Gregory S. Volovic
About Gregory S. Volovic
Gregory S. Volovic (age 61) is President & CEO of Hurco Companies, Inc., serving as a director since 2019; he joined Hurco in 2005, became President in 2013, served as COO in 2019–Mar 2021, and was appointed CEO in March 2021. Prior roles include leading advanced manufacturing equipment development at RCA/Thomson and IT/e-business leadership at Thomson; he began his career as a software developer at Unisys and also serves on the boards of two private industrial/manufacturing companies and the Association of Manufacturing Technology (AMT) . Under his tenure, FY2024 sales were $186.6 million (-18% YoY) with a net loss of $16.6 million, reflecting cyclical industry headwinds; over FY2022–FY2024 the company’s three-year TSR measured for PSU vesting purposes was -32.5% (TSR PSUs paid at 71.79% of target; ROIC PSUs paid 0%) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Hurco Companies, Inc. | President & CEO; Director | CEO since Mar 2021; Director since 2019 | Leads global operations, R&D, product development, sales/service; executes strategic plans and operational initiatives . |
| Hurco Companies, Inc. | President; EVP, Software & Engineering (prior) | President since 2013 | Drove product development and technology leadership across brands . |
| Hurco Companies, Inc. | Chief Operating Officer | 2019–Mar 2021 | Managed global operations prior to CEO appointment . |
| RCA/Thomson (CRT division) | Led advanced manufacturing equipment development; global IT/E-business leadership | Pre-2005 | Directed advanced manufacturing programs and IT/knowledge management initiatives . |
| Unisys | Software developer (Linux programmer) | Early career | Foundation in software/controls relevant to CNC technology . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Association of Manufacturing Technology (AMT) | Board Member | Not disclosed | Industry network and policy/technology insights supporting Hurco’s strategy . |
| Two private industrial/manufacturing companies | Board Member | Not disclosed | Operational and market knowledge cross-pollination for industrial technology businesses . |
Fixed Compensation
| Metric | FY2022 | FY2023 | FY2024 |
|---|---|---|---|
| Salary ($) | 547,820 | 587,383 | 613,735 |
| Base Salary (Plan) ($) | — | — | 659,812 (approved; temporarily cut by 10% Apr 22–Oct 20, 2024) |
| Target Bonus % (STI) | — | — | 100% of base salary |
| Actual STI Paid ($) | 509,255 (NEIP) | 295,880 (NEIP) | 0 (no payouts; negative operating income margin) |
Notes: 2024 base reflects a temporary voluntary reduction during H2 FY2024 as part of cost-cutting; actual paid salary shown in SCT reflects the reduction .
Performance Compensation
Annual Incentive (STI) Design – FY2024
| Metric | Weighting | Threshold | Target | Exceeds | Max | 2024 Result |
|---|---|---|---|---|---|---|
| Operating Income Margin | 70% | 3% (50% payout) | 6% (100%) | 8% (150%) | 10% (200%) | Below threshold; 0% payout |
| Strategic Objectives (CEO-specific) | 30% | 50%–200% payout scale | — | — | — | No payout due to negative OI margin “gate” |
CEO 2024 strategic objectives included new control/software launches (Inspire Control, conversational tools), cost/efficiency targets, manufacturing risk mitigation and alternative strategies, succession planning, and ESG rollout .
Long-Term Incentive (LTI) Structure
- 2024 grants (performance period FY2024–FY2026): mix targeted ~25% restricted shares (time-based, 3-year ratable vest); ~75% PSUs, with performance split ~55% Net Income and ~45% Free Cash Flow; payout 50–200% of target; rationale: profit/cash focus aligned with cyclical context and capital allocation discipline .
- 2025 grants (performance period FY2025–FY2027): time-based portion increased to ~45% to enhance retention and align with market practice; PSUs continue to use Net Income and Free Cash Flow .
CEO LTI Awards – Grants and Vesting
| Grant Date | Award | Shares/Units | Vesting / Performance |
|---|---|---|---|
| Jan 4, 2024 | Restricted Shares | 14,514 | 1/3 per year over 3 years |
| Jan 4, 2024 | PSUs – NI (Target) | 23,223 | Earnout FY2024–FY2026; 50/100/200% payout scale |
| Jan 4, 2024 | PSUs – FCF (Target) | 20,320 | Earnout FY2024–FY2026; 50/100/200% payout scale |
| Jan 3, 2023 | Restricted Shares | 7,902 | 50% vested Jan 3, 2025; 50% vests Jan 3, 2026 |
| Jan 4, 2022 | Restricted Shares | 2,748 | Vested Jan 4, 2025 |
Earned performance awards (FY2022–FY2024 cycle, certified Jan 7, 2025):
- PSUs – TSR paid at 71.79% of target; Volovic earned 8,615 PSUs (ROIC PSUs paid 0%) .
