Seth L. Kaplan
GRIFFONAbout Seth L. Kaplan
Senior Vice President, General Counsel and Secretary of Griffon Corporation (GFF) since May 2010; age 55. Prior roles include Assistant General Counsel and Assistant Secretary at Hexcel (2000–2010) and associate at Winthrop, Stimson, Putnam & Roberts (now Pillsbury Winthrop Shaw Pittman LLP) (1994–2000) . Company performance during his tenure has been strong: adjusted EPS rose 205% and adjusted EBITDA increased 109% from FY2021 to FY2024; 5-year TSR reached 431.70 versus 204.57 for a diversified industrials peer index, underscoring shareholder value creation .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Hexcel Corporation (NYSE: HXL) | Assistant General Counsel & Assistant Secretary; Senior Corporate Counsel | 2000–2010 | Legal leadership supporting advanced composites manufacturer across aerospace/defense, aiding governance and compliance |
| Winthrop, Stimson, Putnam & Roberts | Associate (corporate law) | 1994–2000 | Foundational corporate legal experience |
External Roles
No public-company directorships or external governance roles disclosed for Kaplan .
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 455,886 | 473,380 | 492,315 |
| Stock Awards ($) | 599,997 | 600,006 | 1,282,275 |
| Non-Equity Incentive Plan Compensation ($) | 816,667 | 906,667 | 846,218 |
| All Other Compensation ($) | 142,477 | 169,321 | 148,882 |
| Total Compensation ($) | 2,015,027 | 2,149,374 | 2,769,690 |
- Current salary rate increased to $510,356 effective Dec 1, 2024; target annual bonus “no less than 50% of base salary” per severance agreement terms .
- All Other Compensation (FY2024) detail: life/long-term care insurance $28,534; 401(k) contribution $13,800; NDCP match $39,878; personal automobile $24,992; supplemental medical $24,528; ESOP allocation $17,150; total $148,882 .
Performance Compensation
Annual Cash Incentive – FY2024
| Component | Weight | Threshold | Target | Maximum | Actual | Payout to Kaplan ($) |
|---|---|---|---|---|---|---|
| EBITDA | 75% | $400.0m | $471.0m | $518.0m | $515.7m | $282,552 |
| Working Capital (Adjusted) | 15% | $614.0m | $634.0m | $654.0m | $816.0m | $56,667 |
| ESG (quantified areas) | 10% | n/a | n/a | n/a | “Better than satisfactory” overall | $21,000 |
| Total Annual Bonus | — | — | — | — | — | $360,218 |
- FY2025 program removes ESG metric; weights set to 80% EBITDA, 20% working capital following shareholder feedback .
Long-Term Cash Incentive – FY2022–FY2024 (3-year)
| Metric | Weight | Threshold | Target | Maximum | Actual (Aggregate) | Payout to Kaplan ($) |
|---|---|---|---|---|---|---|
| Core EPS | 65% | $5.66 | $7.07 | $8.48 | $13.73 | $351,000 |
| Free Cash Flow | 25% | $308.75m | $385.94m | $463.13m | $732.09m | $135,000 |
| Hunter Fan EBITDA | 10% | $204.0m | $255.0m | $306.0m | Below threshold | $0 |
| Total LT Bonus | — | — | — | — | — | $486,000 |
Long-Term Cash Incentive – FY2024–FY2026 (granted FY2024)
| Metric | Threshold | Target | Maximum | Kaplan Opportunity ($) |
|---|---|---|---|---|
| Aggregate Core EPS | $10.66 | $13.33 | $16.00 | $135,000 / $270,000 / $405,000 (thr/target/max) |
| Aggregate Free Cash Flow | $570.477m | $713.096m | $855.715m | $45,000 / $90,000 / $135,000 (thr/target/max) |
Equity Awards – FY2024 grants (March 20, 2024; vest Jan 31, 2027; 2-year post-vesting hold)
| Award Type | Performance Metric | Threshold (#) | Target (#) | Max (#) |
|---|---|---|---|---|
| Performance RS | Relative TSR vs Russell 2000 | 2,718 | 5,435 | 16,305 |
| Performance RS | Average ROIC (CY2024–2026) | 4,076 | 8,152 | 24,456 |
- Vest date amended to Jan 31, 2027 to align with certification and tax processes; double-trigger CIC vesting at greater of target or performance-to-date; pro rata vesting on qualifying non-CIC termination; 2-year post-vesting holding requirement .
Equity Ownership & Alignment
Beneficial Ownership (as of Dec 31, 2024)
| Holder | Shares Beneficially Owned | % of Class | ESOP Allocated | Restricted Stock Held |
|---|---|---|---|---|
| Seth L. Kaplan | 234,619 | <1% | 4,776 | 103,427 |
- Outstanding equity awards at FY2024 year-end (market values at $70/share): 20,826 shares (Nov 2021 grant; $1,457,820); 17,852 shares (Nov 2022 grant; $1,249,640); unearned TSR 2,718 ($190,260) and ROIC 4,076 ($285,320) from Mar 2024 grants .
- Stock ownership guidelines: executive officers must hold shares equal to 2× salary (Kaplan category); Company reports each executive meets/exceeds guidelines; policy requires retention of “net” shares until in compliance; compliance tested quarterly .
