Herbert Hotchkiss
CHART INDUSTRIESAbout Herbert Hotchkiss
Herbert G. Hotchkiss, 54, is Vice President, General Counsel and Secretary of Chart Industries (GTLS), appointed March 3, 2019; prior roles include Vice President & Corporate Counsel at Truck‑Lite, Vice President & General Counsel at Blair Corporation, and corporate associate positions at Calfee, Halter & Griswold LLP and Hahn, Loeser & Parks LLP . Company performance in 2024 featured revenue growth to $4,160.3 million from $3,352.5 million in 2023, gross margin up to 33.4% (from 31.0%), operating margin up to 15.6% (from 11.7%), orders of $5,006.8 million, backlog of $4,845.1 million, and net leverage of 2.8x; adjusted EBITDA used for incentives was $1,013.8 million vs a $1,224.0 million target . Say‑on‑pay support at the 2024 meeting was ~88.6%, and executive incentives emphasize performance metrics (EBITDA, debt paydown, ROIC, operating income) with clawbacks, ownership guidelines (2x salary for executives), and prohibitions on hedging/pledging .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Chart Industries, Inc. | Vice President, General Counsel & Secretary | 2019–present | Executive legal leadership for global industrial technologies |
| Truck‑Lite Co., LLC | Vice President & Corporate Counsel | 11+ years | Legal leadership for manufacturing of lighting/specialty truck products |
| Blair Corporation | Vice President & General Counsel | — | Corporate counsel for catalog/retail operations |
| Calfee, Halter & Griswold LLP | Corporate Associate | — | Corporate law practice |
| Hahn, Loeser & Parks LLP | Corporate Associate | — | Corporate law practice |
External Roles
No public company board or external directorships disclosed in GTLS filings for Mr. Hotchkiss .
Fixed Compensation
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Base Salary ($) | $455,000 | $540,000 | $570,000 |
| Target Bonus (% of Salary) | 70% | 70% | 70% |
| Actual STI Payout ($) | $194,285 | $144,018 | — |
| Actual STI (% of Salary) | — | 27% (reflects 38.1% of target) | — |
| Perquisites | Auto allowance $800/month | Auto allowance $800/month | Auto allowance $800/month |
Performance Compensation
2024 Short‑Term Incentive (STI)
| Metric | Weight | Threshold | Target | Maximum | Actual Result | Payout Contribution |
|---|---|---|---|---|---|---|
| Adjusted EBITDA | 45% | $974.0m | $1,224.0m | $1,454.0m | $1,013.8m | 18.1% of STI payout |
| Debt Paydown | 35% | $420.0m | $525.0m | $625.0m | $326.7m | 0.0% of STI payout |
| SOEG (incl. ESG) | 20% | Did not meet | Met/exceeded | N/A | Achieved | 20.0% of STI payout |
| Total STI Outcome | — | — | — | — | — | 38.1% of target |
Notes:
- ESG goals are 25% of SOEG weighting .
- EBITDA target adjusted to reflect large LNG projects .