- Stock vested in FY2024 for Volovic totaled 17,923 shares (restricted + PSUs), with $375,097 value realized; tax withholdings applied .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 124,959 shares; 1.9% of outstanding. Includes 42,021 unvested restricted shares counted toward ownership . |
| Unvested, Time-Based | 2,748 (2022 RS, vested 1/4/2025); 7,902 (2023 RS, 50% vested 1/3/2025; 50% vests 1/3/2026); 14,514 (2024 RS, ratable over 3 years) . |
| Unvested, Performance | 17,768 threshold PSUs for 2023–2025 (NI+FCF); 43,543 target PSUs for 2024–2026 (NI+FCF) . |
| Options | None outstanding (company not using options) . |
| Ownership Guidelines | CEO expected to hold shares ≥5x base salary; must retain all net after-tax shares from awards until compliant; pledged shares do not count . |
| Hedging/Pledging | Prohibited: no pledging, hedging, derivatives, short sales, or most pre-arranged transactions except approved 10b5-1 plans . |
Vesting/selling pressure watch: Large scheduled vesting/settlement events tend to occur in early January tied to annual restricted share tranches (e.g., Jan 3–4) and PSU certifications (e.g., Jan 7 in 2025), historically triggering potential insider liquidity needs (subject to policy and windows) .
Employment Terms
| Feature | CEO Terms |
|---|---|
| Agreement Term | Through Oct 31, 2025; auto-renews annually unless 60-days’ notice prior to expiry . |
| Severance (No CIC) | If terminated without Cause or resigns for Good Reason: 12 months salary continuation; monthly average bonus (prior 3 years) during severance period; 140% of monthly COBRA cost for same period; release required . |
| Severance (Within 12 months Post-CIC) | Same components as above, but for 24 months (double-trigger) . |
| Equity on CIC | If awards not assumed or if involuntary termination within 18 months post-Corporate Transaction: RS vests in full; PSUs vest at target pro-rated for elapsed portion; committee may cash out if not assumed . |
| Restrictive Covenants | Non-compete, customer non-solicit, employee non-solicit, and confidentiality/IP protections . |
| Clawback | Dodd-Frank compliant recoupment of incentive comp for accounting restatements; recovery of excess comp over 3 prior fiscal years; executives must reimburse recovery costs . |
| Insider Trading Policy | Strict prohibitions on MNPI trading; hedging/pledging bans; structured grant timing to avoid MNPI optics . |
Estimated benefits table for hypothetical separation (as of 10/31/2024) is provided in the proxy; headline CEO totals include severance pay, deferred comp balance, equity acceleration per scenario, health coverage, and life insurance amounts .
Board Governance
- Board Service: Director since 2019; management (non-independent) director. No committee memberships listed for Volovic .
- Chair/Leadership: Board chaired by Executive Chairman Michael Doar (executive, transitioning to non-executive at 2026 meeting per 8-K) .
- Independence/Controls: Six independent directors; Presiding Independent Director (Richard Porter) leads executive sessions and agenda-setting for independent oversight .
- Attendance: Board met 5 times in FY2024; all directors attended ≥75% of meetings; all incumbent nominees attended the 2024 annual meeting .
- Director Compensation: Volovic receives no additional compensation for board service (compensated as CEO) .
Director Compensation (for context; non-employee directors)
- Non-employee directors received $45,000 cash retainer plus committee retainers; equity grants of 3,813 restricted shares (grant-date FV $79,997; vest at next annual meeting or 1 year) .
- CEO and Executive Chairman compensation detailed in SCT; no additional director pay .
Compensation & Incentives Detail (CEO)
Summary Compensation (3 years)
| Fiscal Year | Salary ($) | Bonus ($) | Stock Awards ($) | Non-Equity Incentive Plan Comp ($) | All Other Comp ($) | Total ($) |
|---|---|---|---|---|---|---|
| 2024 | 613,735 | — | 1,249,967 | — | 95,305 | 1,959,007 |
| 2023 | 587,383 | 88,764 | 1,249,963 | 295,880 | 96,429 | 2,318,419 |
| 2022 | 547,820 | — | 999,953 | 509,255 | 82,987 | 2,140,015 |
All Other Compensation includes, for 2024: supplemental disability insurance $16,275; 401(k) match $20,700; split-dollar life insurance $58,330 (company is partial beneficiary) .
