Joseph Rakow
EXPONENTAbout Joseph Rakow
Joseph Rakow, Ph.D., 48, is Group Vice President at Exponent; he joined the Company in 2005, was promoted to Principal Engineer in 2012, Corporate Vice President in 2021, and Group Vice President effective April 1, 2023 . He holds a Ph.D. (2005) and M.S. (2000) in Aerospace Engineering from the University of Michigan and a B.S. (1999) in Physics from UC Davis; he is a licensed professional engineer in California and a Fellow of the ASME . Company performance context relevant to pay-for-performance in FY2024: revenues before reimbursements grew 4.3% YoY, EBITDA was $147.1 million (vs. $137.7 million in 2023), EBITDA margin improved to 28.4% (from 27.7% in 2023), and the Company’s TSR index rose to 133 from 130 in 2023 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Exponent | Group Vice President | 2023–Present | Appointed Group Vice President effective April 1, 2023 |
| Exponent | Corporate Vice President | 2021–2023 | Promoted to Corporate VP in 2021 |
| Exponent | Principal Engineer | 2012–2021 | Promoted to Principal Engineer in 2012 |
| Exponent | Engineer | 2005–2012 | Joined Exponent in 2005 |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| University of Michigan | Teaching and research positions | — | Pre-Exponent academic roles |
| Sandia National Laboratories | Teaching and research positions | — | Pre-Exponent research role |
| FEMA Urban Search & Rescue | Structures Specialist (volunteer) | — | Public service specialty role |
| Multiple universities | Academic advisory boards (volunteer) | — | Advisory roles at university level |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary (USD) | $575,000 | $650,000 |
| Company Retirement/Other (USD) | $40,250 | $45,500 |
- Base salary change: Effective March 30, 2024, Dr. Rakow’s annual base salary increased 8% from $600,000 to $650,000 based on performance .
Performance Compensation
Annual Cash Bonus and Equity Grants
| Metric | 2023 | 2024 |
|---|---|---|
| Cash Bonus Paid (USD) | $690,000 | $540,000 |
| Vested RSUs Granted (to settle prior-year bonus) | 5,811 RSUs on 3/15/2024 (Grant-date FV $460,057) | — |
| Matching Unvested RSUs Granted | 5,811 RSUs on 3/15/2024 (Grant-date FV $460,057) | — |
| Stock Awards (Grant-date FV, USD) | $760,152 | $920,114 |
Notes:
- Bonus plan design: the aggregate bonus pool equals 33% of pre-tax income before bonuses, stock-based compensation, realized FX and interest income (FY2024 pool: $76.844 million) . Generally, 40% of each NEO’s annual bonus is settled with fully vested RSUs that are delivered four years after grant, and a matching number of unvested RSUs is granted, which cliff vests after four years, subject to conditions including retirement provisions . For NEOs other than the CEO/CFO, bonus determinations are made on a total compensation basis relative to contribution (no individual metric weightings disclosed) .
Pay-for-Performance Metrics Referenced by the Company
| Metric | Weighting | Target | Actual | Payout Basis | Notes |
|---|---|---|---|---|---|
| Revenues before reimbursements growth | N/D for NEOs (CEO used) | 1.5% growth (0 to 2 scale) | 4.3% growth | Company-wide bonus framework (CEO factor 1.28) | NEO-specific weights not disclosed; NEO bonuses based on contribution |
| Adjusted EBITDAS margin | N/D for NEOs (CEO used) | 31.75% +/- 5 bps per 1% revenue delta | Exceeded target by 96 bps | Company-wide bonus framework (CEO factor 1.48) | NEO-specific weights not disclosed; NEO bonuses based on contribution |
| Company-selected measure for PVP | — | — | EBITDA $147.1M (2024) vs $137.7M (2023) | Pay vs Performance disclosures | Key measures the Company ties to CAP include EBITDA, revenue growth, EBITDA margin |
Vesting mechanics:
- Unvested RSUs cliff vest four years from grant; fully vested RSUs settle (deliver shares) four years from grant; certain retirement provisions allow continued vesting subject to conditions .
