Richard Fricke
Element SolutionsAbout Richard Fricke
Richard L. Fricke, 54, is Executive Vice President, Head of Electronics at Element Solutions Inc (ESI). He assumed the Head of Electronics role on July 1, 2024, after serving in multiple leadership positions across ESI’s semiconductor and electronic solutions businesses since April 2020; he previously held senior roles at Honeywell, ATMI (now Entegris), and Danaher, and holds a B.A. in Biology (UConn) and an MBA (NYU Stern) . Company performance context during his leadership tenure includes ESI’s TSR outperforming its peer group over the last four years and 2024 adjusted EBITDA of $534.7 million (pay-versus-performance table), while the Annual Bonus Plan evaluated pre‑bonus adjusted EBITDA at $580 million for 2024, producing a 135% company pool; his 2024 bonus payout was approximately 127% of target .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| ESI | EVP, Head of Electronics | 2024–present | Executive leadership of Electronics segment; succession from prior head effective July 1, 2024 . |
| ESI | SVP, Electronics / SVP, Electronic Solutions; SVP, Semiconductor & Assembly Solutions; VP & GM, Semiconductor | 2020–2024 | Led semiconductor/electronics businesses through multiple roles, culminating in segment leadership . |
| Honeywell International | VP & GM, Electronic Materials; prior leadership in PMT APAC | 2011–2020 (Electronic Materials 2017–2020) | Ran electronic materials business; regional leadership in Performance Materials & Technology across Asia Pacific . |
| ATMI (now Entegris) | Senior Director, GM, Implant & Advanced Material Solutions | 2006–2011 | P&L leadership in advanced materials for semiconductors . |
| Danaher | Director, Global Marketing / Product Management | 2002–2006 | Product and marketing leadership in industrial/technology portfolios . |
Fixed Compensation
| Year | Base Salary ($) | Base salary rate as of 4/1/2024 ($) | All Other Compensation ($) | Total ($) |
|---|---|---|---|---|
| 2024 | 457,650 | 475,000 | 33,817 | 1,642,731 |
Performance Compensation
Annual Bonus Plan (2024 design and outcomes)
| Component | Metric | Weighting | Target | Actual/Result | Payout factor / Notes |
|---|---|---|---|---|---|
| ESI Pool | Adjusted EBITDA (pre‑bonus) | 25% | $535m | $580m | Company pool set at 135% based on performance . |
| Business Pool (Fricke) | Electronics Adjusted EBITDA | 50% | n/d | n/d | Specific business-level payout not separately disclosed . |
| Individual | Adjusted EPS | 25% | $1.40 | $1.44 | Capped at 125% for 2024 . |
| Total payout (Fricke) | Weighted sum | — | — | — | Approximately 127% of target for Mr. Fricke . |
| Item | Value |
|---|---|
| 2024 non-equity incentive (cash bonus) paid to Fricke ($) | 451,262 |
| Target bonus opportunity (% of salary) | 75% (EVP level) |
Notes:
- Plan formula: Payout = (ESI Pool 25%) + (ESI or Business Pool 50%) + (Individual 25%) .
- Rationale: Adjusted EBITDA and adjusted EPS are central to pay-for-performance .
Long-Term Incentives (Equity)
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Structure and vesting:
- RSUs: three-year vesting, 1/3 annually; PRSUs: three-year performance period, vest at end of period; 2022 “stretch” PRSUs have a five-year period .
- PRSUs typically represent ~67% of annual LTI award mix .
