Brooks Mallard
Gates Industrial CorpAbout Brooks Mallard
L. Brooks Mallard, age 58, has served as Executive Vice President and Chief Financial Officer of Gates Industrial since February 2020, overseeing global finance, capital structure, resource allocation, reporting, and internal controls . In FY2024, Gates achieved Adjusted EBITDA of $778.2M (107% of target), Free Cash Flow of $580.7M (100%), and Revenue of $3,475.6M (99%), funding annual incentives at 134% and reflecting disciplined cost and capital execution under management’s plan . Over 2020–2024, cumulative TSR rose to $150.77 (from a $100 base at 2019 year‑end), while Adjusted ROIC improved to 24.0% in 2024 (vs. 15.2% in 2020); 2024 Net Income was $219.9M . 2024 strategic actions included $176M of share repurchases, $100M gross debt reduction, and S&P/Moody’s upgrades, expanding float post‑sponsor exit and improving the balance sheet .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Henniges Automotive | Chief Financial Officer | 2019–2020 | CFO of global engineered sealing/anti‑vibration supplier |
| JELD‑WEN | EVP & Chief Financial Officer | 2014–2019 | Helped take company public on NYSE; scaled public‑company finance capabilities |
| TRW Automotive; Cooper Industries plc; Thomas & Betts; Briggs & Stratton | Senior financial leadership roles | — | Progressive finance leadership across diversified industrials |
External Roles
No external public company board roles disclosed for Mallard in the proxy .
Fixed Compensation
- No employment contract; at‑will employment for all NEOs .
- 2024 base salary set effective Feb 28, 2024; 2024 perquisites detailed below .
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base salary ($) | 587,168 | 616,298 | 662,269 |
| Base salary level at Feb 28 of year ($) | 621,534 (2023) | 671,257 (2024) | — |
| Perquisites/Other benefits ($) | 95,942 | 86,020 | 16,742 |
| 2024 Other benefits detail | — | — | Parking $3,900; Life insurance $3,583; AD&D/LTD $9,259 |
Performance Compensation
Annual Cash Incentive (Gates Global Bonus Policy)
- 2024 plan metrics and weightings: Adjusted EBITDA (50%), Free Cash Flow (30%), Revenue (20%); 0–200% funding scale with FX translation exclusion if excessive .
- 2024 attainment and funding:
| Measure | Weight | Threshold | Target | Max | 2024 Actual | Funding |
|---|---|---|---|---|---|---|
| Adjusted EBITDA ($M) | 50% | 657.0 | 730.0 | 803.0 | 778.2 | 170% |
| Free Cash Flow ($M) | 30% | 522.0 | 580.0 | 638.0 | 580.7 | 100% |
| Revenue ($M) | 20% | 3,308.4 | 3,517.0 | 3,699.5 | 3,475.6 | 95% |
| Total funding | — | — | — | — | — | 134% (ex‑FX) |
- Mallard’s 2024 payout calculation:
| Input | Value |
|---|---|
| Base salary used ($) | 671,257 |
| Target bonus (% of base) | 100% |
| Gates Financial Performance Factor | 134% |
| Individual Performance Factor | 110% |
| Actual bonus paid ($) | 989,433 |
Long‑Term Incentive (LTI)
- Design: 50% time‑based RSUs (3 equal annual installments); 50% PRSUs with 3‑year performance on Adjusted ROIC (75% weight) and Relative TSR vs S&P 400 Capital Goods (25%); PRSUs pay 0–200%; TSR capped at target if absolute TSR negative .
- 2024 awards (grant date 3/4/2024):
| Grant | Target shares (#) | Grant date fair value ($) | Vesting |
|---|---|---|---|
| RSU | 49,655 | 738,370 | 1/3 annually on 3/4/2025–2027, subject to service |
| PRSU | 49,655 (target) | 812,604 | Earned 0–200% after FY2026; 75% Adjusted ROIC, 25% Relative TSR |
- 2022–2024 PRSU cycle outcome (paid in 2024):
| Cycle | Metric | Weight | Payout | Mallard target → earned (shares) |
|---|---|---|---|---|
| 2022–2024 | Adjusted ROIC | 75% | 130% | |
| Relative TSR | 25% | 94% | ||
| Total | — | 121% | 40,376 → 48,854 |
Equity Ownership & Alignment
- Beneficial ownership: 306,973 shares (includes 129,346 options exercisable within 60 days and 177,627 shares owned); represents <1% of shares outstanding (257,707,674) .
- Stock ownership guidelines: 3x salary for NEOs; all NEOs met guidelines as of latest measurement .
- Hedging/pledging: Prohibited (no shorts, options, collars, swaps, pledging/margin) .
- Outstanding equity as of 12/28/2024:
| Category | Detail | Count/Value |
|---|---|---|
| Stock options | 2/24/2020 Options @ $11.76, exp 2/24/2030 (exercisable) | 76,294 |
| 2/26/2021 Options @ $15.00, exp 2/26/2031 (exercisable) | 53,052 | |
| Unvested RSUs | 7/27/2022 RSU (MV) | 39,461; $815,659 |
| 3/1/2023 RSU (MV) | 31,569; $652,531 | |
| 3/4/2024 RSU (MV) | 49,655; $1,026,369 | |
| Unvested/Unearned PRSUs (target) | 3/1/2023 PRSU (target payout value) | 82,866; $1,712,840 |
| 3/4/2024 PRSU (target payout value) | 86,896; $1,796,140 | |
| 2024 vesting/distribution | Net shares from RSU vesting | 43,034 |
| Net shares from PSU vesting | 27,350 |
Note: Market values above use $20.67 per share (12/27/2024 close) per proxy methodology .
