Michael Dennison
FOX FACTORY HOLDINGAbout Michael Dennison
Michael C. Dennison is Chief Executive Officer (CEO) of Fox Factory Holding Corp., serving as CEO since June 2019 and as a director since February 2018; he joined FOX in August 2018 as President of the Powered Vehicles Group (PVG) . He previously held senior leadership roles at Flex Ltd. (President and Chief Marketing Officer; procurement and global supply chain leadership) and earlier at Arrow Electronics; he holds a B.A. in Liberal Arts from Oregon State University (1989), and is age 57 as of March 26, 2025 . Under his leadership in fiscal 2024, FOX reported Sales of $1,393.9M, Adjusted EBITDA of $167.0M (12.0% margin), and GAAP Net Income of $6.5M; total stockholder return (TSR) declined 55.3% in 2024, and the 2022–2024 TSR CAGR declined 43.8% . Management cites cost optimization actions targeting $25M of savings in 2025, a $55M YoY working capital improvement, and $63M debt paydown in Q4 2024 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Fox Factory Holding Corp. | President, Powered Vehicles Group (PVG) | Aug 2018 – Jun 2019 | Led PVG prior to elevation to CEO; foundation for integration and operational improvements . |
| Flex Ltd. (NASDAQ:FLEX) | President and Chief Marketing Officer; led procurement and global supply chain; SVP business management roles | — | Scaled global supply chain and commercial execution; brings consumer/technology operating rigor to FOX . |
| Arrow Electronics | Regional Director | — | Channel and component distribution expertise supports supply chain strategy . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Solo Brands | Director | Since 2023 | Board member; provides consumer brand perspective . |
| K&N Filters | Chairman of the Board | Since 2024 | Governance leadership at performance aftermarket brand . |
Fixed Compensation
| Item | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base salary ($) | $925,000 | $974,038 | $999,519 (programmed to $1,000,000 annual base for 2024) |
| Target bonus (% of salary) | — | — | 125% (CEO) |
| Actual annual bonus paid ($) | $2,242,500 | $0 | $0 |
| Perquisites and other compensation ($) | $33,462 | $59,635 | $56,727 (incl. executive car program $21,797) |
Notes:
- 2024 base salary table shows CEO set at $1,000,000 (+2.6% vs. 2023) .
- 2024 annual incentive plan paid 0% given adjusted EBITDA below threshold .
Performance Compensation
2024 Annual Cash Incentive (CEO)
| Metric | Weight | Threshold | Target | Max | Actual | Payout |
|---|---|---|---|---|---|---|
| Adjusted EBITDA ($M) | 100% | 200 | 250 | 300 | 167 | 0% |
2024–2026 PSU, Year 1 (2024 tranche)
| Metric | Weight | Threshold | Target | Max | Actual | Payout | Vesting |
|---|---|---|---|---|---|---|---|
| Adjusted EBITDA margin (%) | 100% | 13.50 | 15.70 | 18.00 | 12.00 | 0% | PSUs cliff-vest after 3 years; earned shares, if any, vest early 2027 |
2022–2024 PSU (completed cycle)
| Metric | Weight | Threshold | Target | Max | Actual | Payout |
|---|---|---|---|---|---|---|
| 3-year average ROIC (%) | 50% | 14.45 | 15.45 | 16.45 | 14.00 | 0% |
| Cumulative Free Cash Flow ($M) | 50% | 380 | 422 | 507 | 325 | 0% |
2024 Long-Term and Special Equity Awards (Grants)
| Award | Grant date | Shares (target) | Grant date fair value ($) | Vesting |
|---|---|---|---|---|
| RSU (annual) | 2/27/2024 | 51,364 | 2,600,046 | Ratable over 3 years (1/3 each year) |
| PSU (annual) | 3/15/2024 | 55,544 | 2,600,015 | 3-year performance; cliff vest in early 2027 if earned |
| Revenue Growth Outperformance Award | 3/15/2024 | 26,704 | 1,250,014 | Earns only if revenue reaches ~$2.2B by end of 2027; can’t vest earlier than early 2027; deemed improbable at 2024 year-end (no accrual) |
Design features and alignment:
- 2024 annual plan tied solely to Adjusted EBITDA for CEO; other NEOs had 75% company/25% individual goals (individual only payable if EBITDA threshold met) .