2024 Long‑Term Incentives (granted Jan 2, 2024)
| Award Type | Grant Detail | Vesting / Performance | Quantity | Key Economics |
|---|---|---|---|---|
| Stock Options | Exercise price $135.22 | Time‑based; 25% per year over 4 years; 10‑year term | 4,160 | Black‑Scholes grant date FV assumptions disclosed |
| RSUs | Standard grant | Time‑based; ratable over 3 years, starting 1st anniversary | 2,530 | Grant date Jan 2, 2024 |
| RSUs (recognition/retention) | May 21, 2024 grant | Time‑based; ratable over 3 years | 948 | Performance recognition & retention |
| PSUs | Target units | 3‑year performance; ROIC (50%) and Operating Income (50%); TSR modifier ±20% | 3,370 | ROIC thresholds: 7.8% / 11.8% / 17.8%; payout range 50%–240%; TSR >75th percentile (and TSR>0) → 1.2x; ≤25th → 0.8x |
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Beneficial Ownership (shares) | 33,350 (includes options exercisable within 60 days) |
| Options Exercisable within 60 days | 15,005 |
| Ownership as % of Common Stock | <1% (“*” less than 1%) |
| Stock Ownership Guideline | 2x base salary for executive officers; compliance required within 5 years |
| Compliance Status | All NEOs satisfied guidelines as of March 24, 2025 |
| Hedging / Pledging | Prohibited by Insider Trading Policy (no short sales, no pledging/margin accounts) |
| Deferred Compensation (Company contributions) | $30,105 total benefits in 2024 including $16,867 Deferred Plan; 2025 expected $8,800 |
Employment Terms
| Term | Detail |
|---|---|
| Agreement | Employment Agreement dated March 26, 2019; First Amendment effective Nov 14, 2025 |
| Initial Term & Renewal | Initial 2‑year term; auto‑renews for 1‑year periods; extends 3 years upon Change‑in‑Control |
| Base Salary & Benefits | Base salary per Compensation Committee; eligible for incentive/equity plans; monthly auto allowance $800 |
| Annual Bonus Target | Set under Cash Incentive Plan; up to 180% of target payout based on performance |
| Severance (without CIC) | Lump sum equal to 100% of base + target bonus (as of 12/31/2024) |
| Severance (with CIC, within 2 years, qualifying termination) | Increased from 100% to 200% of each base salary and the greater of current/ prior year target bonus; health premium subsidy period increased from 12 to 24 months (double‑trigger; release & covenant compliance required) |
| Tax Gross‑ups | None; severance provisions do not include excise tax gross‑ups |
| Equity Treatment | Double‑trigger CIC provisions added to equity award agreements since 2019; accelerated vesting values disclosed in tables |
| Clawbacks | Policy since 2015 for restatements; NYSE‑mandated Incentive‑Based Compensation Clawback Policy adopted Nov 2023 |
| Insider Trading Policy | Prohibits hedging/pledging; trading windows applicable to officers |
Investment Implications
- Pay‑for‑performance alignment is strong: 2024 STI paid at 38.1% of target due to EBITDA below target and debt paydown miss, while SOEG/ESG goals were achieved; PSUs hinge on ROIC and operating income with a TSR modifier, creating sensitivity to execution and stock performance .
- Change‑in‑control economics were enhanced in Nov 2025 for Hotchkiss (severance multiple raised to 200% base+bonus; 24 months health subsidy), increasing retention incentives but also elevating potential sale‑event costs; terms require double‑trigger and covenant compliance, mitigating single‑trigger risks .
- Alignment safeguards: ownership guidelines met, robust clawbacks, and strict prohibitions on hedging/pledging reduce misalignment and speculative risk; beneficial ownership is modest (<1%), but ongoing RSU/PSU/option holdings tie value to shareholder outcomes and create periodic vesting‑related liquidity windows to monitor for Form 4 activity .
- Company fundamentals in 2024 (revenue growth, margin expansion, orders/backlog strength, deleveraging) support incentive frameworks; watch ROIC/operating income cadence versus PSU targets through 2026 and any adjustments tied to LNG project mix .
Performance Compensation Details (Appendix)
PSU Metrics (2024 grant performance period 2024–2026)
| Metric | Weight | Threshold | Target | Maximum | TSR Modifier |
|---|---|---|---|---|---|
| ROIC | 50% | 7.8% | 11.8% | 17.8% | ±20% based on peer percentile; cap requires TSR > 0% |
| Operating Income | 50% | Company‑set | Company‑set | Company‑set | ±20% per TSR modifier |
Option & RSU Vesting Mechanics
- Options: 25% per year over 4 years; 10‑year term; exercise price $135.22; quantity 4,160 (Hotchkiss) .
- RSUs: 2,530 granted Jan 2, 2024, +948 granted May 21, 2024; ratable vest over 3 years starting on first anniversary .