up to $135,000; target AIP 65%; LTI target ≥135% of base annually |
| Change-in-Control Agreement | Executed Dec 2022 |
| Severance (no CIC) | Termination without cause: salary continuation for 12 months (NEOs other than CEO) |
| CIC (double-trigger within 13 months) | One times “current annual compensation” (base salary + average actual annual incentive last 3 years), benefits continuation for 12 months, accelerated vesting of outstanding equity/cash awards; non-compete and non-solicit for 12 months; no tax gross-ups |
| Potential payments (12/31/2024 assumptions) | Involuntary not for cause: $792,000 (severance) ; CIC only: $279,579 (cash performance award) ; CIC + termination: total $1,278,634 including $746,468 severance, $166,587 restricted stock, $279,579 cash performance award, $36,000 benefits, $50,000 legal fee reimbursement |
| Clawback | NYSE 303A.14 / Rule 10D-1 compliant; recovers excess incentive comp over 3 fiscal years upon restatement |
| Non-compete / non-solicit | 12 months post-employment (per CIC agreements and offer letter) |
Performance Compensation (Design Insight)
| Element | 2024/2025 design note |
|---|---|
| Annual plan metrics | 2024: OI margin (60%), New Revenues (20%), OWC % sales (20%); Committee cut payout to zero despite a 40% formulaic outcome . 2025: Strategic Revenue (20%), OI margin (60%), OWC % sales (20%) . |
| LTI mix | Time-based RS plus cash-settled performance awards; at least 50% at-risk tied to TSR and ROIC; 0–200% payouts; 3-year performance period ending 12/31/2026 . |
| Peer group and benchmarking | Compensation benchmarked near market median; TSR peer group aligned to updated comp peers (e.g., Gentherm, Modine, Wabash, etc.) . |
Say-on-Pay & Governance
- Say-on-pay approval 88.2% at May 16, 2024 meeting; no specific 2024 changes in response; another vote planned for 2025 .
- Compensation Committee members: Melanie K. Cook (Chair), Jeffrey S. Niew, Wayne M. Rancourt .
Track Record, Value Creation, and Execution Risk
- 2024 was challenging: company TSR value fell to 39.12 (from 110.26 in 2023), net loss of $35.7M, adjusted operating income $6.5M; Committee exercised negative discretion to pay zero bonuses despite partial metric attainment, signaling alignment with shareholder outcomes .
- Cheung’s prior experience emphasizes JV formation, M&A, global product finance, and operational leadership across regions and functions, which the CEO highlighted as important for CVGI’s diversification and growth efforts (including EV and automation end markets) .
Equity Ownership & Alignment (Expanded Detail)
| Aspect | Detail |
|---|---|
| Ownership as % | “Less than 1%”; specific percentage not disclosed for Cheung; group (12 persons) 4.2% |
| Vested vs unvested | Unvested RS 67,172 shares at 12/31/2024; vesting concentrated on 12/31/2025 and 12/31/2026 |
| Insider sales pressure | Executives may not sell shares until ownership guideline compliance; one-year post-vesting minimum hold; hedging/pledging prohibitions—collectively reduce near-term selling pressure |
Compensation Structure Analysis
- Mix shift and risk: 2024 AIP was fully zeroed by Committee discretion despite some metrics over threshold, increasing risk to cash compensation and emphasizing LTI alignment .
- LTI design emphasizes market-driven TSR and capital efficiency (ROIC), with cash-settlement flexibility and 0–200% payout mechanics; at least half at-risk aligns realized pay to shareholder outcomes .
- No options outstanding and prohibition on repricing/buyouts without shareholder approval mitigate option-related dilution or repricing red flags .
Related Party Transactions / Red Flags
- No Item 404 related-person transactions disclosed for Cheung in his appointment 8-K .
- No tax gross-ups in CIC agreements; anti-hedging/pledging policy in place; clawback policy adopted; these are shareholder-friendly features .
Investment Implications
- Pay-for-performance discipline: Zero 2024 bonuses despite formulaic 40% payout potential underscores governance rigor and alignment; future AIP payouts will likely track profitability and working capital execution, with Committee discretion as an overlay .
- Retention risk vs. alignment: Cheung has meaningful unvested equity vesting in 2025–2026 and cash performance awards tied to TSR/ROIC through 2026—strong retention hooks; anti-hedging/pledging and one-year post-vesting hold limit near-term selling pressure .
- Change-in-control economics: One-times current annual compensation plus accelerated vesting on double trigger (no gross-ups) presents moderate CIC cost with alignment to shareholder outcomes through performance award treatment; quantified CIC+termination value of ~$1.28M as of 12/31/2024 shows limited parachute scale .
- Execution focus: LTI metrics (TSR, ROIC) and 2025 AIP emphasis on Operating Income Margin and working capital should concentrate management on profitability and capital efficiency—critical given 2024 TSR decline, net loss, and lower revenues vs. 2023 .