-
2024 grants to Fricke (Grant date: January 19, 2024):
Award Type Target # Shares Grant-Date Fair Value ($) PRSUs 20,861 466,661 RSUs 10,431 233,341 -
2024 PRSU performance metrics and calibration (applies to 2024 LTI cycle):
Metric Threshold Target Maximum Period / Vesting Adjusted EBITDA CAGR (constant currency) 3.5% 5.0% 8.0% 3-year period; vest at end subject to achievement Cash Return on Investment (CRI) 37.6% 38.2% 38.8% 3-year period; vest at end subject to achievement -
Program changes for 2025 LTI: PRSU metrics changed from CRI to adjusted EPS, with both adjusted EPS and constant-currency adjusted EBITDA CAGR now subject to a relative TSR modifier vs. peer group .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (4/7/2025) | 40,829 shares; less than 1% of outstanding; none pledged . |
| Outstanding unvested awards at 12/31/2024 (Fricke) | RSUs: 10,431 ($265,260); PRSUs: 20,861 ($530,495) . |
| Additional unvested awards from prior cycles | 2023 RSUs: 3,354 ($85,292); 2023 PRSUs: 10,060 ($255,826); 2022 RSUs: 955 ($24,286); 2022 PRSUs: 5,732 ($145,765) . |
| Stock options | None outstanding/unexercisable for Fricke; no NEO option grants since 2020 . |
| Stock ownership guidelines | CEO 5x salary; other officers 2x salary; compliance required within 5 years; each NEO exceeded their guideline as of proxy date . |
| Hedging/pledging policy | Prohibits hedging, pledging, short sales; caution on margin accounts . |
Vesting cadence and potential selling pressure: RSUs vest ratably over three years (e.g., 2024 grant 10,431 units vests ~1/3 per year), creating predictable annual vesting events; PRSUs cliff‑vest at the end of the 3‑year cycle subject to performance, concentrating supply at cycle completion .
Employment Terms
- Employment agreements: None of the NEOs (including Fricke) has an employment agreement; pay is approved annually with no guaranteed increases .
- Clawback: Executive Officer Clawback Policy (2023) compliant with SEC/NYSE rules; applies to incentive compensation; LTI awards include clawback language .
- Change-in-control (CIC) agreements: Double‑trigger; severance equal to 2x base salary and 2x target bonus for non‑CEO NEOs; no excise tax gross‑ups; 18‑month non‑compete; confidentiality; requires release .
- Equity acceleration on CIC: Unvested PRSUs/RSUs accelerate per CIC agreements; valuation for disclosure used $25.43 closing price on 12/31/2024; accrued dividends on accelerated awards would be paid (Fricke: $25,018) .
Potential payments upon termination (as if event occurred on 12/31/2024):
| Scenario | Salary ($) | Bonus ($) | LTI Awards Valuation ($) | Total ($) |
|---|---|---|---|---|
| CIC termination (within window, w/ double trigger) | 950,000 | 712,500 | 1,306,924 | 2,969,424 |
Performance & Track Record (Company context)
| Metric | Value |
|---|---|
| TSR vs. peers (last four years) | ESI TSR outperformed its peer group . |
| Adjusted EBITDA (2024, pay vs performance) | $534.7 million . |
| Pre‑bonus Adjusted EBITDA (2024, ABP metric) | $580 million (company pool set at 135%) . |
| Adjusted EPS (2024, ABP individual metric) | Target $1.40; actual $1.44; individual component capped at 125% . |
Compensation Structure Analysis
- Mix and “at-risk” emphasis: Approximately 78% of NEO compensation was performance-based in 2024; bonus and LTI designs emphasize adjusted EBITDA/EPS and multi‑year equity .
- Trend in LTI metrics: Shift from CRI to adjusted EPS for 2025 PRSUs, adding a relative TSR modifier—tightens alignment with earnings quality and shareholder returns .
- Options vs RSUs/PRSUs: No NEO option grants since 2020; equity vehicle mix relies on RSUs/PRSUs, lowering risk vs. options and increasing retention via time and performance vesting .
- Ownership alignment: Robust stock ownership guidelines (2x salary for officers), no hedging/pledging, and disclosure indicates each NEO exceeds guidelines .
Investment Implications
- Pay-for-performance is tightly linked to adjusted EBITDA and adjusted EPS, with Fricke’s 2024 payout at ~127% of target reflecting above‑target performance and capped individual metrics—supportive of alignment but sensitive to non‑GAAP definitions and cap mechanics .
- Retention risk appears moderate: meaningful unvested RSUs/PRSUs, three‑year vesting/performance cycles, and 18‑month non‑compete under CIC reduce immediate flight risk; absence of an employment agreement is offset by standard CIC protections (2x cash, equity acceleration) .
- Insider selling pressure likely manifests around predictable RSU vesting dates and PRSU cycle completions; no stock options and an anti‑pledging policy mitigate forced‑sale dynamics .
- Governance quality signals (clawback, no gross‑ups, double‑trigger CIC, prohibitions on hedging/pledging, ownership requirements) are favorable; 2025 LTI redesign to adjusted EPS plus TSR modifier heightens earnings and market-relative accountability for the Electronics portfolio Fricke leads .