Ryan Schroeder
About Ryan Schroeder
Ryan A. Schroeder, age 49, became President and Chief Executive Officer of The Eastern Company (EML) effective November 6, 2024, and is nominated to join the Board at the 2025 Annual Meeting; he holds an MBA from the Carlson School of Management and a BA from Michigan State University . In 2024, the company reported net loss of $8.529 million and communicated that shareholder value increased by approximately 20% for the year, framing a pay-versus-performance narrative in which CEO compensation “actually paid” was reduced alongside results . Schroeder’s compensation design targets 75% of salary for both annual cash (STIP) and long-term incentives (LTIP), with performance metrics centered on EPS, working capital efficiency (STIP), and EBITDA/ROIC(ROCE) with a relative TSR modifier (LTIP) .
Past Roles
| Organization | Role | Years | Strategic Impact / Notes |
|---|---|---|---|
| Plaskolite LLC | Chief Executive Officer | 2020–2023 | Led a manufacturer of engineering thermoplastics . |
| IMI Norgren (Americas) | President, Americas | 2016–2020 | Motion and fluid control manufacturer leadership . |
| Parker Hannifin | General Manager and various operations roles | 2003–2016 | Roles included GM of hydraulic valve and pump/motor divisions; plant/supply chain leadership . |
External Roles
| Organization/Board | Role | Years | Notes |
|---|---|---|---|
| — | — | — | No other public-company directorships disclosed in EML filings; biography focuses on operating roles . |
Fixed Compensation
| Year/Effective Date | Base Salary ($) | Target Bonus (% of Salary) | LTIP Target (% of Salary) | Notes |
|---|---|---|---|---|
| 2024 (pro-rated from 11/4/24) | 69,423 | 75% | 75% | 2024 salary pro-rated upon appointment; STIP approved Nov 4, 2024 . |
| 1/1/2025 | 495,000 | 75% | 75% | Base increased 4.2% from initial $475,000; targets per Employment Agreement . |
Performance Compensation
Annual Cash Incentive (STIP) – Design and 2024 Outcome
| Metric | Weight | 2024 Target | Threshold/Max Mechanics | 2024 Actual | Payout Impact |
|---|---|---|---|---|---|
| EPS | 75% | $2.50 | Threshold at 80% of goal earns 35% of that component; at 125% earns 180%; CEO max STIP = 150% of salary | Not achieved | 0% component payout . |
| Working Capital Efficiency | 25% | 26.0% (avg quarterly WC / sales) | Same thresholds/multipliers as EPS component | 105% of goal | Paid; drove entire 2024 award . |
| Executive | 2024 Base Considered ($) | STIP Achievement | STIP Paid ($) |
|---|---|---|---|
| Ryan Schroeder | 69,423 | ~23% of prorated salary (from WC metric) | 16,126 . |
Key terms: Schroeder’s STIP target is 75% of base salary; threshold at 80% of each goal earns 35% of that component; at 125% earns 180% of that component; maximum CEO STIP equals 150% of base salary .
Long-Term Incentives (LTIP) – Structure and Current Cycles
| Grant/Program | Vehicles | Core Performance Metrics | Relative TSR Modifier | Vesting Schedule | Notable 2024/2025 Status |
|---|---|---|---|---|---|
| 2024 awards cycle | Performance Stock Awards and Performance Stock Options | EBITDA and ROIC/ROCE by year | Relative TSR vs Russell Top 2000 Value Index applies to stock awards | Tranches vest March 1 in 2025–2027 subject to goals | 2024 performance tranches did not vest (for applicable awards) due to underperformance on 2024 goals . |
| 1/15/2025 grant | Performance Stock Awards | EBITDA and ROIC by FY25–FY27 year | Relative TSR vs Russell Top 2000 Value Index | Vests on 3/1/2026, 3/1/2027, 3/1/2028 subject to goals | Applies to named executive officers; design summarized; specific Schroeder units not itemized in proxy tables . |
Additional design detail examples (company-wide programs):
- Performance stock/option tables illustrate EBITDA and ROIC(ROCE) goal ranges by year; vesting tranches align with single-year performance tests and time-based portions where applicable .
- 2024 performance periods paid 0% on EBITDA/ROIC tests highlighted in tables, reinforcing pay-for-performance symmetry .
Equity Ownership & Alignment
| Item | Schroeder Detail |
|---|---|
| Beneficial Ownership (as of 3/3/2025) | 0 shares; 0% of class . |
| Shares Outstanding (record date) | 6,126,416 . |
| Vested vs Unvested | Not applicable as of 3/3/2025; no vested/unvested awards listed for Schroeder in 2024 year-end table . |
| Ownership Guidelines (Executives) | CEO required to hold shares equal to 5x base salary; compliance deadline 12/31/2028 . |
| Current Guideline Status | Below guideline (0 shares) with time to reach by 12/31/2028 . |
| Pledging/Hedging | Company maintains a Securities Laws Compliance Policy; no pledging by Schroeder disclosed . |
Employment Terms
| Term | Detail |
|---|---|
| Start/Effective Date | Employment Agreement dated Nov 4, 2024; effective Nov 6, 2024 . |
| Base Salary | $475,000 initial; may be increased, not decreased; 4.2% increase to $495,000 effective 1/1/2025 . |
| STIP Target | 75% of base salary; payable based on individual and company performance . |
| LTIP Target | 75% of base salary; mix of performance shares/options per plan . |
| Severance (No Cause/Good Reason) | 1x base salary at termination, paid over 12 months, subject to release; payments commence after 60-day release period . |
| Change-in-Control Treatment | Proxy states payments upon termination without Cause are the same whether or not in connection with a change in control for Schroeder . |
| Restrictive Covenants | 12-month non-compete and non-solicit following separation; confidentiality and non-disparagement provisions . |
| Vacation/Benefits | 4 weeks vacation; eligible for senior executive benefit plans (excluding severance plans) . |
Board Governance and Director Service
- 2025 Nominee: Schroeder is nominated for election to fill the vacancy created when the former CEO stepped down; election is for a one-year term expiring in 2026 .
