Jonathan Grandon
FRANKLIN ELECTRIC COAbout Jonathan Grandon
Jonathan M. Grandon, age 49, serves as Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary of Franklin Electric (since 2016), and is one of the company’s named executive officers responsible for legal, corporate governance, and administrative functions . His incentive pay is tied to near-term working capital and EPS targets (annual bonus) and to three-year normalized EBITDA growth relative to the S&P SmallCap 600 Industrials (PSUs), driving alignment with operating discipline and peer-relative value creation; in 2024 his annual bonus paid at 91.7% of target and the 2022–2024 PSU cycle earned at 93.2% of target . As context for 2024, Franklin Electric delivered sales of $2,021.3 million (vs. $2,065.1 million in 2023), operating income of $243.6 million (down 7% YoY), and GAAP EPS of $3.86 (vs. $4.11 in 2023) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Franklin Electric | VP, Chief Administrative Officer, General Counsel and Corporate Secretary | 2016–present | Oversees legal, corporate governance, and administrative functions; corporate officer signing financing agreements (e.g., Note Purchase/Private Shelf confirmations) |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary Rate ($) | $440,000 | $457,500 |
| Target Bonus (% of Base) | 75% | 75% |
| Target Bonus ($) | $330,000 (75% of $440,000) | $343,125 (75% of $457,500) |
| Actual Annual Bonus Paid ($) | $235,820 | $312,331 |
| Bonus Payout vs Target (%) | — | 91.7% |
Performance Compensation
Annual Cash Incentive (2024 Design and Results)
| Metric | Weight | Threshold | Target | Maximum | Actual | Attainment vs Target |
|---|---|---|---|---|---|---|
| Consolidated Working Capital Ratio | 50% | 36.6% | 30.5% | 27.5% | 29.9% | 102.0% |
| Diluted EPS (Adjusted) | 50% | $3.54 | $4.43 | $4.87 | $3.92 (adjusted) | 88.5% |
| Total Bonus Payout | — | — | — | — | — | 91.7% of target |
Notes: Committee-approved adjustments excluded restructuring ($0.06) and CEO transition costs ($0.03) from EPS for plan-calculation purposes .
Long-Term Incentives (2024 Grants and Plan Mechanics)
| Instrument | Grant Date | Quantity/Terms | Vesting | Grant/Exercise Price |
|---|---|---|---|---|
| Performance Share Units (target) | 2/22/2024 | 3,431 PSUs | End of 3-year performance period (12/31/2026); earned 0–200% vs relative normalized EBITDA growth | N/A |
| Restricted Stock | 2/22/2024 | 1,715 shares | Cliff vest on 3rd anniversary (2/22/2027); CIC acceleration/pro-rata on death/disability/retirement | N/A |
| Stock Options | 2/22/2024 | 4,736 options | 33% per year over 3 years; 10-year term | $98.37 |
PSU Plan (metric/curve): Earnouts are based on Franklin’s aggregate change in consolidated normalized EBITDA vs the S&P SmallCap 600 Industrials Index over three years; payout scale: 0% (<75%), 50% (75%), 100% (100%), 200% (≥125%) with straight-line interpolation . The 2022–2024 PSU cycle earned an estimated 93.2% of target based on actual aggregate normalized EBITDA vs target (company: $904.8m vs target $936.9m) .
Multi-Year Compensation Summary
| Category ($) | 2023 | 2024 |
|---|---|---|
| Salary | $435,192 | $454,135 |
| Time-Based Stock Awards | $147,507 | $168,705 |
| Performance-Based Stock Awards | $295,015 | $337,507 |
| Option Awards | $147,496 | $168,744 |
| Non-Equity Incentive Plan Compensation | $235,820 | $312,331 |
| All Other Compensation | $65,770 | $61,312 |
| Total | $1,326,800 | $1,502,734 |
Equity Ownership & Alignment
Beneficial Ownership (as of March 3, 2025)
| Item | Amount |
|---|---|
| Total Beneficially Owned Shares | 88,531 shares |
| Includes Options Exercisable within 60 Days | 69,467 shares |
| Includes Unvested Restricted Shares | 4,968 shares |
| Includes Estimated Release of PSUs Earned (2024) | 2,356 shares |
| Percent of Class | <1% (starred in table) |
Stock ownership guidelines: Corporate Vice Presidents must hold shares equal to 3× base salary; executives have up to five years (plus a three-year grace period on promotion) to comply; as of year-end 2024 all NEOs met or were within the compliance window . The company prohibits hedging and pledging of company stock and bans margin accounts for insiders, reducing forced-sale/pledge risk .
