Nicola Baty
FreshpetAbout Nicola Baty
Nicola (“Nicki”) Baty is Chief Operating Officer of Freshpet, appointed effective September 1, 2024; she was age 45 at appointment and holds a Law & Business degree from the University of Warwick . She previously served as President & GM of Hill’s Pet Nutrition U.S. (2020–2024), with prior senior roles across Colgate-Palmolive and Unilever, bringing a track record of scaling large consumer businesses across multiple geographies . In Freshpet’s 2024 performance year, company-wide metrics used in executive pay delivered Net Sales of $975.2M and Adjusted EBITDA before bonus accrual of $184.3M, driving a 233% of target NEO payout—a high-pay-for-performance backdrop for her prorated AIP . Freshpet updated 2027 targets to $1.8B net sales, 48% Adjusted Gross Margin, and 22% Adjusted EBITDA Margin, with a goal of free cash flow positive in 2026—key strategic metrics linked to long-term incentive design from 2025 (including relative TSR for senior leaders) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Hill’s Pet Nutrition (Colgate-Palmolive) | President & General Manager, U.S. | 2020–2024 | Executed a strategic plan to scale a multi-billion-dollar U.S. business; led commercial and operational transformation |
| Hill’s Pet Nutrition | SVP Global Sales & GM, Latin America & Asia | 2019–2020 | Led global sales and P&L across international markets, building organizational capabilities |
| Colgate-Palmolive | GM, Nordics; GM, Netherlands; European Customer Development Director | 2014–2019 | Drove regional growth and customer development; led multi-country operations |
| Unilever (UK) | Various roles | 2000–2005 | Early career commercial and brand roles in consumer goods |
External Roles
No public-company directorships or external board roles are disclosed in Freshpet’s filings reviewed for Ms. Baty .
Fixed Compensation
| Metric | 2024 | 2025 |
|---|---|---|
| Base Salary ($) | $266,860 (prorated) | $525,000 |
| Target Annual Bonus (%) | 60% of base (prorated) | 60% of base |
| Actual Annual Bonus Paid ($) | $246,750 under AIP (prorated) + $136,918 offer letter bonus; total $383,668 | Not disclosed |
| Sign-on Bonus ($) | $500,000 | — |
| Relocation Assistance ($) | $50,000 | — |
Notes: Sign-on and relocation are subject to recoupment if not employed on September 1, 2026 .
Performance Compensation
Annual Incentive Plan (AIP) – 2024 Outcomes
| Metric | Weight | Target | Actual | Payout Basis |
|---|---|---|---|---|
| Net Sales (USD, millions) | 45% | $950 | $975.2 | Contributed to 250% element cap |
| Adjusted EBITDA before bonus (USD, millions) | 45% | $124.1 | $184.3 | Maximum on EBITDA; capped at 250% |
| Responsible Business Goals (points) | 10% | 10 | 9 | 80% of target for RBG element |
| AIP Approved Payouts (NEOs) | — | — | — | Ms. Baty $246,750 (prorated) |
Design notes: Senior leaders’ AIP includes quantitative Responsible Business Goals across employee satisfaction, safety, organizational effectiveness, development, and cybersecurity training . Financial elements are scored on an interdependent matrix with a 250% cap .
Long-Term Incentives
| Grant Type | Grant Date | Units | Grant Date Fair Value ($) | Vesting |
|---|---|---|---|---|
| Inducement RSUs | Sep 1, 2024 | 17,150 | $2,310,791 | 33.3% on Sep 1, 2025; 39.5% on Sep 1, 2026; 27.2% on Sep 1, 2027; continued employment required; subject to recoupment if not employed on Sep 1, 2026 |
Freshpet transitioned senior leader LTI design from multi-year options (2020 program) to annual grants beginning in 2025, with at least 50% performance-based and inclusion of a relative TSR metric for senior leaders .
Equity Ownership & Alignment
| Item | As of | Detail |
|---|---|---|
| Unvested RSUs outstanding | Dec 31, 2024 | 17,150 units; market value $2,540,087 (closing price $148.11) |
| Options (exercisable/unexercisable) | Dec 31, 2024 | None disclosed for Ms. Baty |
| Vested equity | Dec 31, 2024 | None from the inducement RSUs (initial vest begins Sep 1, 2025) |
| Stock ownership guidelines | Policy | NEOs required to own 3x base salary within 5 years; retention requirements if non-compliant |
| Hedging/Pledging | Policy | Company has a hedging prohibition; compensation clawback/recoupment policy adopted Oct 2023 per SEC/Nasdaq |
No pledged shares for Ms. Baty are disclosed in filings reviewed .
