Cesar A. Lanuza
About Cesar A. Lanuza
Cesar A. Lanuza has served as President and Chief Executive Officer of Lawson (DSG’s MRO operating company) since April 4, 2022, with compensation and incentives tied predominantly to Lawson’s operating performance and DSG equity value . In 2024, Lawson underperformed its AIP targets (Adjusted EBITDA $59.1M vs $83.1M target; Net Sales $486.4M vs $574.3M; Working Capital 23.9% vs 21.7%; DSG Equity Value +4.9% vs 25% target), resulting in a 0% AIP payout for Lanuza . At the consolidated level, DSG 2024 revenue grew 14.9% to $1.8B (acquisition-led), Adjusted EBITDA reached $175.3M, and TSR rose 9% for the year, while non-GAAP EPS was $1.44 and GAAP net loss was $7.3M .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Lawson (a DSG operating company) | President & CEO | 2022–present | Leads MRO segment with AIP metrics focused on Adjusted EBITDA, Adjusted Net Sales, Working Capital, and DSG Equity Value to align pay with operating and enterprise value creation . |
External Roles
- Not disclosed in DEF 14A filings reviewed.
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary (USD) | $448,079 | $600,000 | $600,000 |
| Target Bonus % of Salary | 100% (prorated 2022 start) | 100% | 100% |
| Target Bonus Amount (USD) | $447,123 (prorated) | $600,000 | $600,000 |
| Actual AIP Paid (USD) | $519,379 | $614,760 | $0 |
| Discretionary Bonus (USD) | — | — | $60,000 |
| All Other Compensation (USD) | $19,798 | $29,526 | $26,551 |
Performance Compensation
Annual Incentive Plan (AIP) – Lawson 2024
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout |
|---|---|---|---|---|---|---|
| Adjusted EBITDA | 30% | $74.8M | $83.1M | $91.4M | $59.1M (after adjustments) | 0% |
| Adjusted Net Sales | 30% | $545.7M | $574.4M | $603.3M | $486.4M (after FX adj.) | 0% |
| Working Capital % Sales | 20% | 22.20% | 21.70% | 21.20% | 23.90% | 0% |
| DSG Equity Value Appreciation | 20% | 20.0% | 25.0% | 35.0% | 4.9% | 0% |
Result: AIP payout = 0% of target for Lanuza in 2024 (target $600,000), consistent with underperformance vs targets .
Long-Term Incentives (LTIP) – Design and Grants
- Program emphasis on out-of-the-money stock options to align value realization with significant share price appreciation; RSUs used selectively for retention .
- Lanuza 2022 new-hire options: 450,000 shares (200,000 @ $27.50; 50,000 @ $40; 100,000 @ $55; 100,000 @ $70); 20% vests annually over 5 years from 4/12/2022 .
- Lanuza 2024 retention RSU grant: 100,000 RSUs on 6/3/2024; vest 20% annually on 6/3/2025 – 6/3/2029; grant date fair value $3,206,000 .
| Award | Grant date | Amount | Strike/price | Vesting | Expiration |
|---|---|---|---|---|---|
| Stock Options (tranche) | 4/12/2022 | 200,000 | $27.50 | 20% annually Years 1–5 | 4/12/2032 |
| Stock Options (tranche) | 4/12/2022 | 50,000 | $40.00 | 20% annually Years 1–5 | 4/12/2032 |
| Stock Options (tranche) | 4/12/2022 | 100,000 | $55.00 | 20% annually Years 1–5 | 4/12/2032 |
| Stock Options (tranche) | 4/12/2022 | 100,000 | $70.00 | 20% annually Years 1–5 | 4/12/2032 |
| RSUs | 6/3/2024 | 100,000 | — | 20% annually 2025–2029 | — |
Outstanding as of 12/31/2024: 27.50 tranche 40,000 exercisable/160,000 unexercisable; 40.00 tranche 20,000/30,000; 55.00 tranche 40,000/60,000; 70.00 tranche 40,000/60,000; RSUs unvested 100,000 (MV $3,440,000 at $34.40) .
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Total beneficial ownership | 340,398 shares (0.7% of outstanding) as of 4/2/2025 |
| Currently exercisable options (included above) | 270,000 shares underlying currently exercisable options |
| Shares outstanding (context) | 46,570,343 as of 4/2/2025 |
| Pledging/Hedging | Anti-hedging policy prohibits hedging by executives/directors; no pledging policy disclosed . |
| Ownership guidelines | Not disclosed in DEF 14A reviewed. |
Note: As of 12/31/2024, Lanuza also held 100,000 unvested RSUs (vesting 2025–2029), and multiple option tranches with annual vesting through 2027, creating a predictable vesting cadence that can influence future equity realizable value .
