Robert O. Kraft
About Robert O. Kraft
Robert O. Kraft is Hillman Solutions Corp.’s Chief Financial Officer and Treasurer, a role he has held since November 2017; he is 54 and a certified public accountant (inactive). Prior to Hillman, he served as President of the Omnicare (Long Term Care) division and EVP at CVS Health (Aug 2015–Sep 2017) and was CFO/SVP of Omnicare (Nov 2010–Aug 2015); he began his career at PricewaterhouseCoopers in 1992 and was admitted as Partner in 2004. He currently serves on the board of Medpace Holdings, Inc. (Nasdaq: MEDP) . Company pay-versus-performance shows TSR and profitability improvement during his tenure: TSR rose to 98.70 in 2024, Net Income improved to $17.255 million, and Adjusted EBITDA increased to $241,753 thousand .
| Performance Metric | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|---|
| Total Shareholder Return (Index, $) | 103.20 | 105.80 | 72.64 | 92.80 | 98.70 |
| Net Income ($USD Millions) | (24.499) | (38.332) | (16.436) | (9.589) | 17.255 |
| Adjusted EBITDA ($USD Thousands) | 221,215 | 207,418 | 210,249 | 219,360 | 241,753 |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| CVS Health | President, Omnicare LTC division; EVP | Aug 2015–Sep 2017 | Led LTC division operations within CVS, senior executive oversight |
| Omnicare, Inc. | CFO & SVP | Nov 2010–Aug 2015 | Financial leadership and capital allocation for Omnicare |
| PricewaterhouseCoopers LLP | Audit/Advisory; admitted Partner | 1992; Partner admission 2004 (end date not disclosed) | Public accounting, audit and advisory experience; leadership track culminating in partnership |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Medpace Holdings, Inc. (Nasdaq: MEDP) | Director | Current (as disclosed) | Industry insights and governance at a clinical CRO; network and information flow benefits |
Fixed Compensation
- Base salary: $500,000 (2024), $500,000 (2023), $415,000 (2022) .
- Perquisites: $700/month car allowance; 401(k) match $11,611 (2024); group term life premium $414 (2024) .
- Ownership guidelines: CFO required to hold 3x base salary in common stock; compliance deadline within 5 years from the later of July 14, 2021 or designation date .
| Component | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary ($) | 415,000 | 454,231 | 500,000 |
| Stock Awards ($) | 299,999 | 374,996 | 1,874,988 |
| Option Awards ($) | 299,708 | 374,999 | 374,997 |
| Non-Equity Incentive ($) | 36,568 | 271,645 | 480,900 |
| All Other Comp ($) | 17,992 | 18,826 | 20,425 |
| Total ($) | 1,069,267 | 1,494,697 | 3,251,310 |
Performance Compensation
Annual incentive structure emphasizes Adjusted EBITDA and Adjusted Leverage Ratio with specified targets and payout curves; for 2024 the Compensation Committee adjusted for extraordinary items (True Value bankruptcy write-off excluded; Intex DIY acquisition excluded) when determining bonus payouts .
| Metric | Weight | Threshold | Target | Maximum | Actual Reported | Deemed Achievement | Payout Factor | Vesting/Timing |
|---|---|---|---|---|---|---|---|---|
| Adjusted EBITDA | 70% | $219,400k | $235,000k | $260,000k | $241,753k | $248,000k | 152.0% | Annual cash bonus after year-end |
| Adjusted Leverage Ratio | 30% | 3.3x | 2.9x | 2.5x | 2.8x | 2.6x | 179.5% | Annual cash bonus after year-end |
- 2024 target bonus opportunity: 60% of base salary (threshold 30%, max 120%); paid $480,900 (160.3% of target) based on formula outcomes .
