Gwen Montgomery
Gates Industrial CorpAbout Gwen Montgomery
Gwen Montgomery, age 53, is Executive Vice President and Chief Human Resources Officer (CHRO) at Gates Industrial (GTES) since January 2024; she joined Gates in March 2017 after senior HR roles at PolyOne/Avient, prior Deloitte tax consulting, and practice as a lawyer . As CHRO she oversees talent management, organizational design, compensation/benefits, labor relations, workforce health, and talent development . Company performance context during her tenure: 2024 pay-versus-performance shows company TSR value of a $100 investment rose to $150.77 (from $97.88 in 2023), Adjusted ROIC increased to 24.0% (from 23.0%), while Net Income was $219.9M . 2024 Annual Plan funding reached 134% with Adjusted EBITDA of $778.2M, Free Cash Flow of $580.7M, and Revenue of $3,475.6M (ex-FX impacts) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Gates Industrial | EVP, Chief Human Resources Officer | Jan 2024–present | Leads global HR strategy aligned to business goals; oversees talent, rewards, labor relations, workforce health |
| Gates Industrial | Senior Vice President, Global Human Resources | 2017–2024 (promoted Jan 2024) | Built organizational capabilities, talent pipelines, compensation programs and succession planning |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Deloitte | Consultant (Tax) | Not disclosed | Technical and compliance experience supporting HR/compensation rigor |
| Legal practice | Lawyer | Not disclosed | Legal training supporting governance, policy and compliance |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $430,500 | $473,550 |
| Target Bonus (% of Base) | 75% (raised from 70% in 2023) | 75% |
| Actual Annual Bonus Paid ($) | $490,770 | $475,918 |
| Long-Term Incentive Target (% of Base) | 150% | 160% |
| LTI Target Grant Value ($) | $630,000 | $757,680 |
Performance Compensation
Annual Bonus Design and Payout
| Component | 2023 | 2024 |
|---|---|---|
| Metrics & Weighting | Adjusted EBITDA 50%; Free Cash Flow 30%; Revenue 20% | Adjusted EBITDA 50%; Free Cash Flow 30%; Revenue 20% |
| Company Attainment & Funding | Adj. EBITDA $747.0M → 147%; FCF $709.6M → 191%; Revenue $3,570.2M → 106%; Total funding 152% | Adj. EBITDA $778.2M → 170%; FCF $580.7M → 100%; Revenue $3,475.6M → 95%; Total funding 134% |
| Individual Performance Factor (Montgomery) | 100% | 100% |
| Montgomery Payout Formula | Base $430,500 × 75% × 152% × 100% = $490,770 | Base $473,550 × 75% × 134% × 100% = $475,918 |
| Individual Payout Cap | 200% of target | 200% of target |
Long-Term Equity Incentives (RSUs/PRSUs)
| Grant | Grant Date | Type | Target Shares | Threshold Shares | Max Shares | Grant Date Fair Value ($) |
|---|---|---|---|---|---|---|
| 2023 LTI | 2/28/2023 | PRSU | 22,435 | 2,804 | 44,870 | $355,309 |
| 2023 LTI | 2/28/2023 | RSU | 22,435 | — | — | $314,987 |
| 2024 LTI | 3/04/2024 | PRSU | 25,476 | 3,185 | 50,952 | $416,915 |
| 2024 LTI | 3/04/2024 | RSU | 25,476 | — | — | $378,828 |
- RSUs vest in three equal annual installments on grant anniversaries .
- PRSUs vest based on a 3-year period: 75% Adjusted ROIC; 25% Relative TSR vs S&P 400 Capital Goods; payout range 0–200% with TSR capped at target if absolute TSR negative .
- 2022–2024 PRSUs earned at 121% of target; Montgomery earned 20,153 shares on a 16,656 target .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 168,645 shares (includes 91,078 options exercisable within 60 days and 77,567 shares owned directly) |
| Shares Outstanding | 257,707,674 (April 8, 2025) |
| Ownership % of Outstanding | Approximately 0.07% (168,645 ÷ 257,707,674) |
| Unvested RSUs (12/28/2024) | 25,476 shares; market value $526,589 at $20.67 close |
| Outstanding PRSUs (assumption basis) | 44,583 shares; payout value basis $921,531 (threshold/value methodology per footnote) |
| Stock Options (Exercisable; key series) | 27,099 (2017 Tier I, $7.21, exp 3/13/2027); 27,099 (2017 Tier IV, $9.84, exp 3/13/2027); 5,000 (2018, $17.72, exp 3/9/2028); 11,135 (2019, $16.46, exp 2/22/2029); 11,459 (2020, $12.60, exp 2/21/2030); 9,286 (2021, $15.00, exp 2/26/2031) |
| Ownership Guidelines | 3× base salary for NEOs; all NEOs met guidelines as of annual measurement |
| Hedging/Pledging | Prohibited by Insider Trading Policy; short sales, derivatives, and pledging not allowed |
Additional activity:
- 2024 option exercise: 27,099 shares; value realized $353,100; net shares after withhold 9,814 .
