John Sterling
About John F. Sterling
Executive Vice President, General Counsel and Secretary of Darling Ingredients (since August 2007); age 61 as of March 20, 2025 . In 2024, the company’s global adjusted EBITDA was approximately $1,079.8 million, below the threshold for payout on the financial metric, resulting in a zero payout on the EBITDA component of annual incentives; Mr. Sterling’s 2024 annual incentive paid 35% of target based solely on Strategic/Operational/Personal (SOP) goals ($197,750) . The company’s long-term incentives emphasize performance share units tied to relative Return on Gross Investment (ROGI) with a TSR modifier, aligning pay with multi-year value creation against peers . On November 10, 2025, Mr. Sterling notified the company he will retire on March 31, 2027; he remains EVP, GC and Secretary until January 4, 2026, then transitions to an advisory role (base salary maintained through March 31, 2026; reduced thereafter to $120,000; no participation in 2026–2027 incentive programs) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Pillowtex Corporation | Vice President, General Counsel and Secretary (served as VP/GC/Secretary since 1999) | 1997 – July 2007 | Not disclosed |
| Thompson & Knight LLP | Corporate and securities practice (began career at the firm) | Not disclosed | Not disclosed |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 500,000 | 550,000 | 565,000 |
| Target Bonus (% of Salary) | — | — | 100% (Target $565,000) |
| Actual Annual Incentive Paid ($) | 750,000 | 391,238 | 197,750 |
Performance Compensation
Annual Incentive (FY 2024 design and outcome)
| Metric | Weighting | Target/Threshold | Actual Result | Payout |
|---|---|---|---|---|
| Adjusted EBITDA (Global) | 65% | Threshold $1,344.8m; Target $1,582.1m; Max $1,819.4m | $1,079.8m (below threshold) | 0% |
| Strategic/Operational/Personal (SOP) | 35% | Goals set per executive | Resulting payout for Sterling | $197,750 (35% of target) |
Key SOP achievement highlights at the company level in 2024 included improved safety (LTIR down 45%), $353.4m debt reduction (leverage 3.68x), DGD SAF project start-up under budget and ahead of schedule, Miropasz acquisition, and targeted SG&A improvements at acquired businesses .
Long-Term Incentives (structure)
- Mix: PSUs 60% / RSUs 40% of target LTI value .
- PSU metric: Average ROGI vs Performance Peer Group over three years; payout 0%–225% of target. TSR relative to peers modifies PSU outcome by −30%/0%/+30% (capped at 225%) .
- RSUs vest 33-1/3% annually on the 1st, 2nd, and 3rd anniversaries of grant; dividend equivalents accrue and pay on vest .
2024 LTI grants to John F. Sterling
| Grant Type | Grant Date | Shares (Threshold/Target/Max) | Grant-date Fair Value ($) | Vesting/Performance Window |
|---|---|---|---|---|
| PSUs | 1/3/2024 | — / 10,375 / 23,343 | 554,336 | Performance period Dec 31, 2023 – Jan 2, 2027; ROGI vs peers with TSR modifier |
| RSUs | 1/3/2024 | 6,917 | 339,002 | Vests 1/3 each year on grant anniversaries |
FY24 award payouts/vesting realized in 2024: Mr. Sterling had 9,434 PSUs (from the 2022–2024 cycle) and 4,555 RSUs vest, with total stock award value realized of $538,229 in 2024 .
Equity Ownership & Alignment
Beneficial Ownership (as of March 11, 2025)
| Holder | Common Stock Owned | Unexercised Plan Options | Common Stock Beneficially Owned | % of Outstanding |
|---|---|---|---|---|
| John F. Sterling | 294,845 | 148,841 | 443,686 | <1% |
Stock ownership and retention policy: NEO requirement is 2.5x annual base salary; must retain at least 75% of net shares from incentive awards until compliant. Company prohibits hedging and pledging (including holding in margin accounts) by directors, executive officers, and employees .
Outstanding Equity Awards at FY-end (December 28, 2024)
| Award Type | Detail | Amount/Terms |
|---|---|---|
| Unvested RSUs | Shares unvested | 11,955 (valued at $400,014 at $33.46 close) |
| Unearned PSUs | Shares at target/max | 28,629 (valued at $957,927 at $33.46 close) |
| Options (Exercisable) | Strike / Expiry | 15,351 @ $14.76 exp 03/10/2025; 15,324 @ $11.97 exp 03/07/2026; 46,083 @ $12.29 exp 02/06/2027; 32,402 @ $18.82 exp 01/29/2028; 26,679 @ $21.00 exp 01/25/2029; 25,353 @ $28.89 exp 01/06/2030 |
| Option Vesting Note | 2020 options | January 6, 2020 grant vested in three equal annual installments |
Employment Terms
- Current role and tenure: EVP, General Counsel & Secretary since August 2007 .
- Retirement transition: Intends to retire March 31, 2027; remains EVP/GC/Secretary until January 4, 2026, then serves in advisory capacity through retirement; current base salary continues through March 31, 2026, then reduced to $120,000; no participation in 2026–2027 annual or long-term incentive programs .
Severance and Change-of-Control (Senior Executive Termination Benefits Agreement)
| Scenario | Cash Severance | Bonus Treatment | Health/Other | Equity Treatment |
|---|---|---|---|---|
| Termination by Company without cause | 24 months of base salary ($1,130,000 shown for Sterling at 12/27/2024 base) | Amount due under applicable AIP based on achievements as of termination (prorated if before year-end) | COBRA up to 18 months; outplacement up to $20,000 | Amount shown in table: $541,252 (valuation at $33.46) |
| Death/Disability | — | — | Life insurance/disability values as specified (e.g., life insurance based on base salary multiples) | $696,704 (valuation at $33.46) |
| Retirement | — | — | — | $864,328 (valuation at $33.46) |
| Without cause or resignation for good reason following a Change of Control (double trigger) | 2x (base salary + target bonus) = $2,260,000 (Sterling) | Greater of actual-year bonus or target; prorated if before year-end | COBRA up to 18 months; outplacement up to $20,000 | $1,018,623 (valuation at $33.46) |
Clawback: Company will recoup erroneously awarded incentive-based compensation from executive officers if required to restate financials (post Oct 2, 2023) regardless of fault; SOX 304 reimbursement also applies to CEO/CFO in cases of misconduct-related restatement .
Investment Implications
- Reduced future selling pressure from new grants: Sterling will not participate in 2026–2027 incentive programs and transitions to advisory role, reducing issuance of new equity that could add incremental selling pressure; however, existing RSUs (tranches vesting on grant anniversaries) and any PSU settlements remain potential supply near vest dates .
- Pay-for-performance alignment intact but near-term cash-heavy: 2024 EBITDA miss drove 0% payout on the 65% financial component; payout depended on SOPs (35%), which paid at 35% of target for Sterling—suggesting tight linkage between financial underperformance and cash incentives .
- Long-term alignment via PSUs: PSU design tied to relative ROGI with a TSR modifier should reinforce multi-year capital discipline versus peers; potential outcomes range 0%–225% depending on performance, which can amplify upside/downside sensitivity to execution .
- Governance risk mitigants: Strict stock ownership guidelines (2.5x salary for NEOs) and prohibitions on hedging/pledging reduce misalignment and forced-selling risks; beneficial ownership for Sterling is <1% of shares outstanding as of March 11, 2025 .
- Severance economics are moderate: Absent a change of control, cash severance equals two years of base salary with COBRA and outplacement; under a double-trigger CoC, cash equals 2x (salary + target bonus), with additional equity treatment—balanced retention but not excessive .