Alan E. Smith
About Alan E. Smith
Alan E. Smith, age 58, is Vice President and General Manager – Batavia (GHM) since July 2015; previously VP of Operations (2007–2015), Director of Operations at Lydall (2005–2007), and earlier 14 years at Graham from Project Engineer to Engineering Manager . Company performance during FY2025: net sales $209.9M (+13% YoY) and net income $12.2M (+168% YoY), with orders $231.1M (110% of net sales) . GHM’s pay-versus-performance table shows cumulative TSR value of a fixed $100 investment at $186.85 (FY2025), $198.19 (FY2024), $95.03 (FY2023) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Graham Corporation | Vice President & General Manager – Batavia | Jul 2015–present | Oversees Batavia operations; ERP implementation and product testing among FY2025 goals |
| Graham Corporation | Vice President of Operations | 2007–2015 | Led operations across manufacturing, process improvement |
| Lydall, Inc. | Director of Operations | 2005–Jul 2007 | Specialty engineered products operations leadership |
| Graham Corporation | Project Engineer → Engineering Manager | 14 years prior to 2005 | Progressive engineering leadership at GHM |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Lydall, Inc. | Director of Operations | 2005–Jul 2007 | Operations improvement in specialty engineered products |
Fixed Compensation
| Metric | FY 2024 | FY 2025 |
|---|---|---|
| Base Salary ($) | $312,000 | $330,000 (rate increased to $340,000 effective Apr 1, 2025) |
| Target Bonus (%) | 50% of base salary | 50% of base salary |
| Actual Annual Cash Bonus ($) | $241,566 | $190,839 (116% of target; 58% of max) |
| Stock Awards Grant-Date Fair Value ($) | $155,994 | $197,988 |
| Change in Pension Value ($) | $70,072 | $76,611 |
| All Other Compensation ($) | $16,165 | $16,963 |
FY2025 All Other Compensation Breakdown:
| Component | Amount ($) |
|---|---|
| Insurance | $2,983 |
| 401(k) Matching Contributions | $13,980 |
| 401(k) Non-elective Contributions | — (none listed for Smith) |
Performance Compensation
Annual Cash Incentive – FY2025 Design and Outcomes
| Metric | Weighting | Threshold | Target | Maximum | Actual FY2025 |
|---|---|---|---|---|---|
| Consolidated Adjusted EBITDA ($mm) | 15% (Smith) | 18.9 | 25.3 | 37.9 | 26.7 (above target) |
| Divisional Adjusted EBITDA – Graham Mfg ($mm) | 35% (Smith) | 9.4 | 12.5 | 18.8 | 19.3 (above max) |
| Consolidated Bookings ($mm) | 6% (Smith) | 187.2 | 234.0 | 280.8 | 231.1 (below target, above threshold) |
| Divisional Bookings – Graham Mfg ($mm) | 14% (Smith) | 104.8 | 131.0 | 157.2 | 82.2 (below threshold) |
| Personal Goals | 30% | 100% | 100% | 200% | 78% achieved (Smith) |
FY2025 Bonus Outcome:
| Item | Value |
|---|---|
| Target Bonus % of Salary | 50% |
| Actual Payout vs Target | 116% |
| Actual Bonus Paid ($) | $190,839 |
Notes:
- Interpolation is linear between threshold/target/maximum; committee adjusted EBITDA to add back ERP, acquisition, BN supplemental bonus, and equity comp as applicable .
- Committee used discretion to award threshold for BN/P3 divisional EBITDA (≈0.1% below threshold) and evaluated metric-level achievements across divisions .
