Joseph Ruzynski
FRANKLIN ELECTRIC COAbout Joseph Ruzynski
Joseph A. Ruzynski, 50, is Franklin Electric’s Chief Executive Officer (since July 1, 2024) and a director (since 2024). He holds a Bachelor’s in math and computer science from Saint John’s University and an MBA from the University of Minnesota, with prior leadership in industrial/electrical sectors at nVent and Pentair focused on growth and innovation . 2024 company performance under the compensation framework: net sales $2,021.3M (down 2% YoY), operating income $243.6M (down 7% YoY), diluted EPS $3.86 (down from $4.11), while gross margin improved to 35.5% (from 33.8%) . Annual bonus metrics achieved: working capital ratio attained 102% of target (29.9% vs 30.5%), adjusted EPS attained 88.5% of target ($3.92 vs $4.43) . Cumulative normalized EBITDA for the 2022–2024 PSU cycle reached $904.8M vs a $936.9M target (≈93.2% payout) . Total shareholder return index rose from 151 (2023) to 156 (2024) in the 5-year graph .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| nVent Electric plc | President, Enclosures Segment | 2018–2024 | Led growth and innovation in electrical connection/protection; sector leadership experience |
| Pentair plc | Various leadership roles | Prior to 2018 | Built experience in water technology and segment leadership |
External Roles
| Organization | Role | Years | Committee roles / notes |
|---|---|---|---|
| Franklin Electric Co., Inc. | Director | 2024–present | Not compensated for director service; dual role as CEO; board term expires 2027 |
- Independence: Board deems the CEO (Ruzynski) not independent; independent directors meet regularly; Lead Independent Director is Jennifer L. Sherman .
- Board activity: Board held 5 meetings in 2024; ≥80% attendance by each director; all directors attended the 2024 annual meeting .
Fixed Compensation
| Component | 2024 figure | Notes |
|---|---|---|
| Base salary | $900,000 | Paid pro-rata from July 1, 2024 start |
| Sign-on bonus | $250,000 | Subject to repayment if departure within 12 months |
| Target bonus % | 100% of base | Full-year target $900,000; pro-rata target $450,000 for 2024 |
| Actual bonus paid | $407,700 | Reflects 90.6% payout (see table below) |
Performance Compensation
Long-Term Incentive Grants (2024)
| Grant date | Award type | Quantity/Units | Grant-date fair value | Exercise price | Vesting | Expiration |
|---|---|---|---|---|---|---|
| 7/1/2024 | Restricted stock | 13,967 sh | $1,312,479 | — | 100% on 7/1/2027 (accelerated on CIC; pro-rata on death/disability/retirement) | |
| 7/1/2024 | Performance share units (target) | 27,935 units | $2,625,052 | — | Earned based on 2024–2026 normalized EBITDA vs S&P 600 Industrials; 0–200% payout; vest at period end | |
| 7/1/2024 | Stock options | 38,798 sh | $1,312,536 | $93.97 | 33% per year over 3 years; accelerated on CIC/death/disability/retirement | 7/1/2034 |
- Annualized targeted LTI value for CEO: $2,500,000 (offer letter equity award estimated target total value $5,250,000) .
Annual Bonus Metrics (2024)
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout (% of target) |
|---|---|---|---|---|---|---|
| Consolidated Working Capital Ratio | 50% | 36.6% | 30.5% | 27.5% | 29.9% | 102.0% |
| Adjusted EPS ($) | 50% | $3.54 | $4.43 | $4.87 | $3.92 | 88.5% |
| Total payout | — | — | — | — | — | 90.6% (CEO) |
- PSU performance framework (2024 awards): 0% below 75% of target; 50% at threshold (75%); 100% at target (100%); 200% at 125%+ .
- PSU results for 2022–2024 cycle: cumulative normalized EBITDA $904.8M vs $936.9M target; ≈93.2% of target PSUs earned .
Equity Ownership & Alignment
| Category | Amount | Notes |
|---|---|---|
| Beneficial ownership (common stock) | 22,222 sh | Includes unvested restricted shares; less than 1% of class |
| Unvested RS (as of 12/31/2024) | 13,967 sh | Vests 7/1/2027 |
| Target PSUs outstanding | 27,935 units | 2024–2026 performance period |
| Stock options unexercisable | 38,798 sh | $93.97 strike; expire 7/1/2034 |
| Ownership guideline | 6× base salary (CEO) | 5-year compliance window; must retain 50% of shares acquired until guideline met |
| Hedging & pledging | Prohibited | Anti-hedging/anti-pledging policy for executives/directors; Insider Trading Policy bans pledging/margin accounts |
- As of end-2024, executives/directors met guidelines or were within applicable grace period .
Employment Terms
| Term | Details |
|---|---|
| Employment Security Agreement (CIC) | If terminated without cause or for good reason within 2 years post-CIC: lump sum equals 3× base salary + 3× target bonus (CEO), plus pro-rata current-year target bonus; 36 months of health & welfare coverage; immediate vesting of equity (PSUs at target); 36 months additional service credit for retirement; outplacement up to $50,000 for 12 months |
| Executive Severance Policy (non-CIC) | If terminated without cause pre-CIC: CEO gets 1.5× (base + target bonus), pro-rata annual bonus based on actual performance, accelerated vesting of stock awards, COBRA premiums paid for 18 months (CEO) |
| Confidentiality & non-compete | 18-month non-compete (design/manufacture/distribution of electrical submersible motors/related products); confidentiality obligations; 18-month non-solicit of employees |
| Clawback | Dodd-Frank compliant clawback adopted Oct 2023; 3-year lookback for incentive comp upon restatement |
| Trading governance | Pre-clearance for trades; defined trading windows; 10b5-1 plan restrictions and cooling-off periods |
Board Governance
- Independence: All directors except the CEO (Ruzynski) and Executive Chair (Sengstack) are independent under NASDAQ rules .