Outstanding and Unvested Holdings (12/31/2024)
| Type | Detail |
|---|---|
| Unexercisable Options | 4,736 @ $98.37; exp. 2/22/2034 |
| Partly Unexercisable Options | 2,036 unexercisable + 4,068 exercisable @ $83.90; exp. 2/24/2032 |
| Partly Unexercisable Options | 2,850 unexercisable + 1,424 exercisable @ $94.86; exp. 2/16/2033 |
| Fully Exercisable Options (examples) | 12,747 @ $42.20 (exp. 2/23/2027); 14,458 @ $40.25 (exp. 2/22/2028); 11,147 @ $55.16 (exp. 2/21/2029); 11,644 @ $59.71 (exp. 2/20/2030); 8,940 @ $73.14 (exp. 2/18/2031) |
| Unvested Restricted Stock | 1,895 vesting 2/24/2025; 1,555 vesting 2/16/2026; 1,715 vesting 2/22/2027 |
| Unvested PSUs (Target) | 9,068 unearned shares; market value $883,677 at $97.45 (12/31/2024) |
Insider trading controls: Pre-clearance is required for executive officers; trading is restricted outside defined windows; 10b5‑1 plans allowed only with cooling-off periods and approvals .
Deferred Compensation (2024)
| Component | Amount |
|---|---|
| Company Contribution | $34,497 |
| Aggregate Earnings | $22,099 |
| Aggregate Balance (12/31/2024) | $265,272 |
Employment Terms
Change-in-Control (CIC) and Severance Framework
- Employment Security Agreements (ESAs): If terminated without cause or resigns for good reason within 2 years post‑CIC, Mr. Grandon receives 2× base salary, pro‑rated current-year target bonus, 2× target bonus, 24 months of additional retirement credits, immediate vesting of equity at target for performance awards, 24 months of health benefits, and 12 months of outplacement (up to $50,000) . Non‑solicit for 18 months; separate confidentiality and non‑compete agreements apply .
- Non‑CIC Severance Policy: If terminated without cause prior to a CIC, cash severance equals 1× (base + target bonus), pro‑rated actual-year bonus, accelerated vesting of equity not otherwise eligible for acceleration, and company-paid COBRA for one year .
Estimated Payouts (as of 12/31/2024)
| Scenario | Salary | Non‑Equity Plan Comp | Accelerated Options | Accelerated RS/PSUs | Additional Retirement Credits | Continued Benefits | Outplacement |
|---|---|---|---|---|---|---|---|
| Termination – No CIC | $457,500 | $652,932 | $34,969 | $1,144,588 | — | $20,663 | — |
| Termination – CIC | $915,000 | $1,021,803 | $34,969 | $1,144,588 | $202,114 | $41,326 | $50,000 |
Clawback policy: Revised in October 2023 to comply with Dodd‑Frank; applies to cash and equity incentive compensation for Section 16 officers over a three‑year lookback upon restatement .
Investment Implications
- Pay-for-performance alignment: Annual cash incentives emphasize working capital and EPS discipline (2024 payout 91.7% of target), while PSUs focus on three-year peer-relative normalized EBITDA growth (2022–2024 earned 93.2%), aligning incentives with operational quality and relative value creation .
- Selling pressure/overhang: Multiple RS tranches vest in 2025–2027; significant legacy options are fully exercisable with long-dated expiries, allowing flexibility and reducing forced selling risk; anti-hedging/anti-pledging and pre‑clearance rules further mitigate adverse trading signals .
- Retention and CIC economics: Double‑trigger CIC protection at 2× cash plus equity acceleration provides strong retention but could introduce incremental deal costs; non‑CIC severance at 1× cash plus equity acceleration offers baseline protection without excessive guarantees .
- Ownership alignment: Meaningful option-based exposure (69,467 options exercisable within 60 days as of 3/3/2025) and ongoing equity grants, combined with 3× salary ownership guidelines, support long-term alignment with shareholders .