Employment Terms
| Term | Detail |
|---|---|
| Appointment & Role | Appointed COO effective Sep 1, 2024; reports to CEO |
| Base Salary | $525,000 |
| Annual Bonus | Target at least 60% of base; based on pre-established performance goals |
| Long-Term Incentive Target | Annual LTI target at least 100% of base salary (beginning with annual cadence from 2025) |
| Inducement RSUs | 17,150 RSUs; vest 33.3%/39.5%/27.2% over 3 years; employment condition; recoupment if not employed on Sep 1, 2026 |
| Sign-on & Relocation | $500,000 sign-on; $50,000 relocation; both subject to recoupment if not employed on Sep 1, 2026 |
| Commercial Scope Restriction | Until May 10, 2025, commercial responsibilities limited to Mass, Grocery, and Club channels |
| Severance & Change-in-Control | See scenario table below; part of key exec severance plan created by Compensation Committee in 2024 |
Severance and Change-in-Control Economics (as of Dec 31, 2024)
| Scenario | Cash ($) | COBRA ($) | Equity ($) | Total ($) |
|---|---|---|---|---|
| Involuntary termination | 1,680,000 | — | — | 1,680,000 |
| Change in control | — | 48,911 | 2,540,087 | 2,588,998 |
| Involuntary termination after change in control | 2,520,000 | 48,911 | 2,540,087 | 5,108,998 |
Notes: Equity value reflects acceleration amounts per outstanding RSUs; COBRA reflects 18 months premium estimate; table uses $148.11 closing price as of Dec 31, 2024 .
Compensation Committee & Benchmarking
- Committee members: Daryl G. Brewster (Chair), Leta D. Priest, David J. West .
- Independent consultant: Transitioned from Korn Ferry to WTW effective January 1, 2024 .
- Peer group (2023 basis): Blend of comparable CPG/food/pet companies including The Simply Good Foods Company, Yeti, Central Garden & Pet, Hostess Brands (pre-acquisition), among others; strategically important roles targeted at higher percentiles .
Say-on-Pay & Shareholder Feedback
- Say-on-Pay approval: Over 97% at 2024 annual meeting; continued investor engagement emphasized .
- Design changes following outreach: Move to annual equity grants (≥50% performance-based), addition of relative TSR metric for senior leaders in 2025; strengthened non-compete and severance framework .
Track Record, Value Creation, and Execution Risk
- Freshpet performance metrics used in pay: Net Sales $975.2M; Adjusted EBITDA before bonus accrual $184.3M in 2024; NEO payouts at 233% of target underscore strong operational execution tied to annual incentives .
- Strategic goals: Updated 2027 targets to 20M households, $1.8B net sales, 48% Adjusted Gross Margin, 22% Adjusted EBITDA Margin; FCF positive in 2026 .
- Governance and retention: Board created a key executive severance plan; updated non-compete policies; adopted clawback policy consistent with SEC/Nasdaq .
Compensation Structure Analysis
- Cash vs equity mix (2024): Large upfront equity via inducement RSUs ($2.31M grant-date fair value) with sign-on cash ($0.55M) and relocation ($0.05M); AIP payout prorated ($246,750) reflecting in-year performance .
- Shift in LTI risk profile: Transition from multi-year options (2010 cohort) to annual grants from 2025, with ≥50% performance-based and inclusion of relative TSR, increasing explicit pay-for-performance sensitivity vs pure time-based RSUs .
- Clawback/recoupment: Company-wide clawback policy (Oct 2023); inducement award and sign-on subject to recoupment on employment condition threshold (Sep 1, 2026)—a retention and alignment device .
Risk Indicators & Red Flags
- Potential vesting-related supply: RSU tranches vest on Sep 1, 2025/2026/2027, which can create mechanical insider selling windows; actual dispositions would be observable via Form 4 filings (not disclosed in proxy) .
- Governance safeguards: Hedging prohibited; clawback policy active; strengthened non-compete and severance plan reduce misalignment risk .
- Executive turnover context: CFO resignation announced Oct 3, 2025, with an interim CFO appointed—neutral disclosure without indicated controversy .
Investment Implications
- Alignment: Stock ownership guidelines (3x salary for NEOs), clawback, and a move to performance-based annual LTI (including relative TSR) raise alignment and reduce windfall risk for senior leaders like Baty .
- Retention: Inducement RSUs and recoupment conditions through Sep 1, 2026 create retention hooks; severance/change-in-control terms provide predictable economics, lowering departure risk .
- Trading signals: RSU vest dates (Sep 1, 2025/2026/2027) may introduce periodic insider transaction activity; monitor Form 4s for potential selling pressure near vest dates .
- Performance linkage: AIP metrics (Net Sales, Adjusted EBITDA) and added relative TSR in LTI design suggest accelerating payout sensitivity to revenue growth, profitability, and market performance—constructive for pay-for-performance investors .