Employment Terms
| Element | Terms (2025) |
|---|---|
| Employment Contract | None; NEOs are not under employment contracts |
| Severance (No Cause/Constructive Termination) | 1.5× (base + target bonus) paid over 18 months; pro-rated current year bonus (without individual factor); health/dental continuation for 18 months; outplacement up to 6 months; release and post-termination covenants required |
| Change-in-Control (Double Trigger) | 2.0× (base + target bonus) lump-sum; pro-rated target bonus; welfare continuation (health, dental, life, LTD) for 24 months; outplacement up to 6 months; best-of-net excise mitigation; release and covenants required |
| Equity Acceleration | RSUs/options require both CIC and qualifying termination; PRSU treatment defined with partial vesting or target vest depending on CIC timing/continuation |
| Clawback | Mandatory recovery for restatements under SEC/NYSE rules; additional detrimental activity recovery under 2018 Omnibus Plan |
| Non-Compete/Non-Solicit | Required to receive severance and CIC benefits for defined period |
Notes: 2024 proxy indicated enhanced EVP severance (then described as 2× base salary for EVP roles), but 2025 policy codifies 1.5× base+bonus for EVPs including Montgomery; CIC multiple increased to 2.0× in 2025 for non-CEO EVPs .
Performance & Track Record
- 2024 strategic actions: repurchased $176M of shares, expanded public float (exit of Former Sponsor-affiliated directors), reduced gross debt by $100M and refinanced term loans/unsecured bonds; S&P and Moody’s upgrades .
- Pay-versus-performance: 2024 company TSR value $150.77 vs peer TSR value $219.66; Adjusted ROIC 24.0%; Net Income $219.9M .
- 2023 say-on-pay support rose to ~98% in 2024 (2023 support was ~72%), with expanded shareholder outreach led by HR and IR leadership .
Compensation Committee & Peer Benchmarking
- Committee: Independent members (chair Neil P. Simpkins; Eliasson; Ireland; Neely); Aon serves as independent compensation consultant .
- Peer group: Fiscal 2024 peers included Franklin Electric addition alongside AMETEK, Crane, Dover, Flowserve, Graco, IDEX, Ingersoll Rand, Lincoln Electric, Nordson, Pentair, Regal Rexnord, SPX Technologies, Timken, Xylem, ESAB . Fiscal 2023 peers similar with ESAB added (post Colfax split) and Regal Rexnord retained .
Risk Indicators & Red Flags
- Hedging/pledging of company stock prohibited (alignment positive) .
- No tax gross-ups except limited relocation benefits .
- Options repricing: none; policy notes no option-like grants since Feb 2021 (NEOs still hold pre-IPO options) .
- Section 16(a) compliance: one untimely Form 4 for each NEO (including Montgomery) in Oct 2024 due to administrative oversight (RSU vest/withholding) .
- Indemnification standard deeds; no pending material litigation involving directors/officers .
Equity Award Vesting & Selling Pressure
| Item | Detail |
|---|---|
| RSU vest cadence | Annual tranches for 2023/2024 grants; recurring taxable events and potential net-share sales for withholding |
| PRSU payout (2022–2024) | Earned at 121% of target; enhances realized equity comp tied to ROIC/TSR |
| 2024 option exercise | 27,099 shares exercised; net shares issued 9,814; potential liquidity creation but most value historically from RSU/PRSU vest |
Say-on-Pay & Shareholder Feedback
| Year | Say-on-Pay Approval | Notes |
|---|---|---|
| 2023 | ~72% | Led to shareholder outreach; clarified STIP cap (200%), enhanced disclosure of individual goals |
| 2024 | ~98% | Continued annual outreach; HR leadership participated |
Investment Implications
- Alignment: A balanced cash/equity mix with 50% of LTI performance-based (ROIC/Relative TSR) and strict anti-hedging/pledging supports shareholder alignment; Montgomery meets 3× salary stock-ownership guideline .
- Retention: EVP-level severance (1.5× base+bonus) and CIC (2× base+bonus) with double-trigger equity vesting, plus significant unvested RSUs/PRSUs, provide retention hooks while avoiding single-trigger windfalls .
- Selling pressure: Ongoing RSU/PRSU vesting and periodic option exercises create routine liquidity events (e.g., 2024 option exercise), but company policy-driven withholdings dominate net-share issuance; no hedging/pledging permitted .
- Pay-for-performance: Company-level funding tied to Adjusted EBITDA/FCF/Revenue, and recent PRSU payout (121%) indicate compensation pays out when operational performance is strong; robust say-on-pay (98% in 2024) lowers governance overhang .
Note: Insider Form 4 trade patterns for the last 24 months were not analyzed here; Section 16 table notes one delayed filing in 2024. If needed, we can compile Montgomery’s Form 4s to assess 10b5‑1 use, net accumulation, and timing relative to vesting .