Brian G. Harris
GRIFFONAbout Brian G. Harris
Executive Vice President and Chief Financial Officer of Griffon Corporation since Nov 13, 2024 (CFO since Aug 1, 2015), with compensation tightly linked to EBITDA, working capital, free cash flow, Core EPS, ROIC and relative TSR performance . Under his tenure, Griffon delivered record fiscal 2024 adjusted EBITDA and adjusted EPS, $326M in free cash flow, and maintained net debt/EBITDA at 2.6x; adjusted EPS and adjusted EBITDA rose 205% and 109% from FY2021 to FY2024, and TSR substantially outperformed the peer index from 2021–2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Griffon Corporation | Senior Vice President & Chief Financial Officer | 2015–2024 | Led finance through deleveraging, capital markets actions (e.g., TLB repricing, RCF upsizing), and record 2024 free cash flow . |
| Griffon Corporation | Executive Vice President & Chief Financial Officer | 2024–present | Elevated scope; compensation and employment terms amended to reinforce retention and alignment . |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 498,709 | 523,645 | 549,827 |
| Base Salary Notes | — | — | Increased to $600,000 effective Nov 13, 2024 (promotion) . |
| All Other Compensation ($) | 144,310 | 175,531 | 154,114 |
| All Other Compensation – Details | — | — | Life/LTC $26,542; 401(k) $13,800; NDCP company match $42,178; Auto $29,432; Supplemental medical $24,528; ESOP $17,634 . |
Performance Compensation
Annual Cash Bonus (FY2024)
| Metric | Weighting | Target/Payout Grid | Company Attainment | Harris Payout ($) |
|---|---|---|---|---|
| Adjusted EBITDA | 75% | Threshold $400M → $70k; Target $471M → $157.5k; Max $518M → $289k | $515.7M | 282,552 |
| Working Capital (end-FY) | 15% | Threshold $614M → $22k; Target $634M → $31.5k; Max $654M → $56.7k | $816.0M | 56,667 |
| ESG Goals | 10% | Fixed opportunity earned upon overall satisfactory performance in five ESG areas | Better than satisfactory | 21,000 |
| Total Annual Bonus ($) | — | — | — | 360,218 |
Long-Term Cash Bonus (Performance Period FY2022–FY2024)
| Metric | Threshold | Target | Maximum | Harris Payout ($) |
|---|---|---|---|---|
| Aggregate Core EPS | $5.66 → $117,000 | $7.07 → $234,000 | $8.48 → $351,000 | 351,000 |
| Aggregate Free Cash Flow | $308.75M → $45,000 | $385.94M → $90,000 | $463.13M → $135,000 | 135,000 |
| Hunter EBITDA | $204M → $18,000 | $255M → $36,000 | $306M → $54,000 | 0 (below threshold) |
| Total LTI Cash ($) | — | — | — | 486,000 |
Equity Awards
Grant date: Mar 20, 2024 (approved Mar 18, 2024) with two performance-based restricted stock awards; dividends accrue but pay only upon vesting .
| Grant | Performance Metric | Shares at Threshold/Target/Max | Performance Period & Vesting | Grant Date Fair Value ($) |
|---|---|---|---|---|
| Performance RS | Relative TSR vs. Russell 2000 | 2,718 / 5,435 / 16,305 | TSR percentile (25%/50%/75%); period 3/20/2024–12/31/2026; linear interpolation | 770,411 |
| Performance RS | ROIC (avg CY2024–2026) | 4,076 / 8,152 / 24,456 (threshold 15.6%, target 19.5%, max 23.4%) | Forfeit if avg ROIC <15.6%; linear interpolation between points | 511,864 |
Notes: Beginning FY2024, CFO equity uses same performance metrics/goals as CEO/COO; equity program weighting: ROIC 60%, Relative TSR 40% .