- Independence: Board determined six of seven directors are independent; the only non-independent director is Ryan A. Schroeder (as CEO) .
- Committee roles: No committee roles disclosed for Schroeder; committee chairs and membership roles are held by independent directors .
- Director compensation: Non-employee directors are paid in stock (annual retainers and chair fees); employee CEOs historically do not receive additional director fees (e.g., Mr. Hernandez received none as a director) .
- Board leadership: Separate Chairman (Fredrick D. DiSanto), mitigating CEO/Chair dual-role concerns .
Compensation Committee and Peer Benchmarking
- Governance: Compensation Committee reviews and approves CEO/CFO goals, oversees 2020 Stock Incentive Plan and executive pay programs .
- Benchmarking approach: Uses Salary.com survey data and independent peer benchmarking for base salaries .
- Current Peer Group (for benchmarking): CECO, CIX, CMT, GENC, GHM, NNBR, STRT, TACT, TRNS, TWIN, UFPT, ULBI .
- Ownership guidelines: CEO 5x salary; CFO 2x salary, with compliance targeted by 12/31/2028 .
Performance & Track Record (Company context during Schroeder’s early tenure)
| Measure | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income ($000s) | 12,301 | 8,585 | (8,529) . |
| Value of $100 Investment (TSR proxy measure) | 77.34 | 114.55 | 121.21 . |
| 2024 Shareholder Value Commentary | — | — | Company notes ~20% shareholder value increase and lower “compensation actually paid” aligning with results . |
Notable context:
- 2024 STIP EPS target missed; working capital efficiency goal exceeded (105%), driving partial STIP payout .
- 2024 LTIP tranches tied to EBITDA/ROIC(ROCE) did not vest, consistent with underperformance versus those targets .
Risk Indicators and Red Flags
- Related party transactions: Board determined none requiring disclosure since the beginning of fiscal 2023 .
- Pledging/Hedging: No pledging by Schroeder disclosed; firm has a Securities Laws Compliance Policy governing insider trading .
- Say-on-Pay: Board recommends “FOR” advisory approval in 2025; historical approval percentages not provided in filing .
- Option repricing/award modifications: No repricing disclosures; 2024 performance-based awards showed zero vesting where goals were not met .
- Leadership transitions: CEO change on Nov 4–6, 2024; separation economics for prior CEO disclosed and bounded .
Director Compensation (for reference; Schroeder as employee CEO not applicable)
| Element | FY2024 Non-Employee Director Framework |
|---|---|
| Annual Retainers (paid in stock) | Chair $125k; Vice-Chair $90k (effective 7/30/24); Directors $70k . |
| Committee Chair Premiums | Audit $10k; Compensation $7.5k; EHS $7.5k; Capital Allocation & Investment $7.5k; Nominating & Governance $2k . |
| Meeting Fees | Over five regular meetings: $1,500 in-person; $500 telephonic; 15% increase to chair premiums and meeting comp effective 2/3/2025 . |
| 2024 Paid | Disclosed as stock awards per director; e.g., Mardy $82,007 total in stock . |
Equity Ownership & Alignment Details (Cap Table excerpt)
| Holder | Shares | % |
|---|---|---|
| Ryan A. Schroeder | 0 | 0% . |
| Shares outstanding (record date) | 6,126,416 | — . |
Employment Economics – Severance/CoC Snapshot
| Scenario | Multiple/Amount | Notes |
|---|---|---|
| Termination by Company without Cause or by Executive for Good Reason | 1x base salary, over 12 months, subject to release | No incremental CoC multiple; payments same if termination occurs in connection with a change in control . |
| Non-compete/Non-solicit | 12 months post-termination | Included in Employment Agreement . |
Investment Implications
- Alignment and risk: Schroeder starts with 0 ownership and a meaningful 5x-salary ownership requirement by 12/31/2028, suggesting potential open-market accumulation; absence of pledging and a strict insider trading framework reduce alignment risk factors .
- Incentive quality: STIP focuses on EPS and working capital discipline; LTIP emphasizes EBITDA and ROIC(ROCE) with a relative TSR modifier—clear line-of-sight metrics with demonstrated downside (0% vesting on 2024 tranches) indicate credible pay-for-performance construction .
- Retention/transition: Severance is moderate at 1x salary with 12-month non-compete/non-solicit; no enhanced CoC multiple—supportive of shareholder-friendly governance during leadership transition .
- Near-term trading signals: Watch for initial Form 4 purchases as he builds toward ownership guidelines, and for STIP/LTIP target calibration in 2025–2027 (changes to hurdles could signal confidence or risk); continued 0% LTIP vesting would be a negative signal, while early achievement against EBITDA/ROIC targets and relative TSR outperformance would be positive for sentiment .