- 2023 target bonus opportunity: 60% of base salary (threshold 30%, max 120%); paid $271,645 (99.0% of target) with payouts driven by Adjusted EBITDA at 86.6% and Leverage Ratio at 127.8% .
| Year | Base Salary ($) | Target % | Target ($) | Bonus Paid ($) | % of Target |
|---|---|---|---|---|---|
| 2024 | 500,000 | 60% | 300,000 | 480,900 | 160.3% |
| 2023 | 500,000 | 60% | 274,500 | 271,645 | 99.0% |
Equity Awards (RSUs, Options) and Vesting Schedules
- 2024 grants: 38,148 RSUs on 3/7/2024 (fair value $374,995) vest 100% on 3rd anniversary; 82,464 options on 3/7/2024 at $9.83 vest 25% annually over 4 years; special RSU grant 157,894 on 9/7/2024 (fair value $1,499,993) vests 50% on 9/7/2027, 25% on 9/7/2028, 25% on 9/7/2029 .
- 2023 grants: 42,759 RSUs (fair value $374,996) and 100,369 options at $8.77 (fair value $374,999); RSUs vest at 3 years; options vest 25% annually .
| Grant Date | Instrument | Shares | Exercise Price | Grant Date Fair Value ($) | Vesting Schedule |
|---|---|---|---|---|---|
| 3/7/2024 | RSU | 38,148 | N/A | 374,995 | 100% at 3rd anniversary (3/7/2027) |
| 3/7/2024 | Stock Options | 82,464 | 9.83 | 374,997 | 25% annually over 4 years (2025–2028) |
| 9/7/2024 | RSU (special) | 157,894 | N/A | 1,499,993 | 50% at 3rd anniversary; 25% at 4th & 5th (2027/2028/2029) |
| 3/7/2023 | RSU | 42,759 | N/A | 374,996 | 100% at 3rd anniversary (3/7/2026) |
| 3/7/2023 | Stock Options | 100,369 | 8.77 | 374,999 | 25% annually over 4 years (2024–2027) |
Equity Ownership & Alignment
- Beneficial ownership: 1,202,468 shares; less than 1% of outstanding .
- Within 60 days acquirable: 987,784 options; RSUs within 60 days: none (as disclosed) .
- Outstanding awards (12/28/2024): Unvested RSUs totaling 268,982 shares (30,181 from 1/11/2022; 42,759 from 3/7/2023; 38,148 from 3/7/2024; 157,894 from 9/7/2024) with indicated market values; multiple option tranches with varying strikes and expirations .
- Hedging/pledging: Executives prohibited from pledging, hedging, or short sales; no pledged shares reported .
- Stock ownership guidelines: CFO at 3x base salary; five-year compliance window .
| Category | Detail |
|---|---|
| Beneficial Ownership (#, %) | 1,202,468 shares; <1% |
| Options within 60 days | 987,784 |
| RSUs within 60 days | None |
| Unvested RSUs (examples) | 30,181 (1/11/2022), 42,759 (3/7/2023), 38,148 (3/7/2024), 157,894 (9/7/2024); market values per proxy |
| Policy | Hedging/pledging prohibited |
| Ownership Guidelines | CFO 3x salary; 5-year timeline |
Employment Terms
- Executive Severance Plan (adopted Nov 2, 2023): For Kraft (a participating NEO), termination without cause or for good reason yields 12 months base salary continuation, 12 months COBRA premiums, pro-rated performance bonus, and upon change-in-control followed by qualifying termination within 24 months, also 100% of target bonus paid over 12 months; CEO terms differ and were adjusted in 2025 transition .
- Estimated payouts as of 12/28/2024: Termination without cause/resignation with good reason $1,001,266; within 90 days post-change-in-control $1,301,266 .
- Change-in-control equity treatment: No mandatory acceleration for awards granted under the 2021 Equity Plan; acceleration may be discretionary; performance-based options under 2014 plan vest only if performance hurdles are met .
- Clawback: Compensation Recovery Policy allows recovery in the event of accounting restatement due to material noncompliance .
- Insider trading policy: Strict governance of trading and blackout windows .
- Tax gross-ups: Not provided under equity plan; plan prohibits repricing without shareholder approval .
| Scenario (as of 12/28/2024) | Estimated Payment ($) |
|---|---|
| Termination w/o cause or good reason | 1,001,266 |
| Termination w/o cause or good reason within 90 days post-CoC | 1,301,266 |
Compensation Structure vs Performance Metrics
- Annual incentives explicitly tied to company Adjusted EBITDA (70% weight) and Adjusted Leverage Ratio (30% weight); payout curves 50–200% by metric; 2024 Committee exclusions recognized extraordinary bankruptcy write-off and an acquisition not contemplated at target setting .
