Michael L. Hance
FORWARD AIRAbout Michael L. Hance
Chief Legal Officer and Secretary of Forward Air (FWRD); served as Interim CEO from February to April 2024 during leadership transition and the Omni Logistics integration. Age 53; with FWRD since 2006 and CLO since 2014, previously practiced law at Baker Donelson and Bass Berry & Sims. 2024 performance context: operating revenue rose 80.5% to $2.5B, Consolidated EBITDA (credit agreement definition) was $308M, but net operating loss driven by a $1.03B goodwill impairment; relative TSR payout for the 2022–2024 cycle was 0% and 2024 say‑on‑pay support fell to 79.3% (from 92.2% in 2023) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Forward Air | Chief Legal Officer & Secretary | 2014–present | Oversees enterprise risk, legal compliance; quarterly risk reporting to Board/Audit; key voice in severance plan changes and governance . |
| Forward Air | SVP HR & General Counsel | 2010–2014 | Led HR/legal through growth; foundation for later GRC and compensation governance . |
| Forward Air | SVP & General Counsel | 2008–2010 | Built legal function supporting operations and transactions . |
| Forward Air | VP & Staff Counsel | 2006–2008 | Early leadership in in‑house legal capabilities . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C. | Attorney | 2003–2006 | Complex corporate and regulatory legal experience . |
| Bass, Berry & Sims, PLC | Attorney | 1999–2003 | Corporate practice foundations leveraged at FWRD . |
Fixed Compensation
- 2024 base salary (annualized): $500,000; target bonus 75% of base ($375,000) .
- Interim CEO stipend: $37,500 per month while serving as Interim CEO (Feb–Apr 2024) .
Multi-year compensation (as reported):
| Component ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | 440,000 | 456,000 | 593,462 |
| Bonus | — | — | — |
| Stock Awards | 393,750 | 393,750 | 1,160,000 |
| Option Awards | 131,250 | 131,250 | — |
| Non-Equity Incentive | 853,380 | 51,300 | 210,000 |
| All Other Compensation | 10,832 | 11,712 | 32,424 |
| Total | 1,829,212 | 1,044,012 | 1,995,886 |
Performance Compensation
2024 design emphasized covenant compliance liquidity and pay-for-performance.
| Metric | Weight | Target | Actual | Payout (component) | Notes |
|---|---|---|---|---|---|
| Consolidated EBITDA (FY 2024, per Credit Agreement) | 70% | $325,000k | $308,000k | 80% of target | Interpolated schedule; aligns with leverage covenant focus . |
| Unlevered Free Cash Flow (H2 2024) | 30% | $131,000k | $151,000k | 0% (committee discretion) | Calculated 125% based on performance, reduced to 0% to align with shareholders . |
| Total Annual Incentive Payout | — | — | — | 56% of target | Hance actual: $210,000 (56% × $375,000 target) . |
Long-term incentives and vesting:
- 2024 LTI mix: $300,000 time-based restricted stock; $300,000 TSR performance shares (3-year relative TSR vs 14 transportation peers; payout 0–200% with four-quarter averaging) .
- Restricted stock vests in 3 equal annual installments; PSUs vest ~2.5 months after the 3-year period end; double-trigger acceleration on CoC if not assumed or upon involuntary termination within 24 months .
- 2022–2024 performance share cycle paid 0% due to TSR below 25th percentile .
Retention awards (Omni acquisition integration retention program):
- Hance: $140,000 cash (1-year cliff) + $560,000 time-based RSUs (2-year cliff; accelerates on not-for-cause termination through 12/31/2025 under Enhanced Severance) .