Multi-Year Compensation Mix (Summary Compensation Table)
| Component ($) | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Stock Awards | 650,011 | 649,984 | 1,282,275 |
| Non-Equity Incentive (Total) | 816,667 | 906,667 | 846,218 |
| Total Compensation | 2,109,697 | 2,255,827 | 2,832,434 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 267,972 shares; less than 1% of class . |
| Composition | Includes 4,933 ESOP-allocated shares and 116,119 restricted shares . |
| Outstanding Unvested Awards (9/30/24) | 22,562 shares (market value $1,579,340) and 19,339 shares (market value $1,353,730); unearned performance awards: 2,718 (TSR, $190,260) and 4,076 (ROIC, $285,320) . |
| Stock Ownership Guidelines | CFO must hold 3x salary; executives must retain net shares until compliant; tested quarterly; all executives hold more than target value (compliant) . |
| Hedging/Pledging | Prohibited for directors and officers; all in compliance . |
| Post-Vesting Holding | Two-year restriction on selling restricted shares after vesting (risk mitigation) . |
| NDCP (2024) | Executive contributions $84,355; company match $42,178; earnings $59,694; balance $437,603 (as of 9/30/2024) . |
Employment Terms
| Provision | Key Terms |
|---|---|
| Role & Status | Promoted to EVP & CFO on Nov 13, 2024; severance agreement amended and restated May 8, 2024 and further amended Nov 13, 2024 . |
| Base/Bonus | Eligible for annual cash bonus with target ≥50% of salary . |
| Non-Compete/Non-Solicit | 12–18 months post-termination . |
| Change-in-Control Modernization | Good Reason clarified; CIC severance not reduced by post-CIC salary/bonus decreases; Cause post-CIC requires 2/3 board approval after executive hearing; removed prior unilateral company termination without severance (for COO, CFO, GC) . |
| Clawback | Policy applies to short- and long-term incentive plans . |
| Tax Gross-Ups | None for NEOs (including severance/CIC) . |
| 280G Treatment | Modified cutback (no payment if net-after-tax benefit would be lower); no 4999 excise tax expected at the FY2024 scenario . |
Potential Payments Upon Termination or Change in Control (as of 9/30/2024)
| Benefit | Death | Disability | Good Reason/No Cause (pre-CIC) | Good Reason/No Cause (post-CIC) |
|---|---|---|---|---|
| Salary | — | 277,113 | 831,339 | 1,385,565 |
| Bonus (severance multiple) | — | — | 831,667 (avg 3-yr combined bonuses, paid over 12 months) | 2,079,168 (2.5x avg 3-yr combined bonuses, lump sum or installments per 409A) |
| Pro-Rata Bonus | 277,113 | 277,113 | — | 906,667 (greater of target or prior year) |
| Accelerated RS Vesting | 951,020 (2024 grants at target) | 951,020 | 214,901 (2024 awards pro-rata at target; 2021/2022 forfeited) | 3,884,090 (full vest; 2024 awards greater of target or actual-to-date) |
| Dividend Vesting | 4,076 | 4,076 | 921 | 185,120 |
| Health Benefits (PV) | — | 45,752 | 133,626 | 196,482 |
| Modified 280G Cutback | — | — | — | — |
| Total ($) | 1,232,209 | 1,555,074 | 2,012,454 | 8,637,092 |
Compensation Structure Analysis
- Pay-for-performance alignment: 78%+ of other NEO compensation is performance-based, with short-term cash tied 75% to EBITDA, 15% to working capital, and 10% to ESG; long-term cash tied to Core EPS and free cash flow, and equity tied to ROIC (60%) and relative TSR (40%) .
- 2024 outcomes: Annual bonus paid $360,218 on strong EBITDA ($515.7M), disciplined working capital ($816.0M), and ESG achievements; LTI cash paid $486,000 driven by Core EPS and free cash flow; Hunter EBITDA tranche did not pay, indicating discipline in metric calibration .
- Equity risk/retention design: 100% performance-based RSUs (since 2012 except a 2020 award), two-year post-vesting holding, and no hedging/pledging reduce short-term selling pressure and align with long-term value creation .
- Governance and investor feedback: The Compensation Committee (independent; Chair Turnbull) uses Gallagher as independent consultant and has incorporated shareholder input (adding FCF and ROIC to incentives; extending performance alignment to CFO/GC) .
Equity Ownership & Alignment Diagnostics
- Skin-in-the-game: 267,972 shares beneficially owned (includes ESOP and 116,119 restricted), compliant with 3x salary guideline; less than 1% of outstanding shares .
- Potential selling pressure: Significant unvested and unearned performance awards (22,562 and 19,339 unvested; 2,718 TSR and 4,076 ROIC unearned) and a two-year post-vesting holding requirement mitigate near-term selling; hedging/pledging is prohibited .
- Deferred comp: Meaningful NDCP participation with $437,603 balance, indicating long-term capital alignment and tax-efficient deferral .
Say-on-Pay & Shareholder Feedback
- 2024 Annual Meeting: Say-on-pay approved (38,069,131 For; 5,626,462 Against; 276,078 Abstain; 4,012,990 broker non-votes), supporting the company’s performance-linked design .
- Equity Plan Share Reserve: Shareholders increased 2016 Plan shares by 2.6M (to 8.85M), preserving capacity for performance equity grants .
Risk Indicators & Red Flags
- No hedging/pledging; clawback policy in place; no tax gross-ups on severance/CIC; modernized CIC protections and removal of unilateral termination right improve governance balance .
- Non-compete/non-solicit (12–18 months) and robust severance protections (2.5x salary and 2.5x average bonus on double-trigger CIC) reduce retention risk during strategic events .
Investment Implications
- Incentive design favors operational cash generation and capital discipline (EBITDA, working capital, FCF, ROIC), consistent with deleveraging and shareholder returns; 2024 outcomes (high FCF, disciplined working capital) paid out as designed .
- Equity is highly performance-conditioned with post-vesting hold and no hedging/pledging, lowering near-term insider selling pressure; ownership guideline compliance further aligns interests .
- Retention risk appears contained: competitive severance/CIC terms, modernized Good Reason/Cause definitions, and committee responsiveness to shareholder feedback support management continuity and execution .