- Board leadership: Sengstack serves as Executive Chair; Lead Independent Director is Jennifer L. Sherman, with defined responsibilities including executive sessions .
- Committees: Audit (Chair: Renee J. Peterson), Compensation (Chair: Alok Maskara), Governance (Chair: Victor D. Grizzle); all independent; Compensation Committee met 6× in 2024, uses Meridian as independent consultant .
- Meeting cadence: Board met 5× in 2024; ≥80% attendance; all attended 2024 AGM .
Director Compensation (for context; CEO receives none as an employee-director)
| Item | Amount |
|---|---|
| Non-employee annual retainer | $85,000 |
| Committee chair/member fees | Audit Chair $22,500; Audit member $12,500; Compensation Chair $25,000; Compensation member $6,000; Governance Chair $15,000; Governance member $6,000 |
| Lead Independent Director fee | $22,500 |
| Equity grant (2024) | 1,368 shares (vested immediately; ≈$135,000 value) |
| CEO director pay | Not compensated as director |
| Director ownership guideline | 5× annual retainer; 5-year window |
Compensation Peer Group & Pay Positioning
- Peer group (23 companies): mix of industrials and water-related names (e.g., IDEX, ITT, Timken, Pentair, Vontier, Zurn, Watts, Nordson, Graco, Woodward, etc.) .
- Target pay positioning: base salary ~50th percentile; annual bonus/LTI ~65th percentile; total target comp typically within ±15% of median adjusted for experience/performance/criticality .
Say-on-Pay & Shareholder Feedback
| Year | Votes For | Votes Against | Abstentions | Result |
|---|---|---|---|---|
| 2024 | 39,095,477 | 2,382,268 | 59,006 | Approved; prior support 94.3% |
| 2025 | 37,779,098 | 2,478,104 | 106,312 | Approved |
Performance & Track Record
- 2024 results: Net sales $2,021.3M (–2% YoY); operating income $243.6M (–7% YoY); gross margin 35.5% (up 170 bps); diluted EPS $3.86 (vs $4.11) . Segment operating margins improved in Water (+40 bps to 16.7%) and Energy (+290 bps to 34.2%); Distribution margin declined (3.5% vs 5.1%) .
- Strategic M&A: Acquired PumpEng Pty Ltd. in Feb 2025 (AUD 24.0M; ≈$15M); definitive agreement to acquire Barnes de Colombia S.A. ($110M EV), pending customary approvals .
- Governance continuity: Executive Chair transitioned (CEO emeritus) with consulting arrangement post-retirement in 2025; CFO transition announced Feb 28, 2025 (resigning effective Mar 28, 2025) .
Equity Ownership & Vesting Schedules (selling pressure assessment)
- Upcoming vest dates: RS vests 7/1/2027; PSUs for 2024 grant vest at 12/31/2026 based on performance; options vest 33% annually through 2026 .
- Trading risk mitigants: pre-clearance, trading windows, 10b5-1 constraints, retention of 50% of shares until guideline met, anti-hedging/anti-pledging .
Employment Economics (Severance & CIC terms)
| Scenario | Multiple | Benefits |
|---|---|---|
| CIC termination (double-trigger) | 3× base + 3× target bonus (CEO) | Pro-rata current-year bonus; 36 months benefits; immediate equity vesting (PSUs at target); 36 months service credit; outplacement up to $50k |
| Non-CIC termination without cause | 1.5× (base + target bonus) | Pro-rata bonus based on actual performance; accelerated vesting; 18 months COBRA premiums (CEO) |
Compensation Structure Analysis (alignment levers)
- At-risk mix: Performance-based comp represented 55–65% of NEOs’ total targeted comp (2024); LTI split 50% PSUs, 25% options, 25% time-based equity .
- Annual metrics: EPS and working capital ratio for CEO (100% tied to corporate goals); no discretionary adjustments applied for 2024 payouts .
- Clawback and trading controls: Dodd-Frank clawback and strict insider trading policy reduce misalignment risks .
Risk Indicators & Red Flags
- Hedging/pledging: Prohibited—reduces misalignment risks .
- Tax gross-ups: No CIC tax gross-ups disclosed for CEO ESA; CIC tax treatment notes exist for prior CEO’s agreement (election under 280G), not applicable to CEO ESA .
- Executive turnover: CFO resignation announced for Mar 2025 (transition risk) .
Investment Implications
- Pay-for-performance: Strong linkage via EPS/WC in the annual plan and 3-year normalized EBITDA relative to S&P 600 Industrials for PSUs; 2024 payouts reflect mixed operating results with disciplined bonus calibration (90.6%) .
- Retention and alignment: Robust ownership guidelines (6× salary), prohibited pledging/hedging, and significant performance-contingent equity support long-term alignment; severance/CIC protections mitigate retention risk during strategic transitions .
- Potential selling pressure: Key vesting events in late-2026 (PSUs) and mid-2027 (RS), but governed by windows and retention requirements; monitoring Form 4 activity around those dates is prudent .
- Governance checks on dual role: Non-independence is mitigated by an Executive Chair, a Lead Independent Director, and fully independent committees with active oversight and external advisors .