Equity Ownership & Alignment
Beneficial Ownership (as of April 9, 2025)
| Item | Value |
|---|---|
| Shares Beneficially Owned | 1,573 shares |
| Shares Outstanding (reference) | 50,757,382 shares |
| Ownership % of Outstanding | ~0.0031% (1,573 / 50,757,382) |
| Options Exercisable within 60 Days | None (N/A for Rakow) |
| RSUs Deliverable within 60 Days | Not disclosed for Rakow (no 60-day RSUs footnote) |
Unvested RSU Schedule (as of January 3, 2025)
| Tranche Vest Date | Unvested RSUs (#) | Market Value at $88.91/share |
|---|---|---|
| March 12, 2025 | 1,366 | $121,451 |
| March 11, 2026 | 2,649 | $235,523 |
| March 10, 2027 | 3,800 | $337,858 |
| March 5, 2028 | 5,811 | $516,656 |
Policy alignment:
- Executive stock ownership guideline for “other NEOs” (includes Group VPs) is 1x annual base salary; all NEOs met or are expected to meet guidelines within the required time .
- Hedging and pledging of Company stock are prohibited for officers and directors .
Employment Terms
| Topic | Key Terms |
|---|---|
| Employment Agreement | None disclosed for NEOs (no separate employment contracts) |
| Change-in-Control (CIC) | Equity is assumed or substituted; upon involuntary termination within 2 years post-CIC (other than for failure to perform), all awards vest and settle on termination (double-trigger) |
| Estimated CIC + Involuntary Termination Equity Value (as of 1/3/2025) | $1,211,000 for Dr. Rakow (at $88.91/share) |
| Retirement Provisions | Unvested RSUs and options continue to vest upon retirement at age ≥59½, subject to conditions (all consulting through the Company and not joining a client or competitor) |
| Clawback | Mandatory recovery of excess incentive-based compensation upon an accounting restatement for current/former executive officers within a 3-year lookback (no indemnification) |
| Deferred Compensation (2024) | Company contribution $17,015; aggregate earnings $209,572; aggregate withdrawals $(220,678); aggregate balance $1,173,470 at 1/3/2025 |
Performance & Company Results Context (for alignment)
| Metric | 2023 | 2024 |
|---|---|---|
| Revenues before reimbursements growth (YoY) | — | 4.3% |
| EBITDA (USD ‘000) | 137,662 | 147,058 |
| EBITDA Margin (%) | 27.7% | 28.4% |
| Total Shareholder Return Index (base $100 in 2020) | 130 | 133 |
Notes:
- For NEOs other than the CEO/CFO, annual bonuses are based on total compensation approach and relative contribution, rather than pre-set individual weights; Company-level metrics used by the Committee include revenue growth and EBITDA margin .
Compensation Committee, Peer Group, and Say-on-Pay
- Human Resources Committee (comp committee): Debra L. Zumwalt (Chair), George H. Brown, Carol Lindstrom, Karen A. Richardson; 5 meetings in FY2024 .
- Independent consultant: Compensia advised on framework and peer data; eight professional services peers used for CEO/CFO benchmarking (e.g., CRA International, FTI Consulting, Heidrick & Struggles, Huron, ICF, Korn Ferry, Resources Connection, Hackett Group); no conflicts identified .
- Say-on-Pay: Approximately 92.8% of votes cast supported FY2023 NEO compensation; FY2024 approach remained consistent .
Investment Implications
- Retention profile: Significant multi-year unvested RSUs vesting annually from 2025 through 2028 (1,366; 2,649; 3,800; 5,811) create strong retention incentives; fully vested RSUs from bonus settle on a four-year delay, further extending alignment and retention .
- Pay-for-performance alignment: While NEO-specific bonus weights are not disclosed, Company bonus design emphasizes revenue growth and adjusted EBITDA margin with improved 2024 EBITDA and margin, and 40% of bonuses delivered in RSUs with 4-year settlement, aligning incentives with long-term shareholder outcomes .
- Governance safeguards: Prohibitions on hedging/pledging, mandatory clawback, no individual employment agreements or cash severance multiples, and double-trigger CIC equity vesting mitigate misalignment and windfall risks .
- Ownership and skin-in-the-game: Beneficial ownership is modest at 1,573 shares (~0.0031%), but policy requires 1x salary ownership and the unvested RSU overhang deepens exposure to equity outcomes over the next 3–4 years .
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