Michael G. Tatusko
GRANITE CONSTRUCTIONAbout Michael G. Tatusko
Senior Vice President, Construction at Granite Construction (GVA); age 60 as of February 1, 2025, with a Construction Management degree from Southern Maine Tech. He joined Granite in 1991 and has held progressively senior operations roles; he has served as SVP, Construction since January 2024 . Compensation alignment is driven by a pay-for-performance mix: his 2024 annual incentive was tied to Company EBITDA (actual $374.8M vs $394.0M target) and Operating Cash Flow as % of revenue (actual 12.0% vs 7.0% target) plus a 111% safety multiplier, yielding a 122% payout vs target for his AIP; long-term incentives paid out 182% of target for the 2022–2024 TSR cycle and 164.4% of target for the 2022–2024 RONA cycle .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Granite Construction | Senior Vice President, Construction | Jan 2024–present | — |
| Granite Construction | Senior Vice President & Group Manager | Jan 2020–Jan 2024 | — |
| Granite Construction | Vice President & Valley Region Manager | 2014–2019 | — |
| Granite Construction | Northern California Area Manager | 2012–2014 | — |
| Granite Construction | Design-Build Project Executive | 2010–2012 | — |
| Granite Construction | Group Construction Manager | 2007–2010 | — |
| Granite Construction | Arizona Operations Manager | 2005–2007 | — |
| Granite Construction | Arizona Construction Manager | 2001–2005 | — |
| Granite Construction | Plants Manager | 1999–2001 | — |
| Granite Construction | Estimator/Project Manager | 1995–1999 | — |
| Granite Construction | Project Engineer | 1993–1995 | — |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Oldcastle Tilcon | Employee | 1984–1991 | — |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $425,000 | $450,000 | $468,000 |
| Target Bonus (%) | — | — | 65% |
| Target Bonus ($) | — | — | $304,200 |
| Actual AIP Payout ($) | $267,419 | $531,709 | $372,285 |
| 401(k) Match ($) | — | — | $20,700 |
| Vehicle Allowance ($) | — | — | $12,000 |
| Insurance ($) | — | — | $21,861 |
| Dividends ($) | — | — | $2,611 |
| Total Other Compensation ($) | — | — | $57,172 |
Notes:
- Granite does not grant stock options as part of its equity compensation programs .
- 2024 AIP metrics were Company EBITDA (80% weight) and Operating Cash Flow as a % of revenue (20% weight), modified by Safety (DART/ORIR) .
Performance Compensation
2024 Annual Incentive Plan (Company-level metrics)
| Metric | Threshold | Target | Maximum | Actual | Weighting | Payout mechanics |
|---|---|---|---|---|---|---|
| EBITDA ($M) | $315.2 | $394.0 | $472.8 | $374.8 | 80% | 50–200% of target; linear interpolation |
| OCF as % of Revenue | 4.9% | 7.0% | 9.1% | 12.0% | 20% | 50–200% of target; linear interpolation |
| Safety Multiplier (ORIR/DART) | 90% | 110% | 115% | 111% | Multiplier | 50/50 weighting ORIR/DART |
Summary (individual payout):
- AIP Target $304,200; Actual company bonus payout $372,285 (122% of target) .
LTIP outcomes (earned RSUs; cliff vest for performance awards)
| Cycle/Metric | Target ($) | Actual ($) | Payout % | RSUs Awarded | Vesting timing |
|---|---|---|---|---|---|
| TSR 2021–2023 | $300,000 | $450,000 | 150% | 13,918 | RSUs vested 10 days after grant (3/14/2024) |
| TSR 2022–2024 | $200,000 | $364,000 | 182% (71st percentile) | 9,735 | RSUs vested 10 days after grant (Q1 2025) |
| RONA 2022–2024 | $100,000 | $164,400 | 164.4% | 4,396 | RSUs vested 10 days after grant (Q1 2025) |
Time-Based RSU Awards (retention)
| Grant Year | Time-Based Service Award ($) | RSUs Awarded | Vesting cadence |
|---|---|---|---|
| 2024 | $112,500 | 2,066 | Vests in three equal annual installments starting 3/14/2025 |
Equity Ownership & Alignment
| Ownership item | Amount |
|---|---|
| Beneficial ownership as of Feb 28, 2025 (shares) | 39,316 |
| ESOP shares allocated as of Feb 28, 2025 | 5,549 (eligible for withdrawals at age 55+ while employed) |
| Shares issuable upon RSU vesting within 60 days of Feb 28, 2025 | 16,850 |
| Unvested RSUs outstanding at Dec 31, 2024 | 5,037 |
| Shares pledged as collateral | Prohibited by policy |
| Hedging of company stock | Prohibited by policy |
| Stock ownership guideline | Other NEOs: 2× annual base salary |
| Guideline compliance (as of Dec 31, 2024) | All NEOs in compliance (held or 50% retention of net RSUs) |
RSU vesting schedule (as of Dec 31, 2024):
| Vesting date | RSUs vesting |
|---|---|
| 3/14/2025 | 2,715 |
| 3/14/2026 | 1,629 |
| 3/14/2027 | 693 |
Stock vested (value realized in 2024):
| Shares acquired on vesting | Value realized ($) |
|---|---|
| 16,567 | $910,109 |
Policies supporting alignment:
- Anti-hedging and anti-pledging policies; directors/officers/employees are prohibited from hedging or pledging Granite securities .
