Robert F. Mehmel
GRIFFONAbout Robert F. Mehmel
President and Chief Operating Officer of Griffon Corporation since December 10, 2012, with an amended and restated employment agreement dated May 8, 2024 . He previously served as President and COO of DRS Technologies and held multiple senior roles in defense electronics, bringing deep operating, M&A, and execution experience . Under his tenure, Griffon delivered record adjusted EBITDA and EPS in FY2024, free cash flow of $326M, a net debt/EBITDA of 2.6x, and multi‑year growth in Adjusted EPS (+205% vs FY2021) and Adjusted EBITDA (+109% vs FY2021) . Griffon’s TSR has outperformed its peer group over fiscal 2021–2024, supported by operational initiatives in CPP and HBP and proactive liability management .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| DRS Technologies | EVP, Business Operations & Strategy | 2001–2006 | Senior operating leadership in defense electronics; foundational M&A and corporate operations experience . |
| DRS Technologies | EVP & Chief Operating Officer | 2006–2008 | Expanded COO responsibilities across integrated products/services for military and intelligence customers . |
| DRS Technologies | President & Chief Operating Officer | 2008–2012 | Led corporate execution and operations for a leading defense supplier; broadened scale and scope . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $1,045,023 | $1,076,374 | $1,108,666 |
| Annual Cash Bonus ($) | $916,667 | $916,667 | $900,546 |
| Long‑Term Cash Bonus ($) | $1,350,000 | $1,350,000 | $1,215,000 |
| Stock Awards – Grant Date Fair Value ($) | $1,818,673 | $1,216,125 | $3,205,617 |
| Perquisites/Other ($) | $224,339 | $241,832 | $223,535 |
- Target aggregate bonus opportunity: not less than 100% of base salary; maximum potential not less than 200% of base salary .
Performance Compensation
| Annual Cash Incentive (FY2024) | Weight | Threshold | Target | Maximum | Actual | Payout ($) |
|---|---|---|---|---|---|---|
| EBITDA ($) | 75% | 400,000,000 | 471,000,000 | 518,000,000 | 515,700,000 | 706,379 |
| Working Capital ($) | 15% | 614,000,000 | 634,000,000 | 654,000,000 | 816,000,000 | 141,667 |
| ESG (fixed if satisfactory) | 10% | — | — | — | Satisfactory | 52,500 |
| Long‑Term Cash Incentive (FY2022–FY2024 cycle) | Metric | Threshold | Target | Maximum | Actual (Aggregate) | Payout ($) |
|---|---|---|---|---|---|---|
| Core EPS (3‑yr aggregate) | 65% weight | $5.66 | $7.07 | $8.48 | $13.73 | $877,500 |
| Free Cash Flow (3‑yr aggregate, $) | 25% weight | 308,750,000 | 385,938,000 | 463,126,000 | 732,086,000 | $337,500 |
| Hunter Fan EBITDA (3‑yr aggregate, $) | 10% weight | 204,000,000 | 255,000,000 | 306,000,000 | Below threshold | $0 |
| Long‑Term Cash Incentive (FY2024–FY2026 cycle targets) | Metric | Threshold | Target | Maximum |
|---|---|---|---|---|
| Aggregate Core EPS | — | $10.66 | $13.33 | $16.00 |
| Aggregate Free Cash Flow ($) | — | 570,477,000 | 713,096,000 | 855,715,000 |
| Equity Awards (Grant 3/20/2024; vest 1/31/2027) | Metric | Threshold (#) | Target (#) | Maximum (#) |
|---|---|---|---|---|
| ROIC (avg CY2024–2026) | ≥15.6% | 10,190 | 20,380 | 61,140 |
| TSR vs Russell 2000 (3/20/2024–12/31/2026) | ≥25th percentile | 6,794 | 13,587 | 40,761 |
- Vesting date for 2024 ROIC/TSR grants amended to January 31, 2027; earlier 2022 grants amended to vest January 27, 2025; 2‑year post‑vesting holding required (now applies to CFO and GC as well) .
- FY2025 annual bonus removed ESG; weightings set at 80% EBITDA and 20% working capital reflecting investor feedback .
Equity Ownership & Alignment
| Beneficial Ownership | Shares | % of Outstanding |
|---|---|---|
| Total beneficial ownership | 1,171,877 | 2.4% |
| Components of Ownership | Shares | Notes |
|---|---|---|
| ESOP allocated shares | 4,210 | Participant‑directed voting . |
| Restricted stock (unvested) | 565,753 | Performance‑based grants outstanding . |
| Outstanding Unvested/Unearned Awards (as of 9/30/2024) | Shares |
|---|---|
| 2021 performance RS (expected; vest 1/27/2025) | 132,000 |
| 2022 ROIC (threshold/target/max ladder) | 17,108 |
| 2022 TSR (threshold/target/max ladder) | 17,108 |
| 2024 TSR (threshold/target/max ladder) | 6,794 |
| 2024 ROIC (threshold/target/max ladder) | 10,190 |
- Stock ownership guideline for President: 4× salary; all executives and business unit presidents exceed guideline value .
- Anti‑hedging/anti‑pledging policy (no margin/pledge/hedging); all directors/officers indicate compliance .