Equity Ownership & Alignment
Ownership snapshot and outstanding awards (as of record date/12-31-2024):
| Item | Amount | Detail/Value |
|---|---|---|
| Beneficial ownership – Common shares | 78,634 | Direct/indirect. |
| May be acquired within 60 days | 18,973 | Includes 9,545 restricted stock vesting within 60 days and 9,428 fully exercisable options . |
| Total beneficial (shares) | 97,607 | <1% of class. |
| Unvested restricted stock | 33,042 shares; $1,065,605 MV | MV at $32.25 on 12/31/2024 . |
| Unearned PSUs (target) | 41,492 shares; $1,333,117 MV | MV at $32.25 on 12/31/2024 . |
| Options – exercisable | 5,303 @ $58.40 (exp. 2/5/2025) | Time-based expirations can create near-term exercise decisions . |
| Options – 2022 grant | 3,024 ex./1,512 unex. @ $106.29 (exp. 2/8/2029) | Standard 3-year vest schedule . |
| Options – 2023 grant | 1,101 ex./2,201 unex. @ $115.42 (exp. 2/7/2030) | Standard 3-year vest schedule . |
| 2024 stock vested | 6,704 shares; $230,426 value realized; 1,665 shares withheld for taxes | Based on vest date market price . |
Alignment policies:
- Executive stock ownership guidelines: CLO must hold 3× base salary; unvested restricted stock counts; PSUs/options do not; retain 50% of net shares until compliant. 2024 price volatility caused some executives to fall out of compliance; Board monitors remediation .
- Hedging and pledging prohibited; margin accounts not permitted .
- Clawbacks: Dodd‑Frank no‑fault restatement recovery and broader discretionary recoupment for misconduct, negative revisions, policy violations, etc. .
Employment Terms
Severance plan economics and restrictive covenants:
| Scenario (Hance) | Severance | Annual Incentive | Accelerated Equity | Healthcare Assistance | Outplacement | Total |
|---|---|---|---|---|---|---|
| Involuntary termination (without cause) | $1,750,000 | $210,000 | $2,403,722 | $31,788 | $20,000 | $4,415,510 |
| Change in control (termination within 24 months or awards not assumed) | $1,750,000 | $210,000 | $2,403,722 | $42,384 | $20,000 | $4,426,106 |
| Death/Disability | — | $210,000 | $1,456,633 | — | — | $1,666,633 |
Plan mechanics:
- General severance: CEO 2× base; C‑suite 1.5× base; pro‑rata annual incentive based on actual results; healthcare assistance for 18–24 months; outplacement up to $20,000 .
- Enhanced Severance (March 15, 2024–December 31, 2025): change‑in‑control treatment applied to “not‑for‑cause” terminations including 2× base + 2× target bonus and accelerated equity vesting under the 2016 Plan .
- Non‑compete/non‑solicit: 24 months for CEO, 18 months for other NEOs; applies upon participation and receipt of severance benefits .
- No tax gross‑ups under the Severance Plan; note a one‑time make‑whole payment to Hance ($25,369) for an IRS penalty from an inadvertent administrative error (not a golden parachute gross‑up) .
Other contract status:
- No separate employment agreement disclosed for Hance; he participates in the Severance Plan and executive restrictive covenants; only CEO and CFO employment agreements are described separately .
Investment Implications
- Pay-for-performance is increasingly strict: 2024 STI paid 56% of target, with committee zeroing FCF despite over‑target delivery; 2022–2024 PSUs paid 0%—reducing windfalls and strengthening alignment to shareholder returns .
- Retention and severance protections are elevated through 2025: Enhanced Severance and 2‑year cliff RSUs create near‑term retention but also increase downside payout risk if leadership turnover occurs; equity acceleration could add selling pressure on vest events .
- Ownership alignment is solid: material unvested RS/PSU balances, option ladders out to 2029–2030, and strict anti‑hedging/pledging; however, stock price volatility triggered guideline non‑compliance for some executives—monitor progress to 3× salary for CLO and equity vest calendars .
- Governance signals: Say‑on‑pay support dropped to 79.3%, coinciding with the Omni integration, impairments, and capital structure changes; compensation committee added a cap on PSU payouts when TSR is negative—a shareholder-friendly adjustment for 2025+ .
- Risk controls: Dual clawback frameworks, prohibition on option repricing, and double‑trigger CoC vesting mitigate excess; continued Board oversight of enterprise risk led by CLO supports execution discipline during integration .