- Long-term incentives pivot: In 2025, the Compensation Committee moved to 50% PSUs and 50% RSUs with return on invested capital (ROIC) as PSU metric, reducing reliance on stock options and increasing performance linkage and retention .
Vesting Timelines and Potential Insider Selling Pressure
- Near-term vesting: Options granted 3/7/2023 vest 25% each March through 2027 (staggered liquidity events); RSUs from 3/7/2023 vest in March 2026; RSUs from 3/7/2024 vest in March 2027; special RSUs from 9/7/2024 vest in Sep 2027/2028/2029—these dates represent potential liquidity catalysts subject to blackout and 10b5-1 arrangements .
- Policy constraints: Hedging and pledging prohibited, mitigating leverage-related forced selling risk .
Equity Award Inventory (Selected Detail as of 12/28/2024)
| Grant | Exercisable | Unexercisable | Strike | Expiration |
|---|---|---|---|---|
| 11/1/2017 Options | 247,238 | — | 6.07 | 11/1/2027 |
| 8/30/2018 Options | 103,015 | — | 7.29 | 8/30/2028 |
| 7/30/2020 Options | 319,761 | — | 7.89 | 7/30/2030 |
| 1/22/2021 Options | 133,920 | 44,641 | 10.00 | 1/22/2031 |
| 1/11/2022 Options | 45,606 | 45,606 | 9.94 | 1/10/2032 |
| 3/7/2023 Options | 25,092 | 75,277 | 8.77 | 3/7/2033 |
| 3/7/2024 Options | — | 82,464 | 9.83 | 3/7/2034 |
Related Party Transactions and Red Flags
- Prohibition on repricing, strong governance in equity plan; no tax gross-ups in plan; clawback policy in place; hedging/pledging prohibited—positive governance signals .
- No pledged shares reported for Kraft .
- Say-on-pay vote results not disclosed; Board recommends approval of executive compensation annually .
Compensation Peer Group (Benchmarking)
- Peer group includes Allegion, American Woodmark, Armstrong World Industries, Dorman, Floor & Decor, Gibraltar, Griffon, JELD-WEN, Leslie’s, Masonite, PGT Innovations, Pool, Richelieu, Simpson Mfg., SiteOne, Spectrum Brands, Trex, The AZEK Company, YETI .
- At the time of evaluation, Hillman net sales at 32nd–46th percentile and market capitalization at 21st–28th percentile versus peers; no fixed target percentile for pay decisions; peer group unchanged year-over-year .
Say-on-Pay & Shareholder Feedback
- Advisory vote to approve executive compensation proposed annually; Board recommends “FOR”; specific historical approval percentages not provided in proxy .
Expertise & Qualifications
- CPA (inactive); deep finance and operations experience across healthcare distribution and public accounting; current public company directorship (MEDP) .
Equity Ownership & Alignments – Additional Detail
- Stock awards vesting on multi-year schedules reinforce retention; 2025 move to PSUs based on ROIC enhances pay-for-performance alignment and reduces option-heavy risk posture .
- Executive and director stock ownership guidelines enforce significant “skin in the game” over five years .
Investment Implications
- Alignment: 2025 shift to PSUs with ROIC increases performance sensitivity and long-term alignment; CFO guideline 3x salary and hedging/pledging prohibitions reinforce governance quality .
- Retention and liquidity signals: Significant scheduled RSU/option vesting from 2026–2029 could create periodic selling pressure windows, subject to trading policies and blackout periods .
- Change-in-control economics: Double-trigger severance of 12 months salary plus 100% target bonus and COBRA, with no mandatory equity acceleration under the 2021 plan, reduces windfall risk while providing retention incentives .
- Performance linkage: Annual bonus metrics (Adjusted EBITDA and Leverage Ratio) align with deleveraging and margin expansion priorities; Committee’s targeted adjustments indicate pragmatic treatment of extraordinary items .