Vincent J. Arnone
FUEL TECHAbout Vincent J. Arnone
Vincent J. Arnone, 61, is Chairman of the Board (since September 1, 2017) and President & Chief Executive Officer (since April 1, 2015) of Fuel Tech, Inc. (FTEK), having held senior roles including CFO, COO, and EVP across more than two decades at the company . Under his tenure, FTEK’s 2024 revenues were $25.133 million with a net loss of $1.943 million; the “pay versus performance” table shows a fixed $100 TSR value of 100.00 for 2024 (92.03 for 2022, 82.68 for 2023), and the company did not use TSR or net income in its compensation programs . The Board combines the Chair and CEO roles in Arnone and has determined this structure is advantageous given his company-specific expertise, with committee oversight remaining fully independent .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Fuel Tech, Inc. | Chairman of the Board | Since Sep 1, 2017 | Combined Chair/CEO; board leadership and strategic oversight |
| Fuel Tech, Inc. | President & CEO; Director | Since Apr 1, 2015 | Enterprise leadership; strategy execution across segments |
| Fuel Tech, Inc. | EVP & COO | Jan 2014 – Mar 2015 | Operations leadership; multi-national execution |
| Fuel Tech, Inc. | EVP, Worldwide Operations | Sep 2010 – Jan 2014 | Global operations management |
| Fuel Tech, Inc. | Consultant | Jun 2008 – Aug 2010 | Advisory support to management |
| Fuel Tech, Inc. | SVP, Treasurer & CFO | Feb 2006 – Jun 2008 | Financial leadership; treasury and CFO responsibilities |
| Fuel Tech, Inc. | VP, Treasurer & CFO | Dec 2003 – Jan 2006 | Financial leadership |
| Fuel Tech, Inc. | Controller & Financial Director | May 1999 – Nov 2003 | Financial reporting and controls |
Board Governance & Committee Roles
- Arnone is not independent and serves as combined Chairman & CEO; Board committees (Audit, Compensation, Nominating & Corporate Governance) are composed entirely of independent directors and chaired by independent directors .
- Committee roles for Arnone: none; committee composition is independent (Audit Chair: Dennis L. Zeitler; Compensation Chair: Sharon L. Jones; Nominating Chair: Douglas G. Bailey) .
- Lead Independent Director: board determined not to fill since June 2022 given board size and committee leadership structure; will revisit as needed .
- Board rationale for combined Chair/CEO in Arnone emphasizes continuity, domain expertise, and strategic execution .
Fixed Compensation
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Base Salary ($) | $419,688 | $425,000 |
| Target Bonus ($) | Not disclosed | $212,500 (CIP representative “target” amount) |
| Actual Bonus Paid ($) | $50,000 one-time cash bonus (Committee grant Mar 26, 2024, reported in 2023 SCT) | $0 under 2024 CIP |
| All Other Compensation ($) | $23,345 | $24,483 |
Notes:
- 2024 Corporate Incentive Plan (CIP) had no payout as minimum operating income threshold was not met .
Performance Compensation
Executive Performance RSUs (2023–2024 performance; grants determined in 2025)
| Metric | Target (2024) | Actual (2024) | Payout | Vesting |
|---|---|---|---|---|
| Total Revenue RSUs (#) | 41,700 | 0 | No grant due to unmet threshold | If granted: 100% vest 12 months post determination |
| New Business Revenue RSUs (#) | 41,700 | 0 | No grant due to unmet threshold | If granted: 100% vest 12 months post determination |
| Operating Income RSUs (#) | 41,700 | 0 | No grant due to unmet threshold | If granted: 100% vest 12 months post determination |
| Look-Back RSUs (#) | 41,700 | 20,850 | 50% of target (Committee decision Mar 27, 2025) | Vests 1/3 each year over 3 years |
Executive Performance RSUs (2025–2026 design and targets)
| Category | Target RSUs (per year) | 2025 Targets | 2026 Targets | Vesting |
|---|---|---|---|---|
| Total Potential RSUs (Arnone) | 166,800 (41,700 per metric) | Total Revenue: $33.8m; New Business Revenue: $1.0m; Operating Income: $1.0m | Total Revenue: $37.18m; New Business Revenue: $3.0m; Operating Income: $2.0m | Revenue/New Business/Op Income RSUs: 100% vests 12 months after determination; Look-Back RSUs vest 1/3 annually over 3 years |
Short-Term Incentives (CIP framework)
- CIP designed to fund an Incentive Pool as a percentage of Operating Income when thresholds are met; example representative funding includes 25% of Operating Income into the CIP, with minimum, “~100% target factor,” and capped levels described; 2024 CIP did not fund due to unmet threshold .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 475,513 shares; 1.5% of outstanding common stock as of Apr 8, 2025 |
| Unvested RSUs (12/31/2024) | 31,100 units; market value $32,655 at $1.05/share |
| Unearned Performance RSUs (12/31/2024) | 166,800 units; market/payout value $175,140 at $1.05/share |
| Ownership Guidelines | CEO target ownership equal to 1x annual base salary by Apr 1, 2028; annual monitoring by Compensation Committee |
| Hedging/Pledging | Board-approved policy prohibits pledging, hedging, and short selling for directors and officers |