Employment Terms
- Start date/tenure: EVP & CFO since February 2020 .
- Employment contract: None; at‑will .
- Clawback: Mandatory recovery of erroneously awarded incentive comp under SEC/NYSE clawback; additional recoupment for detrimental activity under 2018 Omnibus Plan .
- Non‑compete/solicit: Required to comply during employment and for one year post‑termination (or longer if severance payments continue) to receive benefits .
- Severance (non‑CIC): 1.5x base salary + target bonus, pro‑rated current‑year bonus (no individual factor), 18 months health premium equivalents, outplacement; “best‑of‑net” 280G cutback . As of 12/28/2024 illustrative payout: $2,913,255 cash; $14,787 health; $8,000 outplacement; $0 equity acceleration .
- Change‑in‑control (double‑trigger): 2x base + target bonus in lump sum; pro‑rated target bonus; 24 months health/life/LTD premiums; outplacement; “best‑of‑net” 280G; equity acceleration per plan (RSUs require CIC+qualifying termination; PRSUs generally at target if not assumed or per measured performance if within first 6 months, with service vesting tail) . As of 12/28/2024 illustrative totals: $3,584,512 cash; $66,457 health; $8,000 outplacement; $4,775,580 equity .
- Deferred compensation: Company contribution $75,720 in 2024; aggregate balance $257,123 at 12/28/2024 .
- Tax gross‑ups: No excise/income tax gross‑ups (except potential relocation gross‑ups); limited perquisites disclosed .
Total Compensation Summary (multi‑year)
| Component ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | 587,168 | 616,298 | 662,269 |
| Stock awards | 2,749,114 | 1,420,560 | 1,550,974 |
| Non‑equity incentive (Annual Plan) | 358,122 | 944,732 | 989,433 |
| All other compensation | 95,942 | 86,020 | 112,712 |
| Total | 3,790,346 | 3,067,610 | 3,315,388 |
Compensation Structure Analysis
- Strong at‑risk mix: 73% of non‑CEO NEO comp variable in 2024; 50% of LTI performance‑based; Annual Plan capped at 200% .
- Metrics tightened to value creation: LTI emphasizes Adjusted ROIC (75%) and Relative TSR (25%); Annual Plan balances EBITDA, FCF, Revenue; no payouts below thresholds .
- No option repricing; no new options since 2021; equity mix now RSUs/PRSUs (lower risk of windfall vs options) .
- Robust governance: No hedging/pledging; clawback in place; ownership guidelines met; no employment contracts .
- Shareholder support: 98% Say‑on‑Pay approval at 2024 AGM; ongoing investor outreach .
Risk Indicators & Red Flags
- Section 16 timeliness: One Form 4 (RSU vesting/tax withholding) for Mallard and other NEOs was filed untimely in Oct 2024 due to administrative oversight .
- Hedging/pledging prohibited, mitigating misalignment or collateral risks .
- No tax gross‑ups (except relocation) and no option repricing; compensation risk assessment found no material risk .
Equity Ownership & Pledging
| Item | Detail |
|---|---|
| Total beneficial ownership | 306,973 shares (<1% of 257,707,674 outstanding); includes 129,346 options and 177,627 owned shares |
| Ownership guidelines | 3x salary; in compliance |
| Pledging/Hedging | Prohibited |
Compensation Peer Group & Committee
- Compensation Committee: Neil P. Simpkins (Chair), Fredrik Eliasson, James W. Ireland III, Wilson S. Neely; 5 meetings in 2024 .
- Independent consultant: Aon Human Capital Solutions; assists with design, benchmarking, CD&A, risk, tally sheets .
- Peer group (select names): AMETEK, Dover, Flowserve, Graco, IDEX, Ingersoll Rand, Lincoln Electric, Nordson, Pentair, Regal Rexnord, SPX Technologies, Timken, Xylem, Franklin Electric, ESAB .
Investment Implications
- Pay‑for‑performance alignment (EBITDA/FCF/Revenue annual; ROIC/TSR long‑term) supports disciplined capital deployment; 2024 funding at 134% and 121% PRSU cycle payout indicate above‑target operational delivery and ROIC focus; positive for cash conversion and capital returns .
- Selling pressure near‑term is moderated by ownership guidelines and hedging/pledging bans, but sizeable RSU installments (2025–2027) and PRSU vest in 2027 can create episodic liquidity; 2024 net share deliveries evidence routine tax‑withholding supply but no option exercises by Mallard in 2024 .
- Retention risk appears controlled: competitive target LTI at 220% of salary (2024), double‑trigger CIC (2x) and severance (1.5x) economics, and NQDC participation provide stability without shareholder‑unfriendly gross‑ups .
- Governance quality is solid (98% Say‑on‑Pay, independent consultant, no repricing, clawback), reducing headline risk and supporting long‑term investor confidence .