DeLancey Davis
FRANKLIN ELECTRIC COAbout DeLancey Davis
DeLancey W. Davis is Vice President and President of Headwater Companies (Franklin Electric’s U.S. groundwater distribution segment). He is a named executive officer with compensation tied to company-wide metrics (working capital ratio and EPS) and business-unit operating income. 2024 Headwater/Distribution sales were $685.5 million (+$12.2 million YoY), while Company EPS was $3.86; Davis’s annual bonus paid at 45.8% of target, reflecting below-target attainment on combined metrics . Franklin Electric uses PSUs tied to three-year normalized EBITDA growth vs. the S&P SmallCap 600 Industrials; the 2022-grant PSUs (ending 2024) paid at 93.2% of target .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Franklin Electric – Headwater Companies (Distribution segment) | VP & President, Headwater Companies | Not disclosed | Leads the U.S. groundwater distribution platform that delivered $685.5m sales in 2024 (+$12.2m YoY) |
External Roles
No public company directorships or external roles disclosed for Mr. Davis .
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 440,000 | 457,500 |
| Target Bonus % of Salary | 75% | 75% |
| Target Bonus ($) | 330,000 | 343,125 |
| Actual Bonus Paid ($) | 117,910 | 156,165 |
| Bonus Payout (% of Target) | 36.1% | 45.8% |
Performance Compensation
Annual Incentive Structure (2024)
| Metric | Weighting | Threshold | Target | Actual | Attainment |
|---|---|---|---|---|---|
| Consolidated Working Capital Ratio | 25% | 36.6% | 30.5% | 29.9% | 102.0% of target |
| EPS (Adjusted) | 25% | $3.54 | $4.43 | $3.92 (adjusted for restructuring and CEO transition) | 88.5% of target |
| Headwater Operating Income | 50% | Not disclosed | Not disclosed | Not disclosed | Business unit range: 55.9%–91.9% of target |
Notes:
- Annual bonus curve: 0% below 80% of target; 33% payout at threshold; up to 200% at 110% of target .
- 2023 weighting for Davis was the same structure with business-unit operating income at 50% .
Long-Term Incentive (LTI) – Award Mix and PSU Design
- Award mix: 50% PSUs, 25% stock options, 25% time-based restricted stock/RSUs (retirement-eligible executives receive RSUs) .
- PSU metric: three-year consolidated normalized EBITDA vs. S&P SmallCap 600 Industrials; payout scale: 0% <75%, 50% at 75%, 100% at 100%, 200% at ≥125% of target .
Davis – Recent Grants and Terms
| Grant date | Instrument | Shares/Options | Key terms |
|---|---|---|---|
| 2/22/2024 | RSUs | 1,499 | Vests 100% on 2/22/2027; pro-rata on death/disability/retirement; accelerated at CoC |
| 2/22/2024 | PSUs (Target) | 2,999 | Performance period 1/1/2024–12/31/2026; PSU payout per EBITDA-relative scale |
| 2/22/2024 | Stock Options | 4,140 | Strike $98.37; 33% p.a. vesting over 3 years; 10-year term; accelerated vesting on death/disability/retirement/CoC |
| 2/16/2023 | RSUs | 1,489 | Vests 100% on 2/16/2026; pro-rata on death/disability/retirement; accelerated at CoC |
| 2/16/2023 | PSUs (Target) | 2,978 | Performance period ends 12/31/2025; payout as per PSU scale |
| 2/16/2023 | Stock Options | 4,093 | Strike $94.86; 33% p.a. vesting; 10-year term; accelerated on death/disability/retirement/CoC |
| 2/24/2022 | RSUs | 1,752 | Vests 100% on 2/24/2025; pro-rata on death/disability/retirement; accelerated at CoC |
| 2/24/2022 | PSUs (Target) | 2,336 | Performance period ended 12/31/2024; final PSU payout for 2022 grants at 93.2% of target |
| 2/24/2022 | Stock Options | 5,643 | Strike $83.90; 33% p.a. vesting; 10-year term; accelerated vesting on death/disability/retirement/CoC |
PSU vesting result (2022-cycle): estimated release of 2,178 shares credited to Davis from 2024 earned PSUs .
Option/stock activity
- 2024: Exercised 2,889 options; value realized $83,579. Vested 4,106 shares; value realized $405,586 .