- Executive stock ownership guidelines (CEO 5× salary; COO/CFO 3×; other NEOs 2×) with 50% net RSU retention until compliant .
Employment Terms
Change-in-Control (ERSP III) – economics and triggers:
- Double-trigger: benefits if terminated without cause or resigns for “good reason” within two years after a change-in-control; “good reason” includes material diminution of duties, pay decrease (outside broad-based reduction), relocation >30 miles, or material breach .
- Cash severance: 2× base salary + 2× average bonus (last 3 FY) + 2× average employer retirement contributions + 2× average annual insurance premiums; outplacement up to 2 years .
- Equity: performance awards convert to RSUs at target or actual (depending on timing); accelerated vesting upon double-trigger termination .
- No tax gross-ups; payments capped to 280G “safe harbor” if beneficial to the executive .
Potential CIC payments (illustrative as of Dec 31, 2024):
| Component | Amount ($) |
|---|---|
| Cash Severance Payment | $1,638,584 |
| Insurance Benefits | $37,584 |
| Other Compensation (retirement plan equivalents) | $37,000 |
| Accelerated Equity Awards | $3,461,738 |
| Total | $5,174,906 |
Other terms:
- Two-year non-solicitation and non-disparagement post-termination .
- Clawback policy adopted October 2023; recovery of erroneously awarded incentive compensation upon accounting restatements per SEC/NYSE rules .
- Non-compete: not disclosed.
Compensation Structure Analysis
| Component | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary ($) | $425,000 | $450,000 | $468,000 |
| Stock awards – grant date fair value ($) | $99,981 | $481,264 | $870,169 |
| Non-equity incentive plan compensation ($) | $267,419 | $531,709 | $372,285 |
| All other compensation ($) | $52,695 | $54,251 | $57,172 |
| Total ($) | $845,095 | $1,517,224 | $1,767,626 |
Observations:
- Shift toward equity-linked pay: stock awards increased materially from 2022→2024; Granite does not use stock options, favoring RSUs and performance RSUs (TSR/RONA) .
- AIP metrics updated in 2024 to EBITDA (replacing EBIT) and OCF%, with safety multiplier; Tatusko’s AIP payout was 122% of target, driven by strong OCF and safety despite EBITDA below target .
Say-on-Pay & Peer Benchmarking
- Say-on-Pay: 83% approval for 2023 executive compensation; Committee maintained program structure and continues to evaluate alignment .
- Peer group used for 2024 targets: 18 construction/engineering/materials companies (e.g., Tetra Tech, Primoris, Dycom, KBR, Summit Materials, etc.); LTIP and AIP targets are set referencing peer median with conservative positioning .
Equity Ownership & Trading Pressure Indicators
- Upcoming vesting events: 2,715 RSUs on 3/14/2025; 1,629 on 3/14/2026; 693 on 3/14/2027; plus performance RSUs vesting 10 days post-grant cycles; this can create mechanical delivery of shares and potential tax-related sales but Granite prohibits hedging/pledging and has blackout policies; no option exercises (none granted) .
- 2024 stock vesting: 16,567 shares; value realized $910,109 .
Expertise & Qualifications
- Education: Construction Management degree (Southern Maine Tech) .
- Deep operating experience across regions, design-build, and group management since 1991 .
Investment Implications
- Pay-for-performance alignment is strong: AIP tied to EBITDA/OCF with safety modifier, and LTIP tied to relative TSR and capital efficiency (RONA) produced above-target payouts (182% TSR; 164.4% RONA), rewarding shareholder-aligned outcomes in the 2022–2024 cycle .
- Retention risk appears mitigated by multiyear RSU vesting and double-trigger CIC protections; upcoming scheduled RSU vestings and earned performance RSUs support continued alignment, while anti-hedging/pledging policies reduce misalignment risk .
- No stock options and a clawback policy reduce incentive for excessive risk-taking; say-on-pay support (83%) suggests shareholder acceptance of compensation design, though ongoing monitoring of EBITDA performance vs targets is warranted given 2024 EBITDA came in at 88% of target while OCF exceeded .