- 2024–2026 PSUs use annual goal-setting for Adjusted EBITDA margin given market volatility; earned, if any, on 3-year consolidation and vest in early 2027 .
- Committee applied no discretion for 2024 payouts; both 2023 and 2024 annual bonuses paid 0%; 2022–2024 PSUs paid 0% following maximum payout for 2021–2023 cycle, evidencing pay-for-performance symmetry .
Equity Ownership & Alignment
| Ownership element | Detail |
|---|---|
| Beneficial ownership (common shares) | 80,321 shares (<1% of 41,712,445 outstanding as of Mar 11, 2025) . |
| Unvested RSUs (as of Jan 3, 2025) | 71,432 units; market value $2,155,103 at $30.17/share . |
| Unvested PSUs at target (as of Jan 3, 2025) | 103,253 units; market value $3,115,143 at $30.17/share . |
| Shares vested in 2024 | 31,338 shares; value realized $1,427,048; vest dates included 2/24/2024, 2/27/2024, 5/2/2024 . |
| Ownership guidelines | CEO must hold 5x base salary; retain 50% of net shares until met; all covered executives met or are on track within 5 years . |
| Hedging/pledging | Hedging prohibited; pledging requires pre-approval for directors/executives . |
| Options | No stock options outstanding as of Mar 11, 2025 (equity mix is RSUs/PSUs) . |
Implications for selling pressure:
- RSUs vest ratably over three years; CEO realized 31,338 shares vesting in 2024, and held 71,432 unvested RSUs as of FY-end, implying ongoing annual releases that can create periodic liquidity events; PSUs vest only if performance goals are achieved (none earned for 2024 and the completed 2022–2024 cycle) .
Employment Terms
| Provision | Summary |
|---|---|
| Employment agreements | CEO agreement originated Aug 2018 (amended upon CEO promotion in Jun 2019); standard suite of NEO agreements updated over time . |
| Severance (without Cause / for Good Reason) | Cash severance equal to 1x base salary; pro rata performance bonus; continued company share of healthcare premiums; pro-rated PSUs if performance goals are later met . |
| Change in control (plan terms) | If awards NOT assumed/converted in a CoC: vesting accelerates and performance deemed satisfied at target; if awards ARE assumed: continue vesting; if terminated without Cause/for Good Reason within 24 months post-CoC (double trigger), vesting accelerates . |
| Clawback | Amended and Restated Clawback Policy effective Oct 2, 2023; compliant with Exchange Act Rule 10D-1 and Nasdaq Rule 5608, applies to erroneously awarded incentive comp after accounting restatements . |
| Non-solicit | NEOs prohibited from soliciting FOX employees for two years post-termination . |
| Risk mitigators | Stock ownership guidelines; clawback; independent consultant; capped incentive payouts; no hedging; program deemed not to encourage excessive risk-taking . |
Estimated payouts (illustrative, as of Jan 3, 2025):
| Scenario (CEO) | Cash comp | Equity acceleration (RSUs) | Equity acceleration (PSUs) | Benefits | Total |
|---|---|---|---|---|---|
| Without Cause / Good Reason (no CoC) | $1,038,462 | — | — | $21,000 | $1,059,462 |
| CoC – awards not continued OR termination within 24 months (double-trigger) | $1,038,462 | $2,155,103 | $3,115,143 | $21,000 | $6,329,708 |
Board Governance
- Role and tenure: Director since Feb 2018; Class II director serving to the 2027 Annual Meeting; non‑independent by Board determination .
- Board leadership: Independent Chair (Dudley Mendenhall); CEO does not serve as Chair; independent directors comprise 100% of all Board committees and hold executive sessions after every Board meeting .
- Committees: CEO is not on any Board committee; Audit (Chair: Hlay), Compensation (Chair: Fetter), Nominating & Corporate Governance (Chair: Duncan) are fully independent .
- Attendance: Board held five meetings in FY 2024; all directors attended all Board and applicable committee meetings .
- Say-on-Pay: ~90% support in May 2024; five-year average support 94% . At the May 9, 2025 meeting, say‑on‑pay vote results were 21,709,089 For; 10,687,175 Against; 214,525 Abstain; 5,130,292 broker non-votes .