- Dividends on unvested restricted stock accrue and are payable only upon vesting .
Employment Terms
| Provision | Key Terms |
|---|---|
| Role and start date | President & COO effective December 10, 2012 . |
| Agreement | Amended and restated May 8, 2024; aligned change‑in‑control (CIC) definitions and improved Good Reason/Cause provisions . |
| Bonus structure | Target aggregate bonus ≥100% of base; maximum aggregate ≥200% . |
| Non‑compete / non‑solicit | Customary covenants with 12–18 months post‑termination duration . |
| Clawback | Recovery of improperly received incentive compensation for three years upon restatement . |
| Severance Economics (as of 9/30/2024) | Disability | Good Reason/Without Cause (pre‑CIC) | CIC Termination (within 24 months) |
|---|---|---|---|
| Salary multiple | 9 months (installments) | 18 months (installments) | 2.5× base (lump sum; certain CIC paid in installments) |
| Bonus multiple | — | 1.5× avg combined bonuses (last 3 yrs; installments) | 2.5× avg combined bonuses (lump sum; certain CIC installments) |
| Pro‑rata bonus | 100% of salary (target proxy year) | — | Greater of target or prior year combined bonus (pro‑rata) |
| Equity acceleration | At target upon death/disability; CIC: target (or >target if performance to date exceeds target for 2024 grants); pre‑CIC terminations: pro‑rata subject to performance | ||
| Health benefits | 9 months (disability) | 18 months (pre‑CIC) | Through Dec 31 of 2nd year post‑termination (CIC) |
| 280G treatment | Modified cutback to avoid excise tax; illustrative reduction for CIC shown . |
| Potential Payments (as of 9/30/2024) | Disability | Good Reason/Without Cause (pre‑CIC) | CIC Termination |
|---|---|---|---|
| Total ($) | $21,677,466 | $17,861,611 | $29,511,707 (includes cutback amount) |
Performance & Track Record
- FY2024 records: Adjusted EBITDA $513.6M (+1.6% y/y) and Adjusted EPS $5.12 (+12.8% y/y); Adjusted EPS and Adjusted EBITDA up 205% and 109% vs FY2021 respectively .
- Free cash flow $326M in FY2024 enabled $310M returns to shareholders; net debt/EBITDA held at 2.6×; no material debt maturity until 2028 .
- Execution: completed CPP sourcing transition ahead of schedule/on budget (closures and footprint reductions); expanded HBP capacity; reduced Term Loan B pricing (~$1.8M annual interest savings) .
- Shareholder returns: 5‑year cumulative TSR outperformance vs indices; fiscal 2021–2024 TSR outpaced peer group .
Say‑on‑Pay & Shareholder Feedback
- Say‑on‑pay approval: ~87.1% at March 20, 2024 meeting; viewed as strong endorsement .
- Program changes from engagement: CFO/GC equity grants now mirror CEO/COO (ROIC/TSR; 2‑year hold), ESG removed from FY2025 annual bonus (shift to 80% EBITDA/20% working capital) .
- Peer group reconstituted; FY2025 adds Resideo and Zurn Elkay after Masonite acquisition exit .
Compensation Structure Analysis
- High pay‑for‑performance mix: in FY2024, 78.2% of other NEO compensation performance‑based; multi‑year cliff vesting with 2‑year post‑vest holding aligns to long‑term value creation and discourages short‑term risk .
- Long‑term cash tied to Core EPS and FCF; equity tied to ROIC and relative TSR—metrics with investor‑recognized linkage to stock performance and capital efficiency .
- No tax gross‑ups (except limited relocation/equalization); robust clawback and anti‑hedging/pledging policies .
Equity Ownership & Alignment
- Significant ownership: 1,171,877 shares (2.4% of outstanding), including ESOP and large restricted holdings; exceeds stock ownership guideline (4× salary) .
- Upcoming vesting events (Jan 27, 2025; Jan 31, 2027) subject to 2‑year post‑vest holding; mitigates near‑term selling pressure .
- No pledging/hedging; dividends on unvested shares only payable upon vesting .
Employment Terms
- Double‑trigger CIC protection (termination for Good Reason or without Cause within 24 months post‑CIC) provides retention while aligning with shareholder‑friendly standards; modified 280G cutback avoids excise tax inefficiency .
- Non‑compete/non‑solicit 12–18 months; strong governance of executive conduct through clawback and insider trading policies .
Investment Implications
- Alignment: High performance‑based mix and large equity holdings, combined with 2‑year post‑vest holding, align Mehmel’s incentives with multi‑year EPS/FCF/ROIC/TSR delivery—supportive for long‑duration holders .
- Retention risk: CIC and severance economics are competitive but conditional (double trigger), reducing flight risk; program updates reflect responsiveness to investor feedback (e.g., ESG removal) .
- Trading signals: Material vesting in Jan 2025 and Jan 2027 increases future float, but post‑vest holding requirements dampen near‑term supply; continued delivery vs FY2024–2026 Core EPS/FCF targets is a key catalyst screen .
- Execution track: Recent initiatives (CPP re‑sourcing, HBP capacity, liability management) and disciplined capital returns underpin the pay‑for‑performance framework tied to Core EPS/FCF and ROIC/TSR .