Long-Term Equity Incentives – Structure and Grants
| Grant Date | Award Type | Target Units | Max Units | Grant-Date Fair Value ($) | Vesting | Performance Metrics |
|---|---|---|---|---|---|---|
| Jun 4, 2024 | RSUs | 3,873 | — | 98,994 | 1/3 annually on Jun 4, 2025/2026/2027, cont. employment | Time-based (retention) |
| Jun 4, 2024 | PSUs | 3,873 | 7,746 (200%) | 98,994 | Cliff vest at 3rd anniversary (Mar 31, 2027 performance period), cont. employment | 50% 3-year cumulative revenue; 50% 3-year average ROIC change vs FY2024; linear; 0 payout below thresholds |
L-T Incentive Percentage (L-T %) used for grant sizing: Smith 60% (FY2025 and FY2026) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 66,634 shares (as of Jun 27, 2025) |
| Stock ownership guideline | 2.0x base salary for non-CEO NEOs |
| Compliance status | All NEOs in compliance (some within grace period) at FY2025 year-end |
| Hedging/pledging policy | Hedging and pledging prohibited for executives/directors |
| Shares pledged | Not disclosed; pledging prohibited by policy |
| Ownership breakdown (unvested awards at Mar 31, 2025) | RSUs: 3,053 (5/23/22), 18,315 (5/23/22), 4,749 (5/17/23), 3,873 (6/4/24) . PSUs/Performance RSAs (max potential): 18,316 (5/23/22), 14,246 (5/17/23), 7,746 (6/4/24) |
| Market values (Mar 31, 2025 close $28.82) | RSU lots: $87,987; $527,838; $136,866; $111,620 . PSU lots (max): $527,867; $410,570; $223,240 |
| Recent vesting activity | FY2025 stock vested for Smith: 2,374 shares ($69,131), 3,053 shares ($86,736), 10,108 shares ($273,421) |
| Stock ownership guidelines – retention | Must retain 50% of net shares until guideline met |
Employment Terms
| Term | Alan E. Smith |
|---|---|
| Current role start | Jul 2015 (VP & GM – Batavia) |
| Employment agreement | July 30, 2007; amended Dec 31, 2008; auto-renews to maintain 1-year remaining term; ends last day of month in which he turns 65 |
| Non-compete / non-solicit | 18-month covenant post-termination; confidentiality obligations |
| Severance – involuntary termination (without cause/material breach) | Base salary continuation for 12 months at greater of $152,500 or then-current rate; prorated portion of target bonus; release condition |
| Change-of-control (CIC) | No payment on CIC itself; must continue services for 3 months after CIC . If terminated within 12 months of CIC, award agreements provide accelerated vesting: RSUs (full), performance RSAs (target), PSUs (pro-rata target) |
| Equity acceleration outside CIC | Death/disability: time-based awards vest fully; PSUs vest pro-rata at target through quarter-end preceding event |
| Clawback | Policy for Recovery of Erroneously Awarded Compensation effective Oct 2, 2023 |
| Tax gross-ups | Company does not provide tax gross-ups to NEOs |
| Retirement benefits | Eligible for defined benefit Retirement Income Plan; 30 years credited service; present value $1,143,081 (Mar 31, 2025); Supplemental Executive Retirement Plan eligibility with no accrued benefit |
| Life insurance / disability | Company life insurance plan benefit up to lesser of base salary or $250,000; short-term disability: full base salary for six months for Batavia-based NEOs . Estimated life insurance proceeds in CIC table: $3,189,765 (proxy table) |
Compensation Structure Analysis
- Mix and risk: Significant “at-risk” pay via annual bonus tied to EBITDA/bookings and 50% of LTI in PSUs tied to multi-year revenue and ROIC; RSUs balance retention .
- Target levels and outcomes: FY2025 bonus 116% of target reflecting above-target consolidated EBITDA and Graham divisional EBITDA, offset by below-threshold Graham bookings; personal goals achieved 78% .
- Ownership alignment: 2x salary ownership guideline; NEOs in compliance; hedging/pledging prohibited .
- Governance checks: Double-trigger CIC for peers (Thoren/Malone/Thome); Smith’s CIC acceleration via plan agreements, clawback policy adopted, no tax gross-ups .
Say-on-Pay & Compensation Peer Group
- Say-on-Pay approval: ~99% support at 2024 annual meeting .
- Peer group (2025): Allient, Energy Recovery, Perma-Pipe, Astronics, Gulf Island Fabrication, SIFCO Industries, CECO Environmental, Hurco, The Eastern Company, CPI Aerostructures, Natural Gas Services Group, The Gorman-Rupp Company, DMC Global, Park Aerospace, Thermon Group Holdings .
Investment Implications
- Alignment: Strong pay-for-performance with EBITDA/bookings and multi-year PSUs tied to revenue growth and ROIC change; stock ownership guidelines enforced and clawback in place—positive for alignment and governance .
- Overhang/vesting cadence: Multiple RSU tranches scheduled around May 17 and June 4 annually, plus PSUs with three-year cliffs; potential selling pressure around vest dates within open windows, subject to insider trading policy .
- Retention and risk: 18‑month non-compete; severance provides 12 months salary and prorated target bonus on involuntary termination; CIC acceleration through plan provisions (not cash multiples) for Smith—balanced retention without excessive CIC cash burden .
- Pension liability: Defined benefit obligation present for Smith ($1.14M PBO), manageable within context but relevant to long-term commitments .