Dual-role implications:
- While Dennison is both CEO and a director, the presence of an independent Chair and fully independent committees mitigates independence concerns; executive sessions of non‑employee directors occur after all Board meetings .
Director Compensation (context)
- Non‑employee directors receive $80,000 annual retainer plus committee retainers and annual RSUs (typical annual equity value $160,000; Chair adds $90,000 cash and $15,000 equity); employee directors (e.g., the CEO) are not paid under the non‑employee director policy .
Compensation Program Design, Peer Group, and Governance
- Program design: Majority of CEO target pay is at risk through annual and long-term incentives; 50% of LTI in PSUs; payouts vary with performance; no option repricing; no hedging; stock ownership guidelines and clawback in place .
- Performance metrics: 2024 annual adjusted EBITDA; PSUs focused on adjusted EBITDA margin (2024–2026) and previously on ROIC and cumulative FCF (2022–2024) .
- Peer group: 17-company pay peer set includes Brunswick, Deckers, YETI, Vista Outdoor, among others; CEO target pay approximates peer median; ISS uses a different comparator set skewing P4P screens .
- Independent consultant: Pay Governance engaged; Committee determined no conflicts of interest .
Multi‑Year CEO Compensation (Summary)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary ($) | 925,000 | 974,038 | 999,519 |
| Performance‑based bonus ($) | 2,242,500 | 0 | 0 |
| RSU award ($) | 2,250,070 | 2,500,015 | 2,600,046 |
| PSU award ($) | 2,250,070 | 2,500,015 | 2,600,015 |
| Revenue Growth Outperformance Award ($) | — | — | 1,250,014 |
| All other comp ($) | 33,462 | 59,635 | 56,727 |
| Total ($) | 7,701,102 | 6,033,703 | 7,506,321 |
Performance & Track Record
- 2024 financials: Sales $1,393.9M; Adjusted EBITDA $167.0M (12.0% margin); GAAP Net Income $6.5M; Adjusted EPS $1.33 .
- Strategic actions: Targeting $25M cost reductions in 2025; working capital improved $55M YoY; $63M debt paydown in Q4 2024; continued product innovation across segments .
- TSR: 2024 TSR down 55.3%; 2022–2024 TSR CAGR down 43.8% .
Say‑on‑Pay & Shareholder Feedback
- 2024 Say‑on‑Pay: ~90% approval; engagement feedback incorporated (e.g., rigorous goals, disclosure of rationale for peer group, enhanced risk oversight and board evaluation disclosures) .
- 2025 Annual Meeting vote outcomes disclosed via Form 8‑K (detailed vote counts provided above) .
Related Party Transactions and Risk Controls
- No related person transactions requiring disclosure in FY 2024 .
- Clawback policy compliant with SEC/Nasdaq; hedging prohibited; pledging subject to pre-approval .
- Compensation risk assessment concluded the program is not reasonably likely to have a material adverse effect .
Compensation Committee Analysis
- Composition: Independent directors; Chair Elizabeth Fetter; five meetings in FY 2024 .
- Consultant: Pay Governance advises on benchmarking and design; no conflicts .
- Peer group methodology emphasizes branded consumer/leisure leaders with higher-margin growth profiles; planned 2025 review for FY 2026 program .
Investment Implications
- Pay-for-performance is functioning: zero 2023–2024 annual bonus payouts and 0% 2022–2024 PSU payout align with below‑target performance, reducing realized CEO pay and signaling discipline; 2024 RSU/PSU grants preserve retention but PSUs require margin recovery to yield value .
- Near-term supply of stock from vesting appears manageable relative to float: CEO had 31,338 RSUs vest in 2024 and 71,432 unvested RSUs outstanding; PSUs are performance‑contingent, limiting forced selling; hedging is prohibited and pledging constrained by pre‑approval, reducing misalignment risk .
- Change‑in‑control economics are standard: 1x salary severance and double‑trigger equity acceleration if awards are assumed; if not assumed, equity accelerates at target—monitor transaction structures for potential acceleration asymmetry .
- Governance mitigants are solid: independent Chair, fully independent committees, executive sessions, robust ownership and clawback policies, and strong Say‑on‑Pay support historically (2024 ~90%) support investor confidence during the turnaround and cost‑savings execution phase .