Employment Terms
| Term | Detail |
|---|---|
| Role/start date | President & CEO, Lawson; effective April 4, 2022 |
| Base salary | $600,000; subject to periodic review |
| AIP eligibility | Annual performance-based incentive under Lawson AIP |
| Severance (without Cause / Good Reason) | 2x base salary (paid over 2 years) + 2 years of health benefits |
| Change-in-control (equity) | All unvested options vest 10 days prior to CIC; vested become fully exercisable; in-the-money options cashed out; out-of-the-money cancelled without consideration |
| 280G taxes | Cut-back to avoid excise taxes for Lanuza (vs “better-of” net for CFO) |
| Restrictive covenants | 18-month non-compete post-termination |
Potential payments (assumes 12/31/2024 and $34.40 stock price): After CIC termination total ~$4.95M; Without Cause ~$1.91M; Good Reason ~$1.25M; Death/Disability ~$0.66M. Detail includes salary, accelerated equity (RSUs/options), and medical benefits; subject to 280G cutback for CIC .
Compensation Structure Analysis
- Pay-for-performance linkage: Despite a 100% of salary target bonus, Lawson underperformance vs 2024 AIP goals led to a 0% AIP payout for Lanuza, evidencing downside risk in annual cash incentives .
- Shift toward retention equity: In 2024, Lanuza received 100,000 RSUs (five-year ratable vest) on top of 2022 option grants—tilting mix modestly toward time-based equity, which improves retention but lowers performance leverage vs options .
- Governance guardrails: No SERP or tax gross-ups; a Dodd-Frank-compliant clawback policy; anti-hedging policy in place .
- Shareholder support: Say-on-Pay received 99.96% support at the 2024 annual meeting, signaling broad investor approval of the compensation framework .
- Benchmarking: Lanuza’s total direct compensation (3-year framework) compared above peer median but below 75th percentile (Company TDC $2,731K vs peer median $1,705K; 75th $3,140K), reflecting both role scope and equity mix .
Director/Shareholder Alignment Context
- Control shareholder: LKCM beneficially owns ~78.1% of DSG shares; Chairman/CEO J. Bryan King beneficially owns ~77.0% (through affiliated entities and direct) .
- Pay vs performance: 2024 TSR +9.0%; non-GAAP EPS $1.44, GAAP net loss $7.3M; peers’ cumulative TSR outperformed DSG’s in the pay-vs-performance table window, highlighting execution and integration demands tied to acquisition-led growth .
Deferred Compensation and Perquisites
- Lanuza participates in the Deferred Compensation Plan (company contributions above IRS limits). 2024: company contribution $10,200; year-end balance $29,634 .
- Other perks are limited (e.g., 401(k) match and disability insurance); no aircraft, security, or executive life insurance benefits disclosed .
Summary of Recent Compensation Outcomes (multi-year)
| Component (USD) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $448,079 | $600,000 | $600,000 |
| Bonus (discretionary) | — | — | $60,000 |
| Stock awards (RSUs etc.) | — | — | $3,206,000 |
| Option awards (grant-date fair value) | $1,993,250 | — | — |
| Non-equity incentive (AIP) | $519,379 | $614,760 | $0 |
| All other compensation | $19,798 | $29,526 | $26,551 |
| Total | $2,980,506 | $1,244,286 | $3,892,551 |
Investment Implications
- Near-term cash comp sensitivity: AIP outcomes show high sensitivity to Lawson operating results; with 2024 below-threshold performance driving a zero bonus, improvements in EBITDA, sales and working capital execution will directly impact Lanuza’s cash incentive realization .
- Equity overhang/retention: The 2022 multi-strike option grant (partially in-the-money at $27.50) and 2024 RSUs create sustained alignment and retention, with potential incremental selling capacity around annual vest dates (June for RSUs; April for options) as awards vest, though actual dispositions depend on personal and market factors .
- CIC economics/structure: Equity accelerates 10 days pre-CIC (single-trigger on options per agreement), but the proxy’s payout table reflects double-trigger for tabulated benefits; Lanuza is subject to 280G cutback rather than “best-net” treatment, slightly tempering CIC windfalls vs peers .
- Governance mitigants: Strong Say-on-Pay support, clawback, and no hedging improve alignment; lack of disclosed anti-pledging or ownership guidelines is a monitoring point, though concentrated insider ownership suggests strong “skin in the game” at the group level .