- 2023: Exercised 9,487 options; value realized $248,415. Vested 6,042 shares; value realized $583,413 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (3/3/2025) | 11,568 shares; less than 1% of class |
| Options exercisable within 60 days | 5,989 shares included in beneficial ownership |
| 401(k) shares | 127 shares held via plan trustee |
| Unvested RSUs (not counted in ownership table) | 4,427 RSUs (retirement-eligible accounting) |
| PSUs – 2024 earned estimate included | 2,178 shares based on 2024 PSU earnings estimate |
| Outstanding awards (12/31/2024) | Unexercised options: 3,761 (83.90, exp. 2/24/2032); 1,364 (94.86, exp. 2/16/2033); 4,140 (98.37, exp. 2/22/2034). Unvested restricted: 4,740 total with tranches vesting 2/24/2025, 2/16/2026, 2/22/2027. PSUs unearned: 8,313 (target) total across 2025/2026 cycles . |
| Stock ownership guidelines | Corporate Vice Presidents: 3x base salary; all NEOs met requirements or are within grace period |
| Hedging/pledging | Company policy prohibits hedging and pledging by executives/directors |
Employment Terms
Change-in-Control (CIC) Employment Security Agreement (ESA)
| Benefit | Terms |
|---|---|
| Cash severance | 2x base salary + 2x target bonus, plus pro-rata current-year bonus (for terminations within 2 years post-CIC for reasons other than Good Cause or for Good Reason) |
| Retirement plan credit | Lump sum equal to increase from 24 months service credit |
| Equity | Immediate vesting of all stock-based awards; performance awards deemed met at target |
| Health & welfare | Continued coverage for 24 months |
| Outplacement | Up to 12 months, cap $50,000 |
| 280G treatment | Executive election: full benefits with tax or cut-back to avoid excise tax |
Non-CIC Executive Severance Policy (general)
| Benefit | Terms |
|---|---|
| Cash severance | 1x base pay + 1x target bonus for executive officers |
| Pro-rata bonus | Based on approved performance results for year of termination |
| Equity | Accelerated vesting of stock-based awards; removal of restrictions on time-based RS/RSU; accelerated vesting of performance-based stock awards/units |
| COBRA | Company-paid COBRA premiums for one year (executives) |
| Confidentiality/non-compete | 18-month confidentiality and non-compete agreement separate from ESA |
Quantified 12/31/2024 termination-without-cause (no CIC) illustrative values for Davis:
| Component | Amount ($) |
|---|---|
| Salary (severance) | 457,500 |
| Non-Equity Plan Compensation (pro-rata bonus) | 496,766 |
| Accelerated option vesting value | 32,569 |
| Accelerated RS/RSU/PSU vesting value | 1,047,950 |
| Continued benefits (COBRA, etc.) | 18,970 |
Clawback policy: Revised October 2023 to comply with SEC Dodd-Frank mandatory clawbacks (three-year lookback for restatements) .
Deferred Compensation
| Item | Davis (2024) |
|---|---|
| Company contributions ($) | 38,775 |
| Aggregate earnings ($) | 33,900 |
| Aggregate balance at year-end ($) | 743,915 (includes transferred Pension Restoration cash balance of $34,477) |
Pension participation: Basic Retirement portion credited service 6.6 years; Cash Balance portion 7.0 years; present values $17,326 and $90,595 respectively; accruals ceased in 2011 for participants under age 50 at that time .
Performance & Track Record (Business context)
| Segment (leader) | 2023 Sales ($m) | 2024 Sales ($m) | YoY change |
|---|---|---|---|
| Distribution (Headwater Companies) | 673.3 | 685.5 | +12.2 |
Additional Distribution actions:
- 2023: Acquired assets of LCA Pump, LLC (Water Works Pump) .
- 2021: Acquired Blake Group Holdings, Inc. .
Compensation Structure Analysis
- Pay mix emphasizes at-risk compensation: performance-based comp was 55–65% of targeted pay in 2024; PSU-heavy LTI design continues alignment with multi-year EBITDA growth vs peers .
- Ownership alignment: 3x salary guideline in place; executives must retain 50% of shares until compliant; hedging/pledging prohibited; all NEOs compliant or within grace period .
- Peer group benchmarking: 2024 peer group refreshed (5 removals, 5 additions including Pentair, Vontier, Zurn Elkay), targeting base at 50th percentile and bonus/LTI at 65th percentile for talent competitiveness .
- Say-on-Pay: 94.3% support at 2024 meeting (May 3, 2024), no material program changes indicated .
Investment Implications
- Near-term selling pressure windows: Multiple RSU tranches vest in 2025 (2/24), 2026 (2/16), 2027 (2/22), and PSU settlements due 2025 and 2026; coupled with options vesting schedules, this creates episodic liquidity events to watch around trading windows .
- Pay-for-performance signal: Davis’s 2024 bonus (45.8% of target) indicates below-target combined performance on EPS and unit operating income; monitor Headwater margin/operating income trends and inventory turns (working capital ratio beat) to assess recovery potential .
- Retention risk mitigants: Strong unvested equity, ESA protections (double-trigger, equity vesting), and ownership policies reduce voluntary departure risk in a CIC or normal environment .
- Alignment safeguards: Anti-hedging/pledging policies and a Dodd-Frank-compliant clawback enhance governance and compensation discipline .
Overall, Davis is tightly aligned with FELE’s performance metrics and equity outcomes, with meaningful upcoming vesting and PSU settlements that could drive insider activity around planned windows; Headwater’s steady sales growth but mixed bonus outcomes suggest focus on profitability execution and working capital optimization in 2025 .