Richard Schaum
GENTEXAbout Richard Schaum
Independent director of Gentex since 2011; currently serves as independent Chair of the Board and Chair of the Compensation Committee, and is a member (Chair) of the Executive Committee . Age 78; career spans more than 30 years at Chrysler/DaimlerChrysler culminating as EVP, Product Development and GM, Powertrain Operations; General Manager of 3rd Horizon Associates LLC (since May 2003); former VP & GM of Vehicle Systems at WaveCrest; SAE Fellow and its Chairman/President (2007–2008) . The Board has affirmatively determined he is independent under Nasdaq standards .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| DaimlerChrysler/Chrysler | Executive Vice President, Product Development; General Manager, Powertrain Operations (then a $7B business with 11 plants and ~23,000 employees) | “More than thirty years” (dates not individually specified) | Led product development and powertrain operations; extensive operational leadership in auto sector |
| WaveCrest Laboratories | Vice President & General Manager, Vehicle Systems | Oct 2003 – Jun 2005 | Commercialization of electric propulsion systems at a startup |
External Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| 3rd Horizon Associates LLC | General Manager | Since May 2003 | Technology assessment and development leadership |
| Society of Automotive Engineers (SAE) | Fellow; Chairman & President | Chair/President 2007–2008 | Industry leadership and governance in engineering standards |
| BorgWarner, Inc. | Director (prior) | Not disclosed (prior service) | Prior public company board experience |
| Sterling Construction Co. | Director (prior) | Not disclosed (prior service) | Prior public company board experience |
Board Governance
- Independence and leadership
- Independent director; independent Chair of the Board; independent directors meet in executive session .
- Lead Independent Director Policy remains in place to preserve flexibility, though currently not needed given independent Chair .
- Committee assignments and activity (2024)
- Compensation Committee: Chair (members: Schaum, Deur, Walker); 3 meetings in 2024; formal session Feb 2025 .
- Executive Committee: Chair (members: Schaum, Deur, Downing, Walker); met once in 2024 .
- Audit Committee: Deur (Chair), Starkoff, Walker; 5 meetings in 2024 .
- Nominating & Corporate Governance: Brown (Chair), Anderson, Zang; 1 meeting in 2024 .
- Attendance and engagement
- Board held 5 meetings in 2024; all directors then serving attended at least 75% of aggregate Board/committee meetings; all directors attended the 2024 Annual Meeting .
- Related-party oversight and codes
- Audit Committee reviews/approves all related-party transactions; annual questionnaires used; Codes of Ethics and Business Conduct in place; no waivers to date .
Fixed Compensation
| Component | Amount | Notes |
|---|---|---|
| Cash fees (2024) | $206,597 | Includes base director retainer ($90,000), Chair of the Board retainer ($100,000), Compensation Committee Chair retainer ($10,000), Executive Committee member retainer ($5,000); paid quarterly |
| All other compensation (2024) | $2,035 | Includes RS dividends; company aircraft may be available to directors for personal use (if not conflicting with business needs); any such cost would be included here; Schaum’s reported “All Other” was minimal |
Director cash retainer framework (applies to all non-employee directors in 2024): base $90,000; Chair of the Board $100,000; Committee Chair retainers: Audit $12,500, Compensation $10,000, Nominating $10,000; Committee member retainers: Audit $7,500, Compensation $5,000, Nominating $5,000; Executive Committee member $5,000 .
Performance Compensation
| Equity | Grant Value (2024) | Vesting/Terms |
|---|---|---|
| Restricted Stock (director annual grant) | $130,310 | RS equal to $130,000 (rounded) divided by 20-day average price; granted immediately after Annual Meeting; vests on first anniversary |
Performance metrics oversight (executive pay plans administered by Compensation Committee chaired by Schaum):
- Annual Incentive Plan (AIP) metrics and weights: Revenue 33.33%, Operating Income 33.33%, EPS (diluted) 33.33% .
- Long-Term Incentive Plan (LTIP) metrics: 3-year cumulative EBITDA (50%) and 3-year cumulative ROIC (50%) via PSAs; RS comprises time-based portion .
2024 AIP performance vs. targets (context for pay-for-performance oversight):
| Metric (000s except per-share) | Weight | Threshold | Target | Maximum | Actual |
|---|---|---|---|---|---|
| Revenue | 33.33% | $2,000,000 | $2,500,000 | $3,000,000 | $2,313,314 |
| Operating Income | 33.33% | $450,000 | $562,500 | $675,000 | $459,727 |
| EPS (Diluted) | 33.33% | $1.62 | $2.02 | $2.42 | $1.76 |
Governance features tied to incentives:
- Clawback: Incentive-Based Compensation Recoupment Policy adopted per Nasdaq rules .
- Anti-hedging/anti-pledging: Directors and officers prohibited from hedging or pledging company stock .
- Say-on-Pay: 96% support at 2024 Annual Meeting (strong shareholder endorsement of program design) .
Other Directorships & Interlocks
| Company | Role | Status | Notes |
|---|---|---|---|
| BorgWarner, Inc. | Director | Prior | Prior public company directorship |
| Sterling Construction Co. | Director | Prior | Prior public company directorship |
| Compensation Committee Interlocks | — | None disclosed | Committee comprised solely of independent directors; no interlocks disclosed |
Expertise & Qualifications
- Deep automotive product development and powertrain operations leadership (EVP Product Development; GM of a $7B powertrain business at Chrysler/DaimlerChrysler) .
- Technology commercialization and startup experience (WaveCrest; 3rd Horizon Associates) .
- Industry governance and technical stature (SAE Fellow; SAE Chairman/President 2007–2008) .
- Board leadership (independent Chair at Gentex; Compensation Committee Chair; Executive Committee Chair) .
Equity Ownership
| Holder | Shares Beneficially Owned | Exercisable Options (within 60 days) | % of Class |
|---|---|---|---|
| Richard Schaum | 94,319 | 28,000 | <1% |
Notes:
- Options exercisable within 60 days are included in “Shares Beneficially Owned” per footnote; table separately discloses the option count .
- Stock Ownership Guidelines: Non-employee directors expected to hold shares equal to 5x annual retainer within five years; RS and PSAs count toward compliance .
- Anti-hedging and anti-pledging policy applies to directors .
Governance Assessment
- Positives
- Independent Chair with active committee leadership; robust committee structure and annual self-evaluations; independent director-majority board .
- Strong shareholder support for executive pay (96% Say-on-Pay in 2024), suggesting alignment between compensation design and investor expectations .
- Formal clawback policy; prohibition on hedging/pledging; ownership guidelines for directors (5x retainer) support long-term alignment .
- Attendance: all directors met at least 75% attendance; all attended 2024 Annual Meeting .
- Potential watch items
- Use of Mercer (compensation consultant) and Marsh (insurance broker) under common corporate parent (Marsh & McLennan); Compensation Committee assessed consultant independence and disclosed fees (Mercer $90,525; Marsh $567,655) mitigating conflict risk .
- Company allows personal use of aircraft for directors if not conflicting with business needs; while Schaum’s “All Other” comp was minimal ($2,035), the policy can draw investor scrutiny; any usage would be disclosed in “All Other Compensation” .
- RED FLAGS
- None disclosed regarding related-party transactions, hedging/pledging, or Section 16 filing delinquencies; Audit Committee reviews related-party transactions; no waivers of ethics codes reported .