- Pledging/hedging prohibited; margin purchases prohibited; pre-clearance and blackout controls enforced for insiders .
Employment Terms
| Term | Details |
|---|---|
| Start Date | Offer letter dated April 27, 2010; effective May 17, 2010 as SVP, GC & Secretary |
| Latest Agreement | Amended & Restated Severance Agreement dated May 8, 2024 (aligned CIC, Good Reason, cause thresholds; removed unilateral termination right without severance) |
| Non-Compete / Non-Solicit | 12–18 months post-termination; confidentiality and IP protection covenants |
| Severance (pre-CIC) | 18 months base salary ($743,237) and average combined bonuses over prior 3 years ($831,667), paid in installments; potential pro-rata bonus subject to performance and discretion |
| Severance (CIC; within 24 months; double-trigger) | 2.5× base salary ($1,238,728) and 2.5× average combined bonuses ($2,079,168) lump sum (installments in certain 409A cases); pro-rata bonus equal to higher of target or prior year combined bonus ($906,667) |
| Equity Treatment | On death/disability: performance RS vests at target; On CIC + qualifying termination: vests at greater of target/performance to date; otherwise pro-rata subject to performance achieved |
| Health Benefits | COBRA-equivalent coverage valued at $32,800 (disability); $95,798 (pre-CIC termination); $140,861 (CIC termination) |
| Clawback | SEC 2023-compliant clawback for excess incentive comp over prior 3 years on restatement; applies to cash and equity |
| Tax Gross-Ups | None; limited exceptions only for relocation/expatriate equalization; no gross-ups for severance/CIC |
Compensation Structure vs Performance Metrics
- Short-term cash (FY2024): 75% EBITDA, 15% working capital, 10% ESG; ESG removed for FY2025 (80% EBITDA/20% WC) per shareholder feedback .
- Long-term cash (FY2022–2024): Core EPS (65%), Free Cash Flow (25%), Hunter EBITDA (10%); Kaplan earned max on Core EPS and FCF; no payout on Hunter EBITDA (below threshold) .
- Equity (FY2024 onward): ROIC (60% of equity grant value) and relative TSR (40%); threshold/target/max share outcomes detailed; post-vesting 2-year hold enhances alignment .
Vesting Schedules and Insider Selling Pressure
- Near-term vesting events: Nov 30, 2025 (19,339 shares granted Nov 16, 2022 subject to performance certification) ; Jan 31, 2027 (TSR/ROIC grants from Mar 20, 2024) .
- Company mandates 2-year post-vesting holding and prohibits pledging/hedging, reducing forced-selling pressure; pre-clearance and blackout procedures further limit opportunistic trading .
Equity Ownership & Pledging
- Anti-pledging/anti-hedging and margin prohibitions applicable to directors and executive officers; all indicate compliance; policy embedded in insider trading addendum (Form 10-K Exhibit 19.1) .
Employment Contracts, Severance, Change-of-Control Economics
- Double-trigger CIC equity vesting; cash severance multiples at 2.5× salary and 2.5× average combined bonus reinforce retention through change events while avoiding single-trigger windfalls .
Performance & Track Record
- FY2024 record adjusted EBITDA ($513.6m) and adjusted EPS ($5.12); robust free cash flow ($326.1m) enabling $310m capital returns while maintaining 2.6× net debt to EBITDA leverage .
- Strategic execution: CPP asset-light transition completed ahead of schedule; HBP growth and capacity investment; term loan repricing lowered annual interest by ~$1.8m .
- Say-on-pay support at 87.1% in 2024 highlights investor alignment with compensation design .
Compensation Committee Analysis
- Committee chaired by Cheryl L. Turnbull; uses independent consultant Gallagher; multi-metric, performance-weighted design; shareholder outreach led to ROIC/TSR equity metrics and removal of ESG metric in FY2025 .
Related Party Transactions and Red Flags
- Anti-pledging/hedging policy and clawback mitigate alignment risks; no tax gross-ups; no related party transactions disclosed involving Kaplan; strong policy framework on insider trading and pre-clearance .
Stock Ownership Guidelines & Compliance
- Executives must achieve and maintain ownership equal to multiples of salary (Kaplan: 2×); company reports all executives meet/exceed targets; retention of “net” shares required until compliance .
Investment Implications
- High pay-for-performance alignment: Kaplan’s incentives are tightly linked to EBITDA, working capital, Core EPS, FCF, ROIC, and relative TSR—metrics that correlate with shareholder returns .
- Retention risk mitigated by multi-year cliff vesting, double-trigger CIC protection, and post-vesting holding; near-term selling pressure is limited by policies and holding requirements, though vest dates (Nov 2025, Jan 2027) could create event-driven windows after holds expire .
- Governance safeguards (clawback, anti-pledging/hedging, no gross-ups) reduce red-flag risk; strong say-on-pay support indicates investors view the plan as shareholder-friendly .
- Execution confidence: Company’s FCF, leverage discipline, and operational initiatives support incentive attainment; monitoring ROIC and TSR trajectories through FY2026 is key to forecasting equity vesting outcomes and potential supply dynamics .