Grants of Plan-Based Awards – FY2024
| Award | Grant Date | Threshold | Target | Maximum | Grant-Date FV ($) |
|---|---|---|---|---|---|
| 2024 STI (100% of base salary target) | 1/4/2024 | $329,906 | $659,812 | $1,319,624 | — |
| PSUs – NI (FY2024–FY2026) | 1/4/2024 | 11,612 units | 23,223 | 46,446 | 499,991 |
| PSUs – FCF (FY2024–FY2026) | 1/4/2024 | 10,160 units | 20,320 | 40,640 | 437,490 |
| Restricted Shares | 1/4/2024 | — | 14,514 shares | — | 312,486 |
Earned PSUs for FY2022–FY2024: 8,615 TSR PSUs; 0 ROIC PSUs; vest-date value $170,663 .
Say-on-Pay & Shareholder Feedback
- 2024 annual meeting approval: approximately 99% support for NEO compensation; 3-year average ~93%; 5-year average ~92% .
- 2025 annual meeting: advisory say-on-pay passed with 3,914,992 For; 303,379 Against; 162,156 Abstentions; 713,537 broker non-votes .
Compensation Peer Group
- 2024 peer group includes 20 industrial/manufacturing comparables (e.g., Twin Disc, Proto Labs, Transcat, Vishay Precision Group, Starrett, etc.) .
- 2025 adjustments: remove DMC Global and UFP Technologies; add Markforged Holding and Velo3D; resulting medians decreased (Revenue $265m; Market Cap $211m; Employees 980) .
- Pay Governance serves as independent compensation consultant; no conflicts .
Related Party Transactions and Governance
- 2023: sale of a machine (~$499k) to a company in which Executive Chairman Doar is >10% owner and his son is an owner/officer; sold in ordinary course at standard terms; none in 2024 requiring disclosure .
- Audit Committee reviews/approves related person transactions; strong governance framework with charters and codes in place .
Board Service History and Dual-Role Implications
- Volovic is an inside director (CEO) with no committee roles; independence maintained via six independent directors, a Presiding Independent Director (Richard Porter), and committee structures; Board chaired by an Executive Chairman (transitioning to non-executive in 2026) .
- Executive sessions overseen by Presiding Independent Director; attendance/engagement metrics are sound (≥75% attendance for all directors) .
Risk Indicators & Red Flags
- No option repricing (no options outstanding); no tax gross-ups; robust clawback; hedging/pledging prohibited .
- Shift in LTI mix to increase time-based RS from ~25% to ~45% in 2025 elevates retention value but lowers performance at-risk mix versus prior years—a potential signal of retention priority amid industry cyclicality .
- 2024 STI paid 0 despite strategic objectives—evidence of downside rigor; 2022–2024 ROIC PSUs paid 0% .
- Industry cyclicality and FY2024 loss highlight execution risk and macro sensitivity; PSU metrics now emphasize NI and FCF for resilience .
Employment & Deferred Compensation
- Deferred Compensation Plan II participation: CEO contributed $99,838 in FY2024; aggregate balance $760,619; market-based returns (Vanguard options), no above-market earnings .
Equity Ownership Detail (as of Oct 31, 2024)
| Category | Count | Market/Notes |
|---|---|---|
| Time-based unvested RS (2022/2023/2024) | 2,748 / 7,902 / 14,514 | Valued at $21.01 per share at FY2024 year-end . |
| PSUs unearned (2023–2025) | 17,768 (threshold) | NI+FCF-based; threshold placeholder until earned . |
| PSUs unearned (2024–2026) | 43,543 (target) | NI+FCF-based; target placeholder until earned . |
| Beneficial ownership total | 124,959 shares (1.9%) | Includes 42,021 unvested RS deemed beneficially owned . |
Performance & Track Record Indicators
- FY2024: Sales $186.6m (-18% YoY); net loss $(16.6)m (includes $8.6m non-cash tax valuation allowance) .
- Pay-versus-performance disclosure shows CAP moves with TSR and net income; CEO CAP in 2024 was $813,504 per SEC method; TSR index $69.05; net loss $(16.6)m .
Investment Implications
- Alignment: 2024 no STI payout and 0% ROIC PSU earnout demonstrate downside pay rigor; NI/FCF PSUs reorient LTI toward profitability and cash, which should better align with shareholder outcomes in a cyclical downturn .
- Retention vs. at-risk mix: 2025 increase in time-based RS (~45%) suggests a tilt toward retention and talent stability; watch for dilution (requested +850k plan shares approved in 2025) and evolving mix relative to peers .
- Trading signals: Anticipate potential insider selling windows around early January vestings/certifications (RS tranches and PSU settlements), subject to 10b5-1 plans and policy constraints .
- Governance: Majority-independent board with strong controls (presiding lead; clawback; hedging/pledging bans) and high say-on-pay support (~99% in 2024; passed again in 2025) mitigate dual-role concerns for the CEO as a director .
- Execution risk: FY2024 loss and industry cyclicality raise near-term performance risk; the STI OI-margin gate and LTI NI/FCF structure should tie realizable pay tightly to recovery in profitability and cash generation .