| Insider Trading Controls | Insider Trading Policy adopted Feb 28, 2025; blackout periods from quarter-end until 3rd day after earnings |
Employment Terms
| Term | Detail |
|---|---|
| Employment Agreement | Effective Sep 20, 2010; at-will; invention assignment; proprietary data protections; non-compete covenants; arbitration |
| Change-in-Control Severance | If terminated without cause or resigns for good reason within 12 months after a change-in-control: lump sum of 12 months base salary + up to 6 months COBRA reimbursement |
| Additional CoC Protection (Employment Agreement) | Continuation of base salary, benefits, and earned incentive bonus amounts for up to one year or until finding comparable employment, for involuntary termination not for cause within one year of a change-in-control |
| Good Reason Definition | Material diminution of duties/authority, material reduction in base compensation, relocation >35 miles, material breach by Fuel Tech |
| Illustrative CoC Termination Value (as of 12/31/2024) | Base Salary: $425,000; RSUs: $243,555; Benefits: $7,883; Total: $676,438 |
| Clawback Policy | Adopted Nov 2, 2023; recovery of erroneously awarded incentive comp for prior 3 years upon restatement; includes stock price/TSR-based reasonable estimate methodology |
| Indemnification & D&O Insurance | Indemnification to fullest extent of Delaware law; annual premium $165,896; no indemnification payments to date |
Performance & Track Record
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| TSR – $100 initial value (Pay vs Performance) | 92.03 | 82.68 | 100.00 |
| Revenues ($000s) | — | 27,081 | 25,133 |
| Net Income (Loss) ($000s) | — | (1,538) | (1,943) |
| YoY Revenue Change ($000s) | — | — | (1,948) |
Segment detail: 2024 APC revenues $11,242 and FUEL CHEM revenues $13,891; APC backlog $6,175 at 12/31/2024; U.S. revenues decreased $3,595 while international revenues increased $1,647 YoY .
Director Compensation (Employee-Director Treatment)
- Employee directors receive no Board cash fees or equity for board service; Arnone received no director compensation during employment. Non-employee director cash retainer: $50,000; committee chair retainers: Audit $10,000, Compensation $7,500, Nominating $5,000; RSU grants of 15,000 at each annual meeting in 2023 and 2024, vesting at first anniversary .
Compensation Peer Group and Say-on-Pay
- Peer group used for benchmarking in 2023 (for 2024 data) included Advanced Emissions Solutions, CECO Environmental, Capstone Green Energy, Profire Energy, Orion Energy Systems, and others; in 2024 the Committee did not use benchmarking data, relying instead on judgment and performance .
- Say-on-Pay approval exceeded 96% at the June 6, 2024 annual meeting; committee concluded stockholders supported FTEK’s compensation approach .
Compensation Structure Analysis
- No 2024 CIP payout; look-back RSUs granted at 50% of target for 2024 (20,850 shares) vs 75% for 2023 (31,100 shares), reflecting performance outcomes and committee discretion .
- 2023 included a one-time $50,000 bonus acknowledging stewardship and non-participation in other bonus awards; 2024 had no cash incentive for Arnone under CIP .
- Long-term incentive program ties RSU grants to Operating Income, Total Revenue, and New Business Revenue with explicit company-level targets for 2025–2026; vesting emphasizes one-year cliffs for performance RSUs and multi-year time vesting for look-back RSUs .
Risk Indicators & Red Flags
- Governance structure: combined Chair/CEO and lack of Lead Independent Director since 2022, though all committees are fully independent and chaired by independent directors .
- Anti-hedging and anti-pledging policies for directors and officers mitigate alignment concerns; no pledging disclosed .
- No option repricing disclosed; clawback policy aligns with SEC requirements .
Investment Implications
- Pay-for-performance alignment appears intact: failure to meet 2024 thresholds eliminated performance RSU grants and CIP payouts; Look-Back RSUs at 50% of target temper dilution while maintaining retention incentives via three-year vesting .
- Near-term insider selling pressure risk looks modest: 20,850 Look-Back RSUs granted in Mar 2025 vest over three years (1/3 annually), while performance RSUs for revenue/new business/operating income vest only if targets are met and then cliff after one year; anti-hedging/pledging reduces forced-sale risks .
- Change-in-control protections are limited to ~12 months salary plus benefits and COBRA reimbursement, with additional continuation under employment agreement—less generous than multi-year or high-multiple packages, reducing entrenchment concerns .
- Governance watchpoint: combined Chair/CEO and absence of a Lead Independent Director could raise independence issues; however, committee independence and high say-on-pay (96% approval) suggest investor acceptance of the current structure .